                          T.C. Memo. 2002-227



                        UNITED STATES TAX COURT



           ROY ELIASON AND MARGARET ELIASON, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 12748-00L.              Filed September 10, 2002.



        Roy Eliason and Margaret Eliason, pro sese.

        James A. Kutten, for respondent.



                MEMORANDUM FINDINGS OF FACT AND OPINION


     SWIFT, Judge:     This matter is before us on petitioners’

petition for review under section 6330(d)(1) of respondent’s

Appeals Office determination to proceed with collection by way of

levy.
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     Unless otherwise indicated, all section references are to

the Internal Revenue Code as applicable to the years in issue.

     Hereinafter, references to petitioner in the singular are to

petitioner Roy Eliason.


                          FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

     At the time the petition was filed, petitioners resided in

O’Fallon, Missouri.

     Petitioners’ undisputed and unpaid Federal income tax

liabilities including penalties and interest, as of October 1,

2001, total $1,902 for 1994 and $5,254 for 1995.

     On May 22, 1999, respondent mailed to petitioners a notice

of intent to levy and a notice of petitioners’ right to a

collection hearing with respondent’s Appeals Office relating to

petitioners’ income tax liabilities for 1994 and 1995.

     On June 14, 1999, respondent received from petitioners a

request for a collection hearing with respondent’s Appeals

Office.

     On May 20, 2000, in connection with the above request by

petitioners for a collection hearing, petitioners submitted to

respondent’s Appeals Office a financial statement showing with

respect to petitioners’ monthly income and expenses a net income

of $1,914.   After adjustments were made by respondent’s Appeals

Office increasing the amount of petitioners’ monthly expenses,
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respondent’s Appeals Office reduced petitioners’ net income to

$912, or $1,002 less than that reflected on petitioners’

financial statement that was submitted to respondent.

Petitioners’ financial statement and respondent’s Appeals Office

adjustments reflected petitioners’ total monthly income and

expenses as follows:


                                            Monthly Amounts
                                      As Reflected     As Adjusted
                                     by Petitioners   by Respondent

     Income:
     Salaries -   Roy Eliason             $  780          $  780
     Salaries -   Margaret Eliason         2,950           2,950
     Pension -    Roy Eliason              1,048           1,048
     Pension -    Margaret Eliason           180             180
          Total   Income                  $4,958          $4,958

     Expenses:
     National Standard Expenses           $  830          $  957
     Housing and Utilities                 1,365           1,365
     Transportation                          204             291
     Health Care                             110             110
     Taxes (Income and FICA)                 520           1,308
     Life Insurance                           15              15
          Total Expenses                  $3,044          $4,046

          Net Income                      $1,914          $   912


     On May 31, 2000, in connection with petitioners’ collection

hearing, petitioner participated in a telephone conference with

respondent’s Appeals Office.      During the telephone conference,

based on the $912 difference between petitioners’ monthly income

and expenses as reflected in the above calculations, as adjusted

by respondent, respondent’s Appeals Office proposed that

petitioners make monthly payments to respondent of $912.
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     In a letter of May 31, 2000, respondent’s Appeals Office

confirmed to petitioners the proposed payment plan of $912 per

month and requested that petitioners respond before June 23,

2000, with any additional financial information that may differ

from the information already provided.

     Petitioners did not provide to respondent’s Appeals Office

any additional financial information, petitioners did not offer

to respondent’s Appeals Office any alternatives to collection

other than an indefinite postponement for the due dates of the

proposed installment payments, and petitioners did not accept the

above proposed payment plan of $912 per month.

     On November 28, 2000, respondent’s Appeals Office issued to

petitioners separate notices of determination sustaining

respondent’s proposed levy collection action.

     During 2000, and before respondent’s Appeals Office issued

to petitioners the above notices of determination, petitioners

received $10,000 in insurance proceeds relating to an automobile

accident, and petitioners used the $10,000 as a downpayment on a

new home.   Petitioners did not use any portion of the $10,000 to

make a payment on their 1994 and 1995 Federal income tax

liabilities.

     Herein, petitioners assert that it was an abuse of

discretion for respondent’s representative:   (1) To propose that

petitioners agree to a payment plan of $912 per month; (2) to
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fail to take into consideration additional medical expenses (that

were not disclosed to respondent’s Appeals Office in connection

with petitioners’ collection hearing) and the possibility of a

future reduction in petitioners’ income; and (3) to proceed with

collection by way of levy.

     Based on the above stated reasons, in an amended petition,

petitioners ask this Court for “a reduction in past due taxes.”


                              OPINION

     Under section 6330(d)(1), where a taxpayer’s underlying tax

liability is not at issue, we generally review a determination of

respondent’s Appeals Office concerning collection for an abuse of

discretion.   Sego v. Commissioner, 114 T.C. 604, 609-610 (2000).

Under that standard of review, we generally consider only matters

that were raised by the taxpayer or otherwise brought to the

attention of respondent’s Appeals Office at or in connection with

the Appeals Office hearing.   Magana v. Commissioner, 118 T.C.

488, 493 (2002).

     Based on the limited information available to respondent’s

Appeals Office, the payment plan of $912 per month proposed by

respondent’s Appeals Office to petitioners in connection with

petitioners’ collection hearing did not constitute an abuse of

discretion.   The proposed payment plan of $912 per month was

based on a financial analysis performed by respondent’s Appeals
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Office of petitioners’ monthly income and expenses using, among

other things, the financial information provided by petitioners.

     Moreover, based on the $10,000 in insurance proceeds that

petitioners received in 2000 (before respondent’s Appeals Office

made its determination), petitioners had the ability to pay a

significant portion of their outstanding income tax liabilities

for 1994 and 1995 (a total of $7,156, including interest to

October 1, 2001).

     With regard to alleged financial hardship raised by

petitioners for the first time in an amended petition (namely,

additional medical expenses and the possibility of a future

reduction in income), because petitioners did not raise such

matter until the filing of their amended petition in January of

2001, it did not constitute an abuse of discretion for

respondent’s Appeals Office to fail to consider such matter in

making the determination to proceed with collection.1    See Magana

v. Commissioner, supra.




1
      Generally, consideration by respondent of matters not
presented to respondent’s Appeals Office until after a collection
hearing and after the issuance by respondent’s Appeals Office of
its notice of determination would be within respondent’s
discretion under sec. 6330(d)(2) and would not be reviewable by
this Court. Sec. 6330(b)(2), (d)(2); H. Conf. Rept. 105-599, at
266 (1998), 1998-3 C.B. 1020; sec. 301.6330-1(h)(1)(2), Q&A-H1
and H2, Proced. & Admin. Regs.
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     We hold that respondent’s Appeals Office did not abuse its

discretion, and respondent may proceed with the proposed

collection by way of levy.



                                      Decision will be entered for

                              respondent.
