                         T.C. Memo. 2010-234



                       UNITED STATES TAX COURT



                    MORDECHAI ORIAN, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent

                 GLOBAL HORIZONS, INC., Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



    Docket Nos. 26466-07L, 10791-08L.     Filed October 25, 2010.



         Ps filed petitions for judicial review pursuant to sec.
    6320 and/or 6330, I.R.C., in response to determinations by R
    that lien and levy action was appropriate.

          Held: R’s filing of the lien and levy to protect
     the Government’s interest does not constitute an abuse
     of discretion. R’s determination to proceed with
     collection action is sustained.



     Mordechai Orian, pro se in docket No. 26466-07L.

     Mordechai Orian (an officer), for petitioner in docket No.

10791-08L.

     Elaine Fuller, for respondent.
                                   - 2 -

                  MEMORANDUM FINDINGS OF FACT AND OPINION


        WHERRY, Judge:    These consolidated cases are before the

Court on petitions for review of Notices of Determination

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

(notices of determination).1      Petitioner Mordechai Orian (Mr.

Orian) seeks judicial review of respondent’s determination to

proceed with a filed lien and a proposed levy.      These collection

actions concern Mr. Orian’s section 6672 penalty resulting from

Global Horizons, Inc.’s unpaid employment taxes with respect to

Form 943, Employer’s Annual Federal Tax Return for Agricultural

Employees, for all four quarters of the 2005 taxable year.

Review is also sought with respect to respondent’s determination

to proceed with a proposed levy against petitioner Global

Horizons, Inc. (Global Horizons), with respect to its unpaid Form

943 employment taxes for all four quarters of the 2005 taxable

year.       The issues for decision are:

     (1) Whether Mr. Orian is precluded from contesting his

underlying liability under section 6330(c)(2)(B);

     (2) whether petitioners’ challenge to application of

payments for the 2005 tax year constitutes an impermissible

challenge;




        1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended.
                                - 3 -

      (3) whether respondent’s determination to proceed with a

proposed lien and a levy concerning Mr. Orian’s 2005 section 6672

trust fund recovery penalty constitutes an abuse of discretion;

and

      (4) whether respondent’s determination to proceed with a

proposed levy concerning Global Horizons’ 2005 employment tax

liability constitutes an abuse of discretion.

                          FINDINGS OF FACT

      Some of the facts have been stipulated.   The stipulations,

with accompanying exhibits, are incorporated herein by this

reference.   At the time the petition was filed, Mr. Orian resided

in California and Global Horizons was a California corporation

with its principal business address in Los Angeles, California.

During the year at issue, 2005, Mr. Orian was a shareholder and

president of Global Horizons, a company in the business of

obtaining workers for temporary jobs, primarily agricultural.

Global Horizons filed Forms 941, Employer’s Quarterly Federal Tax

Return, for the periods ending March 31, June 30, and September

30, 2005.    Global Horizons subsequently submitted amended Forms

941 and Forms 941c, Supporting Statement to Correct Information,

for the periods ending March 31, June 30, and September 30, 2005.

Global Horizons also filed its Form 943 tax return for the 2005

tax year.
                               - 4 -

     Abatements of tax were processed for the periods ending

March 31 and June 30, 2005.   With regard to the March 31, 2005,

abatement, $271,806.60 was applied to Global Horizons’ unpaid

2003 Form 941 employment tax liabilities.   The remaining

$466,335.20 was applied to Global Horizons’ Form 941 employment

tax liabilities for the period ending September 30, 2005.   The

$616,336.35 June 30, 2005, abatement, together with $67,464.40 of

overpaid Form 943 tax for the period ending December 31, 2004, a

$58 December 19, 2005, payment less a $134.98 December 19, 2005,

refund, were applied as follows:   $56,666.22 to tax, interest,

penalty, and costs for Form 941 tax for June 30, 2005;

$166,251.34 to Global Horizons’ unpaid Form 940, Employer’s

Annual Federal Unemployment (FUTA) Tax Return, tax for the period

ending December 31, 2005; and $33,366.62 to Global Horizons’

unpaid Form 941 employment tax liabilities for the period ending

September 30, 2005.   The remainder of the June 30, 2005,

abatement, $427,439.59, was applied to Global Horizons’ unpaid

Form 943 employment tax liabilities for the period ending

December 31, 2005.

     An additional abatement of $102,709.41 was stipulated by the

parties and is still due with respect to the amended Form 941 and

the Form 941c submitted by Global Horizons for the period ending

September 30, 2005.   This abatement should be applied to Global

Horizons’ Form 943 liability for the 2005 taxable year.
                               - 5 -

     Global Horizons made payments and tax deposits totaling

$308,688.75 with respect to its Form 941 employment tax liability

for the 2005 taxable year.   A tax deposit penalty of $5,281.99

was assessed against Global Horizons with respect to its Form 941

tax liability for 2005.

     Global Horizons’ Form 941 filed for the period ending

December 30, 2005, reported a liability of $52,819.93 (without

any consideration of the $5,281.99 tax deposit penalty) and an

overpayment of $251,347.95, while respondent’s records indicate

an overpayment of $250,586.83.2   Global Horizons requested that

the overpayment of $250,586.83 be applied to its Form 943

liability, presumably for 2005.   However, respondent initially

applied the overpayment to Global Horizons’ Form 941 employment

tax return for the period ending March 31, 2006, and then to

Global Horizons’ 2005 Form 943 liability in the amount of

$236,294.80.3


     2
      The record does not disclose the basis for the $761.12
difference before consideration of the $5,281.99 tax deposit
penalty. After consideration of the penalty, the difference is
$4,520.87, which arises from the claimed amount of total tax
deposits that Global Horizons’ Form 941 indicates was $304,167.88
while respondent’s records indicate the amount was $308,688.75.
As Global Horizons has failed to show how its deposit total was
derived or file a brief in these cases, we shall accept
respondent’s $308,688.75 amount.
     3
      The record in these cases does not contain a computer
transcript or Form 4340, Certificate of Assessments, Payments,
and Other Specified Matters, for Global Horizons’ Mar. 31, 2006,
Form 941 tax liability. Therefore, the Court cannot verify that
                                                   (continued...)
                                 - 6 -

     On account of an alleged unpaid Form 940 and Form 943

liabilities for the 2005 tax year, a Final Notice of Intent to

Levy and Notice of Your Right to a Hearing (CDP levy notice) was

sent to Global Horizons on September 22, 2006.4   Global Horizons

timely filed a Form 12153, Request for a Collection Due Process

Hearing (CDP hearing request).

     At its collection due process hearing (CDP hearing), Global

Horizons asserted that the liability on its Form 943 was

incorrectly reported.   Global Horizons claimed its Form 943

liability for the 2005 tax year should be reduced because some of

its workers were H-2A visa holders who were exempt from income

and employment taxes.   Additionally, Global Horizons questioned

whether all its credits had been properly applied to its Form 943

liability for the 2005 tax year.    No resolution of the underlying

liability was reached, and Global Horizons did not provide

financial information with which a collection alternative could

be considered.   Accordingly, a notice of determination sustaining

the proposed levy action was issued to Global Horizons on April

8, 2008.



     3
      (...continued)
all overpayments were properly credited. However, because
petitioners failed to raise this issue at trial or file a brief
in these cases, the Court accepts the record as it stands.
     4
      At the time the CDP levy notice was sent, Global Horizons
also had an unpaid Form 940 tax liability for the 2005 tax year.
This liability has since been paid.
                                - 7 -

     Also because of Global Horizons’ allegedly unpaid Form 943

liability for the 2005 tax year, Letter 1153, Notice of Proposed

Assessment (proposed assessment), of the 100-percent responsible

person penalty, pursuant to section 6672, was sent to Mr. Orian

at his last known address on January 25, 2007, by certified mail.

Mr. Orian did not file a timely protest with regard to the

proposed assessment, and a trust fund recovery penalty of

$1,527,380.09 was assessed against him on April 24, 2007, with

respect to Global Horizons’ Form 943 liability for the 2005 tax

year.    A CDP levy notice was sent to Mr. Orian at his last known

address on May 30, 2007, and Mr. Orian on June 6, 2007, timely

filed a CDP hearing request with respect to the CDP levy notice.

     On June 12, 2007, Letter 3172, Notice of Federal Tax Lien

and Your Right to a Hearing (CDP lien notice) was sent to Mr.

Orian.    On June 14 or 15, 2007, Mr. Orian timely filed a CDP

hearing request with respect to the CDP lien notice.5

     At his CDP hearing on September 4, 2007, Mr. Orian disputed

the underlying tax liabilities, claiming that the Form 943 as

filed was incorrect because some of Global Horizons’ workers were

H-2A visa holders.    Respondent’s settlement officer concluded:

“Orian is not precluded from raising arguments regarding the



     5
      The Form 12153 is stamped as received on June 15, 2007, but
the settlement officer’s memorandum attached to the notice of
determination indicates that a faxed copy was received by the
Internal Revenue Service on June 14, 2007.
                                 - 8 -

underlying liability as a part of this CDP hearing” and stated

further:    “The file * * * contains no evidence that Orian

actually received the proposed notices (L-1153 & Form 2751) by

certified mail”.    Mr. Orian presented Forms 1099-MISC,

Miscellaneous Income (Form 1099), in support of his assertion

that the amounts paid to H-2A visa holders were not subject to

income and employment tax and that the trust fund amount assessed

against him should be reduced.    At his CDP hearing, Mr. Orian

also requested collection alternatives including an offer-in-

compromise and questioned whether payments made by Global

Horizons toward its Form 941 tax liability had been applied

properly.    No resolution of the underlying liability was reached

during Mr. Orian’s CDP hearing.

     At the time of his CDP hearing, Mr. Orian had not filed his

individual income tax returns for the taxable years 2005 and

2006.   The notice of determination indicates in the attached

settlement officer’s memorandum that Mr. Orian was advised that

in order to qualify for collection alternatives, he would need to

file his outstanding and past due 2005 and 2006 Federal income

tax returns, furnish financial information, including a Form 433-

A, Collection Information Statement for Wage Earners and Self-

Employed Individuals, and (if appropriate) Form 433-B, Collection

Information Statement for Businesses, with all supporting

documentation, and for an offer-in-compromise, file Form 656,
                               - 9 -

Offer in Compromise.   Because none of these requirements was met

by the October 9, 2007, deadline, the settlement officer

recommended and the Internal Revenue Service Office of Appeals

(Appeals) held that petitioners did not qualify for collection

alternatives. Notices of determination concerning collection

action for the filed lien and the proposed levy were sent to Mr.

Orian on October 23 and 24, 2007, respectively.

                              OPINION

I.   Mr. Orian’s Underlying Liability

     Section 6320(a) and (b) provides that a taxpayer shall be

notified in writing by the Commissioner of the filing of a notice

of Federal tax lien and provided with an opportunity for an

administrative hearing.   An administrative hearing under section

6320 is conducted in accordance with the procedural requirements

of section 6330.   Sec. 6320(c).

     Section 6331(a) authorizes the Commissioner to levy upon

property or property rights of a taxpayer liable for taxes who

fails to pay those taxes within 10 days after a notice and demand

for payment is made.   Section 6331(d) provides that the levy

authorized in section 6331(a) may be made with respect to unpaid

tax liability only if the Commissioner has given written notice

to the taxpayer 30 days before the levy.   Section 6330(a)

requires the Commissioner to send a written notice to the

taxpayer of the amount of the unpaid tax and of the taxpayer’s
                                - 10 -

right to a section 6330 hearing at least 30 days before the levy

is begun.

     If an administrative hearing is requested in a lien or levy

case, the hearing is to be conducted by the Appeals office.

Secs. 6320(b)(1), 6330(b)(1).    At the hearing, the Appeals

officer conducting it must verify that the requirements of any

applicable law or administrative procedure have been met.      Secs.

6320(c), 6330(c)(1).    The taxpayer may raise any relevant issue

with regard to the Commissioner’s intended collection activities,

including spousal defenses, challenges to the appropriateness of

the proposed levy, and alternative means of collection.    Sec.

6330(c)(2)(A); see also Sego v. Commissioner, 114 T.C. 604, 609

(2000); Goza v. Commissioner, 114 T.C. 176, 180 (2000).

Taxpayers are expected to provide all relevant information

requested by Appeals, including financial statements, for its

consideration of the facts and issues involved in the hearing.

Secs. 301.6320-1(e)(1), 301.6330-1(e)(1), Proced. & Admin. Regs.

     If a taxpayer’s underlying liability is properly at issue,

the Court reviews any determination regarding the underlying

liability de novo.     Sego v. Commissioner, supra at 610; Goza v.

Commissioner, supra at 181-182.    We review any other

administrative determination regarding the proposed collection

action for abuse of discretion.     Sego v. Commissioner, supra at

610; Goza v. Commissioner, supra at 181-182.    If raised at a
                               - 11 -

hearing by the taxpayer, a taxpayer’s underlying liability is

properly at issue in a section 6330 collection case if the

taxpayer “did not receive any statutory notice of deficiency for

such tax liability or did not otherwise have an opportunity to

dispute such tax liability.”   Sec. 6330(c)(2)(B).   A taxpayer

generally is treated as not having had an opportunity to dispute

a liability that is self reported as due on a return.     Montgomery

v. Commissioner, 122 T.C. 1, 9 (2004).   However, a taxpayer

cannot challenge an underlying liability in a CDP hearing, and

therefore this Court cannot review that liability, if the

taxpayer received a notice of deficiency or otherwise had a

previous opportunity to dispute the underlying liability.    Sec.

6330(c)(2)(B).

     Mr. Orian claims he never received the proposed assessment.

Similarly, respondent argues that the proposed assessment was

sent by certified mail to Mr. Orian at his last known address,

but he did not avail himself of his opportunity to contest the

proposed assessment within the time prescribed.   On these facts,

respondent asserts that Mr. Orian is barred from bringing his

underlying liability before the Court.

     Because the assessment against Mr. Orian was a trust fund

penalty, respondent properly issued a proposed assessment under

section 6672(b)(1), rather than a notice of deficiency.    See

secs. 6212(a), 6672(b).   In respondent’s opinion, a section
                              - 12 -

6672(b)(1) notice provides a taxpayer with the means for

protesting a proposed trust fund penalty assessment

administratively with the Commissioner.    See sec. 301.6330-

1(e)(3), Q&A-E2, Proced. & Admin. Regs.; see also Mason v.

Commissioner, 132 T.C. 301, 316 (2009).     It follows that where a

taxpayer has not received a section 6672(b)(1) notice, or in this

case the proposed assessment, then that taxpayer has not been

afforded an opportunity to dispute the underlying tax liability.

     Documentary evidence of mailing may suffice as proof that a

notice of deficiency was properly mailed to a taxpayer.     Coleman

v. Commissioner, 94 T.C. 82, 90-91 (1990).     When a proposed

assessment is mailed, the Commissioner must follow the same

mailing procedures that are provided for notices of deficiency in

section 6212(b).   Sec. 6672(b)(1).    Hence, the same evidence that

establishes that the Commissioner mailed a notice of deficiency

to a taxpayer’s last known address is sufficient to establish

that the Commissioner properly sent a proposed assessment.       Mason

v. Commissioner, supra at 318; Hickey v. Commissioner, T.C. Memo.

2009-2.

     Respondent has established that a proposed assessment was

sent by certified mail to Mr. Orian’s last known address; that it

was not returned; and that, according to the U.S. Postal

Service’s Web site, it was delivered on July 13, 2007.    While Mr.

Orian testified that he had no memory of receiving the letter and
                                - 13 -

was frequently out of town, actual personal receipt of the

proposed assessment following its delivery to the taxpayer’s home

is not required in order to prove that the Commissioner provided

the required preliminary notice.    Hickey v. Commissioner, supra.

      Accordingly, Mr. Orian has not met the burden of proof

requirements to overcome the presumption that he received the

proposed assessment.   Because respondent has met the requirements

of section 6672(b)(1), the Court finds that Mr. Orian otherwise

had an opportunity to contest his underlying liability.    See

Pough v. Commissioner, 135 T.C. ___, ___ (2010) (slip op. at 10).

Consequently, Mr. Orian’s liability for the trust fund penalty is

not properly in issue, and we review respondent’s determination

of the proposed collection actions against Mr. Orian for abuse of

discretion.

II.   Application of Payments

      Respondent argues that both petitioners are precluded from

challenging the manner in which payments made by Global Horizons

were applied.   Respondent asserts that Global Horizons is

precluded from pursuing this issue because it did not raise the

issue at its CDP hearing and Mr. Orian is precluded because the

issue constitutes an impermissible challenge to his underlying

liability.

      In reviewing for abuse of discretion under section

6330(d)(1), generally the Court may consider only arguments,
                             - 14 -

issues, and other matters that were raised at the CDP hearing or

otherwise brought to the attention of Appeals.   Giamelli v.

Commissioner, 129 T.C. 107, 115 (2007); Magana v. Commissioner,

118 T.C. 488, 493 (2002); see also Porter v. Commissioner, 130

T.C. 115, 117 (2008) (when determining whether a taxpayer is

entitled to relief under section 6015, the Court may consider

evidence introduced at trial but not included in the

administrative record); sec. 301.6330-1(f)(2), Q&A-F3, Proced. &

Admin. Regs.

     According to the record, both Mr. Orian and Global Horizons

questioned at their respective CDP hearings whether all credits

and payments made by Global Horizons with regard to its 2005 tax

liability had been properly applied to its Form 943 liability.

The Court considers that a challenge to the application of

payments to the taxpayer’s overall liability is sufficient to

preserve the issue for review.   We disagree with respondent that

because petitioners did not specifically dispute the “allocation

of payments to the non-trust fund (as opposed to the trust fund)

portion of the tax during the CDP Hearings”, they are precluded

from raising the issue with the Court.

     This Court held in Kovacevich v. Commissioner, T.C. Memo.

2009-160, that “questions about whether a particular check was

properly credited to a particular taxpayer’s account for a

particular tax year are not challenges to his underlying tax
                               - 15 -

liability.”    See also Freije v. Commissioner, 125 T.C. 14, 26-27

(2005).   The Court in Kovacevich v. Commissioner, supra note 10,

distinguished instances in which taxpayers assert they are due

refunds from prior years, as these types of challenges are

considered a challenge to the taxpayer’s underlying liability.

See also Perkins v. Commissioner, 129 T.C. 58 (2007); Landry v.

Commissioner, 116 T.C. 60 (2001).

     Petitioners, like the taxpayers in Kovacevich, are

questioning the application of payments, not claiming they are

due refunds.    Accordingly, the Court finds that neither

petitioner is barred from challenging respondent’s application of

payments with regards to Global Horizons’ 2005 tax liability.

Consequently, we review respondent’s application of payments for

abuse of discretion.    See Sego v. Commissioner, 114 T.C. at 610;

Goza v. Commissioner, 114 T.C. at 181-182.

     Petitioners contend that respondent was obliged to apply

payments made towards Global Horizons’ Form 941 tax liability for

the first, second, third, and fourth quarters of 2005 against the

balance of its Form 943 trust fund tax liability for 2005.

Specifically, petitioners allege that the abatements of tax

credited to Global Horizons because of overpayments of its Form

941 tax liability for the periods ending March 31 and June 30,

2005, should have been credited to its 2005 Form 943 tax

liability.    Additionally, petitioners claim that respondent’s
                             - 16 -

disregard of Global Horizons’ request that the overpayment of

$250,586.83 for its December 30, 2005, Form 941 tax liability be

applied to its Form 943 liability for 2005 is an abuse of

discretion.

     When a taxpayer owing more than one tax or owing tax for

more than one year makes voluntary payments to the Commissioner,

he or she may, by specific written directions, assign the

application of those payments to any portion of the liability.

Tull v. United States, 69 F.3d 394, 396 (9th Cir. 1995); Wood v.

United States, 808 F.2d 411, 416 (5th Cir. 1987); O’Dell v.

United States, 326 F.2d 451, 456 (10th Cir. 1964); see also Rev.

Proc. 2002-26, 2002-1 C.B. 746.   Under the voluntary payment

rule, when a taxpayer who has outstanding tax liabilities

voluntarily makes a payment, the Commissioner usually will honor

the taxpayer’s request as to how to apply that payment.     United

States v. Ryan, 64 F.3d 1516, 1522 (11th Cir. 1995).   However,

section 6402(a) and the regulations promulgated thereunder

demonstrate that a taxpayer’s right to designate the application

of his voluntary payment does not extend to an overpayment

reported on a return.

     Section 6402(a) allows the Commissioner to credit an

“overpayment, including any interest allowed thereon, against any

liability in respect of an internal revenue tax on the part of

the person who made the overpayment” and, subject to certain
                              - 17 -

limitations, refund any balance to the person.   In lieu of a

refund, a taxpayer can instruct the Commissioner to credit his

overpayment against the estimated tax for the taxable year

immediately succeeding the year of the overpayment.   Sec.

301.6402-3(a)(5), Proced. & Admin. Regs.   The Commissioner need

only refund, or apply to the taxpayer’s estimated tax, that

portion of the overpayment that exceeds the taxpayer’s

“outstanding liability for any tax”.   Sec. 301.6402-3(a)(6),

Proced. & Admin. Regs.; see N. States Power Co. v. United States,

73 F.3d 764, 767 (8th Cir. 1996) (“‘[Section] 6402(a), plainly

gives the * * * [Commissioner] the discretion to apply

overpayments to any tax liability.’” (quoting United States v.

Ryan, supra at 1523)); Pettibone Corp. v. United States, 34 F.3d

536, 538 (7th Cir. 1994) (section 6402(a) “leaves to the

Commissioner’s discretion whether to apply overpayments to

delinquencies or to refund them to the taxpayer”).

     Respondent’s partial application of Global Horizons’ 2005

overpayment to its 2005 and 2006 Form 941 tax liabilities falls

within respondent’s authority to credit overpayments to any

liability for any tax year and, therefore, was proper and not an

abuse of discretion.   See also Bryant v. Commissioner, T.C. Memo.

2009-78, affd. ___ Fed. Appx. ___ (6th Cir., Oct. 12, 2010);

Richmond v. Commissioner, T.C. Memo. 2005-238.
                              - 18 -

III. Abuse of Discretion

     In the light of our conclusions supra regarding challenges

to the underlying liabilities and application of payments,

disposition of these cases rests upon whether the record reflects

an abuse of discretion on the part of respondent in determining

to proceed with collection efforts in the form of the filed lien

and the proposed levies.   Under this standard, action constitutes

an abuse of discretion where it is arbitrary, capricious, or

without sound basis in fact or law.    Woodral v. Commissioner, 112

T.C. 19, 23 (1999).   The Court considers whether the Commissioner

committed an abuse of discretion in rejecting a taxpayer’s

position with respect to any relevant issues, including those

items enumerated in section 6330(c)(2)(A); i.e., spousal

defenses, challenges to the appropriateness of the collection

action, and offers of collection alternatives.

     Whether an abuse of discretion has occurred depends upon

whether the exercise of discretion is without sound basis in fact

or law.   Freije v. Commissioner, 125 T.C. at 23.   At the hearing,

generally, the Appeals officer must consider the above-stated

issues raised by the taxpayer, verify that the requirements of

applicable law and administrative procedure have been met, and

consider “whether any proposed collection action balances the

need for the efficient collection of taxes with the legitimate

concern of the person that any collection action be no more
                                - 19 -

intrusive than necessary.”    Sec. 6330(c)(3)(C).   Consequently, an

Appeals officer must verify that the underlying tax was properly

assessed.

     An Appeals officer may rely on a computer transcript or Form

4340, Certificate of Assessments, Payments, and Other Specified

Matters, to verify that a valid assessment was made and that a

notice and demand for payment was sent to the taxpayer in

accordance with section 6303.    Nestor v. Commissioner, 118 T.C.

162, 166 (2002); Schaper v. Commissioner, T.C. Memo. 2002-203;

Schroeder v. Commissioner, T.C. Memo. 2002-190.     Absent a showing

of irregularity, a transcript that shows such information is

sufficient to establish that the procedural requirements of

section 6330 have been met.     Nestor v. Commissioner, supra at

166; see sec. 6330(c)(1), (3).

     It is ordinarily not an abuse of discretion for an Appeals

officer to reject an offer-in-compromise and sustain the

Commissioner’s proposed collection action where the taxpayer has

failed to submit requested financial information timely.    See,

e.g., Shanley v. Commissioner, T.C. Memo. 2009-17 (citing Prater

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

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

2004-20).

     Petitioners raised no issues at their respective CDP

hearings other than the application of the H-2A visas of Global
                             - 20 -

Horizons’ employees and the proper allocation of payments to

Global Horizons’ 2005 employment tax liability.

     The Appeals settlement officer assigned to Mr. Orian’s CDP

hearing reviewed the documentation provided to substantiate the

H-2A visas, namely the Forms 1099.    The Appeals settlement

officer questioned the accuracy of the Social Security numbers

and addresses listed on the Forms 1099 and noted his “enormous

trepidation” with regard to any abatement of Global Horizons’

Form 943 liability based on the documentation provided.

Petitioners presented no further documentation to substantiate

the application of H-2A employee visas to the abatement of the

Form 943 tax liability.

     Following Mr. Orian’s CDP hearing, the Appeals settlement

officer conducted a thorough investigation of the application of

credits generated by Global Horizons’ payments for its Form 941

liability to its Form 943 liability for the 2005 tax year,

including a review of the applicable Forms 4340.    The Appeals

settlement officer determined that respondent had followed all

correct procedures in the assertion and the computation of the

trust fund penalty assessed against Mr. Orian.

     The Appeals settlement officer assigned to Global Horizons’

CDP hearing also thoroughly reviewed the Forms 4340.    She too

determined that respondent followed all correct procedures and
                              - 21 -

verified the accuracy of the levy proposed against Global

Horizons.

     The Court has reviewed the record, in particular the Forms

4340 for petitioners’ 2005 tax year, and finds that the

procedural requirements of section 6330 have been met.    See sec.

6330(c)(1); sec. 301.6330-1(e)(1), Proced. & Admin. Regs.

     The request for a CDP hearing submitted by Global Horizons

did not articulate a desire for any specific collection action,

although the two requests submitted by Mr. Orian proposed both an

offer-in-compromise and an installment arrangement.   However, Mr.

Orian never submitted a proposal for payment or resolution of the

unpaid trust fund liability during his CDP hearing.

Additionally, petitioners provided no financial information at

their CDP hearings, and they were not in filing compliance during

the time their CDP cases were pending before Appeals.

     Accordingly, both Appeals settlement officers determined to

proceed with the lien and levy actions, and did not entertain an

installment agreement or other collection alternatives, because

petitioners failed to fulfill two prerequisites for consideration

of such alternatives:   (1) Submission of financial information

sufficient to enable the Commissioner to evaluate collection

potential; and (2) a showing of compliance with obligations to

make estimated tax payments for the following year (2006).
                             - 22 -

     In the light of this history and on this record, respondent

committed no abuse of discretion in concluding that petitioners

would not be eligible for an offer-in-compromise or a similar

collection alternative.

     In conclusion, the facts of these cases do not establish any

abuse of discretion on respondent’s part.   The Court will sustain

respondent’s proposed collection actions as to the 2005 tax year.

     The Court has considered all of petitioners’ contentions,

arguments, requests, and statements.   To the extent not discussed

herein, the Court concludes that they are meritless, moot, or

irrelevant.

     To reflect the foregoing,


                                         Appropriate orders and

                                   decisions will be entered.
