                        T.C. Memo. 2004-105



                      UNITED STATES TAX COURT



               RUSSELL L. VOORHEES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6891-02L.             Filed April 22, 2004.



     Russell L. Voorhees, pro se.

     R. Bradley Taylor, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GERBER, Judge:   Respondent, on March 14, 2002, issued a

Notice of Determination Concerning Collection Action(s) Under

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

to petitioner’s 1991 and 1996 taxable years, determining to

proceed with enforced collection, including levy.   Petitioner

timely petitioned this Court seeking to dispute the underlying
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merits of his tax liabilities for 1991 and 1996 and to show that

respondent’s determination to proceed with collection was an

abuse of discretion.1

     On November 5, 2003, respondent filed a Motion For Summary

Judgment seeking to preclude petitioner from addressing the

merits of his underlying tax liabilities.   In a January 23, 2004,

Order, this Court granted respondent’s motion with respect to the

1991 tax year based on section 6330(c)(2)(B) and denied

respondent’s motion with respect to the 1996 year.   At trial,

petitioner conceded that he did not want to raise the underlying

merits of his 1996 tax liability, which arose due to petitioner’s

self-assessed tax liability reflected in his 1996 tax return.

     The remaining issue for our consideration is whether

respondent abused his discretion in refusing to accept

petitioner’s offer in compromise.

     All section references are to the Internal Revenue Code in

effect for the years in issue.

                        FINDINGS OF FACT

     At the time of filing his petition, petitioner resided in

Phoenix, Arizona.   On February 3, 1993, petitioner filed his 1991

Federal income tax return, and on July 19, 1994, respondent



     1
       It may be noted that in a prior Memorandum Opinion the
Court granted a motion by respondent to dismiss Ruth C. Voorhees
from this proceeding for lack of jurisdiction. Voorhees v.
Commissioner, T.C. Memo. 2002-289.
                                 - 3 -

issued a notice of deficiency for the tax year 1991 determining a

$7,363 income tax deficiency and penalties in the amounts of $367

and $1,473.    Petitioner filed a timely petition with this Court

in connection with his 1991 tax return filed February 3, 1993,

and on October 18, 1995, an agreed decision was entered

reflecting a $2,717 income tax deficiency and no penalties or

additions to tax for petitioner’s 1991 tax year.   On August 18,

1997, petitioner filed his 1996 income tax return showing a

balance due.

     On August 21, 2001, respondent issued petitioner a Letter

1058, Final Notice--Notice of Intent to Levy and Notice of Your

Right to a Hearing, with respect to petitioner’s 1991 and 1996

outstanding income tax liabilities, which totaled $5,743.04,

including statutory additions.    Petitioner requested a hearing,

and on January 24, 2002, a face-to-face hearing was held between

petitioner and respondent’s Appeals officer.   On February 16,

2002, petitioner submitted Form 656, Offer in Compromise, along

with a Form 433-A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, offering to pay $1,500 in

full payment of the outstanding liabilities.

     At the time that petitioner offered $1,500 in full

settlement of more than $5,000 in liabilities, petitioner was

paying $500 per month on credit card debt.   Subsequent to the

rejection of petitioner’s offer, petitioner was able to borrow
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$15,000 on assets that he owned at the time of the consideration

of his offer.

     Respondent rejected petitioner’s offer and countered with an

offer to permit petitioner to make $100 monthly installment

payments to pay the outstanding liabilities.   Petitioner rejected

those terms, and respondent, on March 14, 2002, issued a notice

of determination, advising petitioner that respondent intended to

proceed with enforced collection.   Petitioner filed an Amended

Petition with this Court on May 3, 2002.

                             OPINION

     We have held in an Order dated January 23, 2004, that

petitioner is precluded from contesting the underlying merits of

his 1991 income tax liability, and petitioner does not contest

his self-assessed 1996 liability.   Accordingly, our review of the

administrative determination is for abuse of discretion.     Sec.

6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 610 (2000).

     Petitioner contends there was an abuse of discretion due to

respondent’s rejection of petitioner’s $1,500 offer in

compromise.   That decision was made based on information

available to respondent showing that petitioner was able to

satisfy the outstanding tax liabilities.

     Petitioner contended at trial that the 1991 income tax

liability should have been about one-half of the $2,717 amount to

which he had agreed in the decision entered October 18, 1995.
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Petitioner’s contention is based on his allegation that he signed

a blank decision with the understanding that the income tax

deficiency would have been an amount approaching $1,500.

Petitioner further alleges that upon receipt of the entered

decision the amount of the “agreed” income tax deficiency was

almost double the amount he thought he had agreed to with

respondent.   The Court asked petitioner whether he had brought

the alleged discrepancy to this Court’s attention after the

decision was entered in 1995.   Petitioner testified that it was

not worth his effort or monetary cost at the time so he did

nothing.   Respondent argued that petitioner’s $1,500 offer in

compromise was based on petitioner’s belief that the wrong amount

had been included in the decision.

       Sections 6320 and 6330 provide for a hearing in connection

with certain collection activity by respondent.   Under section

6330(c)(2)(B) a taxpayer may raise the merits of the underlying

liability if the taxpayer “did not receive any statutory notice

of deficiency for such tax liability or did not otherwise have an

opportunity to dispute such tax liability.”   It is clear in this

case that petitioner received a statutory notice of deficiency

and did have an opportunity to dispute such tax liability.    Under

the statute, and under the doctrine of res judicata, it does not

matter whether petitioner is now in a position to show that the
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outcome or holding resulting from that opportunity may be in

error.   Id.

     In addition, respondent has, in all other respects, complied

with the requirements of section 6330 so as to be entitled to

proceed with collection of petitioner’s outstanding tax

liabilities for 1991 and 1996.    We hold that there was no abuse

of discretion in respondent’s determination to proceed with

collection.

     To reflect the foregoing,



                                         Decision will be entered for

                                 respondent.
