                  T.C. Memo. 2005-203



                UNITED STATES TAX COURT



           FRANCIS A. MORLINO, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 18441-03L.            Filed August 24, 2005.


     P asks us to review a determination by R’s
settlement officer (SO) that R may proceed with
collection by levy of P’s unpaid tax liability for
2001. P claims that the SO abused his discretion by
prematurely concluding P’s hearing when P did not
provide information by the deadline set by the SO. R
objects to P’s testimony as to extenuating
circumstances that prevented him from meeting the
deadline.

     1. Held: P’s testimony is irrelevant since
neither he nor his counsel communicated the extenuating
circumstances to the SO (nor has P explained his
failure to do so).

     2. Held, further, R may proceed with collection
since the deadline was reasonable.
                                 - 2 -

     Timothy J. Burke, for petitioner.

     Nina P. Ching and John V. Cardone, for respondent.


              MEMORANDUM FINDINGS OF FACT AND OPINION


     HALPERN, Judge:     This case is before the Court to review a

determination made by respondent’s Appeals Office that respondent

may proceed to collect by levy unpaid taxes with respect to

petitioner’s 2001 tax year.    We review the determination pursuant

to section 6330(d)(1).

     Unless otherwise indicated, all section references are to

the Internal Revenue Code of 1986, as amended, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

                           FINDINGS OF FACT

     Petitioner resided in Kingston, Massachusetts, at the time

the petition was filed.

     On November 1, 2002, respondent issued to petitioner a Final

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

Hearing.   The notice concerns petitioner’s unpaid Federal income

tax liability for 2001 of approximately $4,780 (the unpaid tax).

     By letter dated November 15, 2002, petitioner’s attorney,

Timothy J. Burke, submitted to the Internal Revenue Service (IRS)

on petitioner’s behalf an IRS Form 12153, Request for a

Collection Due Process Hearing.    On an attachment to the Form

12153, petitioner asserts:    “It is in the best interest of the
                              - 3 -

government and the taxpayer that an Offer in Compromise be

entered into.”

     Petitioner raised no other issue on the Form 12153 or during

the subsequent hearing accorded him.

     On or about November 20, 2002, petitioner submitted an offer

in compromise with respect to the unpaid tax.   That offer in

compromise was rejected on January 15, 2003.

     On or about May 6, 2003, an Appeals Office official,

settlement officer Eugene O’Shea, was assigned to petitioner’s

case.

     By letter dated July 23, 2003, addressed to petitioner, Mr.

O’Shea introduced himself to petitioner, scheduled a meeting with

him for August 5, 2003, acknowledged petitioner’s request for an

offer in compromise, and, in connection with that request,

provided him with a questionnaire and an IRS Form 656, Offer in

Compromise (the questionnaire and the offer form, respectively).

The letter instructed petitioner that he was to complete and

submit the questionnaire and offer form to Mr. O’Shea by August

5, 2003, even if the meeting scheduled for that date were to be

postponed.

     On August 4, 2003, at Mr. Burke’s request, Mr. O’Shea moved

the August 5, 2003, meeting to August 18, 2003, and gave

petitioner until that date, but no later, to provide the

requested information and submit the offer form.
                               - 4 -

     On August 18, 2003, Mr. Burke (but not petitioner) met with

Mr. O’Shea.   Mr. Burke provided Mr. O’Shea with some, but not

all, of the information requested on the questionnaire.    He did

not submit the offer form.   Mr. O’Shea again extended the time

for completion of the questionnaire and submission of the offer

form, until September 2, 2003, and he informed Mr. Burke that no

further extension of time would be granted.

     Petitioner did not submit the missing information or the

offer form to Mr. O’Shea by September 2, 2003, nor did petitioner

or Mr. Burke contact Mr. O’Shea between August 18 and September

2, 2003.

     On September 10, 2003, Mr. O’Shea determined that collection

by levy of the unpaid tax should proceed.   In part, Mr. O’Shea

based his determination on the fact that petitioner had failed to

submit information necessary for an offer in compromise.    In

making his determination, Mr. O’Shea balanced the need for the

efficient collection of taxes with the concern that any

collection action be no more intrusive than necessary.    He

verified that the requirements of applicable laws and

administrative procedures had been met.

     Petitioner was notified of Mr. O’Shea’s determination by a

Notice Of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 dated October 2, 2003.
                                  - 5 -

                                 OPINION

I.    Introduction

       The principal issue in this case is whether the settlement

officer, Mr. O’Shea, abused his discretion in determining to

proceed by levy to collect the unpaid tax.     Before we address

that issue, we shall set forth the general rules governing such

determinations and our review.     We shall then state the parties’

arguments and dispose of respondent’s objection to certain

testimony of petitioner’s.      Finally, we shall decide whether Mr.

O’Shea abused his discretion.

II.    Sections 6330 and 6331

       Section 6331(a) authorizes the Secretary of the Treasury

(Secretary) to levy against property and property rights where a

taxpayer liable for taxes fails to pay those taxes within 10 days

after notice and demand for payment is made.     Section 6331(d)

requires the Secretary to send the taxpayer written notice of the

Secretary’s intent to levy, and section 6330(a) requires the

Secretary to send the taxpayer written notice of his right to a

section 6330 hearing at least 30 days before any levy is begun.1

       If a section 6330 hearing is requested, the hearing is to be

conducted by respondent’s Appeals Office, and, at the hearing,

the Appeals officer or employee (without distinction, Appeals


       1
        A taxpayer receiving a notice of Federal tax lien has
hearing rights similar to the hearing rights accorded a taxpayer
receiving a notice of intent to levy. See sec. 6320(c).
                                 - 6 -

officer) conducting it must verify that the requirements of any

applicable law or administrative procedure have been met.     Sec.

6330(b)(1), (c)(1).   The taxpayer may raise at the hearing any

relevant issue relating to the unpaid tax or the proposed levy.

Sec. 6330(c)(2)(A).     The taxpayer may contest the existence or

amount of the underlying tax liability at the hearing if the

taxpayer did not receive a statutory notice of deficiency with

respect to the underlying tax liability or did not otherwise have

an opportunity to dispute that liability.    Sec. 6330(c)(2)(B).

     At the conclusion of the hearing, the Appeals officer must

determine whether and how to proceed with collection, taking into

account, among other things, collection alternatives proposed by

the taxpayer and whether any proposed collection action balances

the need for the efficient collection of taxes with the

legitimate concern of the taxpayer that the collection action be

no more intrusive than necessary.    See sec. 6330(c)(3).

     We have jurisdiction to review the Appeals officer’s

determination where we have jurisdiction over the type of tax

involved in the case.    Sec. 6330(d)(1)(A); see Iannone v.

Commissioner, 122 T.C. 287, 290 (2004).     Where the underlying tax

liability is properly at issue, we review the determination de

novo.   E.g., Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

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

determination for abuse of discretion.     Id. at 182.   In reviewing
                                 - 7 -

for an abuse of discretion under section 6330(d)(1), generally we

consider only arguments, issues, and other matters that were

raised at the section 6330 hearing or otherwise brought to the

attention of the Appeals Office.     Magana v. Commissioner, 118

T.C. 488, 493 (2002); see also sec. 301.6330-1(f)(2), Q&A-F5,

Proced. & Admin. Regs.    Whether an abuse of discretion has

occurred depends upon whether the exercise of discretion is

without sound basis in fact or law.      See Ansley-Sheppard-Burgess

Co. v. Commissioner, 104 T.C. 367, 371 (1995).

III.    The Parties’ Arguments

       By the petition, petitioner assigns error to Mr. O’Shea’s

determination that collection by levy of the unpaid tax should

proceed.    In support of his assignments, petitioner avers that

(1) acceptance of an offer in compromise was in the best interest

of respondent and petitioner, and (2) respondent improperly and

prematurely concluded petitioner’s section 6330 hearing (the

hearing).    At trial, petitioner abandoned all issues raised in

the petition except that Mr. O’Shea erred by prematurely

concluding the hearing.    To prove that Mr. O’Shea acted

prematurely, petitioner asks us to consider extenuating

circumstances that prevented him from meeting deadlines imposed

by Mr. O’Shea.

       Respondent counters that Mr. O’Shea did not prematurely

conclude the hearing and he did not abuse his discretion in
                                   - 8 -

determining that respondent may proceed with levy to collect the

unpaid tax.      Respondent objects to the admission of petitioner’s

evidence of extenuating circumstances, since the administrative

record contains no mention of such circumstances.

IV.   Admissibility of Petitioner’s Testimony

      A.     The Testimony

      At the trial of this case, over the objection of respondent,

petitioner testified as to some of his activities during August

and September of 2003.       The essence of the testimony is as

follows:      In August of 2003, petitioner and his wife were forced

to leave their home in Massachusetts and travel to California in

order to attend to their daughter’s family after a seizure

temporarily left their daughter’s husband paralyzed.       They flew

to California on August 7, 2003, and returned home on August 23,

2003.      Much of the information requested by Mr. O’Shea in his

letter of July 23, 2003, and thereafter was stored in leased

space outside petitioner’s home, which delayed petitioner in

assembling the information.

      Respondent objected to the testimony on the grounds of

relevancy.      The Court noted respondent’s objection but reserved

its ruling.
                               - 9 -

     B.   Positions of the Parties

     Respondent’s relevancy objection is based on the fact that

petitioner’s underlying liability for the unpaid tax was not

raised at the hearing (and is not before the Court).

Accordingly, argues respondent, the appropriate standard for our

review of Mr. O’Shea’s determination is abuse of discretion, and

the appropriate scope of review, pursuant to the record rule, is

the administrative record made during the hearing.   The record

rule is the general rule of administrative law that a court can

engage in judicial review of an agency action only on the basis

of the record amassed by the agency.   2 Pierce, Administrative

Law, sec. 11.6, at 822 (4th ed. 2002); see United States v. Carlo

Bianchi & Co., 373 U.S. 709, 714 (1963).

     Petitioner responds that our holding in Robinette v.

Commissioner, 123 T.C. 85 (2004), pertains to the matter and the

scope of review is not limited to the administrative record.2


     2
        Recently, the Court of Appeals for the First Circuit
reviewed a District Court judgment that, pursuant to sec.
6330(d)(1), had affirmed an Appeals Office determination made
pursuant to sec. 6330(c)(3) that a levy to collect certain unpaid
employment taxes and penalties could proceed. Olsen v. United
States, 414 F.3d 144 (1st Cir. 2005), affg. 326 F. Supp. 2d 184
(D. Mass. 2004). The Court of Appeals upheld the record rule as
defining the scope of judicial review of such a determination
when, as in the case it was reviewing, the taxpayer’s underlying
liability is not in issue. See id. at __. The Court of Appeals
distinguished Robinette v. Commissioner, 123 T.C. 85 (2004).
Olsen v. United States, supra at __ n.9. Therefore, we are not
required by the doctrine of Golsen v. Commissioner, 54 T.C. 742,
757 (1970), affd. 445 F.2d 985 (10th Cir. 1971), to follow Olsen,
                                                   (continued...)
                                - 10 -

Petitioner argues that his testimony “[demonstrates] the

inflexibility of the Hearing Officer”.

     C.   Discussion

     At trial, petitioner specifically disclaimed that his

underlying liability for the unpaid tax is at issue.     The

appropriate standard of review is, therefore, abuse of

discretion.   See supra sec. II of this report.

     Robinette v. Commissioner, supra, is a case of this Court in

which, pursuant to section 6330(d)(1), we reviewed a

determination by an Appeals officer to proceed with collection of

an unpaid tax.   Since the taxpayer’s underlying liability was not

an issue, we determined that the proper standard of review was

abuse of discretion.     Id. at 94.   Nevertheless, we considered

testimony and other evidence that was not part of the

administrative record.     Id. at 103-104.   We noted, however, that

any evidence admissible in a trial before this court had to be

admissible under the Federal Rules of Evidence.      Id. at 103.    We

rejected the Commissioner’s argument that the evidence in

question was inadmissible because not relevant.      Id. at 103-104

(discussing rules 401 and 402 of the Federal Rules of Evidence).

We found the evidence relevant because it tended to show that the



     2
      (...continued)
notwithstanding that, barring stipulation of the parties to the
contrary, appeal of this case would lie to the Court of Appeals
for the First Circuit. See sec. 7482(b).
                                 - 11 -

Appeals officer abused his discretion in determining to proceed

with collection.   Id. at 104.

     The term “relevant evidence” is defined in rule 401 of the

Federal Rules of Evidence to mean “evidence having any tendency

to make the existence of any fact that is of consequence to the

determination of the action more probable or less probable than

it would be without the evidence.”        The testimony in the instant

case is relevant, and therefore admissible, if and only if the

testimony has a tendency to make the existence of any fact that

is of consequence in determining whether Mr. O’Shea abused his

discretion more probable or less probable than it would be

without the evidence.   Cf. Robinette v. Commissioner, supra at

103-104.

     When considered in light of petitioner’s purpose in offering

the testimony–-to show Mr. O’Shea’s inflexibility–-the testimony

is not relevant for the simple reason that there is no evidence

that either petitioner or Mr. Burke ever informed Mr. O’Shea of

petitioner’s difficulties in assembling the information necessary

to respond to Mr. O’Shea’s requests.       Because Mr. O’Shea was

never informed of those difficulties, the difficulties can hardly

have had any bearing on Mr. O’Shea’s determination to proceed

with collection.   Stated in the terms of rule 401 of the Federal

Rules of Evidence, the testimony cannot possibly have any

tendency to make the existence of any fact that is of consequence
                               - 12 -

in determining whether Mr. O’Shea abused his discretion more or

less probable–-because he was never notified of the extenuating

circumstances that are the subject of the testimony.3

      Because the testimony is irrelevant, it is inadmissible.

See Fed. R. Evid. 402.

      D.   Conclusion

      Respondent’s objection to the testimony is sustained.

V.   Abuse of Discretion

      A.   Introduction

      We are left to determine whether Mr. O’Shea abused his

discretion in determining that respondent may proceed by levy to

collect the unpaid tax.    Petitioner claims that he did because he

prematurely concluded the hearing.

      B.   Discussion

      In Clawson v. Commissioner, T.C. Memo. 2004-106, fewer than

3 months passed between the taxpayer’s filing a request for a

section 6330 hearing concerning a proposed levy and an adverse

determination by an Appeals officer.    Approximately 1 month

passed after the Appeals officer’s offer of a telephonic hearing


      3
        Nor has petitioner offered any excuse for his failure to
explain to Mr. O’Shea his difficulties in complying with Mr.
O’Shea’s Sept. 2, 2003, deadline when compliance with that
deadline became problematic. Cf. Magana v. Commissioner, 118
T.C. 488, 494 (2002) (unusual illness or hardship or other
special circumstances may justify an exception to the general
rule that, in reviewing for an abuse of discretion under sec.
6330(d)(1), the Court will not consider issues not raised at the
sec. 6330 hearing).
                              - 13 -

until the adverse determination, and only 9 days passed after the

telephone conference until the adverse determination.    The

taxpayer argued that the Appeals officer abused his discretion

because he reached his decision to sustain the proposed levy in

“barely one month” after he contacted petitioners.    We held:

“[T]here is neither requirement nor reason that the Appeals

officer wait a certain amount of time before rendering his

determination as to a proposed levy.”   As authority, we cited

section 301.6330-1(e)(3), Q&A-E9, Proced. & Admin. Regs., which

provides that there is no period of time in which Appeals must

conduct a section 6330 hearing or issue a notice of

determination:   “Appeals will, however, attempt to conduct a * *

* [section 6330 hearing] and issue a Notice of Determination as

expeditiously as possible under the circumstances.”

     In this case, Mr. O’Shea made his determination almost 10

months after petitioner filed the Form 12153, his request for a

section 6330 hearing.   It is clear from the Form 12153 that

petitioner contemplated making an offer in compromise at the

hearing.   He submitted an offer in compromise on November 20,

2002, which was rejected on January 15, 2003 (the record contains

no further information with respect to the rejected offer in

compromise).   By letter dated July 23, 2003, Mr. O’Shea scheduled

a meeting with petitioner for August 5, 2003.   Mr. O’Shea

enclosed with the letter the questionnaire and offer form, which
                                - 14 -

petitioner was asked to complete and submit by the date of the

meeting.    The meeting was postponed until August 18, 2003, and

petitioner was given an extension until then to submit the

questionnaire and offer form.    Petitioner did not complete the

questionnaire by the time of the postponed meeting, nor did he

submit the offer form at that meeting.    Mr. O’Shea again extended

the time for completion of the questionnaire and submission of

the offer form, establishing a deadline of September 2, 2003, and

telling Mr. Burke that no further extension of time would be

granted.    Not only did petitioner fail to meet that deadline, but

neither petitioner nor Mr. Burke contacted Mr. O’Shea to explain

any circumstance of delay or to request an extension of the

deadline.

     Petitioner does not argue that Mr. O’Shea was without

discretion to set a deadline, only that he abused his discretion

by setting the deadline too soon.    We disagree.   Mr. O’Shea’s

establishment of a deadline of September 2, 2003, to complete the

questionnaire and the offer form was not unreasonable in light of

the facts that petitioner: (1) submitted the Form 12153 in

November 2002, (2) had from July 23, 2003 (the date Mr. O’Shea

provided him with the questionnaire and the offer form), until

September 2, 2003, to complete those documents, and (3) had

experience with offers in compromise, which, previously, he had
                                - 15 -

submitted.4     While the final 2-week deadline may seem short when

considered in isolation, we do not consider it in isolation.

Rather, we consider it in context, see, e.g., Roman v.

Commissioner, T.C. Memo. 2004-20, which context includes the

longer period that petitioner had to comply with Mr. O’Shea’s

requests and the fact that there is no evidence that either

petitioner or Mr. Burke protested the deadline or asked for any

extension.    If there is fault here, it lies not with Mr. O’Shea

in setting a deadline of September 2, 2003.

     C.   Other Arguments

           1.    Introduction

     On brief, petitioner describes the following errors, which

are either in addition to or supplement his principal assignment

of error, that Mr. O’Shea abused his discretion by prematurely

concluding the section 6330 hearing:     (1) Mr. O’Shea was biased

by his belief that the hearing had to be promptly concluded, (2)

respondent did not conduct the hearing in good faith, (3)

respondent was not flexible in considering petitioner’s matter,

(4) the lack of ascertainable standards to be followed at section

6330 hearings violates due process, and (5) Mr. O’Shea was not



     4
        In addition to referencing the offer in compromise that
petitioner submitted on Nov. 20, 2002, and which was rejected on
Jan. 15, 2003, the record contains a copy of another rejected
offer in compromise, signed by petitioner on July 9, 2001, and
relating to trust fund recovery penalties imposed with respect to
employment taxes due in 1997.
                                - 16 -

impartial since he both conducted the section 6330 hearing and

considered petitioner’s offer in compromise.

     As a general rule, a party cannot argue on brief an issue

not raised in the petition.    See Rule 331(b)(4) (“Any issue not

raised in the assignments of error shall be deemed to be

conceded.”).    Moreover, as stated supra in section III. of this

report, at trial petitioner abandoned all issues raised in the

petition except that Mr. O’Shea erred by prematurely concluding

the hearing.    Respondent asks that we reject all of petitioner’s

other arguments as having been either conceded or abandoned.       We

accept respondent’s request, except that we do consider

petitioner’s arguments with respect to bias and inflexibility,

since we think that they relate closely to the one issue

(premature conclusion) that petitioner has preserved.

           2.   Bias

     Petitioner argues:    Mr. O’Shea “was biased by his belief

that the hearing had to be promptly concluded.”    Beside the fact

that Mr. O’Shea set, and stuck to, a deadline of September 2,

2003, for petitioner to submit information necessary for an offer

in compromise, petitioner has shown no facts that would support

his claim of bias.     As we made plain supra in section V.B. of

this report, there is no requirement that an Appeals officer wait

a certain amount of time before concluding a section 6330

hearing.   Petitioner has failed to show bias.
                                - 17 -

            3.   Lack of Flexibility

     Petitioner argues:    Mr. O’Shea “did not act with flexibility

but with a clear predisposition toward an inflexible and

expeditious determination of petitioner’s matter.”   While it is

true that Mr. O’Shea set, and stuck to a deadline of September 2,

2003, and told Mr. Burke that he would not extend that deadline,

the facts in evidence hardly lead to the conclusion that Mr.

O’Shea was inflexible.    Indeed, he had twice before established

due dates for the requested information but, when petitioner

failed to comply, extended those due dates.   Moreover, there is

no evidence that when the September 2, 2003, deadline was set Mr.

Burke made any protest or that, thereafter, as the deadline

approached, he or petitioner asked for any extension of the

deadline.    In fact, Mr. O’Shea’s records show no contact with Mr.

Burke until September 29, 2003, when Mr. Burke’s secretary called

Mr. O’Shea to ask if any more information was needed.   She was

told by Mr. O’Shea that the information had been due on September

2, 2003, and the case had been closed (and, indeed, the notice of

Mr. O’Shea’s determination was mailed to petitioner 4 days

later).   We do not find that Mr. O’Shea was inflexible.   While he

may have been predisposed to an expeditious determination of

petitioner’s matter, we see nothing wrong with that, given the

facts before us.
                              - 18 -

      D.   Conclusion

      Mr. O’Shea did not abuse his discretion in determining that

respondent may proceed by levy to collect the unpaid tax.

VI.   Conclusion

      To reflect the foregoing,


                                          Decision will be entered

                                    for respondent.
