                        T.C. Memo. 2011-294



                     UNITED STATES TAX COURT



                  JOHN C. HUGHES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7377-10L.             Filed December 22, 2011.



     John C. Hughes, pro se.

     Shannon E. Loechel, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     WELLS, Judge:   Respondent’s Appeals Office sent petitioner a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 (notice of determination) with respect

to a notice of Federal tax lien (NFTL) filed to collect

petitioner’s unpaid tax liabilities for his 1995, 1996, 1997,
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1999, 2000, 2001, 2005, and 2006 tax years.1   The issue we must

decide is whether respondent’s Appeals Office abused its

discretion by sustaining the NFTL.

                          FINDINGS OF FACT

     Some of the facts and certain exhibits have been stipulated.

The parties’ stipulations of fact are incorporated in this

opinion by reference and are found accordingly.   At the time he

filed his petition, petitioner was a resident of Georgia.

     Petitioner is retired, and he receives income from Social

Security and a pension.   Before any deductions, he receives

monthly benefits of $1,471.40 from the Social Security

Administration and a monthly pension of $2,458.   His total

monthly income is $3,929.40.

     Petitioner has Federal income tax liabilities for his 1995,

1996, 1997, 1999, 2000, 2001, 2005, and 2006 tax years.

Petitioner’s Social Security payments have been subject to

respondent’s levy since 2006.   On or about October 13, 2009,

respondent mailed petitioner Letter 3172, Notice of Federal Tax

Lien Filing and Your Right to a Hearing Under IRC 6320.

Petitioner timely requested a collection due process hearing.

Petitioner subsequently completed a Form 433-F, Collection

Information Statement, on which he reported his monthly income



     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended.
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and expenses.   Petitioner requested a face-to-face collection due

process hearing, but his request was denied because respondent’s

records indicated that he was not in compliance with his

estimated tax payments for the current year.    Respondent’s

Appeals Office held a collection due process telephone conference

with petitioner on February 19, 2010.    During that conference,

petitioner did not offer a collection alternative.    Instead,

petitioner contended that the NFTL was filed prematurely because

he had no equity in his house.    At that time, petitioner was

residing in a house that he had purchased with an interest-only,

adjustable-rate mortgage.   He has since vacated that property and

has stopped paying the mortgage on it.

     During the telephone conference, petitioner also indicated

that he was 70 years old and in failing health.    He contended

that his monthly expenses sometimes exceeded his income and that

his income was below the median income in Georgia.    He provided

no financial records to support his contention that his monthly

expenses sometimes exceeded his monthly income.

     After the hearing, the Appeals Office issued a notice of

determination dated February 25, 2010, sustaining the lien.

Petitioner timely filed his petition with this Court.

                              OPINION

     Where the underlying tax liability is not in issue, we

review the determination of the Appeals Office for abuse of
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discretion.   See Sego v. Commissioner, 114 T.C. 604, 610 (2000).

In reviewing for abuse of discretion, we will reject the

determination of the Appeals Office only if the determination was

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

See Murphy v. Commissioner, 125 T.C. 301, 308 (2005), affd. 469

F.3d 27 (1st Cir. 2006).    Petitioner does not dispute the

underlying liabilities.    Consequently, we review the

determination of the Appeals Office for abuse of discretion.

     Where, as in the instant case, we review the Appeals

Office’s determination to sustain the filing of an NFTL for abuse

of discretion, we review the reasoning underlying that

determination to decide whether it was arbitrary, capricious, or

without sound basis in fact or law.     We do not substitute our

judgment for that of the settlement officer, and we do not decide

independently whether we believe the lien should be withdrawn.

See id. at 320.

     Pursuant to section 6321, the Federal Government obtains a

lien against “all property and rights to property, whether real

or personal” of any person liable for Federal taxes upon demand

for payment and failure to pay.    See Iannone v. Commissioner, 122

T.C. 287, 293 (2004).   The lien arises automatically on the date

of assessment and persists until the tax liability is satisfied

or becomes unenforceable by reason of lapse of time.     Sec. 6322;

Iannone v. Commissioner, supra at 293.     The purpose of filing,
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pursuant to section 6323, notice of the lien that arises under

section 6321 is to protect the Government’s interest in a

taxpayer’s property against the claims of other creditors.

Filing an NFTL validates the Government’s lien against a

subsequent purchaser, holder of a security interest, mechanic’s

lienor, or judgment lien creditor.     See sec. 6323(a); Stein v.

Commissioner, T.C. Memo. 2004-124; Lindsay v. Commissioner, T.C.

Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th Cir. 2003).

     If the Commissioner chooses to file an NFTL, he must provide

the taxpayer with written notice not more than 5 business days

after the filing, and he must advise the taxpayer of the right to

a hearing before the Appeals Office.    Sec. 6320(a).   If the

taxpayer requests such a hearing, the Appeals Office must verify

that the requirements of any applicable law or administrative

procedure have been met.   Secs. 6320(c), 6330(c)(1).    The Appeals

officer must also determine whether the proposed collection

action balances the need for the efficient collection of taxes

with the legitimate concern of the taxpayer that any collection

action be no more intrusive than necessary.    Secs. 6320(c),

6330(c)(3).   Finally, the Appeals officer must consider any

issues raised by the taxpayer at the hearing, including

appropriate spousal defenses, challenges to the appropriateness

of collection actions, and offers of collection alternatives such

as an installment agreement.   Secs. 6320(c), 6330(c)(2) and (3).
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     During his telephone conference with the Appeals Office and

during his trial before this Court, petitioner contended that

respondent’s NFTL was filed prematurely because he had no equity

in his house since he had purchased it with an interest-only,

adjustable-rate mortgage.   He also contended that the NFTL

damaged his credit.   Finally, he contended that his tax

liabilities should be considered “uncollectible” because his

monthly expenses sometimes exceeded his income, which he contends

was less than the median income in Georgia.   Respondent contends

that the filing of the NFTL should be sustained because it is

necessary to protect respondent’s interests in petitioner’s

property.

     Petitioner’s contention that the lien is premature because

he has no interests in real property, even if true, is not a

reason the NFTL should be withdrawn.   The lien that arises under

section 6321 attaches not just to real property currently held by

the taxpayer, but “upon all property and rights to property,

whether real or personal, tangible or intangible, belonging to

such person.”   Sec. 301.6321-1, Proced. & Admin. Regs.

Accordingly, even if petitioner currently has no real property,

the NFTL still protects respondent’s interests in petitioner’s

personal property and in any other property petitioner may

acquire in the future.
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     Petitioner contends that the NFTL should be withdrawn

because it hurts his credit.   Every NFTL filed by the

Commissioner damages the taxpayer’s credit.   By itself, that fact

does not show that the NFTL impairs the taxpayer’s ability to

satisfy the tax liability.   Even when the taxpayer has shown that

the withdrawal of the NFTL will facilitate collection of the tax

liability, withdrawal of the NFTL is permissive, not mandatory.

Sec. 6323(j); Berkery v. Commissioner, T.C. Memo. 2011-57.

Petitioner has provided no evidence that withdrawing the lien

will facilitate the payment of his tax liability.   Instead, the

record shows that petitioner has a long history of noncompliance,

and the record amply supports respondent’s contention that the

NFTL is necessary to protect respondent’s interests in

petitioner’s property.   Consequently, we reject petitioner’s

argument that the NFTL should be withdrawn because it hurts his

credit.

     Finally, we reject petitioner’s argument that respondent

should withdraw the NFTL because his income was below the median

income in Georgia and he sometimes had trouble paying all of his

expenses.   Even if it is true that petitioner’s income was below

the median income in Georgia, accepting petitioner’s contention

would preclude the Commissioner from filing an NFTL against half

of the taxpayers in Georgia; i.e., all those who make less than

the median income.   Moreover, even when the Commissioner
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considers the taxpayer’s liability to be currently uncollectible,

the Commissioner may still file an NFTL to preserve his interests

in the taxpayer’s property against the interests of the

taxpayer’s other creditors.   See Schropp v. Commissioner, T.C.

Memo. 2010-71, affd. 405 Fed. Appx. 800 (4th Cir. 2010).

Petitioner has offered no evidence that respondent’s filing of

the NFTL was unduly intrusive.

     Respondent’s Appeals Office considered all of petitioner’s

contentions, verified compliance by the Internal Revenue Service

with all applicable laws and regulations, and considered whether

the proposed collection actions balanced the need for efficient

tax collection with petitioner’s concern that they be no more

intrusive than necessary.   We conclude that the Appeals Office

did not abuse its discretion by sustaining respondent’s filing of

the NFTL.

     In reaching these holdings, we have considered all the

parties’ arguments, and, to the extent not addressed herein, we

conclude that they are moot, irrelevant, or without merit.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
