                        T.C. Memo. 2007-43



                     UNITED STATES TAX COURT



                  JERRY JOE KERR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22838-04L.             Filed February 22, 2007.



     Joseph R. Borich III, for petitioner.

     Dennis R. Onnen and James E. Cannon, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     THORNTON, Judge:   Pursuant to section 6330, petitioner seeks

review of a proposed levy.1   The only issue is whether

respondent’s settlement officer abused his discretion in



     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended.
                                - 2 -

rejecting petitioner’s offer to compromise his 1992 income tax

liability.

                          FINDINGS OF FACT

     The parties have stipulated some facts, which we incorporate

herein by this reference.    When he petitioned the Court,

petitioner resided in Kansas City, Missouri.

Prior Deficiency Proceeding

     On October 20, 1997, respondent sent petitioner a notice of

deficiency with respect to income taxes for the years 1992 and

1993.    Petitioner timely petitioned this Court, seeking a

redetermination of the deficiencies and additions to tax.     On

February 24, 1999, pursuant to the parties’ stipulation, this

Court entered its decision that for taxable year 1992 petitioner

had a deficiency of $44,948 and owed an $8,990 penalty pursuant

to section 6662(a).2

Petitioner’s Marital Settlement

     On December 19, 2001, petitioner and his former wife, DeAnna

Daniels Kerr (Ms. Kerr), filed a marital settlement and

separation agreement (the marital settlement) with the Circuit

Clerk, Cass County, Missouri.    The marital settlement provided

for the division between petitioner and Ms. Kerr of personal

property, real estate, and financial assets.    The marital



     2
       The Court decided that petitioner had no deficiency and
owed no penalties for his taxable year 1993.
                               - 3 -

settlement provided, among other things, that petitioner would

have ownership of a 1989 Ford pickup truck and that Ms. Kerr

would release any interest or title to “any commercial vehicles”.

The marital settlement also provided that petitioner would retain

as his sole and separate property the stock of 7 Materials Corp.

and Kerr Construction & Paving Co.; it further stated that Ms.

Kerr would relinquish any interest in the stock of Redi-Mix

Concrete (hereinafter RMC).   The marital statement also stated

that petitioner owned no real estate, having quitclaimed to Ms.

Kerr his ownership interests in six parcels of real estate,

including one in Lake Winnebago, Missouri, and one at an address

on “Euclid” in Kansas City, Missouri.   In addition, the agreement

indicated that petitioner and Ms. Kerr had made full disclosure

of their income and assets and the values thereof in Income and

Expense Statements and Financial Statements to be filed with the

Cass County Court.

Collection Proceeding

     On March 10, 2003, respondent issued a Final Notice of

Intent to Levy and Notice of Your Right to a Hearing with respect

to petitioner’s unpaid 1992 tax liability, which had grown to

$129,220.   Petitioner requested a hearing.   On June 30, 2003,

before any hearing had been scheduled, respondent received from

petitioner Form 9465, Installment Agreement Request, wherein
                               - 4 -

petitioner proposed to pay his 1992 taxes with $10,000 up front

and $1,000 per month thereafter.

      On June 21, 2004, respondent’s settlement officer held a

face-to-face hearing with petitioner and his representative.3     On

July 6, 2004, the Appeals Office received from petitioner Form

656, Offer in Compromise, wherein petitioner offered to

compromise his 1992 income tax liability for $7,500.

Petitioner’s Form 656 indicated that the offer-in-compromise was

predicated on doubt as to liability and doubt as to

collectability.   Also on July 6, 2004, petitioner submitted to

respondent Form 433-A, Collection Information Statement for Wage

Earners and Self-Employed Individuals.   On the Form 433-A,

petitioner reported that his only income was a pension of $2,201

per month and that he had monthly living expenses of $2,144.

None of the required documentation was attached to the Form 433-

A.   The last page of the Form 433-A admitted into evidence

contains the settlement officer’s handwritten calculations, which

show, without elaboration, the sum of $9,558.16.

      By letter dated July 16, 2004, the settlement officer

advised petitioner that, because of the previous Tax Court

decision adjudicating his 1992 income tax liability, his offer-

in-compromise could be not considered on the basis of doubt as to


      3
       Apparently, at this hearing petitioner made no mention of
his previous installment agreement request; it is unclear that
the settlement officer was aware of it at the time.
                                 - 5 -

liability.   By letter to petitioner dated September 7, 2004, the

Appeals officer advised that he needed additional information in

order to evaluate the offer-in-compromise on the basis of doubt

as to collectability.   The settlement officer requested, among

other things, substantiation of the living expenses petitioner

had claimed on his Form 433-A.    In addition, referring to

provisions of the marital settlement, the settlement officer

requested additional information, including the following:

     1.   Descriptions and values of the “commercial vehicles”

that the marital settlement indicated Ms. Kerr had relinquished

to petitioner.

     2.   With respect to the three companies that the marital

settlement indicated had been retained by petitioner, an

explanation of the current status of these companies, including

documentation of any sales or transfers of the companies’ assets.

     3.   Information about the real properties that, according to

the marital settlement, petitioner had quitclaimed to Ms. Kerr.

The settlement officer requested an explanation as to why

petitioner had since used, at different times, the Lake

Winnebago, Missouri, address and the Kansas City “Euclid” address

as his home address on correspondence with the IRS.

     4.   A copy of the income and expense statements and

financial statements referenced in the marital settlement.
                               - 6 -

     The settlement officer’s letter indicated that if the

requested information were not provided by October 1, 2004,

petitioner’s offer-in-compromise would be rejected.

     By letter dated September 29, 2004, petitioner provided a

minimal amount of documentation relating to his expenses, stating

that he paid for his expenses in cash.   Petitioner’s letter

stated that his interest in “commercial vehicles”, as referenced

in the marital settlement, was limited to a single 1989 Ford

pickup, which he had already listed on his Form 433-A.

Petitioner stated that two of the three companies referenced in

the marital settlement had closed down with no assets, and that

the other company, RMC, was wholly owned by his ex-wife.   He

provided no documentation of any sales or transfers of these

companies.   Petitioner stated that the Lake Winnebago, Missouri,

address was his “permanent mailing address” and that the Kansas

City “Euclid” address was where “I rent to live”; petitioner

stated that he had no copies of quitclaim deeds.   Finally,

petitioner stated that the settlement officer’s request for

financial statements referenced in the marital settlement was

“unclear” and that he had no copy of the statements.

     By notice of determination dated October 26, 2004 (the

notice), the Appeals Office sustained the proposed levy.   An

attachment to the notice indicated, among other things, that

petitioner’s offer-in-compromise had been rejected because
                              - 7 -

petitioner’s response to the settlement officer’s request for

additional information was inadequate to permit the settlement

officer to make a reasonable analysis of petitioner’s offer-in-

compromise.4

                             OPINION

     Petitioner does not dispute his underlying tax liability.

We review the settlement officer’s rejection of petitioner’s

offer-in-compromise for abuse of discretion.   Goza v.

Commissioner, 114 T.C. 176, 182 (2000).

     Petitioner contends that the settlement officer abused his

discretion in rejecting petitioner’s offer-in-compromise.

Petitioner does not dispute that the settlement officer requested

additional information that petitioner never provided.

Petitioner contends, however, that he provided all the

information that he had available, which he says was “complete

and current from his point of view”.   Petitioner suggests that

the burden was on the settlement officer to develop any

additional information which the settlement officer might wish to




     4
       In the notice of determination, the settlement officer
also considered petitioner’s previous request for an installment
agreement, even though petitioner had not raised this issue at
the collection hearing. The settlement officer rejected the
requested installment agreement on the ground that the proposed
payments would not fully pay petitioner’s tax liabilities within
the expiration date for collection. Petitioner has not
challenged this determination in this proceeding.
                              - 8 -

rely upon to reject petitioner’s offer-in-compromise.

Petitioner’s contentions are unpersuasive.

     When requesting an offer-in-compromise, the taxpayer must

provide complete and current financial information sufficient to

enable the Appeals officer to adequately evaluate the offer.

Sec. 301.7122-1(d)(2), Proced. & Admin. Regs.   If the taxpayer

fails to do so, the offer-in-compromise may be rejected.    See,

e.g., Shrier v. Commissioner, T.C. Memo. 2006-181; Picchiottino

v. Commissioner, T.C. Memo. 2004-231; Willis v. Commissioner,

T.C. Memo. 2003-302.

     The settlement officer did not abuse his discretion in

finding that petitioner’s responses to requests for additional

information were insufficient to permit a reasonable analysis of

petitioner’s offer-in-compromise.   The answers that petitioner

provided to the settlement officer’s September 7, 2004, request

for additional information were incomplete and insufficient to

resolve legitimate questions raised by the settlement officer as

to apparent discrepancies between petitioner’s reported financial

information and the provisions of the marital settlement.    For

example, although the marital settlement indicated that Ms. Kerr

had relinquished any interest in RMC, petitioner represented to

the settlement officer, without supporting documentation, that

RMC was wholly owned by Ms. Kerr.   Petitioner has not credibly

explained these inconsistencies or his failure to submit complete
                               - 9 -

information as requested.   Similarly, petitioner has offered no

explanation as to why his Form 433-A, submitted with his offer-

in-compromise, indicated that petitioner had the ability to pay

only $57 per month, whereas in his previously requested

installment agreement, petitioner had offered to pay $10,000 up

front and $1,000 per month thereafter.

     Petitioner refers to the settlement officer’s notations on

petitioner’s Form 433-A, which petitioner interprets to mean that

the settlement officer might have been willing to consider an

offer-in-compromise of $9,558.16.   Petitioner suggests that the

difference between this number and petitioner’s $7,500 offer-in-

compromise is not “meaningful” and that the settlement officer

accordingly abused his discretion in rejecting petitioner’s

$7,500 offer-in-compromise.   We disagree.     As the settlement

officer testified, his willingness to consider a $9,558.16 offer-

in-compromise was contingent on petitioner’s providing all the

information that had been requested.     Having failed to provide

the requested information, petitioner has no cause to complain

that the settlement officer did not further explore the

possibility of an upwardly revised offer-in-compromise.

     In sum, the settlement officer did not abuse his discretion

in rejecting petitioner’s offer-in-compromise.     Accordingly,


                                            Decision will be entered

                                       for respondent.
