                         T.C. Memo. 2010-7



                      UNITED STATES TAX COURT



                  SANDRA D. LONG, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12433-08L.            Filed January 11, 2010.



     Mark D. Allison, Alexander J. Saffi, and Brittany Harrison,

for petitioner.

     Andrew M. Stroot, 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 to the Internal Revenue Code,
                                                   (continued...)
                                  - 2 -

(determination notice) as supplemented in the Supplemental Notice

of Determination (supplemental determination) sustaining the

Notice of Federal Tax Lien (NFTL) to collect petitioner’s Federal

income tax liability for 2004.      The sole issue for decision is

whether respondent’s determination to proceed with the proposed

collection activity was an abuse of discretion.        We hold it was

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 resided in North

Carolina at the time she filed the petition.

       Petitioner timely filed a Federal income tax return for

2004.      Respondent thereafter examined petitioner’s return and

found that petitioner should have included $53,8602 of

cancellation of indebtedness income.        Respondent determined a

$14,254 deficiency for 2004 and issued petitioner a deficiency

notice but petitioner failed to file a petition for

redetermination of the deficiency.        Respondent thereafter

assessed the deficiency.


       1
      (...continued)
and all Rule references are to the Tax Court Rules of Practice
and Procedure, unless otherwise indicated.
       2
        All numerical amounts are rounded to the nearest dollar.
                               - 3 -

     Respondent issued petitioner a Final Notice of Intent to

Levy and Notice of Your Right to a Hearing, notifying petitioner

of her right to a collection due process (CDP) hearing with

respect to her 2004 tax liability.     Petitioner submitted a one-

page Form 433-F, Collection Information Statement, with minimal

documentation a year after receiving the notice.    Respondent

thereafter placed petitioner’s account in “Currently Not

Collectible” status.   Respondent then filed the NFTL against

petitioner for the unpaid liability for 2004 and mailed

petitioner the notice of the lien filing in 2007.    Petitioner

timely requested a CDP hearing as to the lien but not as to the

proposed levy.

     Petitioner’s CDP hearing was assigned to Settlement Officer

Banks (SO Banks).   SO Banks mailed several letters to petitioner

and her counsel to schedule the hearing.    SO Banks requested a

Form 433-A, Collection Information Statement for Wage Earners and

Self-Employed Individuals,3 and Form 656, Offer in Compromise, to

support collection alternatives petitioner wanted SO Banks to

consider.   Neither petitioner nor her counsel provided the

requested financial information or participated in the scheduled

conference because SO Banks erred in addressing the envelopes.



     3
      Form 433-A, Collection Information Statement for Wage
Earners and Self-Employed Individuals, is six pages compared to
the one-page Form 433-F, Collection Information Statement, that
petitioner had previously submitted.
                               - 4 -

SO Banks then issued the determination notice to petitioner, with

a copy to her counsel, sustaining the filing of the NFTL.     In

sustaining the lien filing, SO Banks relied solely on the

information in the collection file including the limited

financial information petitioner submitted with her CDP hearing

request.

     Petitioner then filed a petition with the Court requesting

review of the determination notice.    Petitioner and respondent

filed a joint motion to remand this case to Appeals for further

consideration.   The Court granted their joint motion for a

supplemental hearing with Appeals and ordered a supplemental

determination be made.

     SO Banks again asked petitioner and her counsel to provide

updated financial information and an offer in compromise (OIC) if

petitioner wanted her to consider any collection alternatives at

the supplemental hearing.   SO Banks specifically requested that

petitioner submit financial information to support the issues

petitioner raised in her CDP hearing request.    SO Banks also

requested that petitioner submit a completed tax return for 2007

before the supplemental hearing.

     Neither petitioner nor her counsel submitted any information

or documents to SO Banks before the supplemental hearing.     During

the scheduled supplemental hearing, which took place by

telephone, petitioner’s counsel advised SO Banks that petitioner
                                - 5 -

was unable to pay the deficiency and wanted to submit an OIC.       No

OIC was provided by either petitioner or her counsel nor was any

other financial information provided even though SO Banks

repeatedly requested the information before she made the

supplemental determination.    SO Banks had only the limited

financial information petitioner submitted in 2007.      SO Banks

determined that the limited financial information was outdated,

incomplete, and insufficient to show that petitioner was entitled

to a collection alternative regarding the unpaid tax liability

for 2004.   Lacking any updated information from petitioner, SO

Banks prepared the supplemental determination, again sustaining

the filing of the NFTL.

                              Discussion

     We now review whether respondent abused his discretion in

deciding to sustain the lien filing.       See Sego v. Commissioner,

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

181-182 (2000).   Where, as is the case here, the validity of the

underlying tax liability is not properly placed at issue,4 the

Court will review respondent’s determination for abuse of

discretion.   See Sego v. Commissioner, supra at 610.      Petitioner

may prove abuse of discretion by showing that respondent


     4
      A taxpayer’s underlying tax liability may be at issue only
if the taxpayer did not receive a deficiency notice for the taxes
in question or did not otherwise have an earlier opportunity to
dispute the tax liability. Sec. 6330(c)(2)(B); Dalton v.
Commissioner, T.C. Memo. 2005-7.
                               - 6 -

exercised his discretion arbitrarily, capriciously, or without

sound basis in fact or law.   See Giamelli v. Commissioner, 129

T.C. 107, 111 (2007).

     It is well established that the settlement officer must

address any relevant issues the taxpayer raises in the hearing

request, including spousal defenses, the appropriateness of the

collection action, and any collection alternatives.     Sec.

6330(c)(2).   A taxpayer may raise collection alternatives in a

CDP hearing that may include an installment agreement or an OIC.

Secs. 6320(c), 6330(c)(2)(A)(iii).     An OIC is authorized under

section 7122(a).   Taxpayers who wish to propose an OIC must

submit a Form 656.   See Godwin v. Commissioner, T.C. Memo. 2003-

289, affd. 132 Fed. Appx. 785 (11th Cir. 2005).     Petitioner

argues that SO Banks abused her discretion by not considering the

collection alternative of an OIC.

     SO Banks requested that petitioner submit any information

regarding alternative collection procedures before the

supplemental hearing.   Petitioner failed to submit a Form 656 or

any updated or other financial information to enable SO Banks to

consider collection alternatives.    We have repeatedly and

consistently held that a settlement officer may sustain a

collection action where a taxpayer has failed to provide

requested information that would have permitted consideration of

collection alternatives.   See Huntress v. Commissioner, T.C.
                                 - 7 -

Memo. 2009-161; Nelson v. Commissioner, T.C. Memo. 2009-108; Sapp

v. Commissioner, T.C. Memo. 2006-104; Picchiottino v.

Commissioner, T.C. Memo. 2004-231; Newstat v. Commissioner, T.C.

Memo. 2004-208.   We have similarly held that the Commissioner has

not abused his discretion for failing to consider an OIC where a

taxpayer failed to submit an offer to the Appeals officer.

Kendricks v. Commissioner, 124 T.C. 69, 79 (2005).     SO Banks

informed petitioner and her counsel that petitioner needed to

submit a completed OIC request if she wanted an OIC to be

considered at the supplemental hearing.    Petitioner failed to

submit the appropriate Form 656 or updated financial information.

     This Court has held that there is no abuse of discretion in

Appeals’ failing to consider an offer when there was no offer

before Appeals.   Id.    SO Banks had no OIC to consider.   Thus,

there was no abuse of discretion by the Appeals Office in failing

to consider an OIC.     See Nelson v. Commissioner, supra (holding

that the Appeals Office did not abuse its discretion in

sustaining a lien when a taxpayer expressed a desire for an OIC

but had not prepared one).

     Petitioner also claims that, notwithstanding her failure to

submit an OIC or requested financial information for her

supplemental hearing in 2009, SO Banks should have considered the

financial information she submitted in 2007.    We disagree.   SO

Banks committed no abuse of discretion in discounting outdated
                                 - 8 -

financial information.    See Internal Revenue Manual (IRM) pt.

5.8.5.3.2 (Sept. 23, 2008) (an Appeals officer reviewing

collection alternatives should not consider any financial

information more than 12 months old); IRM pt. 5.8.5.2.2 (Sept. 1,

2005); see also Lloyd v. Commissioner, T.C. Memo. 2008-15.     A

taxpayer’s financial situation may change materially within a 1-

year period, so it is reasonable for the settlement officer to

request new financial information to determine a taxpayer’s

eligibility for collection alternatives.    See Lloyd v.

Commissioner, supra.     Here we note that SO Banks did review the

outdated financial information from 2007.    She reviewed it when

she made her supplemental determination that the financial

information was incomplete and insufficient to qualify petitioner

for a collection alternative regarding the unpaid tax liability

for 2004.

     Petitioner also argues that SO Banks failed to give her

adequate time to produce the requisite financial information and

it was SO Banks’ misaddressing the envelopes that caused the

originally scheduled CDP hearing to be continually rescheduled.

Again, we disagree that the supplemental determination was an

abuse of discretion.    Any infirmity with the incorrect address

was rectified when the Court remanded the case for a supplemental

hearing.    Petitioner had additional time to submit updated

financial information and an OIC.    Despite this additional time,
                                 - 9 -

petitioner failed to submit the requested financial information.

Moreover, we note that neither petitioner nor her counsel

contacted the Court or SO Banks to request additional time before

the supplemental hearing.

     We have reviewed the entire record and find that SO Banks

did not abuse her discretion in sustaining the lien filing.      We

therefore conclude that the collection action may proceed as

described in the supplemental determination regarding

petitioner’s unpaid tax liability for 2004.

     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.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
