                        T.C. Memo. 2003-120



                      UNITED STATES TAX COURT



         CORONA PATHOLOGY SERVICES, INC., Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11433-02L.               Filed April 28, 2003.



     Shirley Gorospe (an officer), for petitioner.

     Karen N. Sommers, for respondent.



                        MEMORANDUM OPINION


     LARO, Judge:   Petitioner petitioned the Court under section

6330(d) to review respondent’s determination as to a proposed

levy upon its property.1   Respondent proposed the levy to collect

1997 and 1998 Federal income taxes of approximately $1,158.53 and


     1
       Petitioner’s mailing address was in Corona, California,
when its petition was filed.
                                -2-

$11,481.14, respectively.2   Currently, the case is before the

Court on respondent’s motion for summary judgment under Rule 121.

Although ordered to do so, petitioner did not file a response to

respondent’s motion.

     We shall grant respondent’s motion for summary judgment.

Section references are to the applicable versions of the Internal

Revenue Code.   Rule references are to the Tax Court Rules of

Practice and Procedure.

                             Background

     Petitioner failed to file 1992, 1994, 1995, and 1997 Forms

1120, U.S. Corporation Income Tax Return, and failed to file

Forms 941, Employment Tax Return, for the second and fourth

quarters of 2001.   Petitioner filed untimely 2000 and 2001 Forms

1120.

     On August 16, 2000, respondent mailed to petitioner a

letter, Final Notice--Notice of Intent to Levy and Notice of Your

Right to a Hearing (final notice).    The final notice informed

petitioner of its tax liabilities for 1997 and 1998.    The final

notice also informed petitioner of (1) respondent’s intent to

collect that liability through a levy upon its property under

section 6331 and (2) petitioner’s right under section 6330 to a




     2
       We use the term “approximately” because these amounts were
computed before the present proceeding and have since increased
on account of interest.
                                 -3-

hearing with respondent’s Office of Appeals (Appeals) to discuss

the proposed levy.

     On September 13, 2000, petitioner requested the referenced

hearing.    Later, Appeals held that hearing with petitioner by

telephone.    At the hearing, petitioner did not dispute the

existence or amount of its tax liabilities for 1997 and 1998.

The only issue raised by petitioner was that it needed more time

to pay its tax liabilities through an installment agreement.

     During the hearing, the Appeals officer reviewed the

transcripts of petitioner’s accounts for 1992, 1994, 1995, 1997,

1998, 2000, and 2001 and discerned that petitioner had not filed

its 1992, 1994, 1995, and 1997 Forms 1120, or its Forms 941 for

the second and fourth quarters of 2001.    The Appeals officer also

discerned that petitioner had not made any estimated payments for

2001 or payroll deposits for the second and fourth quarters of

2001.    The Appeals officer reviewed petitioner’s financial

records and discerned:    (1) Petitioner had commingled its funds

with the funds of a related corporation, and (2) petitioner’s

corporate funds had been used to pay the personal expenses of

petitioner’s shareholders.3   These personal expenses included

automobile insurance for all vehicles used in their household,

housecleaning, children’s college expenses, checks to children,



     3
       As of 1999, petitioner was owned equally by Shirley
Gorospe and Conrad T. Gorospe.
                                -4-

groceries, utilities, clothing, personal fitness, home pool

supplies and services, magazine and newspaper subscriptions,

accounting and legal fees, and numerous cash withdrawals.     The

Appeals officer also reviewed an “Incomplete” Form 433,

Collection Information Statement, that petitioner had filed with

the Commissioner as to its request to make installment payments.

     On June 7, 2002, Appeals issued to petitioner a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 for 1997 and 1998 (notice of determination).     The

notice of determination reflected the determination of Appeals to

sustain the proposed levy on petitioner’s property.   The notice

of determination also reflected the determination of Appeals not

to accept petitioner’s request to make installment payments.       The

notice of determination stated that petitioner was out of

compliance with its filing requirements and that it had

commingled its funds with its shareholders and the funds of a

related corporation.

                           Discussion

     Summary judgment may be granted with respect to all or any

part of the legal issues in controversy if it is shown that there

is no genuine issue as to any material fact and that a decision

may be rendered as a matter of law.   Rule 121(a) and (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
                                -5-

genuine issue as to any material fact and that this case is ripe

for summary judgment.

     We review the Appeals officer’s determination for abuse of

discretion.   Lunsford v. Commissioner, 117 T.C. 183, 185 (2001);

Nicklaus v. Commissioner, 117 T.C. 117, 120 (2001).    The

determination of an Appeals officer must take into consideration:

(1) The verification that the requirements of applicable law and

administrative procedures have been met, (2) issues raised by the

taxpayer, and (3) whether any proposed collection action balances

the need for the efficient collection of taxes with the

legitimate concern of the person that any collection be no more

intrusive than necessary.   Sec. 6330(c)(3).   We review the

Appeals officer’s exercise of discretion on the basis of the

arguments and information available to the Appeals officer when

the discretion was exercised.   Sego v. Commissioner, 114 T.C.

604, 612 (2000).

     Petitioner’s sole argument is that Appeals erred in denying

petitioner’s request for an installment agreement.    We disagree.

Given that petitioner had commingled its funds as discussed, was

out of compliance with its filing requirements, and had filed

with the Commissioner an incomplete Form 433, we do not believe

that the Appeals officer abused her discretion in denying that

request.
                                -6-

     We note that the action of the Appeals officer is consistent

with the Commissioner’s current administrative guidelines for

installment agreements for business tax liabilities.    Those

guidelines condition the Commissioner’s acceptance of an

installment agreement on the ability of the taxpayer to pay

current and delinquent taxes as well as operating expenses.

Internal Revenue Manual, pt. 5.14.7.2(4)b (March 30, 2002).

Those guidelines also state that a taxpayer must be in current

compliance with return filing requirements to qualify for an

installment agreement.   Id. at pt. 5.14.7.2(4)i.

     We sustain respondent’s determination to proceed with

collection with respect to petitioner’s 1997 and 1998 taxable

years.   We have considered all arguments and have found those

arguments not discussed herein to be irrelevant and/or without

merit.   To reflect the foregoing,



                                           An appropriate order and

                                      decision will be entered for

                                      respondent.
