                     T.C. Summary Opinion 2009-113



                        UNITED STATES TAX COURT



                   CHERYL D. FLATHERS, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 24235-07S.             Filed July 20, 2009.



        Cheryl D. Flathers, pro se.

        Fred E. Green Jr., for respondent.



     DEAN, Special Trial Judge:       This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect when the petition was filed.      Pursuant to section 7463(b),

the decision to be entered is not reviewable by any other court,

and this opinion shall not be treated as precedent for any other

case.     Unless otherwise indicated, subsequent section references

are to the Internal Revenue Code.
                               - 2 -

     The petition was timely filed in response to a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 (notice of determination).    Pursuant to section

6330(d), petitioner seeks review of respondent’s Final Notice of

Intent to Levy and Notice of Your Right to a Hearing (notice of

intent to levy) relating to her tax liabilities for 2002 and 2003

and civil penalties for 1999 through 2004.

     Neither the underlying tax liabilities for 2002 and 2003 nor

the civil penalties for filing frivolous returns for 1999 through

2004 are in dispute.   The issues for decision are whether:

(1) Petitioner was denied an opportunity for a fair and

meaningful section 6330 hearing; and (2) the Appeals officer

abused her discretion in failing to provide petitioner an

opportunity to present an offer-in-compromise (OIC) at a hearing

as required by section 6330(b) and (c)(2)(A)(iii).

                            Background

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the exhibits received into evidence

are incorporated herein by reference.    When the petition was

filed, petitioner resided in Nevada.

      Petitioner failed to file timely returns for 2002 and 2003.

Respondent prepared substitutes for returns and issued notices of

deficiency to petitioner for 2002 and 2003 on July 20, 2004, and

June 21, 2005, respectively.   Petitioner did not petition the
                               - 3 -

Court in response to the notices of deficiency.   On January 12,

2007, respondent issued a notice of intent to levy, advising

petitioner that respondent intended to collect unpaid liabilities

for 2002 and 2003 and civil penalties for 1999 through 2004.

     In response to the notice of intent to levy, petitioner

mailed Form 12153, Request for a Collection Due Process Hearing,

on February 8, 2007.   On Form 12153 petitioner states:   “These

charges have already been disputed and are currently in

litigation.   The IRS is attempted [sic] to doubly collect.   I

request a hearing to review records as to how these charges are

listed again”. Petitioner’s case was assigned to an Appeals

officer from respondent’s Appeals Office in Fresno, California

(Appeals Office).

     On May 10, 2007, respondent sent petitioner a letter

acknowledging petitioner’s request for a section 6330 hearing.

In the letter the Appeals officer stated:

     I have scheduled a * * * [telephone section 6330
     hearing] for you on June 14, 2007 at 10:00 AM (PST). I
     will call you at the date and time indicated above.
     This call will be your primary opportunity to discuss
     with me the reasons you disagree with the collection
     action and/or to discuss alternatives to the collection
     action. If this time is not convenient for you, or you
     would prefer your * * * [section 6330 hearing] to be
     held by correspondence, please let me know within
     fourteen (14) days from the date of this letter.

     *       *       *       *        *       *       *
     You will be allowed a face-to-face conference on any
     nonfrivolous issue(s); however you will need to provide
     the nonfrivolous issue in writing or by calling me
                                  - 4 -

     within 14 days from the date of this letter before a
     face-to-face conference will be scheduled.

     *         *      *       *           *     *      *

     * * * For me to consider alternative collection methods
     such as an installment agreement or offer in
     compromise, you must provide any items listed below.
     In addition, you must have filed all federal tax
     returns required to be filed. [Emphasis added].

           !       Completed Collection Information Statement
                   Form 433-A for individuals

           !       Signed tax return(s) for the following tax
                   periods. Our records indicate they have
                   not been filed:
                   Type of Tax: 1040
                   Period or Periods: 2004 and 2005

          !        If you did not file a return because your
                   yearly income was below the amount for
                   which a return is required to be filed,
                   please let me know.

     Please send me the items listed or checked above by May
     25, 2007. I cannot consider collection alternatives at
     your conference nor can I consider alternatives during
     the hearing process without the information requested
     above.

     On May 22, 2007, petitioner sent a certified letter thanking

the Appeals officer for their telephone conservation, stating:

“it would not be feasible for [her] to deal with the Fresno

Office due to time and distance constraints.”    She also requested

that her case be transferred to her local Appeals Office in Las

Vegas, Nevada.

     On May 30, 2007, the Appeals officer notified petitioner

that her case did not qualify for transfer to her local Appeals

Office.   The Appeals officer scheduled the telephone section 6330
                              - 5 -

hearing for June 14, 2007, at 10 a.m., advised petitioner to

complete Form 433-A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, and requested petitioner

to file tax returns for 2005 and 2006.1   The Appeals officer

emphasized that in order for collection alternatives, such as an

installment agreement or an OIC to be considered, petitioner had

to provide the requested information and file her 2005 and 2006

tax returns.

     On June 10, 2007, petitioner sent a response to the Appeals

officer, stating that she did not understand why her case could

not be transferred to her local Appeals Office, and requesting

the specific reasons her case did not qualify for transfer.

Petitioner also stated that she was unable to receive personal

phone calls during the scheduled section 6330 hearing time, but

she was willing to proceed with a correspondence conference “once

[she] received the answers to [her] questions.”2

     On June 14, 2007, the Appeals officer called petitioner for

the scheduled telephone hearing, but petitioner was unavailable.


     1
      Respondent’s May 10, 2007, letter refers to the filing of
petitioner’s 2004 and 2005 tax returns. However, in respondent’s
May 22, 2007, correspondence and pretrial memorandum, respondent
requests that petitioner file returns for 2005 and 2006.
Petitioner does not raise this issue.
     2
      Petitioner’s June 10, 2007, letter was received, stamped,
and dated by the Appeals Office on June 13, 2007, and stamped
received by the “Fresno Appeals Campus” on June 14, 2007.
However, in the Appeals officer’s case activity report, the
Appeals officer does not acknowledge receipt of the letter.
                                - 6 -

The Appeals officer left a message for petitioner, asking her to

contact the Appeals Office.

     On September 18, 2007, the Appeals officer issued to

petitioner a notice of determination regarding the proposed levy

action for 2002 and 2003. In the notice of determination the

Appeals officer stated that petitioner did not provide the

requested information.3   Also, the Appeals officer acknowledged

that although petitioner did respond to the Government’s attempts

to collect the balance owed, she offered no collection

alternatives during the appeals process, nor did she present

information that would warrant withdrawal of the filed notice of

intent to levy.

                              Discussion

     Under section 6330(a), a taxpayer is entitled to notice and

opportunity for a hearing before levy action is taken by the

Commissioner in the process of collecting unpaid Federal taxes.

Upon request, a taxpayer is entitled to a fair section 6330

hearing conducted by an impartial Appeals officer.   Sec.

6330(b)(1), (3).   The section 6330 hearing does not need to be

conducted face to face; a taxpayer may receive a fair hearing by

telephone or through written correspondence.   Sec. 301.6330-

1(d)(2), Q&A-D7, Proced. & Admin. Regs.



     3
      At trial petitioner admitted that during the appeals
process she had not provided the requested documentation.
                               - 7 -

     When conducting a section 6330 hearing, the Appeals officer

is required to:   (1) Obtain verification from the Secretary that

the requirements of applicable law and administrative procedure

have been met; (2) consider certain issues raised by the taxpayer

such as collection alternatives; and (3) consider whether any

proposed collection action balances the need for the efficient

collection of taxes with the legitimate concern of the taxpayer

that any collection action be no more intrusive than necessary.

Sec. 6330(c).

     Section 6330(c) also prescribes the matters that a taxpayer

may raise at a section 6330 hearing.   Under section

6330(c)(2)(A), the taxpayer may raise any relevant issue relating

to the unpaid tax or the proposed levy including:   (1)

Appropriate spousal defenses; (2) challenges to the

appropriateness of collection actions; and (3) offers of

collection alternatives, which may include an OIC. “The decision

to entertain, accept or reject an offer in compromise is squarely

within the discretion of the appeals officer and the IRS in

general.”   Kindred v. Commissioner, 454 F.3d 688, 696 (7th Cir.

2006).

     Although section 6330(c)(2)(A) provides taxpayers faced with

lien or levy actions the right to offer collection alternatives

during the section 6330 hearing process, this right carries with

it certain obligations.   See Kindred v. Commissioner, supra.
                                  - 8 -

Section 301.6330-1(e)(1), Proced. & Admin. Regs., requires

taxpayers to provide all relevant information requested by the

Appeals Office, including financial statements, for its

consideration of the facts and issues involved in a section 6330

hearing.    Section 301.6330-1(d)(2), Q&A-D8, Proced. & Admin.

Regs., provides:

     A face-to-face * * *[section 6330 hearing] concerning a
     collection alternative, such as an installment
     agreement or an * * * [OIC], will not be granted unless
     other taxpayers would be eligible for the alternative
     in similar circumstances. For example, because the IRS
     does not consider * * * [OICs] from taxpayers who have
     not filed required returns or have not made certain
     required deposits of tax, as set forth in Form 656,
     “Offer in Compromise,” no face-to-face conference will
     be granted to a taxpayer who wishes to make an * * *
     [OIC] but has not fulfilled those obligations. * * *
     [Emphasis added.]

     The Court has jurisdiction to review the Commissioner’s

determination.    Sec. 6330(d).   When the validity of the

underlying tax liability is not at issue, the Court reviews the

Appeals officer’s determination under the abuse of discretion

standard.    Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza

v. Commissioner, 114 T.C. 176, 181-182 (2000).     In doing so, the

Court does not conduct an independent review of what would be an

acceptable OIC.    Rather, the Court reviews only whether the

Appeals officer’s decision to issue the notice of determination

without reviewing petitioner’s proposed OIC was arbitrary,

capricious, or without sound basis in fact or law.     See Woodral

v. Commissioner, 112 T.C. 19, 23 (1999).
                               - 9 -

     Petitioner argues that she was denied a section 6330 hearing

in direct violation of section 6330(b)(1) and therefore was not

allowed to offer collection alternatives such as an OIC.    The

Appeals officer, however, advised petitioner that all requested

documents had to be received before consideration of petitioner’s

collection alternatives.   Petitioner has a history of not timely

filing returns and not paying her Federal income taxes.

Consequently, because petitioner did not comply with the requests

to provide all required documentation, the Appeals officer was

not required to and did not transfer petitioner’s case to her

local Appeals Office or conduct a face-to-face hearing.    Sec.

301.6330-1(d)(2), Q&A-D8, Proced. & Admin. Regs.

     The Appeals officer sent a letter scheduling the telephone

section 6330 hearing for June 14, 2007.   In her June 10 letter

petitioner requested a correspondence hearing, stating that she

was unable to receive personal phone calls at work and therefore

would be unavailable for the telephone section 6330 hearing.      On

the date and time of the telephone section 6330 hearing, the

Appeals officer called petitioner, but she was unavailable.

Assuming arguendo that the Appeals officer was unaware4 that

petitioner was unable to receive phone calls during the scheduled

telephone section 6330 hearing time or that petitioner requested

a hearing by correspondence, her case was not administratively


     4
      See supra note 2.
                                  - 10 -

closed until 3 months after the scheduled telephone hearing.

Thus, petitioner had notice and ample opportunity to submit the

Form 433-A and to file her 2005 and 2006 tax returns before her

case was administratively closed, but she failed to do so.         See

Roman v. Commissioner, T.C. Memo. 2004-20 (reasonable to issue

adverse section 6330 determination when, after 6 weeks, taxpayer

had failed to submit information requested with respect to an

OIC).

       It is well within the Appeals officer’s discretion to

require that petitioner be in full compliance before accepting an

OIC.       See Gregg v. Commissioner, T.C. Memo. 2009-19; Otto’s E-Z

Clean Enters., Inc. v. Commissioner, T.C. Memo. 2008-54; Corona

Pathology Servs., Inc. v. Commissioner, T.C. Memo. 2003-120.         The

Appeals officer was under no obligation to consider petitioner’s

OIC without having received the requested documents.5      Thus,

there was a reasonable basis for the Appeals officer’s

determination.      Therefore, the Court finds that petitioner was

afforded a fair and meaningful opportunity for a section 6330

hearing and that the Appeals officer did not abuse her

discretion.      See Morlino v. Commissioner, T.C. Memo. 2005-203

(upholding the Commissioner’s determination to proceed by levy,

when the taxpayer was given a little over a month to provide the


       5
      Petitioner is still free, having provided the appropriate
information, to submit an offer-in-compromise.
                             - 11 -

questionnaire and OIC form to the Appeals officer but failed to

do so).

     The Appeals officer verified that all requirements of

applicable law or administrative procedure have been met and

balanced the need for the efficient collection of taxes with

petitioner’s legitimate concern that the collection action be no

more intrusive than necessary.   See sec. 6330(c)(1), (3)(C);

Tufft v. Commissioner, T.C. Memo. 2009-59.   Accordingly, the

Court holds that respondent’s proposed levy should be sustained.

     Other arguments made by the parties and not discussed herein

were considered and rejected as irrelevant, without merit, or

moot.

     To reflect the foregoing,


                                         Decision will be entered

                                    for respondent.
