                     T.C. Memo. 2009-123



                   UNITED STATES TAX COURT



TGI ENTERPRISES, INC., AN OKLAHOMA CORPORATION, Petitioner v.
         COMMISSIONER OF INTERNAL REVENUE, Respondent



  Docket No. 19157-07L.             Filed June 1, 2009.


        P failed to pay its self-reported Federal payroll
   taxes for various quarters in 2002-04, and R issued a
   notice of intent to levy. P requested a hearing under
   I.R.C. sec. 6330, indicating a desire for a partial
   payment installment agreement. R’s Office of Appeals
   requested that P provide financial information and
   agree to certain prepayment requirements. P did not
   provide all of the requested financial information and
   would not agree to R’s prepayment requirements. R’s
   Office of Appeals issued to P a notice of determination
   in which it determined that a levy was appropriate. P
   appealed that determination to this Court.

        Held: R’s Office of Appeals did not abuse its
   discretion in denying P’s proposal for a partial
   payment installment agreement when P did not provide to
   Appeals the financial information requested.
                                 - 2 -

     Paul H. Burgess, for petitioner.

     William F. Castor, for respondent.



                          MEMORANDUM OPINION


     GUSTAFSON, Judge:     This case is an appeal by petitioner TGI

Enterprises, Inc., an Oklahoma corporation (TGI), under

section 6330(d).1    TGI seeks our review of the determination by

the Internal Revenue Service (IRS) to uphold a proposed levy on

TGI’s assets.     The levy is intended to collect payroll taxes for

the quarters ending 06/2002, 09/2002, 12/2002, 03/2003, 12/2003,

03/2004, 06/2004, 09/2004, and 12/2004.     This case was submitted

fully stipulated pursuant to Rule 122, reflecting the parties’

agreement that the relevant facts could be presented without a

trial.     The parties’ stipulation of October 21, 2008, and the

attached exhibits are incorporated herein by this reference.

                              Background

         At the time TGI filed its petition, it was an Oklahoma

corporation operating in Oklahoma.

TGI’s Nonpayment of Self-Reported Payroll Taxes

     TGI filed its Forms 941, Employer’s Quarterly Federal Tax

Return, for the second, third, and fourth quarters of 2002, the



     1
      Except as otherwise noted, all section references are to
the Internal Revenue Code (26 U.S.C.), and all Rule references
are to the Tax Court Rules of Practice and Procedure.
                               - 3 -

first and fourth quarters of 2003, and all four quarters of 2004,

and the IRS assessed the tax shown on the returns as follows:

         Period           Assessment Date              Tax

          6/2002            12/15/2003              $32,627.74

          9/2002            12/15/2003               28,102.68

         12/2002            12/29/2003               29,887.49

          3/2003             12/1/2003               32,657.93

         12/2003              1/3/2005               32,108.38

          3/2004              1/3/2005               29,538.19

          6/2004             2/28/2005               36,971.11

          9/2004              2/7/2005               34,336.29

         12/2004              4/4/2005               45,244.00

However, TGI failed to pay all of the tax liabilities reported on

each of the returns.2   On the same dates that the IRS assessed

the taxes against TGI, it also assessed penalties and interest

for each period shown above and issued to TGI a Form CP 504,

Notice of Balance Due, for each period.     TGI did not pay the

amounts due.




     2
      While the parties’ stipulation of fact indicates that TGI
“failed to pay all of the liabilities reported on each of the
returns”, a review of TGI’s transcript in the record indicates
that TGI did not pay any of the tax liabilities reported on any
of the returns listed above, except that it made slightly over
half of the payments due for the last quarter of 2004.
                                 - 4 -

Trust Fund Taxes and Penalties

     The unpaid payroll taxes were a combination of TGI’s portion

of FICA tax,3 its employees’ portion of FICA tax that TGI

withheld from its employees’ wages and did not pay over, and

income tax that TGI withheld from its employees’ wages and did

not pay over.   That is, in addition to being required to deposit

TGI’s own portion of FICA tax with the IRS, TGI was also required

to remit to the IRS its employees’ portion of FICA and income tax

that TGI had withheld from its employees’ wages, see secs.

3102(b), 3403, but TGI did not do so.    The FICA tax and income

tax that are withheld from employees’ wages are held in trust for

the United States, see sec. 7501(a), and are known as trust fund

taxes.

     At the time these trust fund taxes were withheld from each

employee’s wages but not remitted to the IRS, the management of

TGI included Julie A. Sawyer, Tracy C. Copeland, Charles

(Michael) Copeland, and Barbara S. Cross.4   Since the foregoing


     3
      Federal Insurance Contributions Act or FICA tax is a
payroll tax imposed on both employers and employees, secs. 3101,
3111, to fund Social Security and Medicare.
     4
      Julie A. Sawyer was a longtime employee of TGI who was the
bookkeeper in charge of preparing TGI’s employment tax returns
and remitting the tax due. Tracy C. Copeland was the president
of TGI from January 1991 until December 2001, the CEO from
January 2002 until sometime after December 2004, and one of its
owners, who had the authority to sign TGI’s tax returns and
payroll checks, as well as to obligate TGI. Michael Copeland was
the secretary-treasurer of TGI and one of its owners. Barbara S.
                                                   (continued...)
                                - 5 -

individuals were part of the management of TGI and were possibly

responsible for the remittance of the unremitted trust fund

taxes, the IRS, on May 27, 2005, issued a Form 4183,

Recommendation re: Trust Fund Recovery Penalty Assessment,

proposing to assess personally against each individual listed

above a liability of $239,433.38 under section 6672 to recover

the trust fund taxes they had failed to remit.

$70,000 Loan From Trust

     In October 2006 TGI borrowed $70,000 from a trust belonging

to the parents of Michael Copeland, one of the corporate

officers, to finance TGI’s purchase of supplies to fulfill a

large order.   The short-term loan was secured by the purchase

order, the materials, the finished goods, and the receivable

created upon shipment.    TGI repaid the loan immediately upon

payment by its customer.    There was no formal agreement with

respect to this loan.    When TGI repaid the loan to the trust, it

repaid $72,000–-i.e., $70,000 plus interest of 48 percent per

annum.

TGI’s Negotiations With Collections

     As early as December 2006, TGI began working with the IRS’s

Revenue Officer Hal Spannagel to try to resolve TGI’s outstanding


     4
      (...continued)
Cross was the president of TGI from January 2002 through October
2004. Ms. Cross was in charge of the day-to-day operations of
TGI and managing the employees. Ms. Cross also had check-signing
authority.
                               - 6 -

tax liability.   TGI proposed a partial payment installment

agreement whereby TGI would pay $1,000 per month, with the

payment increasing to $1,650 per month in September 2007.     TGI

alleges that the revenue officer orally agreed to a $1,606-per-

month payment if certain conditions were met; i.e., the revenue

officer wanted to confirm some facts regarding the $70,000 loan

that TGI had repaid in October 2006.   In a letter dated April 25,

2007, from the revenue officer to TGI’s counsel, the revenue

officer stated that he needed proof that “the money originally

came from the trust, the trust was established by Mr. Copeland’s

father and that the funds in the trust did not originate from TGI

Enterprises Inc or any of its officers.”   Presumably, the revenue

officer wanted to confirm that the $70,000 was a repayment of a

legitimate arm’s-length loan and not a diversion of funds by TGI.

However, TGI did not provide the revenue officer with the

information he requested; and because the trust refused to allow

the IRS to inspect its books, the revenue officer denied TGI’s

installment proposal.

Commencement of CDP Proceedings

     As a result of the failed attempt to settle TGI’s tax

liability, on December 8, 2006, the IRS issued to TGI a Final

Notice of Intent to Levy and Notice of Your Right to a Hearing.

TGI timely requested a collection due process (CDP) hearing by

submitting to the IRS on January 8, 2007, a Form 12153, Request
                               - 7 -

for a Collection Due Process or Equivalent Hearing.   Attached to

the Form 12153 was a letter from TGI’s counsel, Paul H. Burgess,

which stated:

     TGI and its officers are beginning the process of filing
     offers in compromise. The company is filing based on doubt
     as to collectibility and perhaps effective tax
     administration. The officers will be filing based on the
     preceding and doubt as to liability.

IRS Requests for Financial Information

     On May 16, 2007, the IRS’s Office of Appeals sent a letter

to TGI acknowledging that Appeals had received TGI’s request for

a CDP hearing.   Then, by letter dated June 5, 2007, the IRS’s

Settlement Officer Greg Clark scheduled TGI’s telephone CDP

hearing for June 26, 2007.   In that June 5 letter, the settlement

officer advised TGI that in order for the Office of Appeals “to

consider alternative collection methods such as an installment

agreement or offer in compromise, you must provide any items

listed below.”   The only item listed was:

     •    A completed Collection Information Statement Form 433-A
          for all corporate owners and Form 433-B for businesses
          with all line items of section 7 completed.

The settlement officer asked for the requested information to be

submitted within 14 days and stated, “I cannot consider

collection alternatives at your conference without this

information.”

     On June 12 and July 12, 2007, telephone conferences were

held, and on July 10, 2007, a face-to-face meeting was held
                                 - 8 -

between the settlement officer and TGI’s counsel.    During the

course of these conferences, TGI’s counsel requested a partial

payment installment agreement.    The settlement officer advised

TGI and its counsel that the requested Form 433-B, Collection

Information Statement for Businesses, and Forms 433-A, Collection

Information Statement for Wage Earners and Self-Employed

Individuals, had not been provided, and that a failure to provide

the requested financial information was a basis for rejection of

the partial payment installment agreement.    TGI’s counsel agreed

to supply this information by July 13, 2007.

     However, TGI never provided this required information to the

settlement officer.   Nonetheless, the settlement officer was able

to obtain a partially completed Form 433-B that was in the

collection file because it had been submitted to the revenue

officer 4 months earlier, on or around March 12, 2007.    TGI

points out that its Form 433-B amounted to 99 pages and was

accompanied by “over 100 bank statements.”    However, section 7 of

the Form 433-B was not sufficiently completed to allow the

settlement officer to determine TGI’s monthly income and

expenses.   Instead of completing each line item in section 7, TGI

had inserted “$0.00” for total income and “$0.00” for total

expenses and had inserted “SEE page 4 of balance sheet” in the

Section 7 area asking for a specific breakdown of monthly

business income and expenses.    Attached to the March 2007 Form
                               - 9 -

433-B was a variety of documents, such as an accounts receivable

report, a depreciation schedule, and bank records, but nothing

listing TGI’s monthly income and expenses.5   The settlement

officer had particularly requested this missing information in

his June 5 letter, but TGI never provided it.

Prepayment Requirements

     During the CDP hearing the settlement officer further

advised TGI’s counsel that, in accordance with Internal Revenue

Manual (IRM) guidelines, TGI would be required to meet two

prepayment requirements before a partial payment installment

agreement would be approved.   First, the settlement officer

informed TGI that it would be expected to obtain another $70,000

loan from the trust belonging to Michael Copeland’s parents.

Because TGI had recently, i.e., on or about October 31, 2006,

repaid its $70,000 loan to that trust, the settlement officer

inferred that the trust might be willing to lend to TGI.   Second,

after reviewing the TGI Form 433-B that was in the collection

file, the settlement officer also required TGI to contribute

$20,000 of equity it had in a 2002 GMC Yukon XL Denali sports

utility vehicle.   The settlement officer concluded that TGI’s


     5
      TGI did refer to “page 4 of the balance sheet”, but this
was an apparent reference to its Schedule L on page 4 of its 2006
Form 1120S, U.S. Income Tax Return for an S Corporation, which
was attached to the Form 433-B. We do not find the annual
information contained therein for the year ending December 31,
2006, to be helpful in determining with any precision TGI’s
monthly income and expenses as of July 2007.
                              - 10 -

prepayments of these amounts--totaling $90,000–-would decrease

the risk to the Government that TGI would continue to accrue

additional unpaid employment tax liabilities.   The settlement

officer also concluded that because of TGI’s failure to provide

income and expense information on its Form 433-B, TGI’s ability

to pay its operating expenses and current taxes could not be

verified.   Therefore, the settlement officer concluded that TGI

was currently unable to pay its operating expenses and current

taxes.6

     As a result, on July 27, 2007, the Office of Appeals issued

to TGI a Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330, which sustained the proposed levy

to collect TGI’s unpaid payroll taxes.   The attachment to the

Notice of Determination stated that “[t]he request for a Partial

Payment Installment Agreement is denied based on * * * [TGI’s]

failure to submit completed financial information, and * * *

[TGI’s] failure to agree to the prepayment required by the

Settlement Officer.”

     On August 24, 2007, TGI timely petitioned this Court to

review the notice of determination issued on July 27, 2007.    The



     6
      The settlement officer’s conclusion that TGI was unable to
pay its current operating expenses and taxes was further
bolstered by the fact that TGI had recently borrowed the $70,000
from the trust to cover its operating expenses, i.e., to purchase
raw materials and pay for the necessary labor to complete an
order for a customer.
                              - 11 -

petition alleges four points of error in that determination, only

two of which need to be resolved to dispose of this case:7

(1)   That “the Office of Appeals abused its discretion in not
      approving an installment agreement as provided for by Code
      Sec. 6195(a) [sic]”; and

(2)   That the “Appeals Office also abused its discretion by
      demanding certain Petitioner’s individual shareholder to
      file * * * a Form 433-A, when such shareholder is not a
      responsible or willful person.”

TGI then asked the Court to order “Respondent to enter into an

installment agreement for $1,606 per month pursuant to I.R.C.

Sec. 6159(a).”8

      The parties jointly moved to submit the case under Rule 122,

and the case is now before the Court for decision without trial.




      7
      TGI also cites as error (1) that “the Appeals Office abused
its discretion [in requiring $90,000 in prepayments] because
Petitioner has no authority to force the Trust to pay it $70,000,
the truck was not worth $20,000, and Petitioner cannot borrow
$20,000 against it and still make a $2,700 per month payment”,
and (2) that the “Appeals Office abused its discretion by
concluding [TGI] was unable to pay its operating expenses and
current taxes”. Because we find that TGI’s failure to provide
the requested financial information justified the settlement
officer’s rejection of TGI’s partial payment installment
agreement proposal, we need not decide whether the settlement
officer abused his discretion in the other respects that TGI
alleges.
      8
      This is the same $1,606 monthly payment amount that TGI
alleges was orally agreed to by the revenue officer during the
IRS’s pre-CDP collection review.
                              - 12 -

                            Discussion

I.   Applicable Legal Principles

     A.   Collection Review Procedure

     When a taxpayer fails to pay any Federal tax liability

within 10 days of notice and demand, the IRS may collect the

unpaid tax by levy on the taxpayer’s property, pursuant to

section 6331.   However, before the IRS may proceed with that

levy, the taxpayer is entitled to administrative and judicial

review pursuant to section 6330.    Administrative review is

carried out by way of a hearing before the Office of Appeals

under section 6330(b) and (c); and if the taxpayer is

dissatisfied with the outcome there, it can appeal that

determination to the Tax Court under section 6330(d), as TGI has

done.

     The pertinent procedures for the agency-level CDP hearing

are set forth in section 6330(c).    First, the appeals officer

must obtain verification from the Secretary that the requirements

of any applicable law or administrative procedure have been met.

Sec. 6330(c)(1).9   Second, the taxpayer may “raise at the hearing


     9
      In the case of a levy to collect a self-reported tax
liability, the basic requirements (see sec. 6331(a), (d)) for
which the appeals officer obtains verification are: the IRS’s
timely assessment of the liability (secs. 6201(a)(1), 6501(a));
the giving to the taxpayer of notice and demand for payment of
the liability (sec. 6303); and the giving to the taxpayer of
notice of intention to levy and of the taxpayer’s right to a
hearing (secs. 6330(a), 6331(d)). A review of TGI’s IRS
                                                   (continued...)
                               - 13 -

any relevant issue relating to the unpaid tax or the proposed

levy,” including challenges to the appropriateness of the

collection action and offers of collection alternatives.    Sec.

6330(c)(2)(A).   Additionally, the taxpayer may contest the

existence and amount of the underlying tax liability, but only if

he did not receive a notice of deficiency or otherwise have an

opportunity to dispute the tax liability.10   Sec. 6330(c)(2)(B).

     TGI’s contentions pertain to the second of those sets of

issues--i.e., “relevant issue[s] relating to * * * the proposed

levy” under section 6330(c)(2)(A).

     B.   Standard of Review

     When the underlying tax liability is not at issue, we review

the determination of the Office of Appeals for abuse of

discretion.   Goza v. Commissioner, 114 T.C. 176 (2000).    TGI has

not challenged its underlying liability.   Accordingly, we review

the IRS’s determination for abuse of discretion; that is, whether

the determination was arbitrary, capricious, or without sound

basis in fact or law.   See Murphy v. Commissioner, 125 T.C. 301,




     9
      (...continued)
transcript in the hearing record shows that the above
requirements were met; and TGI does not dispute that the
requirements of any applicable law or administrative procedure
were met in compliance with section 6330(c)(1).
     10
      TGI does not contest the underlying, self-reported
liability. Therefore, the underlying liability is not at issue.
See Goza v. Commissioner, 114 T.C. 176 (2000).
                              - 14 -

320 (2005), affd. 469 F.3d 27 (1st Cir. 2006); Sego v.

Commissioner, 114 T.C. 604, 610 (2000).

II.   Whether the Appeals Officer Abused His Discretion in
      Rejecting TGI’s Proposed Collection Alternative

      The IRS determined to proceed with its levy against TGI, and

did not accept the proposal for a partial payment installment

agreement, because TGI failed to fulfill two prerequisites for

consideration of such an alternative:   TGI failed to submit

financial information sufficient to enable the IRS to evaluate

its collection potential; and TGI failed to agree to the

prepayment requirements determined by the settlement officer in

accordance with the IRM.

      A.   The Settlement Officer’s Proper De Novo Review of TGI’s
           Proposed Collection Alternative

      TGI argues that the settlement officer abused his discretion

because, rather than address the narrow grounds upon which the

revenue officer had previously rejected TGI’s installment

proposal, i.e., that a former creditor of TGI (the trust) had

refused to allow IRS inspection of its books, the settlement

officer undertook a de novo review of the installment proposal

and raised issues never considered by the revenue officer.     TGI’s

argument reflects a misunderstanding of the scope and purpose of

a CDP hearing.   By filing a Form 12153 requesting a CDP hearing,

TGI was not merely appealing the denial of the installment

proposal by the revenue officer; instead, it was also appealing
                               - 15 -

the proposed collection action, i.e., a levy upon its assets to

collect its unpaid payroll taxes.

     Pursuant to section 6330(c)(3), a determination by the

Office of Appeals must take into consideration any collection

alternative proposed by the taxpayer.   At the CDP hearing TGI’s

counsel proposed a partial payment installment agreement.     In

considering the viability of that collection alternative, the

settlement officer properly considered all issues regarding TGI’s

eligibility for a partial payment installment agreement under

section 6330(c)(3)–-not just issues that the revenue officer may

have considered in the past.   During the course of a CDP hearing,

the Office of Appeals conducts an independent review of a

taxpayer’s circumstances when considering a proposed collection

alternative, and it is not limited to a revenue officer’s

previous review or findings.   See Marks v. Commissioner, T.C.

Memo. 2008-226; Lloyd v. Commissioner, T.C. Memo. 2008-15.

Therefore, the settlement officer did not abuse his discretion

when he considered all issues related to the proposed partial

payment installment agreement, instead of limiting his review to

the narrow grounds of the revenue officer’s prior denial.
                               - 16 -

     B.   The Office of Appeals’ Proper Denial of TGI’s Proposed
          Collection Alternative When TGI Failed To Provide
          Requested Financial Information

     TGI’s petition argues that “the Office of Appeals abused its

discretion in not approving an installment agreement as provided

for by Code Sec. 6195(a) [sic]”.    We cannot agree.

          1.     TGI’s Failure To Submit a Completed Form 433-B

     During a section 6330 hearing, “[t]axpayers will be expected

to provide all relevant information requested by Appeals,

including financial statements, for its consideration of the

facts and issues involved in the hearing.”    Sec. 301.6330-

1(e)(1), Proced. & Admin. Regs.    An appeals officer may not

consider a collection alternative unless the taxpayer has

provided adequate financial information, such as a current

Form 433-A.    See Rev. Proc. 2003-71, sec. 4.03, 2003-2 C.B. 517,

518; see also IRM pt. 5.14.2.2.1(1), (5) (July 12, 2005),

5.14.7.4.1(5) (Sept. 30, 2004).     The settlement officer was

following the IRS’s administrative guidelines when he asked TGI

to provide a completed financial statement (Form 433-B).       See IRM

pt. 5.14.2.2.1(1), 5.14.7.4.1(5).     It was not an abuse of

discretion for the settlement officer to reject TGI’s proposed

collection alternative when TGI failed to submit a Form 433-B

with each line item in section 7 completed.    See Prater v.

Commissioner, T.C. Memo. 2007-241; Chandler v. Commissioner, T.C.

Memo. 2005-99; Roman v. Commissioner, T.C. Memo. 2004-20.       This
                             - 17 -

finding alone is sufficient to sustain the determination by the

Office of Appeals to proceed with a levy against TGI’s assets to

recover its unpaid payroll taxes.   Nevertheless, we will also

address the related contention that the settlement officer abused

his discretion by requesting Forms 433-A from all of TGI’s

corporate owners.

          2.   TGI’s Failure To Submit Completed Forms 433-A

     In its petition TGI contended that the “Appeals Office also

abused its discretion by demanding a certain Petitioner’s

individual shareholder to file * * * a Form 433-A, when such

shareholder is not a responsible or willful person.”   TGI does

not specifically allege which individual shareholder should have

been excused from providing financial information.   However, in

its response to the motion for summary judgment, TGI alleges that

“[t]here are six shareholders of TGI.   Of the six shareholders,

four are minority shareholders/employees * * * who have never

been assessed the underlying tax * * * [and] do not participate

in management of the company.”   TGI then states that “[t]here are

two shareholders who are potentially liable for part of the taxes

* * * [i.e., Tracy C. Copeland and Barbara S. Cross, but] they

have consistently denied liability for the trust fund penalty and

have instituted litigation in the United States District Court

for the Northern District of Oklahoma seeking relief from the
                              - 18 -

Government’s wrongful assessment.”11   However, TGI never

addresses Michael Copeland’s responsibility, as the secretary-

treasurer of TGI and one of its owners, for TGI’s trust fund

taxes, even though he was listed on the Form 4183 as a

responsible person.   It is reasonable to presume that a corporate

officer may be a responsible person under section 6672.     See

Bolding v. United States, 215 Ct. Cl. 148, 565 F.2d 663 (1977);

see also Kamins v. Spyres, 540 P.2d 1208, 1210 (Okla. Civ. App.

1975) (quoting Monday v. United States, 421 F.2d 1210, 1214-1215

(7th Cir. 1970)).   We find that at least Tracy C. Copeland,

Barbara S. Cross, and Michael Copeland, as corporate officers

charged with general control over the corporation, were all

corporate owners and officers who were possible responsible

persons for TGI’s trust fund taxes.

     The settlement officer was following administrative

guidelines when he requested financial information from TGI’s

owners (Forms 433-A).   See IRM pt. 5.14.7.4.1.1(6)(C), (7) (July

6, 2005).   Before the Secretary grants an installment agreement

that will not fully pay all balances due before the expiration of

the collection period, i.e., a partial payment installment


     11
      The fact that Tracy C. Copeland and Barbara S. Cross were
disputing their liability for section 6672 penalties in District
Court litigation confirms that the IRS assessed the penalty
against them as responsible persons and then defended that
position in litigation. We cannot say that the settlement
officer abused his discretion by taking that position in his own
deliberations about TGI.
                               - 19 -

agreement, a Form 433-A is required from all potentially

responsible persons to show the extent to which the potentially

responsible persons have the ability to pay from current assets

or income.   Id.   The trust fund recovery penalty (TFRP) under

section 6672 is “an alternative means of collecting unpaid trust

fund taxes when taxes are not fully collectible from the

company/business that failed to pay the taxes.”   IRM pt.

8.25.1.1(2) (Oct. 19, 2007); see also Slodov v. United States,

436 U.S. 238 (1978).   Therefore, before the IRS will excuse a

business from paying part of its tax liability–-by granting a

partial payment installment agreement–-the administrative

guidelines direct the appeals officer to examine all other

sources of collection, including collection from possible

responsible persons.

     The IRS had already assessed the TFRP against Tracy C.

Copeland and Barbara S. Cross, so they were certainly possible

responsible persons required to supply their financial

information under the IRS’s administrative guidelines.   Michael

Copeland, as an owner and an officer, was another possible

responsible person who should have been asked to supply his

financial information.   As to the other owners, the record does

not reveal the extent of their involvement with TGI, but in TGI’s

response to the motion for summary judgment, it indicated that

“of the six shareholders, four are minority shareholders/
                               - 20 -

employees * * * [that] do not participate in the management of

the company.”   Therefore, even though TGI characterized the other

owners as not involved in the management of TGI, it admitted they

were at least employees.    This classification alone (i.e., as

non-officer employees) is not sufficient to exclude them from

being possible responsible persons.     Instead, whether these

employee-shareholders could be responsible for a TFRP would

depend on their duties and responsibilities within the company,

and that information is missing from the record.     The assertion

that a mere employee cannot be a responsible person is further

contradicted by TGI’s own contention that Julie Sawyer–-who was

an employee and not an officer--was the primary culprit in TGI’s

failure to pay its taxes.    Since the settlement officer could not

rule out the possibility that all of TGI’s owners might have been

responsible persons, it was not an abuse of discretion for him to

request financial information in accordance with the IRM.      See

Orum v. Commissioner, 123 T.C. 1, 13 (2004), affd. 412 F.3d 819

(7th Cir. 2005); McClanahan v. Commissioner, T.C. Memo. 2008-161;

Etkin v. Commissioner, T.C. Memo. 2005-245.

     Furthermore, when the settlement officer requested the

financial information from all of TGI’s owners, TGI did not

provide the information for some and explain why the others

should be exempt.   Instead, TGI simply failed to supply any

information of any owner.    It was not until the settlement
                              - 21 -

officer sustained the levy that TGI raised the complaint that the

requests were overbroad.   Again, “Taxpayers will be expected to

provide all relevant information requested by Appeals, including

financial statements, for its consideration of the facts and

issues involved in the hearing.”   Sec. 301.6330-1(e)(1), Proced.

& Admin. Regs.   An appeals officer may not consider a collection

alternative unless the taxpayer has provided adequate financial

information, such as a current Form 433-A.   See Rev. Proc. 2003-

71, sec. 4.03; see also IRM pt. 5.14.2.2.1(1), (5);

5.14.7.4.1(8); 5.14.7.4.1.1(6)(C), (7).

     Since the particular collection alternative that TGI

proposed required the settlement officer to obtain financial

information from all possible responsible persons for the trust

fund taxes (see IRM pt. 5.14.7.4.1.1(6)(C), (7)), it was not an

abuse of discretion for the settlement officer to reject TGI’s

proposed collection alternative when none of the possible

responsible persons supplied any financial information.    See

Prater v. Commissioner, T.C. Memo. 2007-241; Chandler v.

Commissioner, T.C. Memo. 2005-99; Roman v. Commissioner, T.C.

Memo. 2004-20.   This finding alone, as well, is sufficient to

sustain the determination by the Office of Appeals to proceed

with levy against TGI’s assets to recover its unpaid payroll

taxes.
                             - 22 -

     We need not address whether the settlement officer’s request

for the $90,000 in prepayments and his finding that TGI could not

pay its current operating expenses and taxes were appropriate.

Rather, we are able to hold, on this record, that the Office of

Appeals did not abuse its discretion in upholding the proposed

levy to collect TGI’s unpaid tax liabilities when TGI failed to

provide to the settlement officer the financial information he

requested.

     To reflect the foregoing,



                                          An appropriate decision

                                      will be entered.
