                  T.C. Memo. 2009-284



                UNITED STATES TAX COURT



            EUGENE M. DININO, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 5596-09L.               Filed December 10, 2009.



     P was assessed trust fund recovery penalties under
I.R.C. sec. 6672, and when he failed to pay after
notice and demand, the IRS issued a notice of intent to
levy. P requested a collection due process (CDP)
hearing before the Office of Appeals, indicating that
he wanted to submit an offer-in-compromise (OIC).
However, P failed to participate in the hearing as
scheduled and made no response to a subsequent
invitation to submit information. Two and a half
months later P’s representative asked for a conference;
but when his request was granted, he asked that the
conference be delayed by a month, and the appeals
officer agreed. When the delayed conference occurred,
P’s representative asked for another month to be
allowed to submit an OIC and supporting information,
and the appeals officer agreed. When the appointed day
approached, P’s representative left several telephone
messages requesting a further extension of time. The
appeals officer made no response, and after the passage
of two more months (during which P submitted no OIC or
                             - 2 -

     supporting information), the Office of Appeals issued
     its notice of determination upholding the proposed
     levy.

          Held: The Office of Appeals did not abuse its
     discretion when it did not grant P’s request for
     further extensions of time and instead issued a notice
     of determination sustaining the proposed levy.



     Ira B. Stechel, for petitioner.

     Justin L. Campolieta, for respondent.



                         MEMORANDUM OPINION


     GUSTAFSON, Judge:   This case is an appeal by petitioner

Eugene M. Dinino, under section 6330(d).1     Mr. Dinino seeks our

review of the determination by the Internal Revenue Service (IRS)

to uphold a proposed levy on his assets.      The levy is intended to

collect so-called “trust fund recovery penalties” assessed

pursuant to section 6672 for various calendar quarters in the

years 2000, 2001, 2004, and 2005.    This case is now before the

Court on respondent’s motion for summary judgment, which Mr.

Dinino has opposed.   The motion will be granted.




     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

Non-payment of the Underlying Liabilities

     During the relevant years Mr. Dinino was owner and chief

executive officer of a restaurant in New York City.   The IRS

determined that, in various calendar quarters in the years 2000,

2001, 2004, and 2005, taxes of over $450,000 had been withheld

from the wages of employees of the restaurant but had not been

paid over to the IRS.   The IRS determined that Mr. Dinino was a

person responsible for paying over those taxes and that he had

willfully failed to do so.   In December 2006 and September 2007

the IRS assessed against Mr. Dinino more than $450,000 in trust

fund recovery penalties pursuant to section 6672.

     On various dates in 2006 and 2007, the IRS sent Mr. Dinino

notices of the liabilities and demanded that he pay them, but he

did not do so.   On February 26, 2008, the IRS sent Mr. Dinino a

“Final Notice--Notice of Intent to Levy and Notice of Your Right

to a Hearing”, advising him that the IRS intended to levy to

collect the unpaid trust fund liabilities and interest that had

accrued thereon, then totaling $572,667.11.   The levy notice

advised Mr. Dinino that he could receive a collection due process

(CDP) hearing before the IRS’s Office of Appeals.

Initial CDP Proceedings

     In early April 2008 the IRS received a Form 12153, “Request

for a Collection Due Process or Equivalent Hearing”, that was
                                - 4 -

signed by Mr. Dinino’s representative as “POA” (power of

attorney) and had been timely mailed on March 27, 2008.    The

Form 12153 indicated that Mr. Dinino desired to submit an offer-

in-compromise (OIC).    (Neither Mr. Dinino nor his representative

ever submitted an OIC.)

     On June 10, 2008, an appeals officer2 with the IRS’s Office

of Appeals made notes of his “Initial analysis” of the case,

which showed “that TP was found willful and responsible on trust

fund periods and did go to appeals officer so precluded issue on

CDP”); i.e., that Mr. Dinino had already had a prior opportunity

to challenge his liability for the trust fund recovery penalty

and was therefore precluded from doing so in a CDP hearing.      On

June 11, 2008, the appeals officer mailed to Mr. Dinino a letter

that scheduled a CDP hearing to be held by telephone on June 27,

2008.    The letter also invited Mr. Dinino to propose a different

date and to request a face-to-face hearing.   Mr. Dinino did not

respond to the June 11, 2008, letter and did not participate by

telephone on June 27, 2008.

     On June 27, 2008 (the date that had been scheduled for the

hearing), the appeals officer sent Mr. Dinino a second letter,



     2
      The employee who conducted the CDP hearing is identified in
the hearing record as a “settlement officer”. Section 6330(c)(1)
and (c)(3) refers to the person who conducts the CDP hearing as
an “appeals officer”; but section 6330(b)(3) refers to the person
as “an officer or employee”. Throughout this opinion, we use the
statutory term “appeals officer”.
                                - 5 -

informing Mr. Dinino that the Office of Appeals would be issuing

a determination based upon the information contained in the

administrative file previously developed by the IRS’s collection

personnel.   However, the letter also allowed Mr. Dinino an

additional fourteen days (i.e., until July 11, 2008) to provide

any further information that he wanted the Office of Appeals to

consider.    Neither Mr. Dinino nor his representative sent in any

information or made any contact by that deadline, nor for two

months thereafter.

     The foregoing facts bear special emphasis, especially

because Mr. Dinino’s memorandum opposing respondent’s motion for

summary judgment ignores them altogether and contends that

Mr. Dinino was never given a hearing.    The subsequent CDP

proceedings that did occur (described below) were undertaken, in

an exercise of the discretion of the Office of Appeals, despite

Mr. Dinino’s unexplained non-appearance at his scheduled hearing

and his failure to send in additional information as invited.

Subsequent CDP Proceedings

     On September 16, 2008--two and a half months after the date

originally set for Mr. Dinino’s CDP hearing--the IRS received its

first contact from Mr. Dinino after his initial request for a

hearing:    Mr. Dinino’s representative contacted the appeals

officer by telephone and asked to set up a conference.    Despite

Mr. Dinino’s prior defaults, the appeals officer agreed to have a
                                - 6 -

telephone conference on October 1, 2008 (three months after the

June 27, 2008, date originally set for the CDP hearing).    On that

date, however, Mr. Dinino’s representative telephoned and

explained that he needed more time (apparently to prepare and

submit one or more delinquent returns that were prerequisites to

IRS consideration of an OIC).   The appeals officer granted this

first request for more time.

     The postponed conference was held on November 5, 2008 (more

than four months after the date originally set for the CDP

hearing).   At that conference, the only issue Mr. Dinino’s

representative raised was the possibility of an OIC as an

alternative to levy.   The appeals officer stated that in order to

consider an OIC, the IRS would need additional information about

Mr. Dinino.   His representative agreed to provide, by December 3,

2008, Mr. Dinino’s updated financial statement,3 wage stubs, bank

statements, and 2006 income tax return,4 and to provide



     3
      The appeals officer had access to Mr. Dinino’s financial
statement (Form 433-A, Collection Information Statement for Wage
earners and Self-Employed Individuals) dated November 20, 2007,
which was a year out of date. The Form 433-A had identified a
restaurant as Mr. Dinino’s employer and sole investment, but in
November 2008 Mr. Dinino’s representative informed the appeals
officer that Mr. Dinino no longer had any interest in that
restaurant.
     4
      The appeals officer did later determine that Mr. Dinino’s
delinquent return for 2006 had been filed. The petition suggests
(in paragraph 4(d)) that Mr. Dinino’s 2007 return was also
delinquent, but since respondent does not rely on this fact
(which is detrimental to Mr. Dinino), we ignore it.
                                 - 7 -

information to show that Mr. Dinino was no longer associated with

the restaurant, as he alleged.    The appeals officer agreed to

this second extension of time.

     Mr. Dinino’s representative did not submit an OIC or the

promised information on December 3, 2008; and on the agreed-upon

date of December 9, 2009 (more than five months after the date

originally set for the CDP hearing), the scheduled conference did

not occur.   Rather, on December 1, 2008, the representative had

left a voice-mail message for the appeals officer, stating that

he had a scheduling conflict (because of a doctor’s appointment)

and would like to “reschedule the Collection Due Process hearing

and the related deadline for submission of documentation

therefor”.   See infra note 5.   That is, he made a third request

for an extension of time.   He placed similar calls on December 4,

8, 10, and 22, 2008, but received no return call from the appeals

officer.5




     5
      Mr. Dinino’s representative declares: “To the best of my
knowledge, [the appeals officer] * * * did not respond to any of
those messages”. Although the appeals officer’s record recites
that he received a voice message from Mr. Dinino’s representative
on December 3, 2008, it has no entries reflecting messages left
December 1, 4, 8, 10, or 22. However, for purposes of
respondent’s motion for summary judgment we assume the facts as
declared by Mr. Dinino’s representative in his declaration
attached to Mr. Dinino’s petition. Respondent’s counsel asserts
that the telephone number listed in that declaration for the call
on December 22, 2008, is not an IRS telephone number, but for
purposes of this motion we assume Mr. Dinino’s representative’s
declaration is accurate.
                              - 8 -

Issuance of the Notice of Determination

     Five more weeks went by, and as of January 16, 2009, the

appeals officer had still not received from Mr. Dinino or his

representative an OIC or the supporting information.    By that

point, more than six months had passed since the date originally

scheduled for the CDP hearing (i.e., June 27, 2008), and more

than nine months had passed since Mr. Dinino had submitted his

Form 12153 (dated March 27, 2008) requesting a CDP hearing and

stating that he wanted to propose an OIC.    The appeals officer

decided that the proposed levy should be sustained and began

processing the paperwork to close Mr. Dinino’s appeal.    On

February 2, 2009--almost a year after the IRS had issued the

final notice of levy (on February 26, 2008)--the Office of

Appeals issued a notice of determination to Mr. Dinino sustaining

the proposed levy.

     On March 9, 2009, Mr. Dinino timely filed his petition in

response to the notice of determination.    The petition states,

inter alia:

     3.   The underlying tax liability alleged by Respondent
          to have existed on Petitioner's part is comprised
          of civil penalties under Section 6672 of the
          Internal Revenue Code (the “Code”) with respect to
          the final calendar quarter of 2000, the four
          calendar quarters of 2001, the final three
          calendar quarters of 2004, and the four calendar
          quarters of 2005 * * *.

     4.   The Notice of Determination upholding collection
          of the alleged deficiency against Petitioner is
          erroneous for the following reasons:
                               - 9 -

               *     *     *     *     *     *     *

          j.    In this case, Petitioner has, as the Notice
                of Determination acknowledges, received no
                hearing. Instead, a series of phone messages
                took place, but no hearing ever occurred,
                although Petitioner’s representative
                repeatedly, but unsuccessfully, attempted to
                do so. See Garage v. United States, 96 AFTR
                2d 2005-7201 (D.N.J. 2009) (remand to Appeals
                Office of Notice of Determination when no
                hearing took place).

          k.    Under Section 6330(b)(1), a taxpayer who
                requests a hearing is entitled to one, and
                prior to the hearing taking place Respondent
                cannot proceed with collection of the tax,
                pursuant to that provision. See Chief
                Counsel Advisory 200123060 (June 8, 2001),
                stating “a taxpayer is entitled to a CDP
                hearing even if he will raise only frivolous
                or constitutional arguments because the
                appeals officer must cover the statutory
                requirements of Sections 6330(c)(1) and
                (3)(C) of verification and balancing.”

          l.    If, as here, no hearing has been conducted,
                an Appeals officer obviously could not have
                obtained at the hearing “verification from
                the Secretary that the requirements of any
                applicable law or administrative procedure
                have been met”, as required by Section
                6330(c)(1), or balanced the need for the
                “efficient collection of taxes with the
                legitimate concern of the person that any
                collection action be no more intrusive than
                necessary”, as required by Section
                6330(c)(3)(C).

At the time Mr. Dinino filed his petition, he resided in the

State of New York.
                             - 10 -

                           Discussion

I.   Applicable Legal Principles

     A.   Trust Fund Recovery Penalty

     Section 6672 is an adjunct to payroll taxes.    An employer

(such as Mr. Dinino’s restaurant) is required to withhold FICA6

tax and income tax from its employees’ wages and to remit the

withheld taxes to the Government.   See secs. 3102, 3402, 3403.

The FICA tax and the income tax that the employer withholds from

employees’ wages are held by the employer in trust for the United

States, see sec. 7501(a), and are known as trust fund taxes.

     The withheld taxes held in trust are sometimes a temptation

to employers who are in financial difficulty.   They may be

inclined to regard many of their expenses as more urgent than

payroll taxes and to use the money for other purposes.    In so

doing, they make the Government, in effect, an unwitting and

unwilling investor in their troubled businesses.    The

Government’s eventual receipt of the trust fund taxes is now put

at great risk, even though in its dealings with the employees the

Government must honor the withholding.   That is, when the

employer issues a Form W-2, “Wage and Tax Statement”, to the

employee showing tax withholding, the employee receives credit on




     6
      Federal Insurance Contributions Act or FICA tax is a
payroll tax imposed on both employers and employees, secs. 3101,
3111, to fund Social Security and Medicare.
                              - 11 -

his tax return for the tax withheld, even if the employer never

pays the tax over to the Government.

     To discourage such misuse of the trust fund taxes,

section 6672(a) imposes “a penalty equal to the total amount of

the tax * * * not accounted for and paid over.”    This penalty is

imposed on any “person required to collect, truthfully account

for, and pay over any” trust fund taxes--referred to in caselaw

as a “responsible person”--“who willfully fails” to do so.    See

Slodov v. United States, 436 U.S. 238 (1978).     The deficiency

notice requirements in sections 6212(a) and 6213(a) are limited

to the taxes imposed by subtitle A (income taxes) and subtitle B

(estate and gift taxes) and chapters 41 through 44 (excise

taxes).   The penalty at issue in this case is imposed by section

6672 with respect to employment taxes imposed by subtitle C,

taxes an employer is required to withhold and pay over.    Although

the IRS must give the taxpayer notice before imposing the

penalty, see sec. 6672(b), the IRS is not required to issue a

notice of deficiency before assessing and collecting the section

6672(a) penalty, see Bronson v. United States, 46 F.3d 1573, 1580

(Fed. Cir. 1995); Wilt v. Commissioner, 60 T.C. 977, 978 (1973).

The IRS determined that Mr. Dinino was a “responsible person” of

his restaurant, and it assessed against him the penalty for trust

fund taxes that were not paid over.
                              - 12 -

     B.   Collection Due Process

     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

under section 6330(b) and (c); and if the taxpayer is

dissatisfied with the outcome there, he can appeal that

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

Mr. Dinino has done.

     The pertinent procedures for the agency-level CDP hearing

are set forth in section 6330(c) and can be stated as four

issues:   First, the appeals officer must “obtain verification

from the Secretary that the requirements of any applicable law or

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

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).   Third,

the taxpayer may contest the existence and amount of the

underlying tax liability, but only if he did not receive a notice

of deficiency or otherwise have an opportunity to dispute the tax
                                - 13 -

liability.    Sec. 6330(c)(2)(B).   Fourth, the appeals officer must

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

intrusive than necessary”.     See sec. 6330(c)(3)(C).

     If the Office of Appeals then issues a notice of

determination to proceed with the proposed levy, the taxpayer may

appeal the determination to this Court within 30 days, as

Mr. Dinino has done, and we now “have jurisdiction with respect

to such matter”.    Sec. 6330(d)(1).

     Except when the underlying tax liability is at issue, we

review the determination of the Office of Appeals for abuse of

discretion, Goza v. Commissioner, 114 T.C. 176 (2000)--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).

     C.      Summary Judgment Standard

     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.
                              - 14 -

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).

     Summary judgment procedure in this Court is governed by

Rule 121 (which is a close equivalent to rule 56 of the Federal

Rules of Civil Procedure).   Under Rule 121(b), the movant must

show by affidavits or other evidentiary materials “that there is

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

be rendered as a matter of law.”   The party moving for summary

judgment (here, respondent) 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, Mr. Dinino).   Dahlstrom v.

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

79 T.C. 340, 344 (1982). Under Rule 121(d), where the moving

party properly supports a motion for summary judgment, the party

opposing the motion must, “by affidavits or as otherwise provided

in this Rule, * * * set forth specific facts showing that there

is a genuine issue for trial.”

     Respondent supported his motion for summary judgment with

the declaration (pursuant to 28 U.S.C. section 1746) of the

appeals officer, to which were attached the documents that

constitute the hearing record.   Petitioner relied on his

representative’s declaration that had been previously attached to
                              - 15 -

the petition.   These two declarations are the evidence upon which

respondent’s motion is decided.

II.   Whether the Proposed Levy Should Be Sustained

      A.   Failure To Conduct a Hearing

      Mr. Dinino’s principal contention is that he was denied a

hearing when the appeals officer refused to reschedule the

hearing that had been scheduled for December 9, 2008.    This

contention fails for two reasons.   First, Mr. Dinino was granted

a CDP hearing, but he simply failed to appear.   Mr. Dinino

himself failed to participate in the telephone hearing that was

scheduled and noticed for June 27, 2008; and Mr. Dinino’s

representative announced that he could not attend the hearing

that he had agreed to attend on December 9, 2008.     If Mr. Dinino

had no CDP hearing before the Office of Appeals, that lack was

not because of the appeals officer but because of Mr. Dinino.

      Second, and more important, Mr. Dinino’s representative did

participate on his behalf in a CDP hearing, although not in a

face-to-face session.   Mr. Dinino’s contention that he did not

have a hearing is evidently founded on a misunderstanding of the

nature of a CDP hearing.   His memorandum states:

      Being well aware of the significance attendant to a
      formal CDP hearing, * * * [Mr. Dinino’s representative]
      sought to comply with * * * [the appeals officer’s]
      request that the additional information that he had
      requested be submitted to him by December 3, 200[8]
      * * *. [Emphasis added.]
                              - 16 -

There is, however, no such thing as a “formal CDP hearing”.

Rather,

          Hearings at the Appeals level have historically
     been conducted in an informal setting. Section
     601.106(c), Statement of Procedural Rules, provides:

          “(c) Nature of proceedings before Appeals.
          Proceedings before the Appeals are informal.
          * * *”

              *     *     *     *      *    *        *

          When Congress enacted section 6330 and required
     that taxpayers be given an opportunity to seek a pre-
     levy hearing with Appeals, 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 * * *. The references in section 6330
     to a hearing by Appeals indicate that Congress
     contemplated the type of informal administrative
     Appeals hearing that has been historically conducted by
     Appeals and prescribed by section 601.106(c), Statement
     of Procedural Rules. * * *

Davis v. Commissioner, 115 T.C. 35, 41 (2000).    “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.”    Sec. 301.6330-

1(d)(2), A-D6, Proced. & Admin. Regs. (26 C.F.R.).       Sometimes a

CDP hearing may be conducted “by telephone or by correspondence.”

Id. A-D7; see also Katz. v. Commissioner, 115 T.C. 329, 337

(2000).

     Mr. Dinino’s representative had a series of telephone

conversations with the appeals officer in which he expressed
                               - 17 -

Mr. Dinino’s desire for an OIC, learned what was needed to

effectuate an OIC, and discussed a schedule (revised several

times) for providing that information.   These communications

constituted a hearing.    The problem for Mr. Dinino was not that

he was given no hearing (as he contends) but rather that he was

not allowed an indefinite number of sessions in that hearing, on

the schedule that he eventually unilaterally demanded.     We find

that he did have a hearing, and that the remaining question

(addressed below) is whether the appeals officer abused his

discretion in denying Mr. Dinino’s representative’s third request

for an extension of time to submit his OIC and supporting

information.

     B.     Compliance With the Specific Requirements of
            Section 6330(c)

            1.   Verification Under Section 6330(c)(1)

     As is noted above, section 6330(c)(1) requires the appeals

officer conducting a CDP hearing to verify “that the requirements

of any applicable law or administrative procedure have been met.”

In the case of a levy to collect a trust fund recovery penalty

under section 6672,7 the basic “requirements of any applicable

law or administrative procedure” for which the appeals officer

must obtain verification in order to determine to proceed with a

levy are:


     7
      As is noted supra pt. I.A, the section 6672 penalty is an
“assessable penalty” not subject to deficiency procedures.
                             - 18 -

     •    the IRS’s proper assessment of the liability, see
          secs. 6201(a)(1), 6501(a), 6672(b);

     •    the taxpayer’s failure to pay the liability after the
          IRS gives the taxpayer notice and demand for payment of
          the liability, see secs. 6303 and 6331(a); and

     •    the IRS’s giving the taxpayer notice of intent to levy,
          see secs. 6330(a)(1), 6331(d)(1), and of the taxpayer’s
          right to a hearing, see secs. 6330(a)(3)(B),
          6331(d)(4)(C).

If those requirements have been met, then the appeals officer can

proceed to consider the other collection and liability issues.

But if those basic requirements have not been met, then

collection cannot proceed, and the appeals officer cannot sustain

the proposed collection action.

     In view of the mandatory nature of the verification

requirement, “this Court will review the Appeals officer’s

verification under section 6330(c)(1) without regard to whether

the taxpayer raised it at the Appeals hearing”, Hoyle v.

Commissioner, 131 T.C. ___ , ___ (2008) (slip op. at 11), if the

taxpayer has adequately raised the issue in his petition filed in

this Court, see Rule 331(b)(4) (“Any issue not raised in the

assignments of error shall be deemed to be conceded”).     Where the

taxpayer in a levy case contends that the appeals officer failed

to obtain the requisite verification under section 6330(c)(1),

the taxpayer has the burden of going forward with a prima facie

case and has the burden of proof on that contention.   See Butti

v. Commissioner, T.C. Memo. 2008-82 (a CDP case involving a
                               - 19 -

verification issue (citing Coleman v. Commissioner, 94 T.C. 82,

89-90 (1990))); Med. Practice Solutions, LLC v. Commissioner,

T.C. Memo. 2009-214 n.16.

     Mr. Dinino’s petition does, in a fashion, raise verification

as an issue by stating:

     If, as here, no hearing has been conducted, an Appeals
     officer obviously could not have obtained at the
     hearing “verification from the Secretary that the
     requirements of any applicable law or administrative
     procedure have been met”, as required by Section
     6330(c)(1) * * *.

That is, he contends that a proper verification could not have

been obtained “at the hearing” because (he says) no hearing

occurred.

     To the extent this argument is simply a restatement of

Mr. Dinino’s contention that no hearing occurred, we deal with it

in part II.A above.    To the extent that he asserts that, as a

matter of fact, the appeals officer failed to obtain

verification, the assertion fails for lack of proof.    Mr. Dinino

cites no evidence to support the assertion.    And on the contrary,

the appeals officer’s declaration that respondent submitted in

support of his motion explicitly states:    “In arriving at my

determination to sustain the proposed collection action, I

verified that the requirements of law and administrative

procedure were met.”    The appeals officer’s attachment to the

notice of determination includes a two-paragraph section entitled

“Verification of legal and procedural requirements”, in which he
                              - 20 -

states, inter alia, “Computer records[8] confirm that assessments

were made and that notice and demand was timely issued to you.

You did not pay the liability within ten days after notice and

demand.”   Respondent submitted with his motion a Form 4340,

Certificate of Assessments, Payments, and Other Specified

Matters, for each calendar quarter at issue, showing an

assessment of the trust fund recovery penalty, a “Statutory

Notice of Balance Due” (i.e., the issuance of a notice and

demand), and an unpaid balance.   The Forms 4340 are current

(i.e., dated September 22, 2009), but we take them as evidence of

the existence in the IRS’s computerized records of the matters

that are reflected on entries on the forms.   The appeals officer

would have seen those entries when he consulted those records

before the notice of determination was issued in February 2009.

     Mr. Dinino alleges no particular defect in the agency’s

compliance with “applicable law or administrative procedure”, and

none is apparent.   He has not carried his burden to prove

failure of verification.




     8
      See Nestor v. Commissioner, 118 T.C. 162, 166-167 (2002)
(appeals officer does not abuse his discretion when, to obtain
the verification required by section 6330(c)(1), he relies on an
IRS transcript); see also Craig v. Commissioner, 119 T.C. 252,
261-262 (2002) (section 6330(c)(1) verification does not require
the appeals officer to rely on any particular document for
verification).
                                - 21 -

          2.     Consideration of Collection Alternative

                 a.    Lack of an OIC and Supporting Information

     Mr. Dinino requested a CDP hearing because (he said) he

wanted to propose an offer-in-compromise; and such an offer must

be considered by the appeals officer at a CDP hearing.      See

sec. 6330(c)(2)(A)(iii), (c)(3)(B).      However, Mr. Dinino never

actually proposed an OIC, so we can hardly say that the appeals

officer abused his discretion by failing to consider an offer

that was never made.    It is not an abuse of discretion for an

appeals officer to sustain a levy and not consider any collection

alternatives when the taxpayer has proposed none.      Kendricks v.

Commissioner, 124 T.C. 69, 79 (2005).

     Similarly, Mr. Dinino’s failure to provide a financial

statement and other supporting information likewise prevented the

appeals officer from considering any collection alternative.

During a section 6330 hearing, “Taxpayers will be expected to

provide all relevant information requested by Appeals, including

financial statements, for its consideration of the facts and

issues involved in the hearing.”    Sec. 301.6330-1(e)(1), Proced.

& Admin. Regs.   An appeals officer may not consider a collection

alternative unless the taxpayer has provided adequate financial

information, such as a current Form 433-A.      See Rev. Proc.

2003-71, sec. 4.03, 2003-2 C.B. 517, 518; see also Internal

Revenue Manual (IRM) pt. 5.14.2.2.1(1), (5) (July 12, 2005),
                                - 22 -

5.14.7.4.1(5) (Sept. 30, 2004).    The appeals officer was

therefore following the IRS's administrative guidelines when he

asked Mr. Dinino to complete an updated Form 433-A.    See IRM pt.

5.14.2.2.1(1), 5.14.7.4.1(5).    It was not an abuse of discretion

for the appeals officer to sustain the levy when Mr. Dinino

failed to submit an up-to-date Form 433-A.    See Prater v.

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

Memo. 2005-99; Roman v. Commissioner, T.C. Memo. 2004-20.

                 b.   Denial of a Further Extension of Time

     Mr. Dinino’s answer to the foregoing is to argue that the

appeals officer abused his discretion by failing to give

Mr. Dinino the additional time that his representative had

requested so that he could produce the requested information.

The reasonableness of a request for more time, and the

reasonableness of a denial of such a request, will depend on the

particular facts of the case; and on the facts of this case we

cannot say that the appeals officer’s handling of this case was

unreasonably strict in this context.9

     First, in deciding whether to grant a given request for more

time, the appeals officer reasonably considered Mr. Dinino’s

prior conduct.   Mr. Dinino had completely ignored the scheduling




     9
      We consider the appeals officer’s deadline in context.
See, e.g., Morlino v. Commissioner, T.C. Memo. 2005-203; Roman v.
Commissioner, T.C. Memo. 2004-20.
                              - 23 -

of his CDP hearing in June 2008 and had failed to participate.10

His representative’s first communication with the appeals officer

was in September 2008--two and a half months after the hearing

was already supposed to have been held.   It might well have been

reasonable for the appeals officer simply to refuse the September

2008 request for an opportunity for a hearing; he can hardly be

criticized for waiting four months to close the case in January

2009, after Mr. Dinino continued to fail to submit his OIC and

supporting information--first, failing to provide the information

on October 1 and requesting more time; second, failing to provide

the information on November 5 and requesting more time; and

third, failing to provide the information on December 3 and

requesting more time.

     Second, the appeals officer’s approach was not inconsistent

with the IRS’s guidelines.   “There is no requirement that the


     10
      Mr. Dinino’s failure to participate and his subsequent
inaction for two and a half months makes this case easily
distinguishable from Meeh v. Commissioner, T.C. Memo. 2009-180, a
case on which he relies, but in which the facts were very
different from the facts of this case: In Meeh the taxpayers
requested the rescheduling of their CDP hearing eleven days
before the original hearing date, and the appeals officer was
unavailable for the rescheduled hearing when the taxpayers
initiated the agreed-upon phone conference. The taxpayers’
subsequent lapses in Meeh thus arose in a factual context very
different from the December 2008 delays of Mr. Dinino and his
representative, which followed months of non-response and foot-
dragging. Likewise, the facts were very different in Judge v.
Commissioner, T.C. Memo. 2009-135, in which an appeals officer
abused his discretion by denying a request for a brief extension
to a taxpayer who (unlike Mr. Dinino) had responded promptly to
the appeals officer’s prior requests for information.
                              - 24 -

Commissioner wait a certain amount of time before making a

determination as to a proposed levy.”     Gazi v. Commissioner, T.C.

Memo. 2007-342.   “Appeals will, however, attempt to conduct a CDP

hearing and issue a Notice of Determination as expeditiously as

possible under the circumstances.”     Sec. 301.6330-1(e)(3), Q&A-

E9, Proced. & Admin. Regs.   The appeals officer’s manual

instructed him:   “Good case management practices dictate * * *

[that] we allow a taxpayer * * * no more than 14 days” to provide

the requested financial information.    Internal Revenue Manual

Abr. & Ann. (IRM-AA) pt. 8.7.2.3.4(6)(A) (Jan. 1, 2006).11

Mr. Dinino had been allowed multiples of 14 days to submit his

OIC and supporting information.

     Third, Mr. Dinino actually did obtain a de facto extension

of time.   It is the policy of the Office of Appeals to consider

financial information submitted past the deadline, and up to the

time of the issuance of the notice of determination.    IRM pt.

8.22.2.2.4.11(1)(C) (Oct. 30, 2007); see also IRM-AA

pt. 8.7.2.3.4(10) (Jan. 1, 2006).    Thus, Mr. Dinino had until his

notice of determination was issued on February 2, 2009–-i.e.,

more than eight weeks after his representative’s initial request

(on December 1, 2008) for more time to obtain the information–-to

make his submission to Appeals.   But he did not do so.   He



     11
      See also Internal Revenue Manual (IRM) pt. 8.22.2.2.6.1(3)
(Dec. 1, 2006).
                              - 25 -

requested more time, heard no response from the appeals officer,

and then let two months pass without proposing an OIC or

producing the information.

     The appeals officer did not abuse his discretion by

declining to give Mr. Dinino the additional time his

representative requested.

          3.   Challenge to Underlying Liability

     Paragraph 3 of Mr. Dinino’s petition states:   “The

underlying tax liability alleged by Respondent to have existed on

Petitioner’s part is comprised of civil penalties under Section

6672”, and paragraph 4 refers to “the alleged deficiency”.

(Emphasis added.)   In case this is intended as a contention that

the liabilities are only “alleged” and are not valid, we observe

briefly the two reasons that Mr. Dinino may not dispute here the

IRS’s determination of his underlying liability.

     First, Mr. Dinino does not allege that he had no prior

opportunity to dispute his liability for the penalties at issue;

and the only evidence in the record (i.e., the appeals officer’s

notes stating “TP * * * did go to appeals officer so precluded

issue on CDP”) indicates that he did have a prior opportunity.12



     12
      See McClure v. Commissioner, T.C. Memo. 2008-136 (quoting
sec. 301.6320-1(e)(3), Q&A-E2, Proced. & Admin. Regs.
(26 C.F.R.): “An opportunity to dispute the underlying liability
includes a prior opportunity for a conference with Appeals that
was offered either before or after the assessment of the
liability”).
                                - 26 -

As we noted above, section 6330(c)(2)(B) permits a challenge to

underlying liability only “if the person did not * * * have an

opportunity to dispute such tax liability.”    Therefore,

Mr. Dinino may not dispute his liability for the trust fund

recovery penalty in this CDP case.13

     Second, the record before us gives no indication that

Mr. Dinino ever contested the underlying liability during the CDP

process before the Office of Appeals.    His Form 12153 requesting

a CDP hearing mentions only his desire for an OIC and makes no

suggestion of a dispute of liability.    His opposition to

respondent’s motion for summary judgment does not dispute the

liability or allege that he attempted to dispute it before the

Office of Appeals.   As a result, he may not dispute the liability

in his appeal to the Tax Court.    See Giamelli v. Commissioner,

129 T.C. 107, 112-116 (2007).

          4.   Balancing Efficiency and Intrusiveness

     The Office of Appeals determined that the proposed

collection action properly balanced collection efficiency and




     13
      Presumably, Mr. Dinino could pay the penalty, or a
“divisible” portion thereof, file an administrative claim for
refund thereof in compliance with section 7422(a), and sue for a
refund, thereby litigating his liability for the penalty. See
Brounstein v. United States, 979 F.2d 952, 954 n.1 (3d Cir.
1992). Even if he cannot maintain a pre-payment dispute in the
CDP context, he retains his post-payment remedies.
                                 - 27 -

intrusiveness, as required by section 6330(c)(3)(C).14

Mr. Dinino’s petition makes no distinct contention about

balancing under subsection (c)(3)(C), other than to argue (as

with verification under subsection (c)(1)) that this balancing

could not have occurred at the CDP hearing because (he argues)

there was no hearing.     We have found, however, that there was a

hearing, and Mr. Dinino points to no defect in the balancing of

efficiency and intrusiveness that the Office of Appeals did

conduct.

                               Conclusion

     On the undisputed facts of this case, we cannot hold that

the denial of the extension by the Office of Appeals was

arbitrary, capricious, or without sound basis in fact or law.     By

its nature, the CDP process interrupts the collection of taxes

that have been determined to be owed--an interruption that is

well justified when it allows consideration of serious, bona fide

disputes and concerns, but that is unfortunate when it allows a


     14
          The attachment to the notice states:

     Although intrusive, it [levy] is necessary for
     satisfaction of the liability. A reasonable time frame
     was offered for substantiation and submission of an
     updated complete financial statement. None of the
     requested substantiation has been submitted to Appeals
     by the agreed date. Insufficient information exists to
     allow any alternative collection resolution. Levy
     action will balance the need for the efficient
     collection of taxes with the legitimate concern of the
     person that any collection action be no more intrusive
     than necessary.
                              - 28 -

taxpayer to attempt to delay the inevitable by stringing the

agency along.   Mr. Dinino owed the Government half a million

dollars--and yet a year after the IRS had served a notice of levy

on Mr. Dinino, he still had not even proposed his OIC and

produced his information.   We conclude that the Office of Appeals

did not abuse its discretion when it decided that, for

Mr. Dinino’s half-million-dollar trust fund liability, the

process must come to an end; and we hold that respondent is

entitled to the granting of his motion and the entry of a

decision sustaining the determination and proposed levy.

     To reflect the foregoing,



                                      An appropriate order and

                                 decision will be entered.
