                       T.C. Memo. 2010-136



                      UNITED STATES TAX COURT



   ENMED, LLC d.b.a. QUALITY HOME HEALTH AGENCY, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17142-08L.            Filed June 22, 2010.




     Johnny Rhondo (manager), for petitioner.

     Guy Glaser and Timothy Berry, for respondent.



                         MEMORANDUM OPINION


     KROUPA, Judge:   This collection review matter is before the

Court in response to a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 63301


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

(determination notice) pertaining to a $28,250 penalty under

section 6698 for failure to timely file a partnership return for

2004 and a $650 penalty under section 6721 for failure to file

the return electronically for 2004.   The sole issue for decision

is whether respondent’s determination to sustain the lien filing

to collect the penalties assessed is an abuse of discretion.2     We

hold it is not.

                           Background

     This case was submitted fully stipulated pursuant to Rule

122, and the facts are so found.   The stipulation of facts, the

supplemental stipulation of facts, and the accompanying exhibits

are incorporated by this reference.   Petitioner maintained its

headquarters in Ontario, California, at the time it filed the

petition.

IRS Penalty Appeal

     Respondent assessed the penalties against petitioner and

issued a notice requesting petitioner to pay the penalties.

Instead of paying, petitioner asked that the penalties be abated

by respondent’s Appeals Office (penalty appeal).   Penalty Appeals

Tax Specialist MaryAnn Woodbury (AO Woodbury) determined that


     2
      Respondent filed a motion for summary judgment. We
recharacterized respondent’s motion as a motion for partial
summary judgment and granted partial summary judgment to
respondent that petitioner was foreclosed from challenging the
underlying liability for the penalties. We left open whether
filing the lien was appropriate to collect the penalties. It is
that issue we decide today.
                                -3-

petitioner was not entitled to have the penalties abated.3     AO

Woodbury explained she did not abate the penalties because

petitioner had a history of failure to timely file penalties,

the return was filed over 17 months late, and so much time

elapsed between the events petitioner cited for causing the delay

and the delayed filing.

The CDP Hearing

     Respondent filed a Notice of Federal Tax Lien in San

Bernardino County against petitioner with respect to the

penalties.   Respondent also sent petitioner a notice informing

petitioner of its collection due process rights.   Petitioner

timely submitted a hearing request seeking abatement of the

penalties.   Petitioner raised no other issue in the hearing

request, nor did petitioner raise any collection alternatives in

the hearing request, such as an installment agreement or an

offer-in-compromise.

     Settlement Officer Wendy J. Clinger (SO Clinger) sent

petitioner a letter scheduling a date and time for the hearing.

She stated in the letter that the purpose of the hearing would be

limited to discussing the lien and that, pursuant to section

6330(c)(2)(B), she would not allow petitioner to challenge its



     3
      Petitioner filed a petition in this Court (Docket No.
26219-07) to contest AO Woodbury’s determination not to abate the
penalties. That petition was untimely, and the case was
dismissed for lack of jurisdiction.
                                -4-

liability for the underlying penalties because petitioner already

had exercised an opportunity to do so during the penalty appeal.

SO Clinger further stated that she would consider any non-

frivolous issues petitioner wished to discuss including

challenges to the appropriateness of the collection action and

other defenses.   She asked petitioner to provide her with all the

information that it wished her to consider regarding the lien so

she could properly consider collection alternatives.

     Responding to SO Clinger, petitioner provided the same

information and repeated the same arguments it had previously

raised during the penalty appeal.     Petitioner also claimed it had

“not had the opportunity to dispute the appropriateness of the

collection action.”   Petitioner did not raise any other

arguments, including objections to the collection action or

collection alternatives.

     Petitioner chose not to participate in a face-to-face

hearing with SO Clinger and declined the opportunity to discuss

the matter by telephone.   Petitioner instead requested that SO

Clinger make her determination using documents it had previously

submitted.4   The documents submitted to SO Clinger only address



     4
      Apparently petitioner now seeks to negotiate the penalties
and has stated that it would like each party to concede 50
percent of the liability based on doubt as to liability.
Petitioner is precluded from challenging its liability for the
penalties pursuant to our order granting respondent’s motion for
partial summary judgment.
                                -5-

petitioner’s liability for the penalties.    They do not raise any

relevant issues.

     SO Clinger issued petitioner a determination notice

sustaining the filing of the lien.    She determined through

account transcript analysis that the penalties were properly

assessed and that petitioner was properly notified of the

assessments and informed of its rights with respect to the lien

action.   SO Clinger also determined that petitioner had

previously had the opportunity to challenge its liability for the

penalties and was therefore precluded from challenging it again.

She further determined that petitioner did not raise any relevant

arguments, including defenses and collection alternatives.

     Petitioner timely filed a petition in response to the

determination notice.   The only issue raised is whether

petitioner is liable for the penalties.

                            Discussion

     We are asked to decide in this collection review matter

whether respondent abused his discretion by proceeding with the

lien action to collect the penalties from petitioner.      Petitioner

only wants to contest its liability for the penalties.     We begin

with general rules that apply to collection actions.

     The Secretary is required to furnish the taxpayer with

written notice that a lien has been filed.    Sec. 6320.   The

taxpayer is entitled, upon request, to a hearing before the
                                 -6-

Appeals Office.    Sec. 6320(b)(1).    If the taxpayer requests a

hearing, he or she may raise at that hearing any relevant issues

relating to the unpaid tax or the proposed collection action.

Sec. 6330(c)(2).    Relevant issues include any appropriate

defenses, challenges to the appropriateness of collection, and

possible alternative means of collection such as an installment

agreement or an offer-in-compromise.      Sec. 6330(c)(2)(A).

     After the hearing, the Appeals officer is required to make a

determination that addresses issues the taxpayer raised, verifies

that all requirements of applicable law and administrative

procedure have been met, and 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.

Sec. 6330(c)(3).    Petitioner may prove abuse of discretion by

showing that respondent exercised his discretion arbitrarily,

capriciously, or without sound basis in fact or law.      See

Giamelli v. Commissioner, 129 T.C. 107, 111 (2007).

     The record reflects that SO Clinger properly verified that

respondent followed the applicable law and administrative

procedure.5   She reviewed respondent’s account transcript and


     5
      Petitioner elected not to participate in a face-to-face or
telephone hearing with SO Clinger and requested that she make her
determination using documents it had submitted to her.
Petitioner now argues in its briefs that its due process rights
were violated when SO Clinger denied its request for a face-to-
face hearing. We find no abuse of discretion by SO Clinger in
light of petitioner’s waiver of the opportunity for a hearing in
                                                   (continued...)
                                  -7-

concluded that petitioner received all notices and was accorded

all rights to which it was entitled regarding the assessments.

Additionally, petitioner did not raise any relevant issues for SO

Clinger’s consideration.   Petitioner did not provide any

collection alternatives, nor did it present any other defenses

for SO Clinger’s consideration.    Finally, the record reflects

that SO Clinger properly balanced the need for efficient

collection of taxes with petitioner’s legitimate concern that any

collection be no more intrusive than necessary.    We therefore

conclude that SO Clinger did not abuse her discretion in

sustaining the lien action to collect the penalties from

petitioner.

     We decline petitioner’s invitation to review whether

petitioner had reasonable cause to file the return almost 18

months after the due date.   That question is not before the

Court.   We previously granted respondent’s partial summary

judgment on the question whether petitioner may challenge its

liability for the penalties in this collection review matter.

     We have considered all arguments made in reaching our

decision, and, to the extent not mentioned, we conclude that they

are moot, irrelevant, or without merit.




     5
      (...continued)
person or by telephone.
                            -8-

To reflect the foregoing,


                                       Decision will be entered

                                  for respondent.
