                                                                           FILED
                           NOT FOR PUBLICATION                              NOV 23 2009

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



INDUSTRIAL INVESTORS,                            No. 08-71467

             Petitioner - Appellant,             Tax Ct. No. 14928-04L

  v.
                                                 MEMORANDUM *
COMMISSIONER OF INTERNAL
REVENUE,

             Respondent - Appellee.



                           Appeal from a Decision of the
                             United States Tax Court

                            Submitted October 5, 2009 **
                               Pasadena, California


Before: HALL, W. FLETCHER and CLIFTON, Circuit Judges.

       Industrial Investors (“Taxpayer”) appeals from the Tax Court’s decision

sustaining a notice of determination issued by the Office of Appeals, which

sustained a levy against Taxpayer for unpaid taxes.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
            The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
      Taxpayer can no longer challenge the amount of its underlying tax liability

because that has been fully adjudicated. I.R.C. § 6330(c)(2)(B). Therefore, the

Tax Court correctly reviewed the decision of the Office of Appeals for abuse of

discretion. See Sego v. Commissioner, 114 T.C. 604, 610 (2000). We review the

Tax Court’s decision de novo, which means we review the Office of Appeals for

abuse of discretion. See Fargo v. Commissioner, 447 F.3d 706, 709 (9th Cir.

2006). “Abuse of discretion occurs when a decision is based on an erroneous view

of the law or a clearly erroneous assessment of the facts.” Fargo, 447 F.3d at 709

(internal quotation marks omitted).

      Taxpayer argues that the Office of Appeals abused its discretion by insisting

upon recording the August 8th meeting with Taxpayer’s lawyer W.G. Wells over

Wells’s objections. I.R.C. § 7521(a) permits an officer of the IRS to record “any

in-person interview with any taxpayer relating to the determination or collection of

any tax,” so long as the officer informs the taxpayer prior to the interview and

makes available a copy of the recording or transcript to the taxpayer. See also

I.R.M. § 8.6.1.4.1. (Nov. 6, 2007) (“IRC 7521(a) authorizes both taxpayers and the

IRS to audio record in-person interviews dealing with the determination or

collection of taxes.”); Keen v. Commissioner, 121 T.C. 8, 16 (2003) (holding that

taxpayer was entitled to audio record his Collection Due Process hearing). A


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Collection Due Process (“CDP”) hearing is an interview related to the collection of

taxes, I.R.C. § 6330, and the Appeals Officer, Adlai Climan, complied with all

requirements for recording. Therefore, the Office of Appeals did not abuse its

discretion by recording the meeting.

      Taxpayer next argues that the CDP hearing violated an earlier Tax Court

order requiring an impartial Appeals Officer who had not seen a previous ex parte

communication regarding Taxpayer’s case. Appeals Team Manager Paula Mills,

who had seen the ex parte communication, was present at the August 8th meeting.

However, Climan, not Mills, was the Appeals Officer assigned to the case. Mills’s

presence was required because the conference was recorded and because Taxpayer

had previously raised frivolous arguments. I.R.M. § 8.6.1.4.2(11) (Nov. 6, 2007)

(“Two Appeals employees must be present at recordings where

frivolous/constitutional et. al. arguments have previously been presented.”).

Taxpayer presents no evidence that Mills improperly influenced Climan. To the

contrary, the Tax Court determined that Climan displayed great patience

throughout the process and was impartial. Therefore, Mills’s presence at the

hearing did not violate the earlier Tax Court order.

      Taxpayer’s final argument is that the Office of Appeals abused its discretion

by reaching a determination without more meetings after the August 8th meeting


                                          3
was cut short by a power outage. The CDP hearing, however, consists of not just

the one meeting, but of all the correspondence between Taxpayer and the Office of

Appeals. The various letters in the record, including the conference itself and

Taxpayers’ declarations at that conference, all constitute parts of the CDP hearing.

All of those interactions, taken together, gave the Office of Appeals a sufficient

basis to make its determination.

      Moreover, Taxpayer presented four declarations in writing at the August 8th

hearing. Those declarations failed to raise a single issue appropriate for

consideration at a CDP hearing. See I.R.C. § 6330(c)(2). Because Taxpayer failed

to raise any legitimate challenges either at the August 8th meeting or otherwise, the

Office of Appeals did not abuse its discretion in reaching its determination.

      AFFIRMED.




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