T.C. Mem o. 2 01 3- 18 3

UNITED STAT ES TAX COURT
B. GORDON LAFORGE, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 79 97 -1 2L. Fil edAug us t 1 2, 2 01 3.

Jo sh uaB. Bei sk er, fo r pe ti ti on er. Rac he l L. Sch iff

m an , for res po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION VASQUEZ, Ju dg e: Pur su an t t o s ect io n 6 33 0( d) , 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 h is unpa id20 05

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al 1 Rev enue Co de ineffe ctat a ll rel ev an t t im es , andall Ru le refe ren ces are t o t he Tax Co urt Ru le s o f Prac ti ce an d P ro cedur e.- 2 -

[* 2] an d 2 00 6 F ed eral in co m e ta x l iabi li ti es . The i ss ue forde ci si on is whet he r
res po nd en t ab us edhi s d is cret io n i n s us ta in in g t he pro po se d l ev y act io n fo r 20 05
an d 2 00 6. FINDINGS OF FACT So m e o f th e fac ts ha ve be enst ip ul at edan d a re s o fo un d. Th e st ip ul at io n o f fact s an d t he att ach edex hi bi ts are i nc or po rat edhe rei n b y

th is refe ren ce. At the ti m e p et it io ne r fi le d h is pe ti ti on , he was a res id en t o f New Je rs ey . On J un e 1 3, 2 00 7, the Int ern al Rev enue Serv ic e (IR S) m ai le d p et it io ne r Lett er 1 05 8, Fi na l No ti ce o f In te ntto Levy andNot ic e o f You r Ri gh t t o aHeari ng , with re sp ectto hi s o ut st an di ng in co m e ta x l iabi li ti es for19 93 , 19 94 , 19 95 , 19 96 , 20 00 , 20 01 , and20 02
. On J anua ry

3, 2 01 1, the IRS m ai le d p et it io ne r two Lett ers 10 58 , on e rel at in g t o p et it io ne r’s ou ts ta nd in g i nc om e ta x l iabi li ti es for 20 00 , 20 01 , 20 02 , 20 05 , and20 06 an d o ne rel at in g t o h is ou ts tand in g i nc om e ta x l iabi li ti es for19 93 , 19 94 , 19 95 , 19 96 , 20 00 , 20 01 , 20 02 , 20 05 , and20 06
. On J anua ry

14 , 20 11 , th e IRS rece iv edpe ti ti on er’s Fo rm 12 15 3, Re qu es t fo r a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g (f irs t Fo rm 12 15 3) , rel at in g t o ta xabl e y ears 20 00 , 20 01 , 20 02 , 20 05 , and20 06 . On th e fi rs t Fo rm 12 15 3 pe ti ti on er ch eck edth e b ox es foranin st al lm en t ag reem en t an d an- 3 -

[* 3] of fer- in -co m

pr om is e (OIC) . On Feb ru ary 8, 2 01 1, p et it io ne r subm itte d a
se co ndFo rm

12 15 3 (s eco ndFo rm

12 15 3) rel at in g t o t ax ab le y ears 19 93 , 19 94 , 19 95 , 19 96 , 20 00 , 20 01 , 20 02 , 20 05 , and20 06 . On th e se co ndFo rm 12 15 3 pe ti ti on er al so ch eck edth e b ox es foranin st al lm en t ag reem en t an d a n OIC
. On J anua ry

12 , 20 12 , Set tl em en t Offi cer C arl McAd am s, IR S Offi ce o f App eal s (Ap pe al s) , m ai le d p et it io ne r a l ette r in fo rm in g h im th atApp eal s h ad
rece iv edhi s re qu es t fo r a co ll ect io n due pro ces s (C DP) h eari ng . Sett le m en t Offi cer M cAd am s s ch edul eda te le ph on e co nf eren ce fo r Feb ru ary 2, 2 01 2. Th e le tt er i nf orm edpe ti ti on er tha t h e co ul d re qu es t a f ace- to -fac e h eari ng withi n 1 4 da y s fr om th e d at e o f th e le tt er (i .e., by Ja nu ary 26 , 20 12 ). Inth e le tt er, Set tl em en t Offi cer M cAd am s s ta te d tha t h e co ul d c on si de r
co ll ect io n a lt ern at iv es , su chas a n i ns ta ll m en t ag reem en t o r anOIC, on ly if pe ti ti on er p ro vi de d: (1) a co m pl et edFo rm

43 3- A, Col le ct io n In fo rm at io n St at em en t fo r W ag e Earn ers an d S el f-Em pl oyed In di vi du al s, i nc lu di ng all requi red at ta ch m en ts , i.e., earni ng s s ta te m en ts , bi ll s o r st at em en ts for m on th ly recurrin g
ex pe ns es forth ree m on th s b efo re the da te of the Fo rm 43 3- A andst at em en ts for ch eck in g andsav in gs acco un ts ; (2 ) pr oo f of est im at edtax pa ym en ts for20 11 ; an d (3 ) si gn edFed eral in co m e ta x re tu rn s fo r 20 07 , 20 08 , 20 09 , and20 10 (whi chha d
no t b eenfil ed ). Set tl em en t Offi cer M cAd am s i ns tru ct edpe ti ti on er t o s ub m ita- 4 -

[* 4] co m pl et edFo rm

43 3- A andth e li st edit em s wi th in 14 day s (i .e., by Ja nu ary 26 , 20 12 ) an d i nf

orm edpe ti ti on er tha t h e co ul d n otco ns id er co ll ect io n a lt ern at iv es witho utth is in fo rm at io n. On J anua ry

23 , 20 12 , pet it io ne r’s rep res en ta ti ve , Dou gl as R. Eis enbe rg , fax edSet tl em en t Offi cer M cAd am s a l ette r reque st in g aface -to -fac e co nf eren ce. At the ti m e o f th is reque stpe ti ti on er h adno t s ub m itte d t he Fo rm 43 3- A or the in fo rm at io n S et tl em en t Offi cer M cAd am s h adreque st ed . Peti ti on er fa il edto pr ov id e th e reque st edin fo rm at io n b y th e Ja nu ary 26 , 20 12 , dea dl in e. Res po nd en t de ni edpe ti ti on er’s reque stfora face -to -fac e h eari ng . On Fe brua ry

2, 2 01 2, Se tt le m en t Offi cer M cAd am s co nt act edMr. Eis enbe rg atth e sc he du le d t im e fo r th e te le ph on e CDP h eari ng . Sett le m en t Offi cer McAd am s i nf

orm edMr. Eis enbe rg th athe co ul d n otco ns id er p et it io ne r’s reque st fo r a CDP h eari ng fortax ab le y ears 19 93 , 19 94 , 19 95 , 19 96 , 20 00 , 20 01 , and20 02 be cau se pe ti ti on er h adno t s ub m it te d ati m el y reque stas t o t ho se y ears . Sett le m en t Offi cer M cAd am s i nf

orm edMr. Eis enbe rg th atpe ti ti on er’s CDP h eari ng reque st s fo r 20 05 an d 2 00 6 wer e ti m el y . Set tl em en t Offi cer M cAd am s i nf orm edMr. Eis enbe rg th athe ha d n ot
rece iv edth e d oc um en ts reque st edinhi s l ette r da te d J anuary 12 , 20 12 . Mr. Eis enbe rg st at edth athe ha d m ai le d t he tax returns for 20 07 th ro ug h 2 01 0 a nda- 5 -

[* 5] Fo rm 43 3- A to Set tl em en t Offi cer M cAd am s o n F eb ru ary 1, 2 01 2. Set tl em en t Offi cer M cAd am s i nf orm edMr. Eis enbe rg th atif the Fo rm 43 3- A was
no t re cei ve d o r was in co m pl et e, he wou ldm ak e a d et erm in at io n b as edon th e adm in is tra ti ve fil e. On Fe brua ry

3, 2 01 2, Se tt le m en t Offi cer M cAd am s re cei ve d alet te r fro m Mr. Eis enbe rg en cl os in g aFo rm 43 3- A, tax returns for20 07 , 20 08 , 20 09 , and 20 10 , a cred itcardst at em en t fo r on e m on th , a ut il it y bi ll foron e m on th , anda Writ of W ag e Exe cu ti on . The l ette r st at edth atth e o nl y ou ts ta nd in g i te m

was the pro of 2 of est im at edtax pa y

m en ts for20 11 , whi chne ed edto be di sc us se d. On M arch 15 , 20 12 , res po nd en t m ai le d p et it io ne r a No ti ce o f Det erm in at io n Co nc ern in g C ol le ct io n Act io n( s) un de r Sec ti on 63 20 an d/ or63 30 su st ai ni ng th e pr op os edlev y . Sett le m en t Offi cer M cAd am s d et erm in edth atpe ti ti on er h ad
subm it te d a n i nc om

pl et e Fo rm

43 3- A andha d fa il edto pro vi de pro of of h is 20 11
es ti m at edtax pa ym en ts .

The Writof Wage Exec ut io n, en te redApri l 6 , 20 11 , fro m th e Supe rio r 2 Co urt o f New Je rs ey , was i n fa vo r of a jud gm en t cr ed it or

for$4 5,4 42 .03 . Each m on th $5 00 was g arn is he d fr om pe ti ti on er’s wag es .- 6 -

[* 6] OPINION I. App li cab le Law Sect io n 6 33 0( a) p ro vi de s tha t the Secr et ary sh al l fu rn is h atax pa y er wi th writ te n n ot ic e o f hi s ri gh t t o ahe ari ng be fo re an y pro pe rty is l ev ie d upo n. Se ct io n 63 30 furth er p ro vi de s tha t the tax pa y er m ay reque stadm in is tra ti ve rev ie w of the
m at te r (i n t he form

of ahe ari ng ) withi n a30 -d ay pe rio d. Se c. 63 30 (a) and(b)
. Pu rs uantto sec ti on 63 30 (c)( 2) (A), a ta xp ay er m ay rai se at t he sec ti on63 30 he ari ng an y

rel ev an t i ss ue with re ga rdto th e Co m m is si on er’s co ll ect io n a ct iv it ie s, in cl ud in g s po us al de fen se s, ch al le ng es to th e ap pr op ria te ne ss of the Co m m is si on er’s i nt en de d c ol le ct io n a ct io n, an d a lt ern at iv e m ean s o f co ll ect io n. Seg o v . Comm is si on er, 1 14 T.C. 60 4, 6 09 (20 00 ); Go za v . Comm is si on er, 1 14 T.C. 17 6, 1 80 (20 00 ). Pet it io ne r do es no t d is pu te th e und erl y in g t ax li ab il it ie s fo r 20 05 an d 2 00 6, whi chare atis su e, no r th os e fo r 19 93 , 19 94 , 19 95 , 19 96 , 20 00 , 20 01 , and20 02 , whi chare n ot . Whe re, as he re, a t ax pay er’s u nd erl y in g t ax li ab il it y is no t i n 3 The Co urt l ack s juris di ct io n o ve r th e ta xabl e y ears 19 93 , 19 94 , 19 95 , 3 19 96 , 20 00 , 20 01 , and20 02 be cau se pe ti ti on er fa il edto ti m el y reque sta CDP he ari ng with re sp ectto th os e y ears . As di sc us se d abo ve , a tax pa y er m us t re qu es t a CDP h eari ng withi n 3 0 d ay s o f rec ei vi ng th e n ot ic e o f in te ntto lev y . Sec. 6 33 0( a) an d (b ). Once th e Sec ret ary is su es a no ti ce o f in te ntto lev y an d n ot ic e o f ri gh t t o a se c. 63 30 he ari ng , a subs eque ntno ti ce, m or e th an30 da y s l at er, tha t the IRS (co nt in ue d...)- 7 -

[* 7] di sp ut e, th e Co urt re vi ews App eal s’ det erm in at io n fo r ab us e o f di sc ret io n. See S eg o v . Comm is si on er, 1 14 T.C. at 6 10 ; Go za v . Comm is si on er, 1 14 T.C. at 18 2. To es tabl is h abu se of d is cret io n, the tax pa y er m us t s ho w th atth e d eci si on
co m pl ai ne d o f is arb it rary, capri ci ou s, o r witho utso un d b as is infactor l aw. Giam el li v. Co m

m is si on er, 1 29 T.C. 10 7, 1 11 (20 07 ) (ci ti ng Seg o v . Co m m is si on er, 1 14 T.C. at 6 10 , andW oo dr al v. Co m m is si on er, 1 12 T.C. 19 , 23 (1 99 9) ); s ee Sc hwa rtz v. Co m mis si on er, 3 48 Fed . App x. 8 06 , 80 8 (3 d C ir. 2 00 9) , aff’g T.C. Me m o. 2 00 8- 11 7; Murp hy v. Co m m is si on er, 1 25 T.C. 30 1, 3 20 (20 05 ), aff’d, 4 69 F.3d27 (1s t Ci r. 20 06 ). In r ev ie win g fo r ab us e o f di sc ret io n, we ge ne ral ly con si de r on ly the arg um en ts , is su es , andot he r m at te rs th atwere ra is edat th e CDP h eari ng or o th erwi se bro ug htto th e at te nt io n o f App eal s. Gia m el li v. Co m m is si on er, 1 29 T.C. at 1 15 ; M ag an a v Co m mis si on er, 1 18 T.C. 48 8, 4 93 (2 00 2) ; s ee al so sec . 30 1.6 33 0- 1( f)(2 ), Q&A-F3 , Pro ced . & Adm in . Reg s. Bu t s ee Hoyle v . Commis si on er, 1 31 T.C. 19 7 (2 00 8)
. (...co nt inue d) 3 in te nd s t o l ev y

on pro pe rty of the tax pa y er fo r th e sa m e ta x a ndtax pe rio d a s i n t he in it ia l n ot ic e d oe s n oten ti tl e th e ta xp ay er t o asec . 63 30 he ari ng . Sec. 3 01 .63 30
- 1( b) (2 ), Q&A-B2 , Pro ced . & Adm in . Reg s. Thus , pet it io ne r ne ed edto reque sta CDP h eari ng withi n 3 0 d ay s o f th e n ot ic e d at edJu ne 13 , 20 07 , no t the subs eque nt no ti ce d at edJan uary

3, 2 01 1.- 8 -

[* 8] II. The Part ie s’ Argu m en ts Pet it io ne r arg ue s tha t Se tt le m en t Offi cer M cAd am s ab us edhi s d is cret io n b y refu si ng to co ns id er h is reque stforanin st al lm en t ag reem en t. Pet it io ne r fu rth er arg ue s tha t Se tt le m en t Offi cer M cAd am s “ fai le d t o s eekan swe rs to un res ol ve d qu es ti on s i n o rd er t o m ak e th e eff ic ie ntco ll ect io n o f ta xe s n o m or e in tru si ve th an
ne ces sa ry , neg le ct edan d i gn or edsi gn ifi can t re le va ntfact or s p et it io ne r pr ov id ed hi m , gav e wei gh t t o i rrel ev an t fa ct or s, an d re li edon im pr op er fa ct s tha t wer e
co nt rary to the ev id en ce p et it io ne r pr es en te d t o h im ”. A. Ins ta ll m en t Ag reem en t Pet it io ne r arg ue s tha t Se tt le m en t Offi cer M cAd am s d en ie d h is reque stforan in st al lm en t ag reem en t b ecau se Set tl em en t Offi cer M cAd am s i nc orrect ly de te rm in edth athe was am em be r of hi s s on ’s li m it edli ab il it y co m pa ny, and th eref or e sh ou ldha ve rep orte d s el f-em pl oym en t i nc om e o r Sch edul e K-1 in co m e
on th e Fo rm

43 3- A. Resp on de ntarg ue s tha t Se tt le m en t Offi cer M cAd am s co ul d
no t ev al ua te whet he r pe ti ti on er was en ti tl edto anin st al lm en t ag reem en t b ecau se pe ti ti on er fa il edto subm itth e d oc um en ta ti on th atSet tl em en t Offi cer M cAd am s ha d re qu es te d. Re sp on de ntfurth er ar gu es th atwhet he r pe ti ti on er was a m em be r of hi s s on ’s li m it edli ab il it y co m pa ny didno t af

fectSet tl em en t Offi cer M cAd am s’ de te rm in at io n. We agre e wit h re sp on de nt .- 9 -

[* 9] Fo rm

43 3- A requi res tax pa y ers to in cl ud e d oc um en ta ti on to supp ort the ir cl ai m edin co m e an d e xp en se s. See Rev . Pro c. 20 03 -7 1, s ec. 4 .03 , 20 03 -2 C.B. 51 7, 5 18 (st at in g t ha t the “ of fer s ho ul d i nc lu de all in fo rm at io n n eces sa ry to ve rif y th e g ro un ds forco m

pr om is e”). Th e supp orti ng do cu m en ta ti onin cl ud es co pi es of
earn in gs st at em en ts , che ck in g a cco un t s ta te m en ts , andbi ll s o r st at em en ts for
m on th ly recurrin g e xp en se s. See Fo rm 43 3- A (20 08 ). Taxp ay ers are re qu ire d t o pr ov id e co pi es of the ab ov e it em s fo r th e th ree m on th s b efo re the da te th atth e Fo rm 43 3- A is subm itte d. Id
. Pet it io ne r fai le d t o a tt ach th e requi reddo cu m en tati on to hi s Fo rm 43 3- A. He fai le d t o a tt ach co pi es of h is ba nkacco un t s ta te m en ts an d l oa n s ta te m en ts for th e th ree p rece di ng m on th s. Pet it io ne r subm itte d aba nkst at em en t fo r hi s ch eck in g a cco un t fo r on ly one m on th , whi chsh ows no act iv it y . Peti ti on er d idno t
subm itst at em en ts of h is wife ’s ban k a cco un t, i nt o wh ic h h is wage s wer e de po si te d. Hi s Fo rm

43 3- A sh ows no sel f-em pl oym en t i nc om e, on ly w ag es . Howev er, h is Fo rm s 1 04 0 fo r 20 07 th ro ug h 2 01 0 s ho w th athe earn edm os t o f hi s in co m e fro m

sel f-em pl oym en t. Pet it io ne r al so fai le d t o s ub m itpro of of h is 20 11
es ti m at edtax pa ym en ts an d fa il edto ex pl ai n h is in co m e acc ur at el y . The refo re, i t was no t an ab us e o f di sc ret io n fo r Set tl em en t Offi cer McAd am s t o d en y

pe ti ti on er an in st al lm en t ag reem en t an d t o s us ta in th e p ro po se d- 10 -

[* 10 ] co ll ect io n a ct io n o n t he ba si s o f pe ti ti on er’s fai lu re t o s ub m itth e reque st ed fin an ci al in fo rm at io n. Ol se n v . Uni te d S ta te s, 4 14 F.3d14 4, 1 54 (1s t Ci r. 20 05 ) (h ol di ng th atth e Co m

mis si on er d idno t ab us e h is di sc ret io n wh ere t he tax pa y er
subm it te d s om e, bu t n otall , of the reque st edin fo rm at io n t o Ap pe al s) ; Ca va zo s v . Co m m is si on er, T.C. Mem o. 2 00 8- 25 7 (h ol di ng th atitis no t an ab us e o f di sc ret io n fo r anApp eal s o ffi cer t o re ject c ol le ct io n a lt ern at iv es an d s us ta in th e p ro po se d
co ll ect io n a ct io n o n t he ba si s o f th e ta xp ay er’s fai lu re t o s ub m itreque st ed fin an ci al in fo rm at io n)
. B. Fo ll owup M eet in g Pet it io ne r arg ue s tha t Se tt le m en t Offi cer M cAd am s ab us edhi s d is cret io n whe n h e d idno t co nt actpe ti ti on er o r Mr. Ei se nb erg aft er h e rev ie wedth e Fo rm 43 3- A andsupp orti ng do cu m en ta ti on , to di sc us s p et it io ne r’s Fo rm 43 3- A andth e
supp orti ng do cum en ts subm it te d. Ho wev er, n o s ta tu to ry or r eg ul at ory

pro vi si on requi res th attax pay ers be affo rd edanun li m it edop po rtu ni ty to s up pl em en t the adm in is tra ti ve reco rd . Mas el li v. Co m m is si on er, T.C. Mem o. 2 01 0- 19 (ci ti ng Ro m anv. Co m

m is si on er, T.C. Mem o. 2 00 4- 20 ). Sect io n 6 33 0 re qu ire s o nl y th ata ta xp ay er b e g iv ena reas on ab le ch an ce t o b e h eardbe fo re the is su an ce o f a n ot ic e of de te rm in at io n. Id
.- 11 -

[* 11 ] Set tl em en t Offi cer M cAd am s re vi ewedth e unt im el y Fo rm 43 3- A and
supp orti ng do cum en ta ti onpe ti ti on er s ub m it te d. Th ere i s n o re qu ire m en t tha t Set tl em en t Offi cer M cAd am s al lo w pet it io ne r to pro vi de supp le m en ta l d oc um en ts . See i d. Fu rth er, Set tl em en t Offi cer M cAd am s i s n otrequi redto pro vi de an y fo ll owup m eet in g wi th pe ti ti on er. See id
. Set tl em en t Offi cer M cAd am s af fo rd edpe ti ti on er an op po rtu ni ty to b e h eard atth e CDP h eari ng be fo re the is su an ce o f th e n ot ic e o f de te rm in at io n. Acco rd in gl y , Set tl em en t Offi cer M cAd am s d idno t ab us e h is di sc ret io n wh enhe di d n otco nt actpe ti ti on er o r Mr. Ei se nb erg fora fo ll owup m eet in g. C. Face -to -Fac e Heari ng Pet it io ne r arg ue s tha t Se tt le m en t Offi cer M cAd am s ab us edhi s d is cret io n in de nyin g h is reque stfora face -to -fac e CDP h eari ng be fo re m ak in g a de te rm in at io n. Th is Co urt h as he ldth ata face -to -fac e h eari ng is no t re qu ire d
un de r se ct io n 6 33 0. Kat z v . Comm is si on er, 1 15 T.C. 32 9 (2 00 0) ; Will ia m so n v . Co m m is si on er, T.C. Mem o. 2 00 9- 18 8; Sto ckto n v . Comm is si on er, T.C. Mem o. 20 09 -1 86 ; Lei ne web er v . Comm is si on er, T.C. Mem o. 2 00 4- 17 . W e h av e al so he ld th atanApp eal s o ffi cer’s d en ia l o f a fac e-t o- face he ari ng do es no t co ns ti tu te an ab us e o f di sc ret io n wh ena ta xp ay er re fu se s t o p ro vi de reque st edfin an ci al- 12 -

[* 12 ] in fo rm at io n. Se e Mo li ne v. Co m m is si on er, T.C. Mem o. 2 00 9- 11 0, af f’d, 36 3 F ed . App x. 6 75 (10 th Cir . 20 10 ); S umm ers v. Co m m is si on er, T.C. Mem o. 20 06 -2 19
. Pet it io ne r fai le d t o s ub m ithi s Fo rm 43 3- A andth e supp orti ng do cu m en ta ti on th atSet tl em en t Offi cer M cAd am s h adreque st edwithi n 1 4 d ay s o f th e d at e o f Set tl em en t Offi cer M cAd am s’ reque stan d b efo re the ti m e o f th e he ari ng . Accor di ng ly, Set tl em en t Offi cer M cAd am s d idno t ab us e h is di sc ret io n in de te rm in in g p et it io ne r was no t en ti tl edto a face -to -fac e h eari ng . III. Co nc lu si on Pet it io ne r ha s n otsh own th atApp eal s’ det erm in at io n t o s us ta in th e pr op os edlev y

act io n was arb it rary, capri ci ou s, o r witho utso un d b as is infactor la w. Accor di ng ly, we ho ldth atres po nd en t d idno t ab us e h is di sc ret io n i n
su st ai ni ng th e p ro po se d l ev y act io n. Re sp on de nt ’s det erm in at io n t o p ro ceedwith
co ll ect io n i s s us ta in ed
. 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 t he
ex te ntno t m en ti on ed , we con si de r th em irr el ev an t, m oo 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.