                              T.C. Memo. 2012-211



                         UNITED STATES TAX COURT



                   KENNETH D. PACE, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 9216-11L.                           Filed July 24, 2012.



      William A. Neilson and James R. Washington III, for petitioner.

      John K. Parchman, for respondent.



                           MEMORANDUM OPINION


      FOLEY, Judge: The issue for decision is whether respondent abused his

discretion in determining to proceed with the collection of petitioner’s income tax
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liabilities relating to 2006 and 2007. The parties submitted this case fully stipulated

pursuant to Rule 122.1

                                     Background

      Petitioner operates a chiropractic business through his wholly owned

corporation, Dauntless, Inc. (Dauntless). Petitioner filed his Federal income tax

returns relating to 2006 and 2007 but failed to pay the full amount of tax reported on

these returns. On December 28, 2009, respondent sent petitioner a Final Notice of

Intent to Levy and Your Right to a Hearing relating to 2006 and 2007. Petitioner

timely requested a collection due process (CDP) hearing and indicated that he

wanted to discuss a collection alternative. Respondent informed petitioner that in

order for respondent to consider a collection alternative, petitioner was required to

provide Form 433-A, Collection Information Statement for Wage Earners and Self-

Employed Individuals; Form 433-B, Collection Information Statement for

Businesses; and proof that he was current with all Federal income tax obligations.

Petitioner provided respondent with the requested Form 433-A and listed investment




      1
       Unless otherwise indicated, all section references are to the Internal Revenue
Code in effect at all relevant times, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
                                         -3-

interests in Dauntless and Visionary Management, Inc.2 In addition, petitioner

provided respondent with Form 433-B relating to Dauntless, Dauntless’ tax return

relating to 2008, and documentation relating to petitioner’s individual income and

expenses.

      On February 15, 2011, the Appeals officer requested additional

documentation: “The * * * [Louisiana secretary of state’s] office shows you are

also involved with Achievement Therapeutic Services L.L.C. and Kenneth D. Pace

D.C., L.L.C. Please provide me with a completed * * * [Form 433-B] * * * for each

of these businesses and evidence that they are both current with their federal tax

return filing and tax payments [sic] requirements.” In addition, the Appeals officer

requested documentation relating to petitioner’s estimated tax payments, household

income, borrowing capacity, and Forms 940, Employer’s Annual Federal

Unemployment (FUTA) Tax Return, and 941, Employer’s Quarterly Federal Tax

Return, relating to Dauntless.

      Prior to the CDP hearing petitioner provided documentation relating to his

borrowing capacity, a copy of his marriage contract, and his wife’s 2010 Form W-2,

Wage and Tax Statement. Petitioner did not provide any of the requested


      2
        Petitioner did not submit, and respondent did not request, a Form 433-B
relating to Visionary Management, Inc.
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documentation relating to Achievement Therapeutic Services, LLC (Achievement

LLC) or Kenneth D. Pace, D.C., LLC (Kenneth D. Pace LLC). In a letter dated

March 17, 2011, petitioner stated that “while he * * * [was] the Registered Agent of

Achievement Therapeutic Services, L.L.C. and Kenneth D. Pace, D.C., L.L.C., he

has derived no income from these entities since they began in 1997. Therefore, he

does not believe producing any information with regard to those entities is

appropriate under this request for an alternative means of collection.”

      On March 22, 2011, respondent held a CDP hearing and petitioner requested

an installment agreement. On April 5, 2011, respondent issued a notice of

determination sustaining the proposed collection action because of petitioner’s

failure to provide respondent with documentation relating to Achievement LLC and

Kenneth D. Pace LLC. On April 19, 2011, petitioner, while residing in Destrehan,

Louisiana, filed his petition with the Court.

                                      Discussion

      Section 6330(a) provides that the Commissioner must notify the taxpayer of

his right to a hearing prior to imposing a levy on the taxpayer’s property. If the

taxpayer submits a timely request for an administrative hearing, the hearing must be

conducted by the IRS Office of Appeals before an impartial officer. Sec.

6330(b)(3). During a collection hearing the taxpayer may raise relevant issues such
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as spousal defenses, the appropriateness of the proposed collection action, and

possible collection alternatives. Sec. 6330(c)(2)(A).

      The Appeals officer must verify that the requirements of applicable law and

administrative procedure have been met, consider issues properly raised by the

taxpayer, and consider whether the proposed collection action balances the need for

the efficient collection of taxes with the taxpayer’s legitimate concern that any

collection be no more intrusive than necessary. Sec. 6330(b), (c)(3). An Appeals

officer analyzing a proposed installment agreement must evaluate the taxpayer’s

current financial condition. See Orum v. Commissioner, 123 T.C. 1, 13 (2004),

aff’d, 412 F.3d 819 (7th Cir. 2005). It is not an abuse of discretion for the

Commissioner to reject an installment agreement where the taxpayer fails to provide

the Commissioner with requested financial documentation. See McLaine v.

Commissioner, 138 T.C. __, __ (slip op. at 24-25) (Mar. 13, 2012).

      The validity of petitioner’s underlying tax liability is not at issue. Therefore,

we review respondent’s administrative determination for abuse of discretion. See

Goza v. Commissioner, 114 T.C. 176, 182 (2000). Petitioner contends that

respondent abused his discretion in denying petitioner’s proposed installment

agreement. Petitioner, however, has failed to establish “clear taxpayer abuse and

unfairness”. See Christopher Cross, Inc. v. United States, 461 F.3d 610, 612 (5th
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Cir. 2006). The Appeals officer, after reviewing information from the Louisiana

secretary of state, determined that petitioner had an interest in Kenneth D. Pace

LLC and Achievement LLC and requested information relating to these entities.

Petitioner’s failure to furnish the requested documentation provided a reasonable

basis for respondent to determine that petitioner was not eligible for an installment

agreement. See id. at 613; McLaine v. Commissioner, 138 T.C. at __ (slip op. at

24-25). Accordingly, respondent did not abuse his discretion. See McLaine v.

Commissioner, 138 T.C. at __ (slip op. at 24-25).

      Contentions we have not addressed are irrelevant, moot, or meritless.

      To reflect the foregoing,


                                                     Decision will be entered

                                               for respondent.
