                         T.C. Memo. 2003-234



                       UNITED STATES TAX COURT



                 WILLIAM G. WELLS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 163-01L.                Filed August 6, 2003.


     William G. Wells, pro se.

     Lorraine Y. Wu, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     VASQUEZ, Judge:    Pursuant to section 6330(d),1 petitioner

seeks review of respondent’s determination to proceed with

collection of his 1991 and 1992 tax liabilities.




     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 2 -

                         FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   At the time he filed the

petition, petitioner resided in Santa Monica, California.

     Until August 1995, for a period of approximately 25 years,

petitioner was employed as the president of Fujita Corp.

     In 1998, petitioner entered into an installment agreement

with respondent as a method of paying his outstanding 1991 and

1992 income tax liabilities (1998 installment agreement).

Pursuant to the 1998 installment agreement, instead of

petitioner’s receiving rental income payments from Miramar Hotel

Corp. (Miramar), respondent was to receive monthly payments

directly from the Miramar.   Petitioner defaulted on the 1998

installment agreement when Miramar ceased making payments to

respondent.

     On August 4, 1999, respondent issued to petitioner a Notice

of Defaulted Installment Agreement Under IRC 6159(b), Notice of

Intent to Levy Under IRC 6331(b) for 1991 and 1992 and a Final

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

for 1991 and 1992.   As of this date, petitioner owed

$1,387,786.98 for 1991 and $865,486.80 for 1992--a total of

$2,253,273.78.

     On or about September 3, 1999, petitioner submitted to
                               - 3 -

respondent a Form 12153, Request for a Collection Due Process

Hearing, regarding his 1991 and 1992 tax years (hearing request).

In explaining his disagreement with the proposed levy, petitioner

wrote “SEE ATTACHED LETTER”.   Petitioner attached to his hearing

request a 2-page letter from his representative, Steven Toscher.

The attached letter stated:

     As you are aware, Mr. Wells has not been able to
     continue the installment obligation entered into in
     July of 1998. The installment obligation was premised
     on Mr. Wells receiving $24,969 in rental income from
     Miramar Hotel leases. Unfortunately, as you are also
     aware, Mr. Wells is involved in litigation with Fujita
     USA which has caused the lessee to terminate the rental
     payments. Thus, Mr. Wells has no ability to continue
     to make said payments. Mr. Wells requests that IRS
     modify the agreement based upon his current ability to
     pay. A modification of an installment obligation will
     facilitate collection of such liabilities.

     Enclosed please find IRS Form 12153 where Mr. Wells
     requests a due process hearing pursuant to I.R.C.
     §6330(b) with respect to the IRS Notice of Intent to
     Levy. As stated above, a modified installment
     agreement or an Offer in Compromise are more
     appropriate collection alternatives given Mr. Wells’
     financial situation. Mr. Wells continues to explore
     any and all alternatives in satisfying the IRS’
     previous assessments. It will not be productive for
     the IRS or Mr. Wells to levy on any of his “assets.”

     Please have the Appeals Officer assigned to this case
     call me to arrange a mutually convenient time to meet
     and discuss this matter.

     On July 6, 2000, Appeals Officer Richard William Bailey and

Mr. Toscher met to hold a section 6330 hearing (July 6, 2000,
                                - 4 -

hearing).2   At the July 6, 2000, hearing, the issues raised by

Mr. Toscher were the possibility of full payment of petitioner’s

1991 and 1992 income tax liabilities, the renegotiation and

revision of the 1998 installment agreement, and the possibility

of an offer-in-compromise.    Mr. Toscher had no information

regarding petitioner’s financial status to provide to Appeals

Officer Bailey.    Appeals Officer Bailey agreed to meet with Mr.

Toscher again on November 9, 2000, to give petitioner the

opportunity to present his financial information to respondent.

     Before November 9, 2000, Appeals Officer Bailey filled out a

“CDP Priority Case Action Plan”.    He completed this form because

the case was over 180 days old and the total tax liability was

over $500,000.    In the section entitled “Action plan”, Appeals

Officer Bailey wrote:

     This taxpayer owes a lot of money and has many assets,
     the representative now realizes that the taxpayer may
     if [sic] fact have to full pay these deficiencies. I
     have a 2nd hearing scheduled for 11/9/2000, at which
     time the representative should have a full accounting
     of the taxpayer’s assets and ability to pay. On that
     date either arrangement for full payment will be made
     or the taxpayer’s representative will present an offer-
     in-compromise. Case delayed due to open related cases
     in appeals. Representative wanted those concluded
     first.

     On November 9, 2000, Appeals Officer Bailey and Mr. Toscher

met regarding petitioner’s case (November 9, 2000, meeting).      Mr.


     2
        Appeals Officer Bailey was not involved in the approval
of, or the notification of default on, the 1998 installment
agreement.
                                - 5 -

Toscher still had no information regarding petitioner’s financial

status to provide to Appeals Officer Bailey.

     On November 13, 2000, Mr. Toscher wrote to Appeals Officer

Bailey.   The letter thanked Appeals Officer Bailey for meeting

with him, stated that Mr. Toscher understood that Appeals Officer

Bailey could no longer hold on to the case and needed to issue a

determination, and thanked Appeals Officer Bailey for his

consideration of this matter.

     Appeals Officer Bailey prepared an “Appeals Case Memo”.    In

it, he wrote:

     The taxpayer has many holdings, both real estate and
     businesses. * * * although the taxpayer’s corporate
     businesses may be legally titled to the taxpayer’s
     wife, these corporations owe the taxpayer sizable
     amounts of money * * * . It appears now that the
     taxpayer may be able to full pay all of the outstanding
     taxes * * * . At Appeals last meeting with the
     taxpayer’s representative on the CDP matter, such an
     accounting was still in the process of being made and
     the representative could not give Appeals a reasonable
     date for the conclusion of such accounting.

     On December 5, 2000, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 to petitioner regarding his 1991 and 1992 tax years

(notice of determination).   In the notice of determination,

respondent determined that the proposed levy was appropriate.

The notice of determination explained:

     Along with your Form 12153, Request for a Collections
     Due Process Hearing, you offered no alternative to
     enforced collection, but suggested that your defaulted
     installment agreement might be renegotiated and
                                - 6 -

     reinstituted. At your due process hearing your
     representative discussed disposition of the liabilities
     through full payment or the possibility of making an
     Offer-in-Compromise. However, your representative was
     unable to provide a comprehensive accounting of your
     assets so that a determination might be made with
     regard to the necessity of full payment or the
     feasibility of an offer (nothing was presented upon
     which a legal sufficiency determination could be
     based), nor was an Offer-in-Compromise presented. The
     renegotiation and reinstatement of your installment
     agreement is not possible because of the pending
     assessments; your previous default; and, the amount of
     the required payments considering all unpaid balance of
     assessments will not pay the debt within the statute.

                               OPINION

     At trial, petitioner stated the only relief he is seeking is

a remand to the Appeals Office for further proceedings.3     Where

the validity of the underlying tax liability is not properly in

issue, we review respondent’s determination for an abuse of

discretion.    Sego v. Commissioner, 114 T.C. 604, 610 (2000).

     Petitioner testified that he suffered from a stroke in 1995

and hearing loss shortly thereafter.     As of April 1999,

petitioner began using hearing aids.     By October 1999, petitioner

felt the hearing aids were functioning well for him.

     In October 1999, petitioner was evaluated by Eugene H.

Freed, M.D.4   Dr. Freed was an Agreed Medical Examiner, a




     3
         Petitioner’s underlying tax liability is not in issue.
     4
        Although the record is unclear, this examination appears
to be part of petitioner’s litigation with Fujita Corp.
                                - 7 -

Qualified Medical Examiner, and an Independent Medical Examiner.5

Based on a physical examination, Dr. Freed determined that

petitioner “was a well developed, sixty-seven year old well

nourished male not in acute distress,” and petitioner “was alert

and cooperative.”    Dr. Freed concluded that petitioner’s hearing

aids were adequate for his current hearing loss.

     At the trial, the Court asked petitioner if he could hear us

and respondent.    He answered, “Yes”.   Petitioner also stated that

his physical condition had improved.

     Petitioner was represented by counsel at the July 6, 2000,

hearing and the November 9, 2000, meeting.    Petitioner’s physical

condition was not discussed at the July 6, 2000, hearing or the

September 9, 2000, meeting.    During 2000, Appeals Officer Bailey

was not aware of petitioner’s physical condition.    See Magana v.

Commissioner, 118 T.C. 488 (2002).

     Given the fact that respondent was not made aware of

petitioner’s 1995 stroke or hearing loss and that petitioner was

represented by counsel, 4 months was a reasonable amount of time

to allow petitioner to submit his financial information.

Furthermore, the evidence petitioner provided at trial does not

suggest that he was physically unable to compile his financial




     5
          The record does not contain an explanation of these
titles.
                                 - 8 -

records within this period of time, and there is no evidence that

petitioner was unable to assist his attorney.

     Petitioner did not submit an offer-in-compromise or any

financial information to respondent.       Respondent gave petitioner

a reasonable amount of time to submit information about his

financial condition.6   We conclude that respondent’s

determination was not an abuse of discretion.7

     Petitioner has failed to raise a spousal defense or make a

valid challenge to the appropriateness of respondent’s intended

collection action.   These issues are now deemed conceded.      Rule

331(b)(4).

     In reaching all of our holdings herein, we have considered

all arguments made by the parties, and to the extent not

mentioned above, we find them to be irrelevant or without merit.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.




     6
        Additionally, petitioner provided no evidence of his
financial condition at trial that could allow us to conclude that
a remand of this case would prove to be helpful.
     7
        We note that respondent also considered the fact that
petitioner had defaulted on a prior installment agreement as an
additional reason to proceed with collection.
