United States Tax Court

T.C. Memo. 2024-68

DOUGLAS JAMES CASEMENT,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 22861-22L. Filed June 18, 2024.

__________

Douglas James Casement, pro se. 

James M. Schutt, Jr., Crystal T. Ochrymowicz, and Patsy A. Clarke, for 

respondent.

MEMORANDUM OPINION

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

petitioner, Douglas James Casement, seeks review pursuant to section

63301 of a determination by the Internal Revenue Service (IRS) 

Independent Office of Appeals upholding a notice of intent to levy with 

respect to unpaid federal income tax liabilities for his 2010, 2011, and 

2012 taxable years.2 The Commissioner has moved for summary 

1 Unless otherwise indicated, statutory references are to the Internal Revenue 

Code, Title 26 U.S.C. (I.R.C.), in effect at all relevant times, regulation references are 

to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, 

and Rule references are to the Tax Court Rules of Practice and Procedure. We round 

all monetary values to the nearest dollar.

2 The Commissioner stated at the hearing held on February 12, 2024, that Mr. 

Casement’s underlying tax liability for 2011 has become moot because “the IRS wrote 

off the tax obligation for that year.” “Ordinarily, once the Commissioner concedes that 

there is no unpaid [underlying] liability for a disputed year upon which a collection 

Served 06/18/24
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[*2] judgment, contending that there are no disputed issues of material 

fact and that the determination to sustain the levy notice was proper as 

a matter of law. We agree and will grant summary judgment for the 

Commissioner. 

Background

This case was calendared for trial at the Court’s February 12, 

2024, Seattle, Washington, trial session. Before trial the Commissioner 

filed a motion for summary judgment. Although this Court directed Mr. 

Casement to respond before trial, he did not do so within the time 

provided. We nonetheless gave Mr. Casement an opportunity to be 

heard on the motion for summary judgment at the Court’s Seattle trial 

session.

At the Seattle trial session, Mr. Casement discussed his case with 

a pro bono attorney. After consultation, Mr. Casement requested 

additional time to respond to the Commissioner’s motion for summary 

judgment. Although we gave him until March 13, 2024, to file his 

response, Mr. Casement has not done so to date. 

The following uncontroverted facts are derived from the petition, 

the exhibits attached to the declaration supporting summary judgment, 

the administrative record of the CDP hearing, and the other filings in 

this case. Mr. Casement lived in the state of Washington when he timely 

petitioned this Court.

I. Mr. Casement’s Tax Liabilities and IRS Collection Activity

Mr. Casement filed federal income tax returns for his 2010 

through 2012 tax years. Based on the amounts reported on these 

returns, the IRS assessed federal income tax liabilities of $5,230 for 2010

and $8,914 for 2012, as well as statutory interest. The IRS also 

determined additions to tax for failure to pay tax, see I.R.C. § 6651(a)(2), 

failure to pay estimated tax, see I.R.C. § 6654, and failure to timely file 

a tax return, see I.R.C. § 6651(a)(1). Mr. Casement thereafter entered 

action could be based, a proceeding filed in this Court pursuant to section 6330 is 

moot.” MacDonald v. Commissioner, T.C. Memo. 2009-240, 2009 WL 3399256, at *2

(first citing Greene-Thapedi v. Commissioner, 126 T.C. 1, 7 (2006); then citing Gerakios 

v. Commissioner, T.C. Memo. 2004-203; and then citing Chocallo v. Commissioner, T.C. 

Memo. 2004-152). As this case is moot insofar as it relates to Mr. Casement’s 2011 tax 

liability, our opinion will focus its discussion on the years remaining at issue. 
3

[*3] into an installment agreement with the IRS and made multiple 

payments toward his tax liabilities.

II. CDP Hearing and Tax Court Petition

After several years, the IRS terminated the installment 

agreement for reasons not disclosed by the record before us. In an effort 

to collect Mr. Casement’s outstanding balance, the IRS issued a levy

notice, which indicated that he owed, inter alia, $16,812 with respect to 

his 2010 and 2012 tax years. Mr. Casement timely requested a CDP 

hearing, expressing his interest in the “forgive[ness] [of] some of the 

interest and penalties.” He explained that he had lost a significant 

portion of his income and assets in the wake of the 2008 financial crisis

and that he struggled again with his finances during the pandemic. In 

a section of the request form relating to collection alternatives, Mr. 

Casement also checked a box marked “I cannot pay balance.”

The case thereafter was assigned to a settlement officer in the 

Office of Appeals, who scheduled a telephone CDP hearing for July 20, 

2022. In her scheduling letter, the settlement officer directed Mr. 

Casement to provide an explanation in support of abatement. After 

noting that IRS “records show[] that [he did] not file[] a tax return for 

2013 to 2021,” the settlement officer stated that, for consideration of any 

collection alternatives, Mr. Casement was required to provide a copy of 

his filed 2016–21 federal income tax returns, proof of estimated tax 

payments, and a completed Form 433-A, Collection Information 

Statement for Wage Earners and Self-Employed Individuals, with 

attached financial documentation. Mr. Casement provided no

documentation or information in response to this letter.

The settlement officer held a telephone CDP hearing as scheduled 

on July 20, 2022. As reflected in the settlement officer’s notes, Mr. 

Casement reiterated his desire to have the penalties and interest abated

“because he lost a lot of his income.” The settlement officer responded 

that this ground was “not a valid reason to consider reasonable cause . . .

abatement.”

During the hearing, the settlement officer noted that Mr. 

Casement had not filed tax returns since his 2012 tax year and that he 

had failed to provide the requested Form 433-A. She explained that she 

could not consider an installment agreement or other collection 

alternative given these failures and informed Mr. Casement that she 

accordingly would sustain the notice of intent to levy.
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[*4] The Office of Appeals subsequently issued a notice of 

determination that sustained the proposed levy and denied penalty 

abatement. In the notice, the settlement officer stated that she had

verified that the IRS had complied with the requirements of applicable 

law and administrative procedure and that sustaining the proposed levy 

“balances the need for efficient tax collection with the idea of least 

intrusiveness.” She reported that Mr. Casement had requested 

currently-not-collectible status and an installment agreement. The 

settlement officer concluded that Mr. Casement “did not provide any 

financial information to consider a collection alternative” and was “not

in compliance with filing returns for 2016 through 2021.” The 

settlement officer further noted that the “reduction in [his] income d[id] 

not meet [the standards for] reasonable cause penalty abatement.”

Mr. Casement filed a timely petition in this Court, challenging 

the settlement officer’s views as to when “to forgive a tax debt.” In 

support of his petition, Mr. Casement offered to forgo “[his] social 

security, any money [he] should get for Covid relief, [his] refund for [his]

student loan, or other money [he] should be getting.”

Discussion

I. General Principles

A. Scope of Review

“[S]ummary judgment serves as a mechanism for deciding, as a 

matter of law, whether [an] agency action is supported by the 

administrative record and is not arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with law.” Belair v. 

Commissioner, 157 T.C. 10, 17 (2021) (quoting Van Bemmelen v. 

Commissioner, 155 T.C. 64, 79 (2020)). Our decision in this case is most 

likely appealable to the U.S. Court of Appeals for the Ninth Circuit, see

I.R.C. § 7482(b)(1)(G)(i), (2), which has held that, absent a proper

challenge to the underlying liability, the scope of review in a CDP case

is confined to the administrative record, see Keller v. Commissioner, 568 

F.3d 710, 718 (9th Cir. 2009), aff’g in part T.C. Memo. 2006-166, and

aff’g in part, vacating in part decisions in related cases; Starcher v. 

Commissioner, T.C. Memo. 2021-144, at *7.

Mr. Casement did not respond to the motion for summary 

judgment, and we could enter a decision against him for that reason 

alone. See Rule 121(d). We nevertheless will consider the motion on its 
5

[*5] merits. We conclude that no material facts are in genuine dispute 

and that this case is appropriate for summary adjudication.

B. Standard of Review

We have jurisdiction to review the Office of Appeals’ 

determination pursuant to section 6330(d)(1). Where the validity of the 

underlying tax liability is properly at issue, we review the determination 

regarding the underlying tax liability de novo. Sego v. Commissioner, 

114 T.C. 604, 609–10 (2000); Goza v. Commissioner, 114 T.C. 176, 182 

(2000). We review all other determinations for abuse of discretion. Sego, 

114 T.C. at 610; Goza, 114 T.C. at 182. In reviewing for abuse of 

discretion, we must uphold the Office of Appeals’ determination unless 

it is arbitrary, capricious, or without sound basis in fact or law. See, e.g., 

Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 

(1st Cir. 2006); Taylor v. Commissioner, T.C. Memo. 2009-27, 2009 WL 

275721, at *9. 

II. Underlying Liability

A taxpayer may challenge his underlying liability at a CDP 

hearing only if he did not receive a statutory notice of deficiency or did 

not have a prior opportunity to dispute the liability. See I.R.C. 

§ 6330(c)(2)(B); Montgomery v. Commissioner, 122 T.C. 1, 9 (2004). 

Taken in a favorable light, Mr. Casement challenged the additions to 

tax both at the CDP hearing and in his petition, requesting abatement 

of this portion of his underlying liability. The Commissioner does not 

argue that Mr. Casement had a prior opportunity to challenge the 

additions to tax but nonetheless assumes that we review the Office of

Appeals’ determination to uphold the imposition of additions to tax for 

the relevant years for abuse of discretion. 

A request for abatement of additions to tax under sections 6651(a) 

and 6654, however, constitutes a challenge to a taxpayer’s underlying 

liability. See Dykstra v. Commissioner, T.C. Memo. 2017-156, at *16 (“A 

taxpayer’s underlying tax liability includes penalties and additions to 

tax that are part of the unpaid tax that the Commissioner seeks to 

collect.”); Brennan v. Commissioner, T.C. Memo. 2013-123, at *11–12. 

As the record contains no indication that Mr. Casement had a previous 

opportunity to raise this challenge, we accordingly will review de novo 

Mr. Casement’s request for abatement of additions to tax and interest.

See Dykstra, T.C. Memo. 2017-156, at *17. 
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[*6] Generally, the abatement of failure-to-file and failure-to-pay 

additions to tax requires a showing that the failures were “due to 

reasonable cause and not due to willful neglect.” I.R.C. § 6651(a) (flush 

language). To prove reasonable cause for failure to file, a taxpayer must 

show that he “exercised ordinary business care and prudence and was 

nevertheless unable to file the return within the prescribed time.” 

Treas. Reg. § 301.6651-1(c)(1). “[F]inancial difficulties generally do not 

constitute reasonable cause for failure to file a return.” Namakian v. 

Commissioner, T.C. Memo. 2018-200, at *12. To prove reasonable cause

for failure to pay, the taxpayer similarly must show that he “exercised 

ordinary business care and prudence in providing for payment of his tax 

liability and nevertheless was either unable to pay the tax or would 

suffer undue hardship if he paid the tax on the due date.” Hardin v. 

Commissioner, T.C. Memo. 2012-162, 2012 WL 2094304, at *4 (citing 

Treas. Reg. § 301.6651-1(c)(1)). Adverse economic conditions do not 

necessarily constitute reasonable cause for nonpayment of federal 

income tax, at least absent the serious effort required to pay timely. See 

Shapiro v. Commissioner, T.C. Memo. 2023-144, at *19. As for the 

addition to tax for failure to pay estimated tax, section 6654(e)(3)(B) 

provides a limited “reasonable cause” exception for newly retired or 

disabled persons, but Mr. Casement made no showing that he might 

qualify for that exception.

The settlement officer rejected abatement on the grounds that the 

“reduction in [Mr. Casement’s] income d[id] not meet [the standards for] 

reasonable cause penalty abatement.” That conclusion was well 

justified. Mr. Casement supplied no information to the settlement 

officer that satisfied the reasonable cause standards for any of the 

additions to tax. He instead made only a vague allusion to financial 

difficulties, which was plainly insufficient for her to gauge his financial 

situation, his reasons for failing to timely file, and his exercise of 

ordinary business care and prudence with respect to his obligations to 

pay taxes and timely file his returns. We accordingly agree with the 

settlement officer that Mr. Casement fell well short of establishing 

reasonable cause for his failure to pay or to timely file his tax returns, 

as would justify abatement. See Namakian, T.C. Memo. 2018-200, 

at *15; Dykstra, T.C. Memo. 2017-156, at *18; Shaw v. Commissioner, 

T.C. Memo. 2010-210, 2010 WL 3745026, at *6 (“Petitioners have 

provided only limited evidence regarding their ability to pay as of the 
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[*7] date payment was actually due, and we are unable to presume that 

any such evidence would be favorable to petitioners.”).3

III. Abuse of Discretion

In determining whether the Office of Appeals abused its 

discretion, we consider whether the settlement officer (1) properly 

verified that the requirements of applicable law or administrative 

procedure have been met, (2) considered any relevant issues Mr. 

Casement raised, and (3) weighed “whether any proposed collection 

action balances the need for the efficient collection of taxes with the 

legitimate concern of [Mr. Casement] that any collection action be no 

more intrusive than necessary.” I.R.C. § 6330(c)(3). Our review of the 

record establishes that the settlement officer satisfied all the 

requirements.

A. Verification

We have authority to review 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, 200–03 (2008), 

supplemented by 136 T.C. 463 (2011). Mr. Casement has not at any 

point in this case challenged the verification requirement, and we 

conclude from the record that the settlement officer conducted a 

thorough review of Mr. Casement’s account transcripts and verified that 

all applicable requirements were met. See Rule 331(b)(4) (“Any issue 

not raised in the assignments of error shall be deemed to be conceded.”);

Rule 121(d).

B. Issues Raised

Mr. Casement’s petition might be read to challenge the 

settlement officer’s consideration of collection alternatives, in particular 

currently-not-collectible status. See, e.g., Bradley v. Commissioner, T.C. 

Memo. 2024-7, at *10 (“CNC status is a collection alternative that the 

taxpayer may propose, and that if proposed, the settlement officer must 

consider.”). We see no abuse of discretion, however.

3 We note that, although Mr. Casement broadly sought forgiveness for 

penalties “and interest” in his petition and at the hearing, he fails to allege, much less 

establish, the prerequisites for abatement of interest. See I.R.C. § 6404(h). We do not 

find any abuse of discretion in the silence in the notice of determination on the subject 

of Mr. Casement’s unelaborated request about interest.
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[*8] A settlement officer does not abuse her discretion in rejecting

collection alternatives where a taxpayer does not provide requested 

financial information. Tucker v. Commissioner, T.C. Memo. 2014-103, 

at *27; Huntress v. Commissioner, T.C. Memo. 2009-161, 2009 WL 

1883984, at *5. “A taxpayer’s failure to file all required returns,

standing alone, is [likewise] sufficient to justify an Appeals officer’s 

rejection” of collection alternatives. Hartmann v. Commissioner, T.C. 

Memo. 2024-46, at *15; see also Giamelli v. Commissioner, 129 T.C. 107,

111–12 (2007). As explained in the notice of determination, Mr. 

Casement failed to supply the requested Form 433-A and was not in 

filing compliance with respect to his 2016–21 federal income tax returns, 

either of which justifies the rejection of any collection alternative.

C. Balancing Analysis

Mr. Casement did not allege in his petition or argue at any later 

point that the settlement officer failed to consider “whether any 

proposed collection action balances the need for the efficient collection 

of taxes with the legitimate concern of the person that any collection 

action be no more intrusive than necessary.” See I.R.C. § 6330(c)(3)(C). 

He thus has conceded this issue. See Rules 121(d), 331(b)(4). In any 

event, the settlement officer expressly concluded in the notice of 

determination that sustaining the levy balanced the need for efficient 

tax collection with Mr. Casement’s legitimate concerns about 

intrusiveness given the absence of a collection alternative. We find in 

the record no basis for disturbing the settlement officer’s conclusion 

regarding this requirement.

IV. Conclusion

Finding no error in the settlement officer’s decisions, we will 

grant summary judgment for the Commissioner and affirm the IRS’s 

determination to sustain the levy for tax years 2010 and 2012. This case 

is moot insofar as it relates to the portion of Mr. Casement’s liability

associated with the 2011 taxable year.

To reflect the foregoing,

An appropriate order and decision will be entered.