T.C. Mem o. 2 01 6- 70

UNITED STAT ES TAX COURT

DAVID W . STRONG, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 13 58 -1 4L. Fi le d Ap ril 19 , 20 16 .
Marti n J . Mart el le , forpe ti ti on er. Nhi T. Luu andCathe rin e J. C ab al le ro , forres po nd en t.

MEMORANDUM OPINION NEGA, Jud ge : Pu rs ua ntto sec ti on 63 30 (d )(1 ), pe ti ti on er s eek s re vi ew of 1 res po nd en t’s d et erm in at io n t o p ro ceedwith c ol le ct io n b y lev y of u np ai d tru stfun d

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o the Int ern al 1 Rev enue Co de as a m en de d andineffe ctat a ll rel ev an t t im es , andall Ru le refe ren ces are t o the Tax C ou rt Rul es of P ract ic e an d P ro cedur e.- 2 -

[* 2] reco ve ry

pe na lt ie s (TFR Ps ) as se ss edag ai ns t h im . The s ol e is su e b efo re the Co urt i s wh ethe r th e In te rn al Rev enue Serv ic e (IR S) Ap pe al s Off ic e ab us edit s di sc ret io n wh enev al ua ti ng pe ti ti on er’s o ffer -in -co m pr om is e (OIC) fordo ub t as to co ll ect ib il ity . Bac kg ro un d All of the fact s h av e b eenst ip ul at edan d are s o fo un d. Th e st ip ul at io n o f fact s an d the att ach edex hi bi ts are i nc or po rat edhe rei n b y

th is refe ren ce. The pa rti es ha ve ag reedto subm itth e cas e fo r de ci si on witho uttri al un de r Ru le 12 2. Pet it io ne r res id edinIda ho when th e p et it io n was fil ed . Pet it io ne r op erat es a win do w andgu tt er i ns ta ll at io n b us in es s. Pet it io ne r in it ia ll y op erat edth e b us in es s as Bo is e Gut te r, In c., a C co rp or at io n. He l at er fo rm edStr on g S id in g & W in do w LLC, a si ng le -m em be r di sr eg ard edli m it ed li ab il ity co m pa ny tha t o pe rat edun de r th e as su m edbu si ne ss na m e Bo is e Gut te r. Bo is e Gut te r us es a cas h b as is acco un ti ng m etho d. On M ay 1, 2 01 2, re sp on de ntis su eda Lett er 1 05 8, Fi na l No ti ce o f In te ntto Lev y an d No ti ce o f You r Ri gh t t o aHeari ng Und er I.R.C . 63 30 , with re sp ectto pe ti ti on er’s unp ai d TFRPs for tax ab le pe rio ds en di ng : Dece m be r 31 , 20 06 ; M arch 31 , 20 07 ; Dec em

be r 31 , 20 09 ; an d Dec em be r 31 , 20 10 . In re sp on se to th is no ti ce pe ti ti on er t im el y

subm it te d F orm

12 15 3, Re qu es t fo r a Co ll ect io n Du e Pro ces s o r- 3 -

[* 3] Equ iv al en t Hearin g. Th e Fo rm 12 15 3 p erm it te d p et it io ne r to in di cat e th e na tu re o f hi s C DP he ari ng reque stby check in g b ox es sel ect iv el y . Peti ti on er ch eck ed“ I Can no t Pay

Bal an ce” o n h is Fo rm

12 15 3. Alo ng with h is Fo rm

12 15 3 p et it io ne r subm it te d aco m pl et edFo rm

43 3- B, Co ll ect io n In fo rm at io n S ta te m en t fo r Bu si ne ss es . Peti ti on er’s Fo rm 43 3- B rep orte d B oi se Gut te r’s m on th ly inc om e as $4 7,8 12 an d m on th ly exp en se s as 2 $4 4,8 94 . There aft er, p et it io ne r subm it te d aco m pl et edFo rm

43 3- A, Col le ct io n In fo rm at io n S ta te m en t fo r W ag e Earn ers an d S el f-Em pl oyed In di vi du al s. Pet it io ne r’s Fo rm

43 3- A rep orte d g ro ss m on th ly bus in es s i nc om e o f $6 3,6 97 an d m on th ly bus in es s ex pe ns es of $ 61 ,71 5. Fo rm 43 3- A als o re po rte d b us in es s as se ts of : (1 ) $1 5,6 63 ina U.S. Ban k c he ck in g a cco un t an d aD.L. E va ns Ban k s av in gs acco un t an d (2 ) $7 ,20 0 u se d fo r th e p ro du ct io n o f in co m e. On Oct ob er 1 2, 2 01 2, re sp on de ntrece iv edFo rm 65 6, Offe r inCo m

pr om is e (OIC), fr om

pe ti ti on er, wh ic h p ro po se d alu m p- su m off er o f $1 1,5 00 ba se d upo n do ub t as to co ll ect ib il ity . The OIC s ou gh t t o c om pr om is e: (1) anInd iv idua l Mas te r Fi le (IMF ) ba lanc e o win g t ot al in g $ 67 ,46 2, wh ic h i nc lu de d the TFRPs for ta xabl e p eri od s en di ng Decem be r 31 , 20 06 , Marc h 3 1, 2 00 7, Dec em be r 31 , 20 09 , an d Dec em

be r 31 , 20 10 , and(2) a Bu si ne ss Mas te r Fi le (BMF ) ba lanc e o win g All m on et ary am ou nt s ar e ro un de d t o the ne ares t d ol lar. 2- 4 -

[* 4] to ta li ng $1 05 ,95 2. Pe ti ti on er d idno t i nd ic at e o n F orm 65 6 any exce pt io na l ci rcu m st an ces inhi s ca se su chth atacce pt an ce o f hi s OIC wou ldpro m ot e eff ect iv e ta x a dm in is tra ti on . Peti ti on er at ta ch eda le tt er t o the Fo rm 65 6 s ta ti ng th atBo is e Gut te r op erat es ona cas h b as is an d tha t al th ou ghhi s b us in es s b an k a cco un t ba lanc es were h ig h, Bo is e Gut te r ha d o ffs etti ng pay ab le s fo r no rm al bu si ne ss ex pe ns es . On No ve m

be r 30 , 20 12 , pet it io ne r subm it te d two am en de d OIC s, wh ic h d id no t am en d the to ta l am ou ntof h is ori gi na l o ffer , $1 1,5 00 , bu t ra th er al lo cat edth at am ountbe twee n p et it io ne r’s IMF t ax li ab il it ie s an d h is BMF t ax li ab il it ie s. Th e am en de d o ffer s d idno t i nd ic at e an y ex cep ti on al cir cu m st an ces su chth at acce pt an ce o f hi s OIC wou ldpro m ot e effe ct iv e ta x a dm in is tra ti on . Acti ng th ro ug h l ette rs , fax es , andtel ep ho ne cal ls , a se tt le m en t o ffi cer ( SO) atth e IRS App eal s Off

ic e reque st edan d p et it io ne r pr ov id edad di ti on al in fo rm at io n, s ub st an ti at io n, an d e xp lana ti on s o f th e rep res en ta ti on s s etforthon pe ti ti on er’s OICs an d F orm 43 3- A andFo rm

43 3- B. Sp eci fic al ly, pe ti ti on er, th ro ug h h is rep res en ta ti ve , pro vi de d: (1) Bo is e Gut te r’s pr of itan d l os s (P &L) st at em en ts forJan ua ry

th ro ug h S ep te m

be r 20 12 an d J anua ry

th ro ug h J ul y

20 13 ; (2 ) Bo is e Gut te r’s di strib ut io n re po rts for20 12 an d 2 01 3, wh ic h s ho wed di strib ut io ns th atpe ti ti on er re cei ve d fr om hi s b us in es s; (3) pe ti ti on er’s b us in es s- 5 -

[* 5] ba nkst at em en ts at U.S. BankforMay, Ju ne , andJu ly 201 2; (4) pe ti ti on er’s bu si ne ss bankst at em en ts at D.L. Evan s B an k fo r Apr il , May, an d J un e 2 01 2; (5) pe ti ti on er’s 2 01 1 and20 12 Fed eral in co m e ta x re tu rn s; an d (6 ) Bo is e Gut te r’s acco un ts pay ab le an d a cco un ts rece iv ab le rep orts as o f Sep te m be r 30 , 20 12 . Boi se Gut te r’s acco un ts pay ab le rep ort s ho wedth atof i ts to ta l p ay ab le s o f $5 3,0 80 , $3 0,7 46 was o wedto Denn is B. Str on g andSh irl ey J. Stro ng . On No ve m

be r 23 , 20 13 , th e SO rev ie wedpe ti ti on er’s d oc um en ts an d n ot ed th atth e U.S. Ban k a cco un t h adanav erag e en di ng ba lanc e o ve r a thr ee-m on th pe rio d fr om

May thro ug h J ul y

20 12 of $ 14 ,65 5. Th e SO co nc lu de d tha t ac co rd in g to pe ti ti on er’s b us in es s b an k a cco un t s ta te m en ts , Boi se Gutte r ha d fu nd s t o m ak e m on th ly paym en ts , m ai nt ai n d ep os it s, an d p ay bu si ne ss expe ns es . The SO de te rm in edth atsh e wou ldno t i nc lu de th e fund s i n p et it io ne r’s bu si ne ss bank acco un ts inde te rmin in g p et it io ne r’s reas on ab le co ll ect io n p ot en ti al (RCP ) be cau se pe ti ti on er n eed edth e fund s t o c on ti nu e to pro du ce i nc om e an d p ay hi s b us in es s ex pe ns es . The SO i nc lu de d $ 33 ,95 2 o f Bo is e Gut te r’s acco un ts rece iv ab le th at was les s tha n 9 0 d ay s p as t due an d tha t was rep orte d o n i ts acco un ts rece iv ab le rep ort d at edSep te m

be r 30 , 20 12 , inde te rm in in g p et it io ne r’s RCP. Th e SO cal cu la te d p et it io ne r’s RCP a s $ 38 ,83 9. Th e SO su m m ari zedhe r fi nd in gs ina le tt er t o p et it io ne r da te d No ve m be r 25 , 20 13 .- 6 -

[* 6] On Dec em

be r 11 , 20 13 , pet it io ne r’s rep res en ta ti ve fax eda le tt er t o the SO inres po ns e to he r an al y si s. Pet it io ne r’s rep res en ta ti ve ex pl ai ne d tha t the SO sh ou ldno t co ns id er Bo is e Gut te r’s acco un ts rece iv ab le as b us in es s as se ts for pu rp os es of c al cu la ti ng pe ti ti on er’s RCP be cau se Bo is e Gut te r ne ed edth e acco un ts rece iv ab le to co nt inue to op erat e. The l ette r refe rredth e SO to pr ev io us ly sub m it te d a cco un ts pay ab le an d a cco un ts rece iv ab le rep orts date d Sep te m be r 30 , 20 12 , th atsh owe d tha t Bo is e Gut te r’s acco un ts pay ab le ex ceed ed it s ac co un ts rece iv ab le by $18 ,73 4. Th e le tt er al so arg ue d, p er the Int ern al Rev enue Manua l (I RM) pt . 5.8 .5.1 4 (Oc t. 2 2, 2 01 0) , th atacco un ts rece iv ab le m ay be tre at edas f

utur e in co m e whe n i t i s d et erm in edth atli qu id at io n o f a rec ei vabl e wou ldbe de tri m en ta l t o the co nt inue d o pe rat io n o f anothe rwis e p ro fit ab le bu si ne ss . Fin al ly, th e le tt er re qu es te d tha t p et it io ne r’s cas e b e rev ie wedby a supe rv is orbe fo re the SO m ad e a d et erm in at io n. Tha t s am e d ay , th e SO n ot edinhe r cas e act iv ity reco rdth atsh e h ad rev ie wedpe ti ti on er’s rep res en ta ti ve ’s po si ti on th atBo is e Gut te r’s acco un ts rece iv ab le sh ou ldno t b e co ns id eredbu si ne ss ass et s b ecau se th ey were n eces sary to op erat e Bo is e Gut te r. On Dec em

be r 17 , 20 13 , th e SO an d h er m an ag er re vi ewedall th e d oc um en ts th atpe ti ti on er p ro vi de d andag reedth atBo is e Gut te r’s acco un ts rece iv ab le were- 7 -

[* 7] bu si ne ss ass et s tha t s ho ul d b e in cl ud edinpe ti ti on er’s RCP . Spe ci fic al ly, th ey no te d tha t p et it io ne r’s 20 13 P&L s ta te m en t was in co ns is te ntwith p et it io ne r’s 20 13 di strib ut io n re po rt. Th e SO al so de te rm in edth atth e 2 01 3 d is tri bu ti onrep ort was no t n eces sary

to he r an al y si s b ecau se th e fi nanc ia l d oc um en ts pe ti ti on er pr ov id edforth aty ear wer e in co m pl et e an d s he co ul d c om

pl et e h er an al y si s u si ng th e 2 01 2 d oc um en ts pro vi de d. Pet it io ne r di d n otm ak e an othe r am en de d OIC inres po ns e to th e SO’s an al y si s. OnDecem

be r 23 , 20 13 , res po nd en t i ss ue d aNot ic e o f Det erm in at io n Co nc ern in g C ol le ct io n Act io n( s) Und er Se ct io n 6 32 0 and/o r 63 30 of the Int ern al Rev enue Co de (no ti ce o f de te rm in at io n) . Inth e n ot ic e th e SO ev al ua te d p et it io ne r’s OIC b as edup on do ub t as to co ll ect ib il ity

an d o ut li ne d h er ca lc ul at io n o f pe ti ti on er’s RCP . The SO al so pr ov id eda de ta il edhi st ory of p et it io ne r’s CDP cas e. Sp eci fic al ly, inde te rm in in g th atpe ti ti on er’s RCP sh ou ldin cl ud e Bo is e Gut te r’s acco un ts rece iv ab le th atwere le ss th an90 day s o ld , th e SO co ns id eredrel ev an t IRM s ect io ns , in cl ud in g IR M p t. 5.8 .5.1 4, ci te d b y

pe ti ti on er’s rep res en tati ve . The SO al so no te d d is crep an ci es be twee n B oi se Gut te r’s 20 12 di strib ut io n re po rt andit s 2 01 2 P &L st at em en t fo r Janu ary th ro ug h S ep te m

be r. Spe ci fic al ly, Bo is e Gut te r’s 20 12 di strib ut io n re po rt li st ed$4 1,3 19 indi strib ut io ns to pe ti ti on er fo r th e y ear ( fo r a $ 3,4 43 m on th ly- 8 -

[* 8] av erag e) wh il e Bo is e Gut te r’s 20 12 P&L s ta te m en t thr ou gh Sep te m be r 20 12 cl ai m ed$2 ,98 2 i n n etav erag e b us in es s i nc om e an d a$2 33 “ dr aw” fro m payro ll fo r th is pe rio d. Th e SO n ot edth atalt ho ug h the re were m ajordi sc rep an ci es be twee n B oi se Gut te r’s 20 13 P&L s ta te m en t fo r Ja nu ary th ro ug h J ul y an d i ts 20 13 di strib ut io n re po rt, the 20 13 P&L s ta te m en t was st il l co ns id ered . Inhe r rec ap an d ana lysis inth e n ot ic e o f de te rmin at io n the SO no te d tha t an av erag e m on th ly bal an ce o f $1 4,8 55 inpe ti ti on er’s U.S. Ban k a cco un t, al lo win g fo r un ex pe ct edexpe ns es , was s uf fic ie ntto op erat e p et it io ne r’s bu si ne ss . She als o no te d: “ The acco un t re cei vabl e is m on ey owedan d yet th e b us in es s co nt inue s t o op erat e an d m ai nt ai n h ig h m on th ly bal an ce b as edonth e b an k s ta te m en ts pr ov id ed .” The S O con cl ud edth atacco rd in g t o a ll th e d oc um en tati onsubm it te d an d c on si de red , th e RCP of $ 38 ,83 9 was reas on ab le . Mos t o f th e SO’s cal cu la ti on of pe ti ti on er’s RCP cam e fro m 50 % of the fai r m ark etva lu e o f pe ti ti on er’s U.S. Ban k c he ck in g a cco un t l es s en cu m br an ces of - $4 ,25 3, an d B oi se Gut te r’s acco un ts rece iv ab le of - $3 3,9 52 . The No ti ce o f Det erm in at io n s us ta in edth e p ro po se d l ev y act io n andreject edpe ti ti on er’s OIC o f $1 1,5 00 be cau se itdi d n otequa l o r ex ceed pe ti ti on er’s RCP .- 9 - Dis cu ss io n [* 9] Pet it io ne r as se rts th atth e SO im pr op erl y reject edhi s OIC . W e rev ie w for ab us e o f di sc ret io n the SO’s det erm in at io n t o re ject p et it io ne r’s OIC. See S eg o v . Co m m is si on er, 1 14 T.C. 60 4, 6 10 (20 00 ); Go za v . Comm is si on er, 1 14 T.C. 17 6, 18 2 (2 00 0) . W e d o n otco nduc t an in de pe nd en t re vi ew of whatwou ldbe an acce pt ab le OIC o r subs ti tu te ou r jud gm en t fo r th atof the App eal s Off ic e. See McC lana ha n v . Comm is si on er, T.C. Mem o. 2 00 8- 16 1. Rath er, anSO’s dec is io n to rejectanOIC wil l n otbe di sturbe d u nl es s i t i s arbi tra ry , cap ric io us , or wi th ou t so un d b as is infactor l aw. See, e.g ., Mur ph y v. Co m m is si on er, 1 25 T.C. 30 1, 3 20 (2 00 5) , aff’d, 4 69 F.3d27 (1s t Ci r. 20 06 ); Hans env. Co m m is si on er, T.C. Mem o. 20 07 -5 6, af

f’d inpart, v acat edinpart s ub no m . Kell er v . Commis si on er, 5 68 F.3d 71 0 (9 thCir . 20 09 ). Gene ral ly, we ha ve fou ndno ab us e o f di sc ret io n wh ere the App eal s Off

ic e h as fol lo wedth e Co m m is si on er’s g ui de li ne s t o a sc ert ai n a ta xp ay er’s RCP an d h as reject eda ta xp ay er’s co ll ect io n a lt ern at iv e o n tha t b as is . Litwakv. Co m

m is si on er, T.C. Mem o. 2 00 9- 29 2, af f’d, 47 3 F . App ’x 70 9 (9 th Cir . 20 12 ); R om ero v. Co m

m is si on er, T.C. Mem o. 2 00 9- 26 4; McC lanaha n v . Co m m is si on er, T.C. Mem o. 2 00 8- 16 1; Lem ann v . Comm is si on er, T.C. Mem o. 20 06 -3 7.- 10 -

[* 10 ] At the CDP h eari ng th e ta xp ay er m ay rai se an y rel ev an t i ss ue with re ga rdto th e co ll ect io n a ct iv it ie s, i nc lu di ng alt ern at iv e m ean s o f co ll ect io n s uc h a s an OIC. Sec. 6 33 0( c)(2 )(A); see als o S eg o v . Comm is si on er, 1 14 T.C. at 6 09 . Taxp ay ers are e xp ect edto pro vi de all rel ev an t i nf orm at io n re qu es te d b y

th e SO, in cl ud in g fin an ci al st at em en ts , forco ns id erat io n o f th e fac ts an d i ss ue s i nv ol ve d i n the he ari ng . Sec. 3 01 .63 30 -1 (e)( 1) , Pro ced . & Adm in . Reg s. Sect io n 7 12 2( a) au th or iz es th e Sec ret ary to co m pr om is e a t ax pa y er’s in co m e ta x l iabi li ty. In g en eral , th e d eci si on to acce ptor r ejectanoff er as well as th e te rm s an d c on di ti on s ag reedto are l eftto th e d is cret io n o f th e Co m mis si on er. Sec. 3 01 .71 22 -1 (a)( 1) , (c)(1 ), Pro ced . & Adm in . Reg s. Th e g ro un ds forth e co m pr om is e o f a t ax li ab il ity

are d oubtas t o l iabi li ty, do ub t as to co ll ect ib il ity , and th e p ro m ot io n o f effe ct iv e ta x a dm in is tra ti on . Id. p ara. (b ). Pet it io ne r ba se s h is OIC o n d oubtas t o c ol le ct ib il ity , whi ch“ ex is ts inan y cas e whe re the tax pa y er’s as se ts an d i nc om e are les s tha n the ful l am ountof the li ab il ity .” Id . subp ara. (2 ). The Co m m is si on er wi ll ge ne ral ly com pr om is e a l iabi li ty on the ba si s o f do ub t as to co ll ect ib il ity

on ly if th e li ab il ity

ex ceed s the tax pa y er’s RCP , “ i.e., tha t am ount , les s tha n the ful l l iabi li ty, th atth e IRS co ul d c ol le ctth ro ug h m ean s s uc h as adm in is tra ti ve an d ju di ci al co ll ect io n re m ed ie s” . Mur ph y v. Co m mis si on er,- 11 -

[* 11 ] 12 5 T.C. at30 9; Sal azarv. Co m m is si on er, T.C. Mem o. 2 00 8- 38 , aff’d, 3 38 F. App ’x 75 (2dCir . 20 09 ). Pet it io ne r arg ue s tha t the SO ab us edhe r di sc ret io n b y tre at in g h is acco un ts rece iv ab le les s than 9 0 d ay s p as t due as b us in es s as se ts th atwere i nc lu di bl e in th e de te rm in at io n o f hi s R CP. Pet it io ne r st at es th atth e n ot ic e o f de te rmin at io n c it ed on ly dep os itacco un t b al an ces fro m pe ak bu si ne ss m on th s as th e so le fact s an d ev id en ce fo r th e d et erm in at io n. Pe ti ti on er al so st at es th atth e SO’s an al y si s fa il ed to setforth an y

ex pl an at io n fo r di sr eg ard in g d oc um en ts th atpe ti ti on er s ub m it te d sh owi ng th at : (1 ) pe ti ti on er’s acc ou nt s p ay ab le si gn ifi can tl y off se t an y acco un ts rece iv ab le an d (2 ) bankacco un t b al an ces whi chrefl ect edfun ds setasi de fro m bu si er s umm er m on th s wo ul d b e n eces sary to co ve r th e co stof p et it io ne r’s bu si ne ss du rin g s lo wer win te r m on th s. Fi na ll y , pet it io ne r arg ue s tha t the SO di d no t i nd ic at e th atsh e rev ie wedth es e d oc um en ts as p artof h er an al y si s. Sp eci fic al ly, pe ti ti on er co nt en ds th atth e SO n eg le ct edto in co rp or at e in co m e an d ex pe ns e fi gu res fro m

hi s t ax returns inhe r an al y si s t o c al cu late hi s av erag e in co m e fo r pu rp os es of R CP. Res po nd en t ar gu es th atth e SO p ro pe rly revi ewedpe ti ti on er’s b us in es s b an k acco un t s ta te m en ts an d c on cl ud edth atBo is e Gut te r ha d fu nd s i n the se acco un ts to pa y it s b us in es s ex pe ns es . Res po nd en t ar gu es th atth e SO subs eque nt ly foll owe d- 12 -

[* 12 ] th e g ui de li ne s i n the IRM, i nc lu di ng IRM p t. 5 .8.5 .14 , andpro pe rly val ue d Bo is e Gut te r’s acco un ts rece iv ab le les s tha n 9 0 d ay s p as t due inful l fo r pu rp os es of cal cu la ti ng pe ti ti on er’s RCP an d a ct edwithi n h er d is cret io n t o re ject pe ti ti on er’s OIC, wh ic h h e p utforth onth e so le gro un d o f do ub t as to co ll ect ib il ity . Furt he rm or e, res po nd en t ar gu es th atpe ti ti on er i s at te m pt in g t o ra is e a n ew is su e o n b rie f--s pe ci fic al ly, th atth e SO ab us edhe r di sc ret io n i n n ot ad dr es si ng pe ti ti on er’s s pe ci al cir cu m st an ces or e co no mic hard sh ip inth e n ot ic e of de te rm in at io n. As a p rel im in ary m atte r, we fin d tha t p et it io ne r di d n otrai se a ne w is su e o n br ie f. Pet it io ne r di d n otne edto in di cat e o n h is Fo rm 65 6 any exce pt io na l ci rcu m st an ces inhi s ca se su chth atacce pt an ce o f hi s OIC wou ldpro m ot e eff ect iv e ta x a dm in is tra ti onforth e Co urt t o re vi ew hi s ar gu m en t. Pet it io ne r do es no t ar gu e an y ex cep ti on al cir cu m st an ces ; rath er, h e arg ue s the SO ab us edhe r di sc ret io n whe n s he fai le d t o c on si de r al l the fact s an d e vi de nc e p res en te d andde ci de d t o tre atBo is e Gut te r’s acco un ts rece iv ab le as b us in es s as se ts . This is su e is pro pe rly rev ie wab le by the Co urt. On the ba si s o f th e rec or d, p et it io ne r’s arg um en t d oe s n otpa ss m us te r. The reco rdcle arl y

sh ows th e SO to okin to acco un t al l re le va ntdo cu m en ts subm it te d. The SO’s cas e act iv ity

reco rdsh ows th atonDecem be r 11 , 20 13 , sh e rev ie wed- 13 -

[* 13 ] pe ti ti on er’s rep res en ta ti ve ’s con te nt io n tha t Bo is e Gut te r’s acco un ts rece iv ab le sh ou ldno t b e co ns id eredbu si ne ss ass et s an d tha t s he co ns ul te d wi th he r m an ag er s oo n the reaf te r. Sti ll , pet it io ne r co m

pl ai ns th atth e SO co ns id ered bu si ne ss acco un t b al an ces fro m on ly peakbu si ne ss m on th s i n d et erm in in g tha t the acco un ts co ul d a de qu at el y sat is fy pe ti ti on er’s ex pe ns es . Howev er, p et it io ne r pr ov id edth e SO with b an k s ta te m en ts fro m on ly the se pe akbu si ne ss m on th s; he di d n otpro vi de m at eri al ev id en ce t o s ub st an ti at e h is cla im th atth e h ig h b us in es s acco un t b al an ces were n eces sary to co ve r th e co stof h is bu si ne ss du rin g s lo wer win te r m on th s. Alt ho ug h p et it io ne r pr ov id edth e SO with h is tax returns to sh ow in co m e an d e xp en se s fr om Bo is e Gut te r, a ta x re tu rnis m erel y a st at em en t o f a ta xp ay er’s cl ai m ; i t d oe s n otest ab li sh th e tr uth o f th e m atte rs setforth th erei n. Se e W il ki ns onv. Co m

m is si on er, 7 1 T.C. 6 33 , 63 9 (1 97 9) ; Ro be rts v. Co m m is si on er, 62 T.C. 83 4, 8 37 (19 74 ). Man y of the do cu m en ts pe ti ti on er s ub m it te d, s uc h a s B oi se Gutte r’s di strib ut io n re po rts an d P &L st at em en ts , were i nc on si st en t wi th on e an othe r. Furth erm or e, Bo is e Gut te r’s acco un ts pay ab le , whi chpe ti ti on er co nt en ds off se t i ts acco un ts rece iv ab le for20 12 , sh owe d tha t m os t o f th e p ay ab le s wer e ap pa ren tl y owe d t o p et it io ne r’s rel at iv es as o pp os edto th ird -p arty ve nd or s. Pet it io ne r si m

pl y di d n otpro vi de th e SO with a de qu at e ev id en ce t o s ho w th atth e li qu id at io n o f- 14 -

[* 14 ] Bo is e Gut te r’s acco un ts rece iv ab le wou ldbe de tri m en ta l t o i ts su rv iv al . See IRM pt . 5.8 .5.1 4. Th es e fac ts an d the factth atpe ti ti on er h adanRCP m or e th an th ree t im es hi s p ro po se d OIC sh ow tha t the SO di d n otab us e h er d is cret io n i n reject in g the OIC. See, e.g ., Moo re v . Comm is si on er, T.C. Mem o. 2 01 3- 27 8. We th eref or e su st ai n the SO’s det erm in at io n. Inreac hi ng ou r ho ld in g, we h av e co ns id eredall arg um en ts m ad e, an d, t o the ex te ntno t m en ti on edab ov e, we co nc lu de th ey

are m oo t, i rrel ev an t, o r witho utm eri t. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te red fo r res po nd en t.