                          T.C. Memo. 2004-24



                        UNITED STATES TAX COURT



      VICKI S. PLESS AND COY E. PLESS, JR., Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1917-03L.              Filed February 3, 2004.



     Vicki S. Pless and Coy E. Pless, Jr., pro se.

     James R. Rich, for respondent.



                MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:     This case was commenced in response to a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 and a Notice of Determination Concerning

Your Request for Relief from Joint and Several Liability Under

Section 6015.    The issue for decision is whether there was an

abuse of discretion in issuing the notices of determination
                                 - 2 -

without conducting a hearing requested by petitioners under

section 6330.   Unless otherwise indicated, all section references

are to the Internal Revenue Code.

                         FINDINGS OF FACT

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioners resided in South Carolina at the time that their

petition was filed.

     Petitioners filed a joint Federal income tax return for

1998, reporting taxable income of $91,261, taxes of $28,113, and

an unpaid balance of $16,058.    The return described the

occupation of petitioner Coy E. Pless, Jr. (Mr. Pless), as

chiropractor and the occupation of petitioner Vicki S. Pless

(Ms. Pless) as office manager.    The amount shown as due was not

paid with the 1998 return.   As of the time of trial in October

2003, petitioners had not filed Federal income tax returns for

any years subsequent to 1998.

     On September 6, 2000, the Internal Revenue Service (IRS)

sent to petitioners a Notice of Federal Tax Lien Filing and Your

Right to a Hearing Under IRC 6320 with respect to unpaid taxes

for 1998 in the amount of $16,616.72.    On October 2, 2000,

Mr. Pless submitted a Form 12153, Request for a Collection Due

Process Hearing, in which he disagreed with the proposed action

as “Due to Business Failure”.    On October 3, 2000, Ms. Pless
                                 - 3 -

submitted a Form 12153, in which she disagreed with the proposed

collection action because of the “Innocent Spouse Rule”.   Ms.

Pless also submitted a Form 8857, Request for Innocent Spouse

Relief.   In the Form 8857, Ms. Pless requested equitable relief;

i.e., relief from joint and several liability under section

6015(f) with respect to the underpayment of the tax shown on the

1998 return.

     On June 13, 2001, an Appeals officer for the IRS sent to

petitioners a letter referring to the claims for relief that had

been submitted by them.    The letter stated:

     Your request for a Due Process Hearing will be
     scheduled after the innocent spouse claim has been
     worked. The Due Process Hearing may be in person or
     over the phone. Please let me know which you prefer
     when you are contacted to schedule your Due Process
     Hearing.

                  *    *     *    *      *   *   *

     If you plan to propose collection alternatives, certain
     financial information is needed in order to determine
     the merits of any collection alternative proposal you
     make. In this regard, if you plan to propose
     collection alternatives, please complete the enclosed
     Form 433-A and Form 433-B (if applicable) and return
     them to me as soon as possible.

     Since interest continues to accrue while your case is
     being considered, you may wish to pay as much as you
     can as soon as you can. If you have questions or
     concerns, please contact me at the above address, fax
     or telephone number.

Also on June 13, 2001, the Appeals officer sent to an “Innocent

Spouse Coordinator” Ms. Pless’s Form 8857, noting:   “Ms. Pless

did not provide any explanation as to why she feels she qualifies
                               - 4 -

for innocent spouse relief other than the information that is

reflected on the Form 8857 enclosed.”

     On August 21, 2001, a tax auditor wrote to Ms. Pless

concerning her claim under section 6015(f).    The letter stated,

among other things:   “It is important that you call me within

7 days of the date of this letter in order to arrange an

appointment.   For your convenience, the following space is

provided for you to record the appointment.”    Ms. Pless did not

call, but on August 29, 2001, the tax auditor called petitioners’

home and left a message for Ms. Pless to return the call.

Ms. Pless did not return the call.     On September 7, 2001, the tax

auditor interviewed Ms. Pless over the telephone.    After

questioning Ms. Pless about the factors considered with respect

to relief under section 6015(f), the tax auditor recommended

denial of relief because the taxpayers were still married and

living together; hardship was not shown; there was no indication

of marital abuse; there was no legal obligation (by divorce

decree or agreement) for Mr. Pless to pay the liability;

Ms. Pless had knowledge of the unpaid liability when she signed

the tax return; Ms. Pless worked periodically in Mr. Pless’s

office during 1998; Ms. Pless made some of the deposits into

personal and business bank accounts; and Ms. Pless participated

with Mr. Pless in paying the household expenses.
                                - 5 -

     On August 22, 2002, the Appeals officer again wrote to

petitioners, asking that they contact her by September 6, 2002,

to schedule a hearing.    Petitioners responded to the Appeals

officer’s letter on August 28, 2002, requesting that an “in

person hearing” be scheduled “if possible after September 2002.”

On September 9, 2002, the Appeals officer notified petitioners

that she had scheduled an appointment for a hearing on October 9,

2002.   The letter stated:   “If this date or time is not

convenient for you, please call me to reschedule this appointment

by September 20, 2002.”    On September 16, 2002, Ms. Pless wrote

to the Appeals officer, requesting that the hearing be

rescheduled “because of a conflict with my doctor’s appointments

in October.”   On October 1, 2002, the Appeals officer wrote to

petitioners, suggesting three tentative dates for the hearing, to

wit, October 24, October 28, or October 30, 2002.    That letter

also indicated that Ms. Pless would be given an opportunity to

present factors relating to her innocent spouse claim during the

hearing.

     On October 2, 2002, Ms. Pless mailed a letter dated

October 1, 2002, to the Appeals officer, stating:

     My husband had an unexpected death in his family that
     resulted in his being hospitalized for a stress related
     illness. Therefore it will be necessary to schedule
     hearing date in November, preferably November 9th or
     November 16th, 2002. This will also allow me to meet
     my doctor’s appointments in October.
                               - 6 -

     On October 28, 2002, the Appeals officer prepared a

memorandum reviewing the facts, applicable law and procedure, and

chronology and concluding that the proposed collection action be

sustained.   Her memorandum stated in part:

     It should be noted that November 9, 2002, and
     November 16, 2002, are both Saturdays. The Internal
     Revenue Service offices in South Carolina are not open
     on Saturdays. When I offered to let Mr. and Ms. Pless
     pick a date for the hearing, they asked that it not be
     held for the entire month of September but be put off
     until October. I honored that request and scheduled an
     appointment for October 9, 2002. When they wrote that
     that date was not convenient but did not suggest a
     convenient date, I tried to call them but they did not
     return my phone call. Then I wrote them giving them
     three different dates to choose from. To this they
     responded, again by certified mail, that none of these
     dates was convenient but either of two days that the
     office is closed in November would be a possibility.

     In the October 1, 2002, letter, I explained to Mr. and
     Ms. Pless that if they did not confirm one of the three
     hearing dates scheduled for them by October 16, 2002, I
     would make a determination in this matter based on the
     information available to me. Mr. and Ms. Pless did not
     confirm one of the dates scheduled for them. Mr. and
     Ms. Pless have been given numerous opportunities to
     schedule a collection due process hearing. Mr. Pless
     is a chiropractor. I assume his office has a telephone
     from which a mutually convenient hearing time could be
     scheduled. Mr. and Ms. Pless negated the entire month
     of September as not being convenient for them to hold
     the hearing. They negated all four hearing dates I
     scheduled for them in October since they did not
     suggest a date that would be convenient for them in
     October. Then they suggested dates on which the office
     is closed as possibilities that might be convenient for
     them.

     Since Mr. and Ms. Pless have not scheduled a hearing,
     the determination is made in this matter based on the
     information available to me.
                                 - 7 -

The Appeals officer adopted the tax auditor’s recommendation

against section 6015(f) relief.    The Appeals team manager

approved the Appeals officer’s memorandum on November 12, 2002.

The notices of determination that are the basis of this action

were sent to petitioners on January 7, 2003.

     On February 5, 2003, the Appeals officer received a letter

dated January 6, 2003, but postmarked February 3, 2003, from

Ms. Pless, which stated:

     This letter is to inform you that I am recovering from
     the cancer surgery that was performed on October 31,
     2002. I am now able to ride without pain from sitting
     and the risk of further complications. This will allow
     me to reschedule for a hearing in January or February
     2003. Previously, I had to reschedule the hearing
     because of the necessary pre-surgical evaluations that
     had led up to the April and October surgeries.

                                OPINION

     Section 6330(c) specifies the issues to be considered at the

hearing requested by petitioners as follows:

          SEC. 6330(c). Matters Considered at Hearing.--In
     the case of any hearing conducted under this section--

                 *    *     *     *       *   *   *

               (2) Issues at hearing.--

                    (A) In general.--The person may raise at
               the hearing any relevant issue relating to
               the unpaid tax or the proposed levy,
               including--

                           (i) appropriate spousal defenses;

                          (ii) challenges to the
                     appropriateness of collection actions;
                     and
                                 - 8 -

                            (iii) offers of collection
                       alternatives, which may include the
                       posting of a bond, the substitution of
                       other assets, an installment agreement,
                       or an offer-in-compromise.

                    (B) Underlying liability.--The person
               may also raise at the hearing challenges to
               the existence or amount of the underlying tax
               liability for any tax period if the person
               did not receive any statutory notice of
               deficiency for such tax liability or did not
               otherwise have an opportunity to dispute such
               tax liability.

Petitioners have not suggested any challenge to the underlying

liability that they reported on their 1998 tax return.

     Respondent objected to consideration of any testimony at

trial or any evidence as to whether Ms. Pless qualifies for

relief under section 6015(f) that was not presented during the

telephonic hearing of September 7, 2001.    The Court indicated

that the testimony would be allowed.     See Ewing v. Commissioner,

122 T.C. ___ (2004).    Although Ms. Pless was present at trial of

this case, she did not testify.    No medical records were ever

presented to respondent to corroborate Ms. Pless’s claims about

scheduling of medical appointments or hospitalization.    Mr. Pless

testified generally to financial difficulties arising from his

chiropractic practice and medical bills for Ms. Pless.    His

testimony, however, failed to explain why petitioners could not

attend a hearing at any time between August 2002 and January 2003

or the inconsistency between the letters sent prior to the

notices of determination and the letter sent after the notices of
                                 - 9 -

determination with respect to the multiple excuses for their

inability to attend a hearing.    Petitioners did not present any

proposal for payment of the unpaid balance of their tax liability

for 1998, other than an offer in Court that Ms. Pless would pay

$500 toward the balance.   Petitioners never supplied the

financial information requested in the Appeals officer’s letter

of June 13, 2001.

     Ms. Pless failed to present evidence that she would qualify

for relief from joint and several liability or any evidence

contradicting the tax auditor’s findings, which were adopted by

the Appeals officer.   Her failure to file tax returns for years

subsequent to 1998, as well as the factors considered by the tax

auditor, are factors weighing against relief.   See Rev. Proc.

2000-15, sec. 4.03(2), 2000-1 C.B. 447, 449.

     On consideration of the entire record, we conclude that

petitioners were provided several opportunities for a hearing

contemplated by section 6330, they failed to take advantage of

that opportunity, and they engaged in dilatory conduct to

postpone collection.   Moreover, we conclude that, even if the

evidence that they offered at trial of this case had been offered

at a hearing, the determination would have been the same.   Thus,

we conclude that there was no abuse of discretion in denying

Ms. Pless’s claim for relief under section 6015(f) or in

determining that the proposed collection action could proceed
                             - 10 -

pursuant to the notice of Federal tax lien with respect to

petitioners’ Federal income tax liability for 1998.


                                        Decision will be entered

                                   for respondent.
