                    T.C. Summary Opinion 2006-178



                       UNITED STATES TAX COURT



               KATHERINE ILOVAR RODRIGUEZ, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16172-05S.                Filed November 2, 2006.


     Katherine Ilovar Rodriguez, pro se.

     Tamara L. Kotzker, for respondent.



     DEAN, Special Trial Judge:    This case was heard under the

provisions of section 7463 of the Internal Revenue Code as in

effect when the petition was filed.    Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code of

1986, as amended.    The decision to be entered is not reviewable

by any other court, and this opinion should not be cited as

authority.
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     The petition in this case was 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 proposed levy

action with respect to her income tax liabilities for 1993, 1994,

and 1995.   The issue for decision is whether respondent’s

determination to proceed with collection action was an abuse of

discretion.

                            Background

     The stipulation of facts and the exhibits received into

evidence are incorporated herein by reference.   At the time the

petition was filed, petitioner resided in New York, New York.

Earlier Contact With the Internal Revenue Service

     Petitioner failed to timely file her tax returns for 1993,

1994, and 1995, and she filed them without full remittance.    In

addition to the years under consideration, petitioner has unpaid

tax liabilities for the period 1988 through 1992.   Over several

years, beginning in 1994, petitioner submitted nine offers-in-

compromise (OIC) which were rejected for one reason or another.

Petitioner feels that many employees of the Internal Revenue

Service (IRS) with whom she came into contact were insulting,

incompetent, or “threatening”.
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Appeals Conference in 2003

     In December of 2001 petitioner submitted her last OIC, along

with a request for abatement of penalties and interest.   The OIC

and the request for abatement were rejected.   The OIC was

rejected because it was determined that petitioner had sufficient

assets to fully pay her outstanding tax liabilities.   Petitioner

appealed the rejection, and the appeal was assigned to an Appeals

team located in New York, New York.    The Appeals team included a

settlement officer, Gilbert Breitberg, and a team manager, John

O’Dea.   In May 2004 the Manhattan Appeals team rejected the OIC

as well as petitioner’s request for abatement of interest and

penalties.

     In December 2003, while the Manhattan Appeals team was

considering petitioner’s requests, petitioner wrote a check for

$35,000 to the U.S. Treasury for “Payment for taxes:   1988, 1989,

1990, 1991, 1992, 1993, 1994, 1995”.   Petitioner sent the check

despite her conclusion that when she offered to pay the taxes

during a meeting with Messrs. Breitberg and O’Dea, the Appeals

team paid “no mind to our presentation”.   Initially, respondent

applied the check to the earliest taxes, including penalties and

interest.1   Petitioner wrote to respondent to complain that the

$35,000 was intended to be applied solely against her outstanding


     1
      Except with reference to deficiency procedures, under sec.
6601(e)(1), Interest Treated as Tax, references to underpaid
“tax” include interest on the tax. The term “tax” also includes
additions to the tax, additional amounts, and penalties. Sec.
6665(a)(2).
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“taxes”, not interest and penalties.     The funds were reapplied

against the unpaid tax assessed for each year, leaving unpaid the

interest and penalties for each year.

     Petitioner found the settlement officer to have been unfair,

discourteous, biased, and unprofessional, displaying an “attack

dog mentality”.

Notice of Intent To Levy

     Respondent issued to petitioner for 1993, 1994, and 1995 a

Letter 1058, Final Notice of Intent to Levy and Notice of Your

Right to a Hearing, dated July 10, 2004.     The letter advised

petitioner that the total amount due was $7,973.35.     Petitioner

timely filed her Form 12153, Request for a Collection Due Process

Hearing, under section 6330.   Petitioner stated that she did not

agree with the collection action because “The taxes for 1993,

1994, 1995 have been paid.”    She attached to the request a copy

of the check for $35,000 dated December 2003.

     Settlement Officer Carol Berger of the Manhattan office of

Appeals responded by letter to petitioner’s request for a hearing

under section 6330.   Petitioner replied, strongly objecting to

having her case heard in the same Manhattan Appeals Office where

Mr. Breitberg, who had considered and rejected her OIC and her

request for abatement, was working.

     Petitioner’s request for a section 6330 hearing was

reassigned from the Manhattan Appeals Office to the Appeals

Office in Hempstead, New York.    Settlement Officer Elissa
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Dellosso of the Hempstead Appeals Office sent petitioner a letter

describing, on the basis of the case history, the expected scope

of the hearing and what petitioner would be required to show in

order to avoid the proposed collection action.   Petitioner

replied by letter; she stated that she was “disturbed by the way

you have continued to be abusive to us taxpayers in the tone and

content of your letter.”   She also stated that it was clear from

the letter that “you are working with Mr. Breitberg and you are

going to be unfair, partial, and abusive in dealing with our

case.”   Respondent refused to further reassign petitioner’s case.

Notice of Determination

     Respondent issued a notice of determination to petitioner,

finding that she had failed to raise a relevant issue under

section 6330 and had failed to offer an acceptable alternative to

the proposed collection action.

                            Discussion

Section 6330

     Section 6330 generally provides that the Commissioner cannot

proceed with collection by way of a levy until the taxpayer has

been given notice and the opportunity for an administrative

review of the matter (in the form of an Appeals Office hearing),

and that, if dissatisfied, the taxpayer may obtain judicial

review of the administrative determination.   See Davis v.

Commissioner, 115 T.C. 35, 37 (2000); Goza v. Commissioner, 114

T.C. 176, 179 (2000).   The taxpayer requesting the hearing may
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raise any relevant issue with regard to the Commissioner’s

intended collection activities, including spousal defenses,

challenges to appropriateness of the collection action, and the

offers of collection alternatives.      Sec. 6330(c); see Sego v.

Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner,

supra at 180-181.

     Where the validity of the tax liability is not properly part

of the appeal, the Court reviews the determination of the Appeals

officer for abuse of discretion.     Sego v. Commissioner, supra at

609-610; Goza v. Commissioner, supra at 181-182.

     The taxpayer may raise challenges “to the existence or

amount of the underlying tax liability”, however, only if he “did

not receive any statutory notice of deficiency for such tax

liability or did not otherwise have an opportunity to dispute

such tax liability.”   Sec. 6330(c)(2)(B).

Petitioner’s View of the Case

     At trial, petitioner testified that Ms. Dellosso “violated

my due process rights by refusing to give me an opportunity to be

heard and have an accountant present so that we could present

appropriate collection alternatives.”     Petitioner testified that

Ms. Dellosso was “impatient, abusive, capricious, argumentative,”

and did not properly consider her case.     Petitioner asked that

Ms. Dellosso be “called to task” by the Court.     Petitioner

testified that she wanted the Court to decide that her due

process rights had been violated by Ms. Dellosso.
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     Petitioner then stated that she wanted to “settle” the case

immediately.   When asked by the Court what she meant by using the

word “settle”, she explained that she wanted to pay the subject

amounts in full.    She said she wanted to “concede” the case.    She

testified that she had offered several times to fully pay the

outstanding amounts.    According to petitioner, she made an offer

to Ms. Dellosso to fully pay the taxes for 1993, 1994, and 1995

but was rebuffed.    Petitioner stressed that her offer to pay in

full was limited to the tax years before the Court.

     Petitioner, while insisting that she wanted to “concede” her

case, nevertheless wanted her husband to testify, which testimony

the Court allowed.    Petitioner’s husband testified that the

telephone communications among himself, petitioner, and Ms.

Dellosso were unpleasant.    He also testified that Ms. Dellosso

refused to accept full payment for 1993, 1994, and 1995 and

refused to extend the time for a hearing so that their accountant

could be present.

Evidence of Respondent’s View

     Ms. Dellosso was not called by either party to testify at

the hearing in this case.   The parties, however, stipulated as an

exhibit a copy of her case activity records (case records).      As

one might guess, Ms. Dellosso’s view of their interaction was

different from petitioner’s.    According to the case records, on

the first occasion Ms. Dellosso spoke with petitioner by

telephone, petitioner was “irate and obnoxious” and “extremely
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rude and arrogant”, and she “ranted and raved” at her.   But

petitioner did, eventually, request a conference.

     Ms. Dellosso, according to the case records, advised

petitioner by a telephone message that petitioner was required to

submit a Form 433-A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, and proof of income and

expenses.   Ms. Dellosso informed petitioner that her check for

$35,000 had not fully paid her tax liabilities.   She informed

petitioner that she had set aside both July 7 and 12, 2005, at 10

a.m. as alternative dates for a conference.   Receiving no

response to her telephone message, Ms. Dellosso telephoned

petitioner again and left another message stating that if

petitioner failed to appear by the July 12, 2005, appointment,

Ms. Dellosso would issue her determination.

     The case records indicate that petitioner responded to the

second telephone message.   She asked by telephone that the

hearing be postponed until July 19, 2005.   Petitioner stated that

she wanted the interest and penalties abated and wanted to

“settle” the case.   Ms. Dellosso and her supervisor, who was also

on the line, informed petitioner that no OIC or installment

agreement could be accepted unless all unpaid years were

included.   At this point, according to the case records,

petitioner began “shouting hysterically”, refusing to let Ms.

Dellosso speak.   Ms. Dellosso terminated the telephone call.
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     Petitioner did not appear at the date and time Ms. Dellosso

had set for a meeting with petitioner, July 12, 2005, at 10 a.m.

About 2 hours after the time of the appointment, petitioner

called Ms. Dellosso and stated that she was unable to make the

appointment.    Petitioner asked for an opportunity to speak to her

accountant and was given 2 days to do so.

     Petitioner called Ms. Dellosso 2 days following the canceled

appointment, stated that she had been unable to contact her

accountant, and requested an installment agreement only for 1993

through 1995.   According to the case records, Ms. Dellosso

informed petitioner that although she could pay what she wanted,

all years had to be included in either an installment agreement

or an OIC.   Ms. Dellosso terminated the call after an unpleasant

exchange of words.

     The notice of determination was issued on July 27, 2005.

The Issue for the Court

     The underlying tax liabilities are not at issue in this

case.2   The issue for the Court to decide is whether respondent

abused his discretion in determining to pursue the intended

collection action.




     2
      Petitioner conceded at trial the underlying tax liabilities
and with them the abatement of interest and penalties raised in
the petition. See sec. 6201; supra note 1. Had petitioner not
conceded the issues, she would be precluded from raising them.
See sec. 6330(c)(2)(B); sec. 301.6320-1(e)(3), Q&A-E2, Proced. &
Admin. Regs.
                               - 10 -

     An abuse of discretion is a decision that:    (1) Rests on an

error of law or a clearly erroneous factual finding, or (2) a

decision not necessarily the product of legal error or a clearly

erroneous finding of fact but nevertheless is outside the range

of permissible decisions.    Zervos v. Verizon N.Y., Inc., 252 F.3d

163, 169 (2d Cir. 2001).

     Petitioner argued at trial that she was not given a hearing

at which she could be heard and have her accountant present.    But

petitioner was offered two alternative dates for a hearing and a

2-day extension after she failed to appear at the hearing on the

second alternative date.    Petitioner failed to request or make an

appointment between the 2-day extension and the issuance of the

notice of determination.

     Once a taxpayer has been given an opportunity for a hearing

but fails to avail herself of that opportunity, the Appeals

officer may proceed in making a determination by reviewing the

case file.   See Mann v. Commissioner, T.C. Memo. 2002-48; sec.

301.6330-1(d)(2), Q&A-D7, Proced. & Admin. Regs.   When petitioner

did not appear for the hearing, Ms. Dellosso reviewed

petitioner’s case file and considered the sole issue raised by

petitioner in her request for a hearing, that she had “paid the

tax”.   After the review, respondent issued the notice of

determination.

     Petitioner alleges that she offered to pay the tax in full,

certainly a viable collection alternative, and the settlement
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officer refused to accept it.    The case records indicate that Ms.

Dellosso refused to accept an installment agreement restricted to

the years for which petitioner had requested a section 6330

hearing, but advised petitioner that she could pay what she

wanted to pay.   The case records also note that petitioner had

not provided a Form 433A disclosing her financial information.

     Ms. Dellosso’s position on the installment agreement, as

recorded in the case records, is in accord with pertinent

provisions of the Internal Revenue Manual (IRM).   See IRM sec.

5.14.2.2, sec. 5.14.1.5.1.   The Court has generally upheld

collection determinations made by the Commissioner in accord with

the IRM.   See Etkin v. Commissioner, T.C. Memo. 2005-245 (and

cases cited therein).

     Petitioner has some prior experience in dealing with the

IRS, unpleasant though it may have been.   Had petitioner wanted

to fully pay the outstanding liabilities for the 3 years at issue

here, she could have done so just as she did in making the

earlier $35,000 payment.   If she has not done so already, she may

yet choose to pay the liabilities.

                             Conclusion

     Because petitioner did not present viable alternatives to

collection, the Court finds that respondent’s determination to

pursue the intended collection action was not an abuse of

discretion.
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    Reviewed and adopted as the report of the Small Tax Case

Division.

                                       Decision will be entered

                                  for respondent.
