                               T.C. Memo. 2014-68



                         UNITED STATES TAX COURT



                  ROGER A. BUCHANAN, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 23587-11L.                         Filed April 16, 2014.



      Roger A. Buchanan, pro se.

      Diana N. Wells, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      GOEKE, Judge: This is a collection due process (CDP) appeal pursuant to

section 6330(d),1 in which petitioner Roger Buchanan asks this Court to review

the determinations of the Internal Revenue Service (IRS) Appeals Office. The


      1
      Unless otherwise indicated, all section references are to the Internal
Revenue Code.
                                         -2-

[*2] issue for decision is whether respondent’s settlement officer abused her

discretion in rejecting petitioner’s proposed offer-in-compromise. We hold that

she did not.

                               FINDINGS OF FACT

      Petitioner resided in Indiana when he filed his petition.

      Respondent sent petitioner a Letter 1058 (LT-11NC), Final Notice of Intent

to Levy and Notice of Your Right to a Hearing (levy notice), advising him that

respondent intended to impose a levy against him for his unpaid trust fund

recovery penalty liabilities (TFRP liabilities) for the tax periods ended March 31,

June 30, September 30, and December 31, 2006, and March 31 and June 30, 2007,

and that petitioner could request a hearing with the IRS Appeals Office. When

respondent issued the levy notice, petitioner’s total TFRP liabilities were

$27,871.46.

      Petitioner timely mailed respondent a Form 12153, Request for a Collection

Due Process or Equivalent Hearing (CDP hearing). In his Form 12153, petitioner

requested an installment agreement, an offer-in-compromise, or currently-not-

collectible status. Petitioner’s request was forwarded to the IRS Appeals Office.

      An IRS settlement officer sent a letter to petitioner that scheduled a CDP

hearing and requested petitioner to provide certain information. John Brengle,
                                          -3-

[*3] who held a power of attorney for petitioner, faxed various documents for the

settlement officer’s review in anticipation of the hearing. Those documents

included a Form 636, Offer in Compromise (OIC); Form 433-A, Collection

Information Statement for Wage Earners and Self-Employed Individuals; two

Form 433-A attachments; bank account information; and wage and income

information. The Form 433-A attachments detailed petitioner’s 25% interest in

several parcels of land (collectively Buchanan Farms) and petitioner’s business

expenses. The attachments did not however include a value for Buchanan Farms

or any information showing the value of petitioner’s 25% interest. In his OIC,

petitioner offered to pay a total of $1,357 to satisfy his TFRP liabilities on the

basis of doubt as to collectibility.

      The settlement officer postponed petitioner’s hearing while the IRS

Centralized Offer in Compromise Unit considered petitioner’s OIC. The

settlement officer rescheduled the hearing and requested additional information

from petitioner. Mr. Brengle responded with the information and participated in

the hearing on petitioner’s behalf. During the CDP hearing, the settlement officer

stated that she would make a determination based upon the information petitioner

had previously provided, issues raised and discussed during the hearing, and any

additional, posthearing information requested and provided.
                                         -4-

[*4] Among the items provided to the settlement officer was a tax assessment for

Buchanan Farms that showed a total assessed value of $73,400. Mr. Brengle also

provided a letter asserting the value of petitioner’s 25% interest in Buchanan

Farms would be $18,350 if petitioner could liquidate it.

      Using all the information provided, the settlement officer issued a Corrected

Notice of Determination Concerning Collection Action(s) under Section 6320

and/or 6330 for petitioner’s TFRP liabilities. This notice displayed an income and

expense table and an asset-equity table. The asset-equity table showed that

petitioner had $20,666 in total equity. The income and expense table showed that

petitioner’s monthly expenses exceeded his monthly income by $147.

      The settlement officer informed petitioner she had determined that his

accounts are currently not collectible, that the proposed levy action would not be

allowed, and that petitioner’s proposed OIC had been rejected because the

information petitioner provided did not support it. Petitioner timely petitioned this

Court for a redetermination. The petition disputes respondent’s rejection of the

proposed OIC but does not dispute the underlying liabilities.
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[*5]                                   OPINION

I.     Jurisdiction

       Petitioner comes before us pursuant to section 6330(d) to appeal the

settlement officer’s determination in his CDP hearing. “[J]urisdiction under

section 6330(d)(1)(A) is established when there is a written notice that embodies a

determination to proceed with the collection of the taxes in issue, and a timely

filed petition.” Lunsford v. Commissioner, 117 T.C. 159, 164 (2001).

       Petitioner received a notice of determination stating that his liabilities are

currently not collectible, that the proposed levy action would not be allowed, and

that his proposed OIC was rejected. Petitioner timely petitioned this Court in

response to the IRS notice of determination. However, because the IRS decided

not to proceed with the collection of taxes in issue, the question arises whether the

OIC determination is moot.

       Although the settlement officer determined that the proposed levy was not

appropriate and that petitioner’s TFRP liabilities are not currently collectible,

collection by levy is still possible in the future if petitioner’s financial condition

improves.2 A determination to accept the proposed OIC would have permitted


       2
       The IRS previously issued a notice of Federal tax lien on Buchanan Farms
and on petitioner’s home.
                                          -6-

[*6] respondent to treat petitioner as having met his payment obligations and

would have eliminated the possibility of a future collection action. Accordingly,

we do not believe the OIC determination is moot.

II.   CDP Hearings in General and Standard of Review

      If a taxpayer fails to pay any Federal income tax liability after notice and

demand, section 6331(a) authorizes the IRS to collect the tax by levy on the

taxpayer’s property. Before proceeding with a levy, the Commissioner must issue

a final notice of intent to levy and notify the taxpayer of the right to a hearing.

Sec. 6330(a) and (b)(1). During the hearing a taxpayer may raise any relevant

issue, including challenges to the appropriateness of the collection action and

possible collection alternatives. Sec. 6330(c)(2)(A).

      Following the hearing, the Appeals Office must determine whether the

proposed collection action may proceed. For a notice of levy, the Appeals Office

is required to consider: (1) whether the Secretary has met the requirements of

applicable law and administrative procedure; (2) the relevant issues raised by the

taxpayer; and (3) whether the proposed collection action appropriately balances

the need for efficient collection of taxes with the taxpayer’s concerns that the

collection action be no more intrusive than necessary. Sec. 6330(c)(3). The

settlement officer considered each of these prongs and found petitioner’s accounts
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[*7] were currently not collectible and the proposed levy action would not be

allowed.

      Petitioner does not argue that the Secretary failed to meet the requirements

of applicable law and administrative procedure and is not challenging the

underlying liabilities. However, petitioner claims that the settlement officer erred

in rejecting his proposed OIC.

      Where a taxpayer’s underlying tax liability is not in dispute, the Court

reviews the Commissioner’s determination for abuse of discretion. See Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176,

182 (2000). To establish an abuse of discretion, the taxpayer must prove that the

decision of the Commissioner was arbitrary, capricious, or without sound basis in

fact or in law. Giamelli v. Commissioner, 129 T.C. 107, 111 (2007) (citing Sego

v. Commissioner, 114 T.C. at 610, and Woodral v. Commissioner, 112 T.C. 19, 23

(1999)). In reviewing for abuse of discretion, we generally consider only the

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

brought to the attention of the Appeals Office. Giamelli v. Commissioner, 129

T.C. at 115.
                                         -8-

[*8] III.    Whether the Settlement Officer Abused Her Discretion

       Petitioner argues that the settlement officer’s determination merely delays

respondent’s inevitable future collection attempts. Petitioner asks this Court to

require the IRS to accept his proposed OIC and put an end to the collection action

permanently.

       Petitioner’s proposed OIC offered to pay $1,357 in satisfaction of his TFRP

liabilities, which had grown to $28,119.59 by the time he submitted his OIC. The

settlement officer rejected this proposed OIC because the information petitioner

provided did not support it. Using the information petitioner provided, the

settlement officer determined that petitioner’s reasonable collection potential was

about $20,666.

       Petitioner argues that respondent overvalued his equity in Buchanan Farms

(i.e., $18,350) because he and his three brothers have a binding agreement that

requires unanimous consent to sell the property. Petitioner argues it would be

impossible for him to sell the land to pay his tax liabilities. He also claims

liquidating his interest would be difficult because his brothers were not interested

in buying him out and no third party would buy his interest on account of the

restrictions under the brothers’ agreement.
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[*9] Although petitioner alleges the difficulty of liquidating his interest in this

property, he has produced no evidence sufficient to prove the settlement officer

made an arbitrary determination. He relies solely on his own self-serving

testimony and the brothers’ agreement. In Tokarski v. Commissioner, 87 T.C. 74,

77 (1986), we held that the Court is not required to accept a party’s self-serving

testimony that is uncorroborated by persuasive evidence. Petitioner failed to

produce any testimony from his brothers to support his claim that they were not

interested in purchasing his interest. Petitioner also failed to produce any

evidence showing that the land could not be partitioned or that a loan could not be

obtained against his interest. The only evidence of value petitioner produced for

the CDP hearing indicated that his interest in Buchanan Farms had a value of

$18,350. Given these facts, we hold that petitioner has failed to prove abuse of

discretion regarding his proposed OIC.

IV.   Conclusion

      We hold that the settlement officer did not abuse her discretion in rejecting

petitioner’s proposed OIC. We therefore sustain the determination of the

settlement officer.
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[*10] In reaching our holdings herein, we have considered all arguments made,

and, to the extent not mentioned above, we conclude they are moot, irrelevant, or

without merit.

      To reflect the foregoing,



                                                    An appropriate decision will be

                                              entered.
