                  T.C. Memo. 2011-285



                UNITED STATES TAX COURT



             CYNTHIA BUSCHE, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 16043-10L.             Filed December 7, 2011.



     R issued to P a notice of proposed levy, and P
timely requested a hearing under I.R.C. sec. 6330. In
that request P asked for a face-to-face hearing and
indicated that she desired an installment agreement or
an offer-in-compromise, but P never made a concrete
proposal of either. P did not submit current evidence
of proper tax withholding. As a result, R did not
offer a face-to-face conference as P had requested. P
refused to participate in a telephone collection due
process conference, and R issued to P a final notice of
determination that R would sustain the proposed levy.
P appealed that determination to this Court, arguing
that she was entitled to a face-to-face hearing. R
moved for summary judgment, and P opposed R’s motion.

     Held: R’s Office of Appeals did not abuse its
discretion in sustaining the proposed levy when (1) P
generally requested an installment agreement but
disregarded Appeals’ multiple requests for a concrete
proposal, and (2) P failed to supply information as to
                                - 2 -

     her current compliance with tax withholding
     obligations.



     Cynthia Busche, pro se.

     David M. McCallum, for respondent.



                         MEMORANDUM OPINION


     GUSTAFSON, Judge:   This case is an appeal by petitioner

Cynthia Busche, pursuant to section 6330(d),1 asking this Court

to review the notice of determination issued by the Office of

Appeals (“Appeals”) of the Internal Revenue Service (“IRS”)

sustaining a proposed levy to collect Ms. Busche’s unpaid Federal

income tax for the year 2008.   The case is currently before the

Court on respondent’s motion for summary judgment filed

August 18, 2011.   The principal issue for decision is whether

Appeals abused its discretion by denying Ms. Busche a face-to-

face hearing.   For the reasons explained below, we will grant

respondent’s motion.




     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 -

                            Background

     The following facts are based on the documents in the record

of the IRS’s hearing held pursuant to section 6330(b) and (c).

As is discussed below, Ms. Busche did not raise any genuine issue

as to these facts.

Ms. Busche’s self-reported 2008 liability

     On April 15, 2009, petitioner Cynthia Busche timely filed a

Form 1040, “U.S. Individual Income Tax Return”, for the year

2008, on which she reported a total tax liability of $11,342,

withholding credits of $4,769, and an unpaid balance due of

$6,573.   That is, the amounts of tax that the IRS proposes to

collect by levy are not the result of a deficiency determination

by the IRS but rather are as reported by Ms. Busche herself.

The IRS’s initial attempts at collection

     The IRS assessed the tax reported by Ms. Busche; and,

because the balance due was unpaid, the IRS sent her in May and

June 2009 notices of balance due.   When Ms. Busche did not pay

the balance due, the IRS sent her a “Final Notice of Intent to

Levy and Notice of Your Right to a Hearing” dated January 4,

2010.

Ms. Busche’s request for a CDP hearing

     In response to that notice, Ms. Busche submitted to the IRS,

on January 20, 2010, a Form 12153, “Request for a Collection Due
                                 - 4 -

Process or Equivalent Hearing”.2    The form permits a taxpayer to

indicate the nature of her collection due process (“CDP”) hearing

request by checking boxes selectively, but Ms. Busche checked

boxes almost indiscriminately.     That is, she checked not only the

“Proposed Levy or Actual Levy” box (which was appropriate, given

her receipt of a notice of proposed levy) but also the “Filed

Notice of Federal Tax Lien” box (as well as other lien-related

boxes, i.e., “Subordination”, “Discharge”, and “Withdrawal”),

even though our record shows no lien filing, the IRS alleges that

none has ever been made, and Ms. Busche makes no allegation that

she received a notice of lien.     Ms. Busche checked the boxes

indicating that she desired both an “Installment Agreement” and

an “Offer in Compromise”, though she later acknowledged that “an

Offer in Compromise * * * does not apply in this situation.”

     Ms. Busche submitted her Form 12153 under a cover letter3

that included the following:




     2
      Ms. Busche’s mailing included two similar Forms 12153, one
of which, dated “11-16-09”, pertained to 2008 and is at issue
here. Even though it pre-dated the final notice of levy, the IRS
treated it as timely. The form refers to “Attached Sheets”, but
those sheets do not appear in our record (despite the Court’s
invitation to Ms. Busche, described below). Ms. Busche’s other
Form 12153 (dated “8/24/2009”) pertains to years other than 2008
and is not at issue here.
     3
      The cover letter purports to be dated January 19, 2009, but
it is clear, both from dates within the letter and from an
accompanying affidavit, that the letter was actually composed in
January 2010.
                              - 5 -

     On June 11, 2009, by registered mail #RA513114084US, the
     INTERNAL REVENUE SERVICE, AUSTIN, TX received payment, and
     authority to process payment with IRS form 56,[4] to
     discharge the 2008 IRS Debt of CYNTHIA L BUSCHE. I have no
     evidence to the contrary. Debt is discharged in full under
     UCC 3-603.[5] I have no evidence to the contrary.




     4
      Ms. Busche’s reference to “Form 56” apparently reflects the
frivolous contention that

     The federal government * * * has tricked the populace into
     becoming U.S. citizens by entering into ‘contracts’ embodied
     in such documents as birth certificates and social security
     cards * * * [; that] the government holds the profits in
     secret, individual trust accounts, one for each citizen
     * * * [; and that one] who learns of and is able to
     implement the remedy, can supposedly use the debt owed to
     her by the government to discharge her debts to third
     parties with Bills of Exchange that are drawn on her trust
     account * * *.

Bryant v. Washington Mut. Bank, 524 F. Supp. 2d 753, 758-759
(W.D. Va. 2007). One can supposedly invoke this remedy for tax
purposes by filing “an IRS Form 56 (‘Notice Concerning Fiduciary
Relationship’)--requesting that the Secretary remit to him [an
amount] * * * from his trust account”. Gravatt v. United States,
___ Fed. Cl. ___ (Sept. 27, 2011).
     5
      Ms. Busche apparently invoked “UCC 3-603” on the grounds
that “the Uniform Commercial Code (UCC) provides the means for a
person to implement” the remedy of obtaining his secret trust
funds from the Government, Bryant v. Washington Mut. Bank, 524 F.
Supp. 2d at 759. Ms. Busche’s home State’s version of the cited
provision--N.C. Gen. Stat. sec. 25-3-603(b) (2009)--provides:
“If tender of payment of an obligation to pay an instrument is
made to a person entitled to enforce the instrument and the
tender is refused, there is discharge”. However,

     the United States Government, as the sovereign, is not bound
     by such State statutes as the Uniform Commercial Code. See
     Burnet v. Harmel, 287 U.S. 103, 110 (1932); Texas Learning
     Technology Group v. Commissioner, 96 T.C. 686, 693 (1991),
     affd. 958 F.2d 122 (5th Cir. 1992). * * * [T]he only way
     income tax liabilities can be settled or compromised is by
                                                   (continued...)
                               - 6 -

     I dispute your claim of contract under 15 USC 1692g.[6]

Thus, although Ms. Busche implicitly contended that her 2008

liability should be considered “discharged” because of her rights

to a secret trust fund, she did not, in her initial request for a

CDP hearing, challenge the correctness of the tax liability that

she had reported on her tax return, and she did not propose any

specifics for an installment agreement or other collection

alternative.

     Upon receipt of Ms. Busche’s request for a CDP hearing, the

IRS’s Office of Appeals sent her an introductory letter dated

April 15, 2010, explaining (among other things) that such

hearings take place “by: (1) telephone, (2) mail, and/or

(3) personal interviews.   If you prefer your hearing to be a




     5
      (...continued)
     following the procedures set forth in the Internal Revenue
     Code and the regulations thereunder. * * *

Bear v. Commissioner, T.C. Memo. 1992-690, 64 T.C.M. (CCH) 1430,
1432 (1992), affd. without published opinion 19 F.3d 26 (9th Cir.
1994).
     6
      What Ms. Busche cited is a provision in Title 15 of the
United States Code, Chapter 41 (“Consumer Credit Protection”),
Subchapter V (“Debt Collection Practices”). 15 U.S.C. sec. 1692g
(2006) (“Validation of Debts”) imposes various requirements on a
“debt collector”, and Ms. Busche appears to have assumed that the
IRS is a “debt collector” for this purpose. That is not so. See
id. sec. 1692a(6) (“The term ‘debt collector’ * * * does not
include * * * (C) any officer or employee of the United States
* * * to the extent that collecting or attempting to collect any
debt is in the performance of his official duties”).
                               - 7 -

face-to-face conference at the Appeals Office closest to your

residence/business address, please let us know immediately”.

     On April 26, 2010, Ms. Busche promptly sent a letter

“demand[ing] a face-to-face conference”.

Appeals’ requests for information, and Ms. Busche’s responses

     The Appeals Office replied by letter of April 27, 2010, in

which it scheduled a telephone conference, not a face-to-face

conference, for June 3, 2010--i.e., more than 5 weeks after the

date of Appeals’ letter.   Appeals’ letter explained:

     I have determined that an issue raised in your hearing
     request is:

          1.   a “specified frivolous position”, identified by
               the IRS in Notice 2008-14[7] * * *; or

          2.   a reason that is not a “specified frivolous
               position,” but is a frivolous reason reflecting a
               desire to delay or impede Federal tax
               administration; or

          3.   a moral, religious, political, constitutional,
               conscientious, or similar objection to the
               imposition or payment of Federal taxes that
               reflects a desire to delay or impede the
               administration of Federal tax laws[.]



     7
      Ms. Busche’s Form 56 contention quoted above (see text
notes 4-6 above), was not explicitly listed in Notice 2008-14,
2008-4 I.R.B. 310 (Jan. 28, 2008) (but is listed as frivolous in
the superseding Notice 2010-33, sec. III(20) and (21), 2010-17
I.R.B. 609). However, because Ms. Busche later disclaimed her
frivolous contention and Appeals did proceed to review her levy
notice in a CDP hearing, we need not determine whether the
“boilerplate”, see Thornberry v. Commissioner, 136 T.C. 356, 358-
359 (2011), in Appeals’ letter of April 27, 2010, would have been
sufficient to warrant non-consideration of Ms. Busche’s request
for a CDP hearing.
                          - 8 -

Please be advised that Appeals does not provide a
face-to-face conference if the issues you wish to discuss
include frivolous issues or issues that Appeals considers as
reflecting a desire to delay or impede the administration of
Federal tax laws.

You will be allowed a face-to-face conference on any
legitimate issue you raised if you withdraw in writing
within 30 days from the date of this letter, the frivolous
issues or issues reflecting a desire to delay or impede the
administration of Federal tax laws.

   *       *      *       *       *        *       *

To be allowed a face-to-face conference about collection
alternatives, you must also have filed all required returns
and provided all information requested in this letter.

   *       *      *       *       *        *       *

For me to consider alternative collection methods such as an
installment agreement or offer in compromise, you must
provide any items listed below. In addition, you must have
filed all Federal tax returns required to be filed.

The items to be provided are:

       •   Proof of filing tax return(s) for the following
           applicable periods. * * *
           Type of Tax: Form 1040, U.S. Individual income Tax
           Return
           Period or Periods: 2009

       •   Specific proposed installment agreement payment
           amount and payment date for consideration.

   *       *      *       *       *        *       *

Please send me the items listed or checked above by May 11,
2010. I cannot consider collection alternatives at your
conference nor can I consider alternatives during the
hearing process without the information requested above. I
am enclosing the applicable forms and a return envelope for
your convenience.
                               - 9 -

     Ms. Busche responded by letter dated May 5, 2010, which

again made no challenge to her self-reported tax liability for

2008 and stated:

     I wish to withdraw any frivolous or desire-to-delay issues,
     so that I will be allowed a face-to-face conference.

        *       *      *       *       *        *       *

     I still demand a face-to-face conference at the INTERNAL
     REVENUE SERVICE, ASHEVILLE, NORTH CAROLINA office. I do not
     agree to a CDP Hearing by telephone or by mail.

Ms. Busche did not provide, with this repeated demand, the

information that Appeals had requested in its letter of April 27,

2010.

Appeals’ second request for information

     Appeals therefore replied by letter dated May 13, 2010,

which stated:

     This is in response to your letter dated May 5, 2010 where
     you withdrew any frivolous or desire to delay issues. As
     the letter dated April 27, 2010 stated, to allow a face-to-
     face conference about collection alternatives you must also
     have filed all required returns and provided all information
     requested in that letter. Based on the information
     available to us, you have filed your 2009 tax return with a
     balance due. However, you did not provide the other
     information requested.

     The items to be provided are:

            •   Your specific proposed collection alternative for
                consideration.

        *       *      *       *       *        *       *

            •   If an Installment Agreement is your proposed
                collection alternative, please provide your
                specific proposed installment agreement payment
                amount and payment date.
                                - 10 -

             •    Proof of withholding paying compliance: Please
                  provide proof of filing a corrected Form W-4,
                  Employee’s Withholding Allowance Certificate, with
                  your employer to ensue the correct Federal income
                  tax is withheld from your pay.[8]

         *       *       *       *       *        *       *

     Please send me the items listed or checked above by May 25,
     2010. Collection alternatives cannot be considered without
     the information requested above nor can the face-to-face
     hearing be granted. If all of the information is not
     provided by May 25, 2010, the telephone conference will
     remain as scheduled on June 3, 2010 at 10:00 am. Central
     Daylight Time. Please call me for the conference.

     If you do not participate in the conference or respond to
     this letter, the determination and/or decision letter that
     we issue will be based on your hearing request, any
     information you previously provided to this office about the
     applicable tax periods, and the Service’s administrative
     file and records.

Ms. Busche’s responses

     Ms. Busche did not provide the specifics of her collection

alternative.     Rather, on May 25, 2010 (the date by which Appeals

had asked for the information), Ms. Busche sent another letter,

which stated:

     Thank you for your letter dated May 13, 2010 and postmarked
     May 17, 2010. I received your correspondence on May 20,
     2010.

     Because of the short suspense, three (3) working days, I am
     unable to respond to your letter in the time you have given
     me. Three (3) working days is an unreasonably short amount
     of time to respond considering the seriousness of this


     8
      This request for information about withholding of taxes
from Ms. Busche’s wages was not included in Appeals’ prior
request for information and was presumably prompted by Appeals’
discovery that her recent 2009 return (like her 2008 return at
issue) reported taxes due but not withheld.
                              - 11 -

     matter. Your actions with the short suspense is causing
     undue delays, because I have to respond to each of your
     correspondences. Furthermore you keep changing the rules
     for a face-to-face hearing. Your rule changing is
     confusing, causing more delays as I try to figure out your
     intent. Due to your above listed actions, I must now demand
     no tricks and no lies.

     I request an extension of time until June 25, 2010 to
     respond to your letter dated May 13, 2010. I do not agree
     to a June 3, 2010 telephonic hearing date. I only agree to
     a mutually agreed upon face-to-face hearing at a mutually
     agreed upon date, time, and location.

     I have a very busy schedule and want to devote the proper
     time to this matter. I have to do some research which will
     take me some time.

The letter made no challenge to Ms. Busche’s self-reported tax

liability for 2008.

     On June 3, 2010 (the date Appeals had appointed for the

telephone conference), Ms. Busche did not call Appeals as

directed in the April 27, 2010, letter.   Instead, Ms. Busche sent

Appeals another copy of her May 25 letter and requested a

response.   She did not challenge in that letter her self-reported

tax liability for 2008, and she did not provide with that letter

the specifics of her proposed collection alternative.

     On June 16, 2010, Ms. Busche sent Appeals another letter,

again purporting to respond to Appeals’s letter of May 13, 2010,

and making demands for information from the IRS:

     [T]his letter is my final response to your May 13, 2010
     letter.

     It is not my intent to bring up frivolous issues, however
     the courts have determined that I cannot rely on IRS
     agents/personnel to provide accurate information, therefore
                                - 12 -

     I am now requesting copies of the law that requires me to go
     along with your prerequisites for a face to face hearing.
     It is my understanding that there are no requirements for a
     face to face hearing, except for me asking for a face to
     face hearing. I believe there is no evidence to the
     contrary. I am now repeating my request for a face to face
     hearing. This is my 3rd request for a face to face hearing.

     In the spirit of cooperation, and wanting to resolve this
     matter in an expedient way, I am providing information that
     you requested in your letter dated May 13, 2010:

          *    specific proposed collection alternative and
               specific proposed installment agreement payment
               amount and payment date has already been
               established on June 5, 2009 with registered mail
               number RA513114084US and was received by INTERNAL
               REVENUE SERVICE on June 11, 2009.

          *    If an Offer in Compromise is your proposed
               collection alternative... This bullet point does
               not apply in this situation.

     Your criteria has been met, now please provide me with a
     proposed date and time for a face-to-face hearing at the
     Asheville, North Carolina office. Upon receipt of your
     reply letter, I will confirm or propose an alternate date
     and time for a face-to-face hearing at the Asheville, North
     Carolina office.

No letter of June 5, 2009, was attached to Ms. Busche’s letter of

June 16, 2011; and no letter of June 5, 2009, appears in the

record of this case (despite the Court’s invitation to

Ms. Busche, described below).    The transcript for Ms. Busche’s

2008 income tax account shows that she made no payments in

June 2009 (or at any other time) that could have been in

conjunction with a proposal of an installment agreement.

     Thus, as of the time of Ms. Busche’s “final response” to

Appeals, she had not provided the specifics of a proposed
                                - 13 -

installment agreement or any other collection alternative, nor

had she provided information about her compliance with tax

withholding requirements, nor had she made any challenge to her

self-reported tax liability for 2008.

Appeals’ determination to proceed with collection

     On June 18, 2010, the Office of Appeals issued to Ms. Busche

its “Notice of Determination Concerning Collection Action(s)

under Section 6320 and/or 6330”, which stated in part:

     The Appeals office has determined that the Notice of Intent
     to Levy was appropriately issued based on applicable laws
     and procedures. We could not reach an agreement, extend any
     relief to you, or even consider alternatives to the levy,
     because after you requested an appeal and a hearing was
     offered, you did not fully cooperate with us. The Appeals
     office fully sustains the Compliance office proposed levy
     action. * * *

An attachment to the notice of determination stated in part:

                           BRIEF BACKGROUND

     The CDP notice was for the unpaid income tax liability for
     your 2008 Form 1040, U.S. Individual income Tax Return. A
     review of the account transcript indicates that the self-
     assessed tax return was filed by you and reflected a balance
     due at the time of filing due to insufficient withholdings,
     untimely paying, penalties, and interest. * * *

        *      *       *         *       *      *        *

     Currently, the IRS has no record of receiving the financial
     data requested in the letters dated April 27, 2010 and
     May 13, 2010. * * *

        *      *       *         *       *      *        *

     The letters had requested proof of withholding paying
     compliance and proof of 2009 Form 1040 filing compliance.
     * * * For an installment agreement, the letter [of
     April 27, 2010] requested your specific proposed installment
                              - 14 -

    agreement payment amount and payment date for consideration
    and the completed Form 433-A[9] with supporting documentation
    attachments. * * *

        *       *      *       *       *        *       *

    As of today, you have not provided proof of paying
    compliance, or the financial data needed for any collection
    alternative or to provide a face-to-face hearing.
    Therefore, the Appeals office is issuing the determination
    that the Notice of Intent to Levy was appropriately issued
    for the applicable tax period. The proposed levy action is
    sustained in full.

        *       *      *       *       *        *       *

        Verification of Legal and Procedural Requirements

    The requirements of applicable law or administrative
    procedures have been met and actions taken were appropriate
    under the circumstances.

            •   Assessment was made on the applicable 2008 Form
                1040 CDP notice period based on the return you
                filed, per IRC § 6201, and the notices and demand
                for payment letters were mailed to your last known
                address, within 60 days of the assessment, as
                required by IRC § 6303. This information was
                verified from the account transcripts.

            •   There was a balance due when the CDP notice was
                issued per IRC § 6330 and § 6331(a). There is
                presently an amount due and owing.

            •   IRC § 6330(a) imposes the requirement that a
                taxpayer be given an opportunity for hearing



    9
      Ms. Busche’s request for a CDP hearing had indicated an
interest in both an installment agreement and an
offer-in-compromise. The request for Form 433-A, “Collection
Information Statement for Wage Earners and Self-Employed
Individuals”, in Appeals’ letter of April 27, 2010, was made in
conjunction with its discussion of an offer-in-compromise, and
not specifically with reference to an installment agreement. For
purposes of this opinion we therefore overlook Ms. Busche’s
failure to provide Form 433-A.
                              - 15 -

                before the Internal Revenue Service can levy on
                the taxpayer’s property.

            •   Per review of computer transcript, the CDP Notice
                of Intent to Levy and Notice of Your Right to a
                Hearing was sent by Certified Mail, Return Receipt
                Requested, to your last known address, which was
                also the address indicated on the CDP hearing
                request.

            •   The timely received request for CDP Appeal was
                verified. Per review of the computer transcript,
                the levy action has been suspended by the
                appropriate computer condition codes for the tax
                period at issue.

            •   There is no offer in compromise or installment
                agreement pending or currently in effect. There
                is also no pending innocent spouse request.

            •   There is no pending bankruptcy case, nor did you
                have a pending bankruptcy case at the time the CDP
                notice was sent (11 U.S.C. § 362(a)(6)).

            •   This Appeals employee has had no prior involvement
                with this taxpayer concerning the applicable tax
                periods before this CDP case.

        *       *       *      *        *       *       *

     On the Form 12153, you did not challenge the existence or
     the amount of the self-assessed income tax liability.

Tax Court proceedings

     On July 14, 2010, Ms. Busche filed a timely petition

pursuant to section 6330(d)(1), appealing the collection

determination and asking this Court to review it.   Her petition

argues at length that she was wrongly denied a face-to-face

hearing before the Office of Appeals.

     On August 18, 2011, the IRS moved for summary judgment.    By

order served August 26, 2011, the Court ordered Ms. Busche to
                              - 16 -

file and serve a response and explained her responsibility as a

non-movant responding to such a motion.   On September 9, 2011,

she filed a response.   By order served September 28, 2011, the

Court pointed out an apparent gap in Ms. Busche’s opposition and

ordered that she be permitted to file a supplemental response,

which she then did on October 12, 2011.

                            Discussion

I.   Applicable legal principles

     A.   Summary judgment standards

     Where the pertinent facts are not in dispute, a party may

move for summary judgment to expedite the litigation and avoid an

unnecessary (and potentially expensive) trial.   Fla. Peach Corp.

v. Commissioner, 90 T.C. 678, 681 (1988).   Summary judgment may

be granted where there is no genuine issue as to any material

fact and a decision may be rendered as a matter of law.

Rule 121(a) and (b); see Sundstrand Corp. v. Commissioner, 98

T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz

v. Commissioner, 90 T.C. 753, 754 (1988).   The party moving for

summary judgment (here, the IRS) bears the burden of showing that

there is no genuine issue as to any material fact, and factual

inferences will be drawn in the manner most favorable to the

party opposing summary judgment (here, Ms. Busche).   Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner,

79 T.C. 340, 344 (1982).   However, Rule 121(d) provides:
                              - 17 -

     When a motion for summary judgment is made and
     supported as provided in this Rule, an adverse party
     may not rest upon the mere allegations or denials of
     such party’s pleading, but such party’s response, by
     affidavits or as otherwise provided in this Rule, must
     set forth specific facts showing that there is a
     genuine issue for trial. * * *

In compliance with Rule 121(b), the IRS made and supported a

showing of the facts of the case, and it was incumbent on

Ms. Busche to “set forth specific facts”, supported by affidavits

or otherwise, to contradict the IRS’s showing.

     B.   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

pursuant to section 6330(b) and (c); and, if the taxpayer is

dissatisfied with the outcome there, she can appeal that

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

Ms. Busche has done.

     For the CDP hearing before the Office of Appeals, the

pertinent procedures are set forth in section 6330(c).

     First, the IRS’s Appeals officer must obtain verification

from the Secretary that the requirements of any applicable law or
                              - 18 -

administrative procedure have been met.     Sec. 6330(c)(1).   In the

case of a levy to collect a self-reported tax liability, the

basic requirements, see sec. 6331(a), (d), for which Appeals must

obtain 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).     (We

discuss below Ms. Busche’s 11th-hour attempt to raise a

“verification” issue.)

     Second, the taxpayer may “raise at the hearing 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).

Ms. Busche’s principal contention--that she should have gotten a

face-to-face hearing for consideration of an installment

agreement--pertains to that second set of issues, i.e., offers of

collection alternatives, and we discuss this issue below.

     Additionally, the taxpayer may contest the existence and

amount of the underlying tax liability if she did not receive a

notice of deficiency and “did not otherwise have an opportunity

to dispute such tax liability.”   Sec. 6330(c)(2)(B).    The

liability at issue here is that which Ms. Busche self-reported on

her 2008 tax return, so she did not receive a notice of
                               - 19 -

deficiency and did not have a prior opportunity to make such a

dispute.   (We discuss below her failure to raise such a dispute

before the Office of Appeals.)

      When the Office of Appeals issues its determination, the

taxpayer may “appeal such determination to the Tax Court”,

pursuant to section 6330(d)(1), as Ms. Busche has done.    In such

an appeal, we review de novo any determination of the Office of

Appeals as to the underlying liability that is properly at issue;

and as to collection matters, we review the determination of the

Office of Appeals for abuse of discretion--that is, we decide

whether the determination was arbitrary, capricious, or without

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

301, 320 (2005), affd. 469 F.3d 27 (1st Cir. 2006); Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114

T.C. 176 (2000).

II.   Ms. Busche’s arguments

      In Ms. Busche’s opposition to the IRS’s motion for summary

judgment, we discern four arguments that we now address.

      A.   Verification

      In her supplemental opposition to the IRS’s motion, Ms.

Busche raises for the first time the issue of “verification”.

The totality of her contention is as follows:

      The respondent has not verified that the requirements of any
      applicable law or administrative procedure were met. I have
      no evidence to the contrary, and have yet to see evidence to
      the contrary from the Respondent.
                                - 20 -

As we explained above, the Office of Appeals is required by

statute to “obtain verification from the Secretary that the

requirements of any applicable law or administrative procedure

have been met”.    Sec. 6330(c)(1).   A taxpayer may challenge that

verification in an appeal to this Court whether or not he raised

verification before the Office of Appeals.      See Hoyle v.

Commissioner, 131 T.C. 197 (2008).       However, Ms. Busche’s

verification challenge is unavailing, for three reasons.

            1.    Omission from Ms. Busche’s petition

     A petition commencing a CDP case in this Court must

contain--

     Clear and concise assignments of each and every error which
     the petitioner alleges to have been committed in the notice
     of determination. Any issue not raised in the assignments
     of error shall be deemed to be conceded.

Rule 331(b)(4).    Ms. Busche’s petition did not raise lack of

verification as an assignment of error, and she therefore

conceded lack of verification.

     However, even if we take note of Ms. Busche’s

self-represented status and construe her pleadings broadly, the

outcome does not change, as we now show.

            2.    Lack of “reasons for the amendment”

     If we were to find in Ms. Busche’s opposition to the IRS’s

motion for summary judgment a latent or implicit motion to amend

her petition to raise the issue of verification, we would then

address that motion to amend under the standards of Rule 41(a):
                              - 21 -

     a party may amend a pleading only by leave of Court or by
     written consent of the adverse party, and leave shall be
     given freely when justice so requires. No amendment shall
     be allowed after expiration of the time for filing the
     petition, however, which would involve conferring
     jurisdiction on the Court over a matter which otherwise
     would not come within its jurisdiction under the petition as
     then on file. A motion for leave to amend a pleading shall
     state the reasons for the amendment * * *. [Emphasis
     added.]

Ms. Busche states no reasons for an amendment, and it is

therefore not possible to conclude that “justice * * * requires”

an amendment.

     On the contrary, apart from Ms. Busche’s general statement

in her brief that “respondent has not verified”, the record

before us contains nothing to suggest anything other than that

verification was indeed duly obtained:   Appeals’ notice of

determination gives a detailed account of verification of all the

basic requirements, and Ms. Busche’s IRS transcript (i.e., a Form

4340, “Certificate of Assessments, Payments, and Other Specified

Matters”) that was submitted with the IRS’s motion for summary

judgment confirms that those requirements were met.   Ms. Busche

suggests no particular defect in that verification, and a motion

to amend her petition would be denied.

          3.    Lack of “specific facts” to dispute verification

     Even if verification were deemed to be properly pleaded in

this case, the IRS would still be entitled to summary judgment on

the point.   The IRS’s motion made and supported a showing of

verification; and under Rule 121 it was therefore incumbent on
                              - 22 -

Ms. Busche “not [to] rest upon the mere allegations or denials of

such party’s pleading” but rather to “set forth specific facts

showing that there is a genuine issue for trial.”   (Emphasis

added.)   This obligation was not hidden from Ms. Busche.   Rather,

in view of Ms. Busche’s self-represented status, the Court stated

in its order dated August 24, 2011--

          If Ms. Busche disagrees with the facts set out in the
     IRS’s motion, then Ms. Busche’s response should point out
     the specific facts in dispute. The response should support
     Ms. Busche’s version of the facts by attaching relevant
     documents and/or by attaching one or more affidavits (i.e.,
     written statements that are signed and sworn before a
     notary) or unsworn declarations that are made “under penalty
     of perjury” (see 28 U.S.C. sec. 1746). If Ms. Busche
     disagrees with the IRS’s argument as to the law, then her
     response should also set out her position on the disputed
     legal issues.

          Ms. Busche’s attention is directed to Tax Court Rule
     121 (available on the court’s website at
     www.ustaxcourt.gov), which sets out the principles for
     filing, opposing, and resolving motions for summary
     judgment. * * *

Notwithstanding this tutorial on summary judgment, Ms. Busche

made only the most general contention--“respondent has not

verified that the requirements of any applicable law or

administrative procedure were met”--and neither stated nor

supported the “specific facts” that Rule 121 requires.    The IRS

is therefore entitled to summary judgment on the matter of

verification under section 6330(c)(1).
                               - 23 -

     B.     Face-to-face hearing

     Ms. Busche’s principal argument is that she was wrongly

deprived of a face-to-face CDP hearing before Appeals, and she

appears to contend in effect that she had an absolute right to

such a hearing (rather than the telephone hearing she was

offered) without regard to anything that she might have done or

failed to do.    As she stated in her opposition to the IRS’s

motion, “It is my understanding that there are no requirements

for a face-to-face hearing, except for me asking for a face-to-

face hearing.”    If Ms. Busche were right, then a taxpayer would

have the unilateral power to delay collection of tax until after

a face-to-face hearing, even if she had nothing to say or propose

once the hearing took place.

     In fact, a taxpayer does not have an absolute right to a

face-to-face hearing.    Section 6330(b)(1) provides simply that a

“hearing shall be held” by Appeals, and the statute does not

prescribe the nature of that “hearing”.    As we have previously

observed:

     Hearings at the Appeals level have historically been
     conducted in an informal setting. * * * When Congress
     enacted section 6330 * * *, Congress was fully aware of
     the existing nature and function of Appeals. Nothing
     in section 6330 or the legislative history suggests
     that Congress intended to alter the nature of an
     Appeals hearing * * *.

Davis v. Commissioner, 115 T.C. 35, 41 (2000).     The regulations

implementing the CDP process provide as follows:
                                  - 24 -

     CDP hearings are * * * informal in nature and do not require
     the Appeals officer or employee and the taxpayer, or the
     taxpayer’s representative, to hold a face-to-face meeting.
     A CDP hearing may, but is not required to, consist of a
     face-to-face meeting, one or more written or oral
     communications between an Appeals officer or employee and
     the taxpayer or the taxpayer’s representative, or some
     combination thereof. * * *

        *      *         *         *       *        *       *

     [A] taxpayer who presents in the CDP hearing request
     relevant, non-frivolous reasons for disagreement with the
     proposed levy will ordinarily be offered an opportunity for
     a face-to-face conference at the Appeals office closest to
     taxpayer’s residence. * * *

        *      *         *         *       *        *       *

     A face-to-face CDP conference concerning a collection
     alternative, such as an installment agreement or an offer to
     compromise liability, will not be granted unless other
     taxpayers would be eligible for the alternative in similar
     circumstances. * * * In all cases, a taxpayer will be given
     an opportunity to demonstrate eligibility for a collection
     alternative and to become eligible for a collection
     alternative, in order to obtain a face-to-face
     conference. * * *

Sec. 301.6330-1(d)(2), Q&A-D6 through -D8, Proced. & Admin. Regs.

(26 C.F.R.) (emphasis added).

     We therefore address the question of whether Ms. Busche was

entitled to a face-to-face hearing under this standard, and we

find that she was not.       Her request for a CDP hearing asserted a

frivolous issue (i.e., the secret trust fund invoked by Form 56),

which certainly did not entitle her to a face-to-face hearing.

After she withdrew that frivolous argument, no concrete issue or

proposal remained to flesh out her CDP hearing request, and her

reasserted “demand” for a face-to-face hearing lacked any
                              - 25 -

justification at all.   Despite explicit requests by the IRS, she

failed to provide a specific proposal for an installment

agreement and failed to provide information that she was eligible

for such an agreement (i.e., information that she was in

compliance as to withholding of tax from her wages).     On that

record, there was nothing to be discussed at a face-to-face

hearing, so the IRS sensibly declined to schedule one.

     Ms. Busche alleged, in her response to the IRS’s motion,

that she had “provided the requested financial data” to Appeals.

To support that allegation, she cited a document (her letter of

June 16, 2010) that in turn cites another document (a supposed

letter of June 5, 2009) that the Court thought might implicate a

genuine issue of material fact as to whether Ms. Busche might

have made a specific proposal for an installment agreement.

(According to the letter of June 16, 2010, the alleged letter of

June 5, 2009, provided a “specific proposed installment agreement

payment amount and payment date”.)     However, no letter dated

June 5, 2009, was attached to her response.     Because such a

letter, if it had been sent, might have been material to

Ms. Busche’s case, the Court issued its order of September 28,

2011, which stated:

     Petitioner’s response includes an “Attachment A” that
     includes a letter dated June 16, 2010. That letter refers
     to a proposal dated June 5, 2009 (received by the IRS June
     11, 2009), which proposal is not included with petitioner’s
     response. (The June 16, 2010, letter also refers to other
                              - 26 -

     correspondence, as does a letter of June 28, 2010, that is
     included in Petitioner’s “Attachment B”.)

          In a reply filed September 27, 2011, the IRS asserts
     (at 9) that its administrative file does not include a copy
     of the alleged proposal of June 5, 2009.

          Ms. Busche should carefully review the IRS’s motion
     papers (including its reply) and note its assertions about
     what Ms. Busche did and did not submit to IRS Appeals during
     her collection due process hearing. Ms. Busche's obligation
     in opposing the IRS’s motion is to “set forth specific facts
     showing that there is a genuine issue for trial”. (Rule
     121(d).) Her presentation may fall short if she fails to
     submit the documents she relies on. To enable her to
     include in our court record any documents that she relies on
     but that are not yet in our record, it is

          ORDERED that, no later than October 12, 2011,
     petitioner Cynthia Busche may, if she wishes, file a
     supplement to her response to the IRS’s motion in which she
     may include any documents, not yet submitted, on which she
     intends to rely to oppose the IRS’s motion (including, if
     she wishes, her proposal of June 5, 2009).

Ms. Busche did file a supplement to her response, but that

supplement makes no mention of, and did not attach, a letter of

June 5, 2009, or any other document.

     Consequently, as our record now stands, Ms. Busche still has

not--despite the Court’s explicit invitation--described specific

installment agreement terms that she claims to have proposed to

Appeals during her CDP hearing.   She has implicitly alleged that

she proposed such terms to other IRS personnel in June 2009, but

has not actually made a showing that she did so at any time.   The

IRS has asserted, and its record shows, that Ms. Busche did not

propose specific terms.   Under Rule 121, Ms. Busche was, again,

obliged “not [to] rest upon the mere allegations or denials of
                              - 27 -

such party’s pleading” but rather to “set forth specific facts

showing that there is a genuine issue for trial.”   (Emphasis

added.)   Since she did not do so, we conclude for purposes of the

IRS’s motion that Ms. Busche did not propose installment

agreement terms to Appeals and was therefore not entitled to a

face-to-face hearing to discuss an installment agreement that she

did not propose.

     Where a taxpayer proposes a collection alternative such as

an installment agreement, the hearing (whether face-to-face or by

telephone) is a means for Appeals to consider the proposal.

Where denial of a face-to-face hearing would impede adequate

consideration of a collection alternative, then that denial might

itself be an abuse of discretion.   However, the ultimate question

is not whether a face-to-face hearing was held but whether

Appeals abused its discretion by not agreeing to a collection

alternative.   That is not how Ms. Busche frames the issue, but

that is in fact the real issue.   We find that Appeals did not

abuse its discretion, for two reasons that are obvious in what we

have already said:

     First, it was not an abuse of discretion for Appeals to

reject collection alternatives when Ms. Busche had proposed none.

See Cavazos v. Commissioner, T.C. Memo. 2008-257 (citing

Kendricks v. Commissioner, 124 T.C. 69, 79 (2005)); see also

Nelson v. Commissioner, T.C. Memo. 2009-108 (Appeals did not
                                - 28 -

abuse its discretion in sustaining a lien when a taxpayer

requested an OIC generally but had not prepared one).

     Second, it was not an abuse of discretion for Appeals to

consider Ms. Busche ineligible for an installment agreement on

the ground of her failure to show compliance with current

withholding obligations.    See Giamelli v. Commissioner, 129 T.C.

107, 111-112 (2007).   It appears that for the year at issue

(2008) Ms. Busche’s liability was underpaid because her income

tax withholding was inadequate.    When during the CDP process

Appeals obtained her return for the next year (2009), it saw that

her self-reported liability was again underpaid because of

inadequate withholding.    Lest Ms. Busche continue to fall further

and further behind, Appeals had a legitimate interest in assuring

that her withholding be adequate on a going-forward basis.

Ms. Busche failed to provide the information that could grant

that assurance and thereby rendered herself ineligible for an

installment agreement.     Appeals did not abuse its discretion in

declining to enter into an installment agreement with her.

     C.   Underlying liability

     In her supplemental opposition to the IRS’s motion,

Ms. Busche raises for the first time the issue of her underlying

liability for the tax that is the subject of the proposed levy.

The totality of her contention is as follows:

     Since Petitioner was not granted the requested face to face
     collection due process hearing (CDPH). [Sic.] Petitioner
                              - 29 -

     was not give a chance to dispute the Respondents alleged
     2008 tax liability. Therefore, since a Notice of
     Determination was mailed, the Petitioner’s only option
     thereafter was to request the Tax Court hearing, to enforce
     Petitioner’s rights to a face to face CDPH. There is no law
     which requires the Petitioner to challenge the existence or
     the amount of the self-assessed income tax liability prior
     to a face to face CDPH. * * *

On the contrary, the regulations implementing the CDP process

provide:   “A face-to-face conference need not be granted if the

taxpayer does not provide the required information set forth in

A-C1(ii)(E) of paragraph (c)(2)”, sec. 301.6330-1(d)(2), Q&A-D8,

Proced. & Admin. Regs. (26 C.F.R.), and the cross-referenced

provision requires that the taxpayer must state “The reason or

reasons why the taxpayer disagrees with the proposed levy”, id.

par. (c)(2), Q&A-C1(ii)(E).

     A CDP petitioner may certainly dispute even a liability that

she self-reported on her own return, see Montgomery v.

Commissioner, 122 T.C. 1, 8-9 (2004); but Appeals can hardly be

expected to intuit that the taxpayer might now disagree with

herself.   Rather, the taxpayer must raise with Appeals the issue

of underlying liability.   Under the regime described in the

regulations, a face-to-face hearing may be granted only upon a

showing that there is something to be accomplished at a face-to-

face hearing.   The regulation requires that, before a hearing

will be granted, the taxpayer must state the “reasons” she

disagrees with the levy (which reasons might include a contention

that she does not owe the tax).   A taxpayer may not hide her
                                 - 30 -

contentions, demand a face-to-face hearing without justification,

and then disclose her contentions only if and after the IRS

capitulates to her demand.

     Consistent with the regulation, the Office of Appeals

informed Ms. Busche in its letter of April 27, 2011:

     To be allowed a face-to-face conference about collection
     alternatives, you must also have filed all required returns
     and provided all information requested in this letter.

     During the hearing, I must consider * * * [verification,
     collection alternatives, “[c]hallenges to the
     appropriateness of collection action”, and spousal
     defenses].

        *         *       *       *       *        *       *

            •      We may also consider whether you owe the amount
                   due, but only if you did not receive a statutory
                   notice of deficiency or have not otherwise had an
                   opportunity to dispute your liability with
                   Appeals.

        *         *       *        *       *        *       *

     If you do not participate in the conference or respond to
     this letter, the determination and/or decision letter that
     we issue will be based on your hearing request, any
     information you previously provided to this office about the
     applicable tax periods, and the Service’s administrative
     file and records.

None of Ms. Busche’s submissions to Appeals challenged the

liability.      She failed to justify a face-to-face hearing and

refused to participate in a telephone hearing.      Appeals therefore

based its determination on the information available to it, which

did not include any challenge to underlying liability.      We
                             - 31 -

therefore now review a determination that did not address and

could not have addressed underlying liability.

     As we explained in Giamelli v. Commissioner, 129 T.C. at

112-113:

     Section 6330(c)(2)(B) permits a taxpayer to “raise at the
     hearing challenges to the existence or amount of the
     underlying tax liability” under certain circumstances. The
     statute [i.e., section 6330(c)(3)] contemplates
     consideration of issues “raised” by the taxpayer at the
     hearing. Thus, if an issue is never raised at the hearing,
     it cannot be a part of the Appeals officer’s determination
     * * *

--and our jurisdiction under section 6330(d)(1) to review a

“determination” does not extend to issues that were not so raised

and that are therefore outside any such determination.

Underlying liability is therefore not properly before us in this

case.

     Moreover, as with the issue of verification, see supra

part II.A, Ms. Busche’s challenge of underlying liability would

fail for the additional reasons (1) that she did not plead in her

petition that her liability is less than was assumed in the

proposed levy (and she provides no warrant for allowing an

amendment to her petition to add such a contention) and (2) that

in opposing the IRS’s motion for summary judgment, she did not

assert or support “specific facts” to show a lesser liability.

We therefore do not entertain her vague assertion about an

unelaborated dispute as to her 2008 income tax liability.
                              - 32 -

     D.   The IRS’s supposed failure to provide information

     In Ms. Busche’s “final response” letter to Appeals, she

stated:   “I am now requesting copies of the law that requires me

to go along with your prerequisites for a face to face hearing.”

In her supplemental response to the IRS’s motion, she argues:

“If Petitioner is required to respond to any and all letters from

respondent in a timely fashion then Respondent is required to do

likewise”; and since Appeals did not give her the requested

copies, she argues that its determination was therefore

“premature” (so that, she says, we should deny the IRS’s motion

for summary judgment).   We assume, for purposes of the IRS’s

motion, that there could be circumstances in which Appeals’

failure to answer questions could disable a taxpayer from

participating meaningfully in the CDP process, so that the notice

of determination might reflect an abuse of discretion.    However,

that is not the case here.

     Ms. Busche in effect posits a symmetry between Appeals and

the taxpayer (“If Petitioner is required * * * then Respondent is

required”)--a symmetry that the law does not actually provide.    A

CDP petitioner is, by definition, a taxpayer with an assessed

liability who has received a notice and demand, has not paid the

liability, and has been served with a collection notice.    The

IRS, on the other hand, is the agency authorized and required by

law to collect that liability.   By filing a CDP hearing request,
                              - 33 -

the taxpayer asks Appeals to interrupt that collection process;

and to evaluate such a request, Appeals needs information that it

can most reasonably get from the taxpayer.   Given that dynamic,

the system imposes on the taxpayer certain burdens that she must

meet in order to justify the interruption of collection activity

that she has requested.   The IRS is not without burdens of its

own, but the IRS’s burdens are those imposed on it by statute, as

discussed above, not additional burdens imposed by the taxpayer.

The CDP taxpayer does not have the prerogative to add to the

IRS’s obligations and to suspend the CDP process (and thereby to

suspend collection of tax) until the IRS has satisfied her

demands.   Rather, the taxpayer has the rights conferred on her by

statute; the IRS has the duties imposed on it by statute; and the

Tax Court will enforce those rights and duties by applying the

statutes and the regulations promulgated thereunder.   We hold

that, in deciding whether Ms. Busche qualified for a face-to-face

hearing, the IRS was not obliged to cite chapter and verse to Ms.

Busche.

                            Conclusion

     On the record before us, we cannot hold that the decision of

the Office of Appeals to sustain the proposed levy was arbitrary,

capricious, or without sound basis in fact or law.   As a result,

we conclude that the Office of Appeals did not abuse its
                             - 34 -

discretion, and we hold that respondent is entitled to the entry

of a decision sustaining the determination as a matter of law.

     To reflect the foregoing,


                                         An appropriate order and

                                   decision will be entered.
