                                 T.C. Memo. 2017-47



                        UNITED STATES TAX COURT



                   RAFAEL MARTINEZ, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 23036-15L.                        Filed March 21, 2017.



      Rafael Martinez, pro se.

      Laura J. Mullin, for respondent.



                          MEMORANDUM OPINION


      LAUBER, Judge: In this collection due process (CDP) case, petitioner

seeks review pursuant to sections 6320(c) and 6330(d)(1) of the determination by

the Internal Revenue Service (IRS or respondent) to uphold the filing of a notice
                                        -2-

[*2] of Federal tax lien (NFTL).1 Respondent has moved for summary judgment

under Rule 121, contending that there are no disputed issues of material fact and

that his determination to sustain the proposed collection action was proper as a

matter of law. We agree and accordingly will grant the motion.

                                     Background

      The following facts are based on the parties’ pleadings and respondent’s

motion, including the attached affidavits and exhibits. Petitioner resided in Cali-

fornia when he filed his petition.

      Petitioner did not file a Federal income tax return for 2000, 2003, 2004,

2005, or 2006. On the basis of third-party information reports, the IRS prepared

for each year a substitute for return that met the requirements of section 6020(b).

Petitioner filed delinquent Federal income tax returns for 2002 and 2007-2013 but

did not pay the tax shown as due. The IRS subsequently assessed the tax for all 13

years plus applicable additions to tax under sections 6651(a)(1) and (2) and

6654(a).

      On March 24, 2015, in an effort to collect these unpaid liabilities, the IRS

sent petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing.

      1
       All statutory references are to the Internal Revenue Code in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
Procedure.
                                         -3-

[*3] On April 28, 2015, respondent received from petitioner a Form 12153,

Request for a Collection Due Process or Equivalent Hearing. In his request

petitioner stated: “My income is very low, and I don’t have enough personal

belongings or money to afford” to pay the assessed liabilities. He sought a

collection alternative in the form of an offer-in-compromise (OIC). He did not

indicate an intention to challenge his underlying tax liability for any of the years in

question.

      Immediately after receiving petitioner’s case, a settlement officer (SO) from

the IRS Appeals Office reviewed his administrative file and confirmed that the tax

liabilities in question had been properly assessed and that all other requirements of

applicable law and administrative procedure had been met.2 On July 15, 2015, the

SO sent petitioner a letter scheduling a telephone CDP hearing for August 5, 2015.

The SO informed petitioner that, in order for her to consider a collection alterna-

tive, he had to provide her before the hearing: (1) a completed Form 433-A, Col-

lection Information Statement for Wage Earners and Self-Employed Individuals;


      2
        Section 6751(b)(1) provides that “[n]o penalty under this title shall be as-
sessed unless the initial determination of such assessment” receives supervisory
approval. This provision does not apply to “any addition to tax under section
6651, 6654, or 6655.” Sec. 6751(b)(2)(A). Accordingly, the SO was not required
to verify that the additions to tax assessed against petitioner under sections
6651(a) and 6654(a) had been approved by a supervisor.
                                         -4-

[*4] (2) a completed Form 656, Offer in Compromise; (3) a signed tax return for

the 2014 tax year; and (4) proof of estimated tax payments. The SO emphasized in

her letter that she could not consider a collection alternative unless petitioner sup-

plied the completed forms and information to her.

      Petitioner provided none of the requested documentation before the CDP

hearing. The SO consulted transcripts of his account, which showed that he had

not filed a return for the 2014 tax year. Petitioner participated in the CDP hearing

as scheduled; the SO reiterated that she could not consider a collection alternative

without the documentation she had requested. Petitioner did not raise during the

hearing any challenge to his underlying tax liabilities for the years in question.

      Because petitioner failed to submit the required financial information, the

SO determined that he was not eligible for a collection alternative. The SO ac-

cordingly closed the case and, on August 10, 2015, issued a Notice of Determi-

nation Concerning Collection Action sustaining the NFTL filing.

      On September 11, 2015, petitioner timely petitioned this Court for review.

In his petition he stated: “I request installment agreement because I only receive

Social Security. I can pay $100 per month. Or take out from the social security

every month.”
                                        -5-

[*5] On September 15, 2016, respondent filed a motion for summary judgment,

to which we directed petitioner to respond. Our order informed him that, if he dis-

agreed with any facts stated in the IRS motion, he should point out those factual

issues. We also informed petitioner that failure to respond to our order would be

grounds for granting respondent’s motion and entering judgment against him.

Petitioner did not respond to this Court’s order and has not otherwise responded to

the IRS motion for summary judgment.

                                    Discussion

A.    Summary Judgment

       The purpose of summary judgment is to expedite litigation and avoid cost-

ly, time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90

T.C. 678, 681 (1988). Under Rule 121(b), the Court may grant summary judgment

when there is no genuine dispute as to any material fact and a decision may be ren-

dered as a matter of law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary

judgment, we construe factual materials and inferences drawn from them in the

light most favorable to the nonmoving party. Ibid. However, the nonmoving par-

ty may not rest upon the mere allegations or denials of his pleadings but instead
                                         -6-

[*6] must set forth specific facts showing that there is a genuine dispute for trial.

Rule 121(d); see Sundstrand Corp., 98 T.C. at 520.

      Because petitioner did not respond to the motion for summary judgment, we

could enter decision against him for that reason alone. See Rule 121(d). We will

nevertheless consider the motion on its merits. We conclude that no material facts

are in dispute and that this case is appropriate for summary adjudication.

B.    Standard of Review

       Neither section 6320(c) nor section 6330(d)(1) prescribes the standard of

review that this Court should apply in reviewing an IRS administrative determina-

tion in a CDP case. Where (as here) there is no challenge to the amounts of a tax-

payer’s underlying tax liabilities,3 the Court reviews the IRS determination for

abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

Abuse of discretion exists when a determination is arbitrary, capricious, or without

sound basis in fact or law. See Murphy v. Commissioner, 125 T.C. 301, 320

(2005), aff’d, 469 F.3d 27 (1st Cir. 2006).

      3
        Petitioner did not challenge his underlying tax liabilities during the CDP
hearing or in his petition to this Court. He is thus precluded from challenging
those liabilities here. See Rule 331(b)(4) (“Any issue not raised in the assign-
ments of error shall be deemed to be conceded.”); Thompson v. Commissioner,
140 T.C. 173, 178 (2013) (“A taxpayer is precluded from disputing the underlying
liability if it was not properly raised in the CDP hearing.”); sec. 301.6330-1(f)(2),
Q&A-F3, Proced. & Admin. Regs.
                                         -7-

[*7] C.      Analysis

      The only question is whether the IRS properly sustained an NFTL filing to

collect petitioner’s unpaid tax liabilities. We review the record to determine

whether the SO: (1) properly verified that the requirements of applicable law or

administrative procedure have been met; (2) considered any relevant issues pe-

titioner raised; and (3) considered whether “any proposed collection action bal-

ances the need for the efficient collection of taxes with the legitimate concern of

* * * [petitioner] that any collection action be no more intrusive than necessary.”

See sec. 6330(c)(3).

      As to the first point, this Court has authority to review an SO’s satisfaction

of the verification requirement regardless of whether the taxpayer raised that issue

at the CDP hearing. See Hoyle v. Commissioner, 131 T.C. 197, 200-203 (2008).

However, petitioner did not allege in his petition that the SO failed to satisfy the

verification requirement. That issue is therefore deemed conceded. See Rule

331(b)(4) (“Any issue not raised in the assignments of error shall be deemed to be

conceded.”); Triola v. Commissioner, T.C. Memo. 2014-166, 108 T.C.M. (CCH)

185, 187; Dinino v. Commissioner, T.C. Memo. 2009-284. In any event, even if

petitioner had properly preserved this issue, he has set forth no facts suggesting

that any of the assessments was improper.
                                         -8-

[*8] At his CDP hearing petitioner was entitled to make offers of collection al-

ternatives, such as an OIC or an installment agreement. See sec. 6330(c)(2) and

(3). This right, however, carries with it certain obligations on the taxpayer’s part.

As provided in the regulations, “[t]axpayers will be expected to provide all rele-

vant information requested by * * * [the Appeals officer], including financial

statements, for * * * [her] consideration of the facts and issues involved in the

hearing.” Sec. 301.6330-1(e)(1), Proced. & Admin. Regs.

      On his Form 12153 petitioner expressed interest in an OIC and stated: “I

am capable to pay to I.R.S. from $150 up $200 monthly.” Before the CDP hearing

the SO asked him to submit (among other things) a completed Form 433-A and a

completed Form 656 to enable her to consider collection alternatives. Petitioner

neglected to submit the documentation required for consideration of an offer.

      The SO provided petitioner ample time to submit the required documenta-

tion. Cf. Szekely v. Commissioner, T.C. Memo. 2013-227, 106 T.C.M. (CCH)

375, 377. In her response to petitioner’s request for a CDP hearing the SO asked

petitioner to provide these documents by July 29, 2015. Petitioner failed to supply

any documentation by that date or during the ensuing week before the hearing on

August 5, 2015. The SO waited another five days before closing the case on Au-

gust 10, 2015. Petitioner could have asked the SO to afford him additional time to
                                         -9-

[*9] submit the documents, but he made no such request and offered no excuse for

neglecting to supply the information.

      We have consistently held that it is not an abuse of discretion for an Ap-

peals officer to reject collection alternatives and sustain the proposed collection

action where the taxpayer has failed, after being given sufficient opportunities, to

supply the SO with the required forms and supporting financial information. See

Huntress v. Commissioner, T.C. Memo. 2009-161; Prater v. Commissioner, T.C.

Memo. 2007-241; Roman v. Commissioner, T.C. Memo. 2004-20. We have like-

wise held that it is not an abuse of discretion for an Appeals officer to reject a col-

lection alternative where the taxpayer is not in compliance with his current tax

obligations, as petitioner was not for his 2014 tax year. See Hull v. Commission-

er, T.C. Memo. 2015-86, 109 T.C.M. (CCH) 1438, 1441; Internal Revenue Man-

ual pt. 5.14.1.4.2 (18) (Sept. 19, 2014). We will accordingly grant summary judg-

ment for respondent and affirm the proposed collection action as to all tax years.

We note that petitioner is free to submit to the IRS at any time, for its considera-

tion and possible acceptance, an OIC on Form 656 supported by the necessary fi-

nancial information.
                                  - 10 -

[*10] To reflect the foregoing,


                                           An appropriate order and decision

                                  will be entered.
