                         T.C. Memo. 2003-34



                       UNITED STATES TAX COURT



                DRINA L. MCCORKLE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10330-02L.             Filed February 14, 2003.


     Deborah R. Jaffe and Robert M. McCallum, for petitioner.

     Julie L. Payne, for respondent.



                         MEMORANDUM OPINION

     VASQUEZ, Judge:    This case is before the Court on

respondent’s motion for summary judgment.

     Rule 121(a)1 provides that either party may move for summary

judgment upon all or any part of the legal issues in controversy.



     1
        Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code.
                                - 2 -

Full or partial summary judgment may be granted only if it is

demonstrated that no genuine issue exists as to any material

fact, and a decision may be entered as a matter of law.     Rule

121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), affd. 17 F.3d 965 (7th Cir. 1994).

       We conclude that there is no genuine issue as to any

material fact and that a decision may be rendered as a matter of

law.

Background

       Petitioner is a self-employed realtor.   Petitioner filed

delinquent Federal income tax returns for 1997 and 1999.

Petitioner failed to pay the taxes due on those returns.

       On August 13, 2001, respondent issued to petitioner a Final

Notice, Notice of Intent to Levy and Notice of Your Right to a

Hearing, regarding her income tax liabilities for 1997 and 1999

(notice of intent to levy).    As of the date of the notice of

intent to levy, petitioner’s 1997 and 1999 income tax

liabilities, including penalties and interest, totaled $50,536.43

and $93,936.36, respectively.    As of the date of the notice of

intent to levy, petitioner had not filed her income tax return

for 2000, had made insufficient estimated tax payments toward her

year 2000 tax liability, and had not made any estimated tax

payments toward her year 2001 tax liability.
                               - 3 -

     On August 30, 2001, petitioner signed a Form 433-A,

Collection Information Statement for Individuals, and sent it to

respondent.

     On September 6, 2001, petitioner submitted a Form 12153,

Request for a Collection Due Process Hearing, regarding her 1997

and 1999 tax years (hearing request).   Petitioner stated that she

disagreed with respondent’s decision to levy because she was

unable to pay the assessments in full at that time.   Petitioner,

however, did not dispute the amount of the liabilities.    She

requested that respondent consider an installment payment plan in

lieu of enforced collection action.

     On January 23, 2002, petitioner sent respondent spreadsheets

showing the sales she closed and commissions she earned during

2001 and two pages of claimed business expenses.

     On the basis of all of the information provided by

petitioner, respondent prepared a monthly income and expense

analysis.   Respondent concluded that petitioner had the ability

to pay $5,599 per month toward her outstanding 1997 and 1999 tax

liabilities.

     On March 19, 2002, respondent assigned Appeals Officer

Denise Mountjoy to petitioner’s hearing request.   Appeals Officer

Mountjoy reviewed the administrative file and obtained

transcripts of petitioner’s account for 1997 and 1999.    The

administrative file and transcripts of account confirmed the
                               - 4 -

assessments against petitioner and that all required collection

notices had been issued.   Appeals Officer Mountjoy contacted

petitioner’s counsel to schedule an administrative hearing

(hearing).

     On March 25, 2002, the hearing was held.   At the hearing,

petitioner’s counsel noted that petitioner’s income fluctuates

considerably and proposed a “pay as she can” installment

agreement for petitioner’s 1997 and 1999 tax liabilities.    The

proposed installment plan suggested that several months of

expenses would be deducted from each commission check petitioner

received and that a percentage of the remaining amount would be

paid to respondent (proposed installment plan).    Appeals Officer

Mountjoy stated that she would consider the proposed installment

plan and would get back to petitioner’s counsel.

     Appeals Officer Mountjoy considered the proposed installment

plan and determined it was unacceptable.   The reasons underlying

Appeals Officer Mountjoy’s decision were that (1) it would be

difficult for respondent to monitor; (2) it would not necessarily

provide for full payment of petitioner’s 1997 and 1999 tax

liabilities within the periods of limitations on collection; and

(3) petitioner’s failure to make adequate estimated payments for

taxable year 2001 suggested a continuing compliance problem.

     On May 1, 2002, Appeals Officer Mountjoy spoke with

petitioner’s counsel.   Petitioner’s counsel advised Appeals
                                 - 5 -

Officer Mountjoy that he no longer believed that petitioner was

entitled to an installment agreement because she was not in

compliance with her filing and paying requirements for 2001.     The

conversation reconfirmed Appeals Officer Mountjoy’s prior

conclusion that it was not in the Government’s interest to accept

the proposed installment plan.

     On May 10, 2002, respondent issued a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330 to

petitioner regarding her 1997 and 1999 tax years (notice of

determination).   In the notice of determination, respondent

determined that the issuance of the notice of intent to levy and

proposed collection action were appropriate.   In the attachment

to the notice of determination, respondent explained:   “Since you

are not in compliance with the current filing and paying

requirement for current taxes [2001], you do not qualify for an

installment payment plan.”

     On June 17, 2002, petitioner timely filed a petition for

lien or levy action under Code section 6320(c) or 6330(d) seeking

review of respondent’s determination to proceed with collection

of petitioner’s 1997 and 1999 tax liabilities.2

     On November 20, 2002, respondent filed a motion for summary

judgment.   On November 21, 2002, the Court ordered petitioner to



     2
        At the time she filed the petition, petitioner resided
in Anacortes, Washington.
                               - 6 -

file any objection to respondent’s motion for summary judgment on

or before December 12, 2002.   On December 16, 2002, petitioner

filed a response to respondent’s motion for summary judgment

(response).

Discussion

     Petitioner’s only argument is that respondent’s refusal of

the proposed installment plan constituted an abuse of discretion.

Where the validity of the underlying tax liability is not

properly in issue, we review respondent’s determination for an

abuse of discretion.   Sego v. Commissioner, 114 T.C. 604, 610

(2000); Black v. Commissioner, T.C. Memo. 2002-307 (reviewing the

Commissioner’s determination regarding an installment agreement

proposed at a section 6330 hearing under an abuse of discretion

standard); Schulman v. Commissioner, T.C. Memo. 2002-129.

     One reason respondent did not accept the proposed

installment plan was because petitioner was not in compliance

with her current filing and paying obligations.   See Internal

Revenue Manual, pt. 5.14.1.4.1 (July 1, 2002), pt. 5.14.9.3(5)

(Mar. 30, 2002), pt. 5.19.1.3.3.1(1) and (5) (Oct. 1, 2001), pt.

5.19.1.5.4.10(1)-(2) (Oct. 1, 2001).   In her response, petitioner

admits that as of the date of the notice of determination, May

10, 2002, she had not filed her 2001 return and had not fully

paid her tax liability for 2001.
                               - 7 -

     Petitioner, however, claims that she has now filed her

return and fully paid her tax liability for 2001.3   Even if this

is so, it does not appear that respondent abused his discretion

in determining to proceed with collection.   After the section

6330 hearing and prior to issuing the notice of determination,

Appeals Officer Mountjoy spoke with petitioner’s counsel, and he

advised Appeals Officer Mountjoy that he believed that petitioner

was not entitled to an installment agreement.

     Additionally, respondent’s determination was based on the

financial information provided to him by petitioner.    See

Schulman v. Commissioner, supra.   Respondent allowed certain

expenses in amounts greater than those originally claimed by

petitioner.4   On the basis of all the information provided by

petitioner, respondent prepared a monthly income and expense

analysis and determined that petitioner had income net of

necessary living expenses of $5,599 per month that could be

applied to petitioner’s outstanding 1997 and 1999 tax

liabilities.


     3
        Petitioner attached a Form 1040 for 2001 to the response.
This return is not signed or dated by petitioner or the paid
preparer listed on the form, and there is no evidence of any
payment made by petitioner. Additionally, there is no evidence
that petitioner submitted this return to the Internal Revenue
Service. Furthermore, in the petition petitioner admitted that
she had not paid her 2001 tax liability in full.
     4
        Petitioner listed her total monthly living expenses to be
$8,607; however, respondent calculated petitioner’s total
allowable monthly expenses to be $17,174.
                                 - 8 -

     Respondent also determined that the proposed installment

plan would be difficult to monitor.       We agree.   Because

petitioner’s net income fluctuates monthly, respondent would be

forced to audit continually the correctness of the income and

deductions petitioner claimed.    Furthermore, the proposed

installment plan left uncertain whether petitioner would fully

pay her outstanding liabilities within the periods of limitations

on collection.    We conclude that respondent gave due

consideration to the proposed installment plan, and his

determination was reasonable.

     Petitioner has failed to raise a spousal defense or make a

valid challenge to the appropriateness of respondent’s intended

collection action.    These issues are now deemed conceded.     Rule

331(b)(4).   Accordingly, we conclude that respondent did not

abuse his discretion by refusing to accept the proposed

installment plan, and we sustain respondent’s determination to

proceed with collection with respect to petitioner’s 1997 and

1999 tax years.

     To reflect the foregoing,

                                              An appropriate order and

                                         decision will be entered.
