                         T.C. Memo. 2015-107



                   UNITED STATES TAX COURT



      QUALITY SOFTWARE SYSTEMS INC., Petitioner v.
    COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 14008-11L.                          Filed June 11, 2015.



       P petitioned for review of a determination by the Internal
Revenue Service Appeals Office upholding R's filing of a notice of
Federal tax lien (NFTL) and rejecting P's proposed collection
alternative. P's alternative would have reinstated an offer-in-
compromise agreement that was terminated on account of P's breach
of the condition requiring P, for five years, to file all returns timely
and to pay all taxes timely.

      Held: P breached the agreement, and R was within his rights to
terminate it, to reinstate unpaid tax, and to move to collect the unpaid
tax by filing the NFTL.

       Held, further, remanded to Appeals Office to explain its basis
for rejecting P's collection alternative.
                                         -2-

[*2] Henry F. Furst, for petitioner.

      Marco Franco, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      HALPERN, Judge: This case is before the Court to review a determination

(determination) made by the Internal Revenue Service (IRS) Appeals Office

(Appeals) that (1) respondent had properly and appropriately filed a notice of

Federal tax lien (NFTL) to collect petitioner's unpaid employment tax liability and

(2) Appeals would not, as a collection alternative, reinstate an agreement

(agreement) accepting petitioner's offer-in-compromise (OIC). The terms of the

agreement were that respondent would accept a partial payment of petitioner's

employment tax liability if, among other things, petitioner complied for five years

with all provisions of the Internal Revenue Code (Code) relating to filing its

returns and paying its required taxes. Respondent had terminated the agreement

and reinstated the unpaid tax liability on account of petitioner's breach of that

condition. Petitioner assigns error to the determination on the grounds that

Appeals abused its discretion in refusing to reinstate the agreement and not

withdrawing the NFTL.
                                         -3-

[*3] Unless otherwise indicated, all section references are to the Code of 1986,

as amended. All dollar amounts have been rounded to the nearest dollar. We

review the determination pursuant to sections 6320(c) and 6330(d)(1).

                                FINDINGS OF FACT

      The parties have stipulated certain facts and the authenticity of certain

documents. The facts stipulated are so found, and the documents stipulated are

accepted as authentic. When petitioner filed the petition, its principal place of

business was in New Jersey.

OIC and Agreement

      On February 23, 2005, respondent accepted petitioner's offer to pay

$360,000 in compromise of its substantially greater unpaid employment tax

liability for certain taxable periods that ended in 2000 and 2002. Petitioner had

made the OIC on the basis of doubt as to collectibility; i.e., that it did not have

sufficient assets and income to pay the full amount it owed. The agreement

resulting from respondent's acceptance of the OIC provides, among other things,

that petitioner will comply with all provisions of the Code relating to filing its

returns and paying its required taxes for five tax years from the date of the

agreement. In the event of petitioner's default, the agreement provides that
                                         -4-

[*4] respondent can reinstate the unpaid amount of tax and collect it along with

interest.

Petitioner's Compliance History

       Respondent maintains an organization, the Centralized OIC Unit (COIC

Unit), to monitor compliance with accepted OICs. As an employer, petitioner was

obligated to file quarterly employment tax returns on Form 941, Employer's

Quarterly Federal Tax Return, and to make periodic deposits of employment taxes.

From July 2006 through March 2009, petitioner breached the agreement on several

occasions by not timely filing Form 941 or by not timely making its required tax

deposits. Respondent's records indicate that, on four occasions, in response to

petitioner's breach of the agreement, the COIC Unit sent to petitioner what

respondent characterizes as a "potential default letter" and that, on August 12,

2009, the unit sent to petitioner what respondent characterizes as a "default

letter".1 On September 3, 2009, respondent terminated the agreement.

       1
        The term "default" is defined in relevant part as: "The omission or failure
to perform a legal or contractual duty". Black's Law Dictionary 480 (9th ed.
2009). With respect to OICs, the IRS uses the term in two different ways: (1) as
modified by the adjective "potential", to signify that a taxpayer is not in
compliance with his obligations under an accepted OIC but that the IRS is not
ready to terminate the agreement, see, e.g., Internal Revenue Manual (IRM) pt.
5.8.9.3(1)(b) (Jan. 1, 2015), and (2) to signify the termination of the agreement,
see, e.g., id. pt. 5.8.9-4 (Sept. 23, 2008) (Default Letter). We will use the term
                                                                         (continued...)
                                            -5-

[*5] The following table summarizes that activity.

            Date                              Activity

          7/31/2006    Petitioner does not timely file Form 941 for quarter ended
                       6/30/2006.
      10/25/2006       COIC sends potential default letter referencing failure to file
                       return.
      12/15/2006       Petitioner files return.

       9/30/2007     Balance due on account of $265 penalty for late deposits.
      12/20/2007     COIC sends potential default letter referencing failure to pay
                     penalty.
      12/27/2007     Petitioner makes payment.
      __________________________________________________________________
       1/30/2009     Petitioner does not timely file Form 941 for quarter ended
                     12/31/2008.
       3/31/2009     COIC sends potential default letter referencing failure to file
                     return.
        4/9/2009     Petitioner files return.

          4/30/2009    Petitioner does not timely file Form 941 for quarter ended
                       3/31/2009.
          6/25/2009    Respondent claims the COIC Unit sent potential default letter
                       referencing failure to file return. Petitioner claims it did not
                       receive the letter.
          7/19/2010    Petitioner files return.

          8/12/2009    Respondent claims the COIC Unit sent default letter, stating
                       that petitioner had failed to file a Form 941 for the quarter
                       ended 3/31/2009 and had failed to pay a $344 penalty
                       occasioned by a late employment tax deposits for the quarter
                       ended 12/31/2008. Petitioner claims it did not receive the
                       letter.
           9/3/2009    Respondent terminates the agreement.


      1
        (...continued)
"breach" to mean a failure to comply with the terms of an accepted OIC and the
term "terminate" to refer to an IRS decision to take adverse action, such as to
reinstate the original tax obligation, on account of a breach. See Trout v.
Commissioner, 131 T.C. 239, 258 n.1 (2008) (Marvel, J., concurring).
                                         -6-

[*6] Reinstatement of Liability and the NFTL

      On September 28, 2009, on account of having terminated the agreement,

respondent reinstated the unpaid amount of petitioner's employment tax liability

for 2000, which resulted in a reinstated assessment of $138,745 of previously

assessed tax and the assessment of $70,188 of statutory interest, for total

assessments of $208,933. As of the petition filing date, respondent had not made a

determination with respect to the amounts of petitioner's unpaid employment tax

liabilities for the taxable periods ended in 2002, which were also covered under

the agreement.

      On May 27, 2010, respondent filed an NFTL and issued to petitioner a

Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320

(notice), with respect to petitioner's unpaid employment tax liabilities for the

quarters ended December 31, 2000 ($208,933), and December 31, 2008 ($344).

Rectification

      Petitioner filed the missing Form 941 for the quarter ended March 31, 2009,

on July 19, 2010, and paid the $344 penalty on August 26, 2010.

Collection Due Process Hearing

      On June 4, 2010, in response to the notice, petitioner filed a Form 12153,

Request for a Collection Due Process or Equivalent Hearing, referencing the
                                         -7-

[*7] quarter ended December 31, 2000, and stating as the basis for the hearing

request respondent's filing of the NFTL. In response to the question on the form

asking why petitioner disagreed with the filing of the NFTL, petitioner referenced

a letter it said was attached to the form. However, no letter accompanied the form

that respondent received. Petitioner's request was ultimately assigned to

Settlement Officer Jesse D. Voysest to conduct the hearing.

      On November 8, 2010, Mr. Voysest held a face-to-face hearing with

Michael G. Falk, petitioner's representative. The only issues they discussed were

(1) whether the agreement should be reinstated and (2) whether petitioner received

the notices of potential default. Mr. Falk argued that petitioner's breaches of the

agreement causing respondent to terminate it (i.e., failing to file one quarterly

return and to pay a $344 penalty) were de minimis and that it would be an abuse of

Appeals' discretion not to reinstate it. On November 8, 2010, Mr. Voysest

recorded the following in his case activity record.

      Held a face to face conference with the TP's [taxpayer's] POA
      [individual having the taxpayer's power of attorney].

      Essentially, although I agree that a reinstatement of the TP's offer is a
      viable resolution, technically, all proper procedures were followed in
      defaulting the offer.

      I agreed to run this past COIC to determine if there are any
      reinstatement options.
                                       -8-

[*8] On November 12, 2010, after a discussion with someone in the COIC Unit,

Mr. Voysest recorded: "[S]ince the TP clearly defaulted there is no procedural

basis for reinstatement."

      On March 29, 2011, he made an entry in the case activity record that

summarizes his thinking.

      Reviewed COIC case history which clearly indicates that the TP's
      OIC was properly defaulted as the proper notification (Potential
      Default Letter, Letter 2909C) was mailed to the TP on 12/18/07.
      However, there appears to be unresolved issues regarding whether or
      not the TP's POA was propoerly [sic] notified.

      The TP's offer was accepted on 11/29/04 [sic 2/23/2005]. The TP's
      offer was defaulted on 8/12/09 based on non-compliance with the five
      year rule. During the last year of compliance monitoring the TP
      incurred an FTD [Federal tax deposit] penalty (5/18/09) in the amount
      of $343.81 which was fully satisfied on 8/26/10. In addition, Form
      941 for the 1st quarter of 2009 was not filed in a timely manner. The
      tax return was due by 4/15/09. The return was filed on 7/21/10. All
      FTD's were timely made and no penalties were incurred.

      At this point although the TP has technically defaulted I need to
      consider the hazards of litigation since the TP's CDP [collection due
      process] request was filed in a timely manner. My concern is whether
      or not the US Tax Court may find that an abuse of discretion has
      occurred by not reinstating the TP's offer since the actions which
      caused·the default were de-minimus [sic] and were rectified.
      Essentially, would it be fair to reinstate the TP's offer? In this
      instance I believe it would be.

      Mr. Voysest sought further guidance from an Appeals analyst. On April 25,

2011, he recorded that he had received a response from the analyst, who advised
                                          -9-

[*9] "that reinstatement of the TP's offer should be denied as there was a genuine

default of the TP's offer." He then recorded his conclusion: "Therefore,

[c]ompliance must be sustained." He later advised Mr. Falk of his decision to

deny reinstatement of the agreement and that Appeals would issue a negative

determination.

      On May 12, 2011, by a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (notice of determination), Appeals

Team Manager Darryl Lee provided petitioner with the following "Summary of

Determination":

      Based on the available facts, the applicable laws and administrative
      procedures were followed and the filing of the Notice of Federal Tax
      Lien was proper and appropriate.

      Your request for the reinstatement of your offer in compromise has
      been denied. It was determined that you did not comply with the
      compliance terms and provisions of Form 656, Offer in Compromise.

      Enclosed with the notice of determination was an attachment apparently

written by Mr. Voysest, which describes the grounds for the determination. It

begins with Mr. Voysest's recommendations, which repeat verbatim Mr. Lee's

summary of the determination. It states that, by the hearing request, petitioner

requested the reinstatement of the agreement as a collection alternative. It states

that petitioner did not dispute its liability for the tax and raised no further issues.
                                        - 10 -

[*10] Under the heading "Balancing of need for efficient collection with taxpayer

concern that the collection action be no more intrusive than necessary.", it states

the following.

      The lien action balanced the need for the efficient collection of taxes
      and is no more intrusive than necessary.

      Based on a review of the case activity records and case transcripts the
      lien action was necessary in order to protect the government's interest.

Petition

      Petitioner timely filed the petition on June 13, 2011. Petitioner assigned as

error that the IRS failed to properly exercise its discretion to permit an OIC to be

reinstated. In support of its assignment of error, petitioner avers, among other

things, that the IRS did not prove that petitioner received all appropriate notices

concerning the default and that reinstatement of $289,933 of tax is a penalty

disproportional to the harm to the IRS of one missed return and the late payment

of a small tax penalty.2 Respondent denied both petitioner's assignment and its

described averments.




      2
        It is not clear where the amount of $289,933 comes from. We are
reviewing only the determination related to petitioner's unpaid 2000 Form 941
liability, assessments of which (including interest) the parties have stipulated total
$208,933.
                                        - 11 -

[*11]                                OPINION

I.      Introduction

        Section 6321 imposes a lien for unpaid Federal taxes. Section 6323

provides that the lien imposed by section 6321 is not valid against certain persons

until notice of the lien (the NFTL) is filed in accordance with rules provided.

Section 6320(a) provides that, after the Commissioner has filed the NFTL, the

Commissioner must notify the taxpayer of the fact of the filing and, among other

things, his right to request a hearing. If the taxpayer requests a hearing, the

hearing is to be conducted by Appeals, and the Appeals officer conducting the

hearing must verify that the requirements of any applicable law or administrative

procedure have been met. Secs. 6320(b) and (c), 6330(c)(1). The taxpayer

requesting the hearing may raise "any relevant issue" relating to the unpaid tax or

the Commissioner's collection action, including "challenges to the appropriateness

of collection actions" and "offers of collection alternatives", including "an offer-

in-compromise." Sec. 6330(c)(2)(A)(ii) and (iii).

        Following the hearing, the Appeals officer must determine whether the

collection action is to proceed, taking into account the verification the Appeals

officer has made, the issues raised by the taxpayer at the hearing, and whether the

collection action "balances the need for the efficient collection of taxes with the
                                        - 12 -

[*12] legitimate concern of the * * * [taxpayer] that any collection action be no

more intrusive than necessary." Sec. 6330(c)(3). Section 6330(d)(1) specifies that

we have jurisdiction to review such determinations. Where the taxpayer's

underlying tax liability is not at issue, which it is not here, we review such

determinations for abuse of discretion. E.g., Isley v. Commissioner, 141 T.C. 349,

361 (2013). An abuse of discretion occurs if the Appeals officer exercises his

discretion arbitrarily, capriciously, or without sound basis in fact or law. See id.

II.   Parties' Arguments

      A.     Petitioner's Arguments

      Petitioner argues that Mr. Voysest had discretion to reinstate the agreement

and, by not doing so, he abused that discretion. It argues Mr. Voysest erred in

determining that maintaining the NFTL balanced the need for efficient collection

of taxes and petitioner's legitimate concern that any collection action be no more

intrusive than necessary. It also argues that respondent's failure to send a notice of

potential default supports reinstatement of the agreement. Finally, it argues that

its late payment of a $344 penalty does not constitute grounds for terminating the

agreement.
                                        - 13 -

[*13] B.     Respondent's Arguments

      Respondent argues that Appeals did not abuse its discretion by not

reinstating the agreement. He cites 13 Williston on Contracts, sec. 39:32 (4th ed.

2000), for the proposition that, "[o]nce a contract is breached, the injured party can

choose to either continue the contract or terminate the contract." He concedes, as

he must, that generally, the injured party can bring a terminated contract back into

effect: "In the context of an OIC", he states, "this means that respondent has the

legal right to * * * bring a terminated OIC back into effect after it [sic] previously

decided to terminate it." He adds: "However, despite the fact that respondent has

a legal right to reinstate a terminated OIC, respondent has no obligation or

expectation to exercise this right." "[T]he decision to reinstate an OIC that was

terminated due to a taxpayer's breach", he continues, "rests solely within

respondent's discretion." He states: "[B]oth respondent and its Appeals Office

have consistently maintained a policy that they will not reinstate an OIC that was

properly defaulted after a taxpayer breached its terms and conditions." (Emphasis

added.) Particularizing his argument to the facts of this case, respondent states:

            The Appeals Office's decision declining to reinstate the OIC
      was not unexpected, as it was consistent with the Appeals Office's
      regularly practiced policy regarding terminated offers. The Appeals
      Office did not deviate from its policy in any way, nor did Appeals
                                        - 14 -

      [*14] treat the petitioner in this case differently than they would have
      treated any other similarly situated taxpayer.

Apparently using the adverb "fairly" to mean evenhandedly, respondent concludes

his argument thus: "Petitioner does not allege that Appeals treated it unfairly.

* * * While petitioner may be unhappy with the final outcome of this case, there

was no abuse of discretion."

      He argues that Mr. Voysest properly balanced the need for efficient

collection with petitioner's legitimate concern that collection be no more intrusive

than necessary because, other than reinstating the agreement, petitioner offered no

collection alternative.

      He argues that petitioner's allegation that it did not receive all the notices is

"immaterial", since the agreement specifically states that respondent could

terminate the agreement upon breach without further notice of any kind. He

argues that "[a]t most", the IRM states that the COIC unit should "make an

attempt" to secure compliance by sending warning notices before terminating an

OIC agreement but that the IRM does not require such notices to be sent, and,

moreover, petitioner cannot rely on the IRM.

      Finally, he argues that petitioner breached the agreement no fewer than five

times, all of which could be grounds to terminate the agreement. Respondent
                                        - 15 -

[*15] terminated the agreement because of (1) petitioner's failure to file timely its

Form 941 for the first quarter of 2009, and (2) petitioner's failure to make a timely

Federal tax deposit for the fourth quarter of 2008, which resulted in the assessment

of the $344 penalty. While respondent believes the latter failure also constitutes a

breach of the agreement, respondent argues the former failure was clearly a breach

sufficient to terminate the agreement on its own.

III.   Discussion

       A.    Introduction

       Petitioner assigned as error only that Appeals failed properly to exercise its

discretion in not permitting the agreement to be reinstated. It is, however, clear

from its averments in support of the assignment and from its arguments on brief

that it also challenges the appropriateness of respondent's NFTL filing and Mr.

Voysest's determination to maintain the NFTL.3 We will deal first with

petitioner's challenge to the appropriateness of the NFTL filing. We will then

consider Mr. Voysest's exercise of discretion. For the reasons stated infra, we




       3
      Generally, we will refer to Appeals as the actor making the determination.
When we wish to discuss Mr. Voysest's personal involvement, we will refer to him
by name. It is clear to us that the determination embodied his considerations and
recommendations.
                                         - 16 -

[*16] need not now deal with petitioner's challenge of Appeals' determination to

maintain the NFTL.

      B.     Appropriateness of Respondent's Filing the NFTL

      On September 3, 2009, respondent terminated the agreement, and, on

September 28, 2009, he reinstated petitioner's unpaid 2000 employment tax

liability. He reinstated the previous assessment of tax and assessed interest, for

total assessments of $208,933. By May 27, 2010, petitioner had not paid that sum,

nor had it paid $344 owed for the last quarter of 2008, and, on that date, respondent

took action to collect both amounts by filing an NFTL. Petitioner challenges the

appropriateness of respondent's filing the NFTL, at least to the extent of the

$208,933, on the grounds that respondent had unlawfully terminated the agreement.

Had he not terminated the agreement, petitioner argues, there would have been no

actionable assessments totaling $208,933, and, without those actionable

assessments, no lien notice for $208,933 would have been filed. Therefore, it

concludes, the NFTL, at least to the extent of $208,933, was an inappropriate

collection action.

      The parties have stipulated, and we have found, that respondent terminated

the agreement as a result of petitioner's failures (1) to file the Form 941 for the

quarter ended March 31, 2009, and (2) to pay a $344 penalty for a late employment
                                         - 17 -

[*17] tax deposit for the quarter ended December 31, 2008. The agreement

specifically provides that, for five years following the date of the agreement,

February 23, 2005, petitioner would comply with all provisions of the Code

relating to filing its returns and paying its required taxes. The agreement further

provides that, upon petitioner's breach of its terms, respondent could reinstate the

unpaid amount of tax and collect it. In Trout v. Commissioner, 131 T.C. 239, 254

(2008), we held that the timely-filing-and-paying requirements of an OIC similar to

the one here in question were express conditions of the resulting agreement with

the IRS, requiring strict compliance to avoid breach and termination of the

agreement. Petitioner cannot argue that it did not breach the agreement by failing

timely to file the Form 941 for the quarter ended March 31, 2009. It argues that its

failure to pay the $344 penalty did not breach the agreement because the agreement

required it only to pay all required taxes and did not also require it to pay all

required penalties. Respondent points out that the $344 penalty was assessed only

because petitioner did not timely make a Federal tax deposit, which it was required

to do under the applicable provisions of the Code relating to paying its taxes. See

sec. 6656(a) (providing that the penalty for failure to make Federal tax deposits is

applied against taxpayers who fail to make a deposit of tax as required under the

Code or by regulations of the Secretary). Petitioner breached the agreement both
                                         - 18 -

[*18] by failing timely to file a required return and by failing timely to make a

Federal tax deposit. Respondent was within his rights under the agreement to

terminate the agreement and to reinstate the unpaid tax, along with assessing

interest. Respondent was also within his rights to act to protect the Government's

interest by filing an NFTL. See sec. 6323(a). We see no error in respondent's

action in that regard.

      C.     Mr. Voysest's Exercise of Discretion

      The parties have joined issue as to whether Appeals failed properly to

exercise its discretion by not permitting the agreement to be reinstated. The notice

of determination states only: "Your request for reinstatement of your offer in

compromise has been denied. It was determined that you did not comply with the

compliance terms and provisions of Form 656, Offer in Compromise." The

Voysest attachment to the notice offers no further explanation. Mr. Voysest's case

activity record, part of the administrative file, indicates his sympathy for reinstating

the agreement. On November 8, 2010, he recorded: "I agree that a reinstatement

of the TP's offer is a viable resolution". Shortly thereafter, on the basis of a

discussion with someone in the COIC Unit, he recorded his conclusion that,

because the agreement had been terminated, there was no procedural basis for

reinstatement. On March 29, 2011, he considered the grounds on which the
                                         - 19 -

[*19] agreement had been terminated: It had been terminated during the last year

of petitioner's five-year compliance term because petitioner had been assessed a

Federal tax deposit penalty of $344, which it had paid, and it had not timely filed

Form 941, for one quarter, which it had subsequently filed. He recorded his

concerns that those breaches of the agreement were de minimis and had been

rectified. He worried that, for those reasons, the Tax Court would find that

Appeals had abused its discretion in not reinstating the agreement. He concluded

his March 29 entry with a rhetorical question (which he answered): "Essentially,

would it be fair to reinstate the TP's offer? In this instance I believe it would be."

On further consultation with an Appeals colleague, he concluded that reinstating

the agreement was not an option since the agreement had properly been terminated.

The determination followed.

      A taxpayer may, in a section 6330 hearing, raise a collection alternative, and

collection alternatives include offers-in-compromise. Sec. 6330(c)(2)(A)(iii). On

brief, respondent concedes that Appeals faced no legal impediment to reinstating

the agreement; to do so, he states, "rests solely within respondent's discretion". As

a matter of policy, however, respondent argues, neither he nor Appeals will

reinstate an OIC agreement that was terminated because of a taxpayer's breach of

the agreement's terms and conditions. We thus conclude that, practically speaking,
                                         - 20 -

[*20] Mr. Voysest had no discretion to reinstate the agreement. Notwithstanding

his apparent conclusion that the equities weighed in favor of reinstatement, he

determined that the only recommendation that he could make was that Appeals

reject petitioner's collection alternative of reinstating the agreement.

      While there may be good reason for Appeals' blanket rejection of the

reinstatement of OIC agreements in cases of breach, we cannot tell that from the

record or from respondent's argument. It is not even clear such a policy exists

despite Mr. Voysest's determination and respondent's contentions on brief. Cf.

Trout v. Commissioner, 131 T.C. at 255 ("The Appeals officer understood * * *

that he had the discretion to excuse the breach of the express condition and

reinstate the OIC. He chose not to.").

      If such a policy does exist, it is not readily apparent what reasons or

principles justify the lack of an exception to reinstatement in all circumstances of

breach, especially given the individualized analysis afforded the initial termination

decisions of breached OIC agreements. See, e.g., IRM pt. 5.8.9.3 (Jan. 1, 2015)

(procedures for handling breached but not yet terminated OIC agreements, referred

to as "Potential Default Cases"); supra pp. 4-5 (petitioner breached several times

yet respondent did not terminate the agreement). And if there are no reasons or

principles justifying the policy, we point out that one definition of "arbitrary" is,
                                         - 21 -

[*21] "determined by chance, whim, or impulse, and not by necessity, reason, or

principle". The American Heritage Dictionary of the English Language 91 (5th ed.

2011). By having discretion to reinstate OIC agreements, but choosing never to

exercise that discretion, without providing any sort of justification, Appeals may be

abusing its discretion. In this instance, Appeals has excused itself from stating

facts and reasons that respond to the evidence and arguments of petitioner and has

deprived us of the opportunity for thoughtful judicial review. Cf. Estate of Roski

v. Commissioner, 128 T.C. 113, 128-131 (2007) ("By adopting a bright-line rule in

every case, the Commissioner has shirked his administrative duty to state findings

of fact and reasons to support his decisions that are sufficient to reflect a

considered response to the evidence and contentions of the losing party and to

allow for thoughtful judicial review."); see also Harborlite Corp. v. Interstate

Commerce Comm'n, 613 F.2d 1088, 1092 (D.C. Cir. 1979) (on which we relied in

Estate of Roski).

      Appeals retains jurisdiction over this case, see sec. 6330(d)(2), and we will

remand it so that, if Appeals, on further consideration, determines not to reinstate

the agreement, it can include in its determination a full explanation of its reasons,

whether those reasons are particular to the facts of this case or whether those

reasons amount to a policy not to reinstate OIC agreements that have been
                                        - 22 -

[*22] terminated without regard to the facts of a particular case. Our remand will

also give the parties the opportunity to consider whether Mr. Voysest's communica-

tions with the COIC Unit constituted prohibited ex parte communications between

Appeals and other IRS employees. See Rev. Proc. 2000-43, sec. 3, Q&A-6, 2000-2

C.B. 404, 406, amplified, modified, and superseded by Rev. Proc. 2012-18, sec.

2.03(10)(a), 2012-10 I.R.B. 455, 460.

      D.    Remaining Issues

      We need not address any unaddressed issues until this case returns to us

following remand.

IV.   Conclusion

      To reflect the foregoing,


                                                 An appropriate order will be issued.
