                        T.C. Memo. 2011-13



                      UNITED STATES TAX COURT



           MARK A. AND DINA S. ZELDEN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17369-09L.            Filed January 18, 2011.



     William A. Neilson and Douglas L. Salzer, for petitioners.

     John K. Parchman, for respondent.



                        MEMORANDUM OPINION


     SWIFT, Judge:   Under section 6320, petitioners challenge

respondent’s notice of determination rejecting petitioners’

proposed collection alternative of an installment agreement

relating to petitioners’ approximate total of $350,000 in

outstanding Federal income tax liabilities for 2000 through 2006.
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     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.

                            Background

     This case was submitted under Rule 122.      The stipulated

facts are so found.   At the time of filing the petition,

petitioners resided in Louisiana.

     With the exception of petitioners’ 2000 and 2006 tax

returns, petitioners were late in filing their Federal income tax

returns for the years in issue.    With the filing of their tax

returns, petitioners failed to pay the taxes reported due

thereon.

     After making assessments, on December 11, 2007, respondent

filed a notice of Federal tax lien (NFTL) relating to the above

self-reported Federal income taxes.      Respondent mailed

petitioners a copy of the NFTL and an explanation of petitioners’

right to a collection Appeals Office hearing under section 6320.

     On January 10, 2008, petitioners filed with respondent a

Form 12153, Request for a Collection Due Process or Equivalent

Hearing, relating to the NFTL.    Specifically, petitioners

proposed a collection alternative of an installment agreement.

     On July 16, 2008, petitioners made an estimated Federal

income tax payment for the second quarter of 2008 (ending June

30, 2008).
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     On July 23, 2008, respondent mailed petitioners a letter

scheduling a face-to-face collection due process (CDP) hearing

with petitioners’ counsel for August 27, 2008, relating to the

above NFTL.   In this letter respondent’s Appeals officer (AO)

requested that petitioners, by August 12, 2008, submit, among

other things, a completed Form 433-A, Collection Information

Statement for Wage Earners and Self-Employed Individuals, a copy

of petitioners’ 2007 Federal income tax return, and a statement

of how the proposed installment agreement would be funded.

     On August 14, 2008, petitioners provided respondent’s AO

with a copy of their 2007 Federal income tax return.

     On August 26, 2008, petitioners provided respondent’s AO

with a completed Form 433-A that included a proposal that

petitioners would pay their total outstanding tax liability in

installments over 5 years.

     On March 5, 2009, petitioners made late estimated Federal

income tax payments for the periods ending September 30 and

December 31, 2008.    The estimated tax payments for these

quarterly periods were due on October 15, 2008, and January 15,

2009, respectively.

     On June 24, 2009, respondent’s AO made a determination under

section 6320 and mailed to petitioners a notice thereof rejecting

petitioners’ proposed collection alternative.    In this notice

respondent’s AO indicated that, among other reasons, because
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petitioners failed to pay timely their estimated Federal income

tax payments for the third and fourth quarters of 2008,

respondent’s NFTL was sustained.

                              Discussion

     Petitioners do not contest the amounts of their 2000 through

2006 Federal income taxes.    Where the validity of the underlying

tax liability is not properly at issue, under section 6320 the

Court will review the administrative determination of the AO only

for abuse of discretion.     Goza v. Commissioner, 114 T.C. 176, 182

(2000).   An abuse of discretion exists where the AO’s

determination is arbitrary, capricious, or without sound basis in

fact or law.   Murphy v. Commissioner, 125 T.C. 301, 320 (2005),

affd. 469 F.3d 27 (1st Cir. 2006).

     Petitioners argue that respondent abused his discretion by

failing to adequately consider petitioners’ proposed collection

alternative.   Petitioners assert that by the time respondent

issued his notice of determination, they had demonstrated full

compliance with all tax filing and payment requirements and,

accordingly, that respondent’s rejection of their proposed

installment agreement was without sound basis in fact.    We

disagree.

     Petitioners’ history of noncompliance with their Federal

income tax obligations, the late filing of their Federal income

tax returns for years 2001 through 2005, and the late remittance
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of their estimated tax payments for the periods ending September

30 and December 31, 2008, among other things, establish a pattern

of noncompliance with their Federal income tax obligations.         See

Orum v. Commissioner, 123 T.C. 1, 13 (2004), affd. 412 F.3d 819

(7th Cir. 2005); Londono v. Commissioner, T.C. Memo. 2003-99.

     Respondent’s determination properly verified that all

requirements of applicable law and administrative procedure have

been met, that respondent’s AO considered the issues petitioners

raised in their CDP hearing, and that respondent’s AO balanced

the need for efficient collection of taxes with the legitimate

concern of petitioners that the collection action be no more

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

     We sustain respondent’s determination to reject petitioners’

proposed collection alternative of an installment agreement.

     To reflect the foregoing,


                                         Decision will be entered

                                 for respondent.
