                  T.C. Summary Opinion 2004-73



                     UNITED STATES TAX COURT



                  EDIE D. GLASS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10499-03S.            Filed May 25, 2004.


     Edie D. Glass, pro se.

     Irene Scott Carroll and Ron S. Chun, for respondent.



     PANUTHOS, Chief Special Trial Judge:   This case was heard

pursuant to the provisions of sections 6330(d) and 7463.1   The

decision to be entered is not reviewable by any other court, and

this opinion should not be cited as authority.

     Respondent issued petitioner a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330


     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended.
                                - 2 -

for unpaid Federal income tax and related liabilities for 1992,

1993, 1995, and 1996.2

     The issue for decision is whether respondent abused his

discretion by rejecting petitioner’s Form 656, Offer in

Compromise.

Background

     Some of the facts have been stipulated, and they are so

found.   Petitioner resided in Pasadena, California, at the time

the petition was filed.

     Petitioner filed Federal income tax returns for 1992, 1993,

1995, and 1996.   For the unpaid tax liability of $7,022 reported

on her 1992 return, petitioner entered into an installment

payment plan with respondent.   She made payments of approximately

$100 per month to respondent during 2001, but she stopped making

payments under the plan before paying off the remaining account

balance of $6,146.41, which includes accrued interest and

penalties as of July 1, 2002, for the 1992 taxable year.

     On February 1, 2002, respondent issued petitioner a notice

of intent to levy for the 1992, 1993, 1995, and 1996 taxable

years.   On March 4, 2002, respondent received petitioner’s Form




     2
        As of Feb. 1, 2002, the total amount due for the four
taxable years was $20,939.17.
                               - 3 -

12153, Request for a Collection Due Process Hearing, in which

petitioner indicated:

     My account should not include 1992 taxes.   The balance
     for 1992 was paid off nearly 3 years ago.

     I have made monthly payments on the account for years
     and the balance never decreases. The exorbitant fees
     and assessments make it virtually impossible to pay off
     the balance in monthly payments.

     By letter dated August 15, 2002, Appeals Officer Allan H.

Marble notified petitioner that he had scheduled a hearing.

Petitioner submitted a Form 656 and other requested documents for

respondent’s Appeals officer to consider.   Appeals Officer Marble

rejected petitioner’s offer in compromise, noting that

petitioner’s offered amount of $2,496 was substantially less than

what would comprise a “minimum acceptable offer” of $15,780.

Petitioner’s offered amount was based upon total “gross” monthly

income of $2,600 and “Other expenses” of $300 per month for a

watchdog.   In determining the minimum acceptable offer, Appeals

Officer Marble disallowed the expense for a watchdog, noted that

petitioner appeared “to have used ‘net’ (rather than ‘gross’)

income” on her offer in compromise, and calculated petitioner’s

total gross monthly income to be $4,195.

     Appeals Officer Marble also addressed petitioner’s concern

regarding payment of her liability for the 1992 taxable year as

follows:

     An analysis of IRS transcript information indicated
     that the taxpayer had entered into a $100 per month
                              - 4 -

     Installment Agreement on or about January 1, 2000. The
     taxpayer made these monthly payments on a reasonably
     regular basis until February 27, 2002.

     Given the aggregate amount of the taxpayer’s liability
     at the time the installment agreement was initiated,
     her contention that the balance due was ‘never
     decreasing’ is essentially correct ($1,200 paid per
     year would do little more than pay the interest of the
     aggregate liability). However, this would indicate
     that the installment agreement itself was ‘faulty’ in
     that the creator of the agreement should have set a
     much greater monthly payment in order to liquidate the
     aggregate liability within a reasonable time span.
     This retrospective observation, however, in no way
     addresses whether or not levy action is appropriate, as
     the taxpayer has not expressed any interest in
     modifying the terms of an installment agreement in
     order to fully pay the remaining outstanding
     liabilities.

     On May 29, 2003, the Appeals Office issued the Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330, notifying petitioner of the determination to proceed

with collection of the outstanding liabilities for the 1992,

1993, 1995, and 1996 taxable years.

Discussion

     This Court has jurisdiction to review the Commissioner’s

administrative determination under section 6330.   Sec. 6330(d).

Where, as here, the validity of the underlying tax liability is

not at issue,3 we review the determination for abuse of

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


     3
        Indeed, it appears from respondent’s records that
petitioner signed a waiver of assessment with respect to the 1993
and 1995 taxable years.
                                - 5 -

v. Commissioner, 114 T.C. 176, 183 (2000).     In so doing, we do

not conduct an independent review of what would be an acceptable

offer in compromise.    Van Vlaenderen v. Commissioner, T.C. Memo.

2003-346.   We review only whether the Appeals officer’s refusal

to accept the offer in compromise made by petitioner was

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

See Woodral v. Commissioner, 112 T.C. 19, 23 (1999).

     Under section 6330, a taxpayer is entitled to one hearing in

which he or she may raise any relevant issue relating to the

unpaid tax or the proposed levy, including offers of collection

alternatives such as an offer in compromise.    Sec. 6330(b) and

(c)(2).   In the present case, petitioner contends that respondent

should not have rejected her offer in compromise.    The Appeals

officer’s determination was based on an analysis of the

information that petitioner submitted.   On the basis of the

information considered by the Appeals officer, we cannot conclude

that rejection of petitioner’s offer in compromise was an abuse

of discretion.    See Van Vlaenderen v. Commissioner, supra; Crisan

v. Commissioner, T.C. Memo. 2003-318; Willis v. Commissioner,

T.C. Memo. 2003-302; O’Brien v. Commissioner, T.C. Memo. 2003-

290; Schulman v. Commissioner, T.C. Memo. 2002-129.     Petitioner’s

offer in compromise of $2,496 was based upon total “gross”

monthly income of $2,600 and “Other expenses” of $300 per month

for a watchdog.    In determining the minimum acceptable offer of
                               - 6 -

$15,780, Appeals Officer Marble disallowed the expense for a

watchdog, noted that petitioner appeared “to have used ‘net’

(rather than ‘gross’) income” on her offer in compromise, and

calculated petitioner’s total gross monthly income to be $4,195.

Indeed, when the Court asked petitioner to explain why she

disagreed with respondent’s analysis of her offer in compromise,

petitioner failed to provide an adequate explanation.

Petitioner also contends that she should not have any tax

liabilities for the 1992 taxable year because of her monthly

payments.   Respondent determined that payments of approximately

$100 per month from January 2001 to February 2002 were

insufficient to extinguish her reported tax liability of $7,022,

exclusive of interest and penalties, for the 1992 taxable year.

We are satisfied that respondent did not abuse his discretion in

making his determination.4

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To give effect to the foregoing,

                                            Decision will be entered

                                       for respondent.




     4
        During the hearing of this case, petitioner advised the
Court that she would submit an amended or new offer in compromise
based upon her discussions with respondent. The Court encouraged
petitioner to follow through with respondent. At the time of
writing this opinion, the Court has not received any information
concerning the submission of an amended or new offer in
compromise.
