T.C. Memo. 2003-99

UNITED STATES TAX COURT

CARLOS LONDONO, Petitioner v. 

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 11792-01L. Filed April 9, 2003.

Tommy E. Swate, for petitioner.

Brook D. Remick, for respondent.

MEMORANDUM OPINION

SWIFT, Judge: Petitioner seeks our review under section

6330(d)(1)(A) of an adverse Appeals Office collection action

determination. Respondent and petitioner cross move for summary

judgment on all issues. 
- 2 -

Unless otherwise indicated, all section references are to

the Internal Revenue Code for the years in issue. 

Background

The following facts are established by the record. 

On April 20, 2000, respondent, in connection with

petitioner’s unpaid assessed Federal income tax liabilities for

1990, 1991, and 1992 in the total cumulative amount of $71,385

(including penalties and accrued interest), issued to petitioner

a notice of intent to levy in conformity with the notice

requirements of section 6330(a).

On May 11, 2000, petitioner requested a collection hearing

before respondent’s Appeals Office regarding respondent’s

proposed levy. As of May 11, 2000, petitioner had not filed his

Federal income tax returns for 1993 through 1999.

In the fall of 2000, respondent’s Appeals Office mailed to

petitioner and to petitioner’s representative a number of letters

inviting petitioner to a face-to-face meeting to discuss

respondent’s proposed levy. Rather than attend a meeting with

respondent’s Appeals Office, petitioner’s representative talked

to respondent’s Appeals Office over the telephone, and on

October 25, 2000, petitioner submitted to respondent’s Appeals

Office an alternative to respondent’s proposed levy, namely, an

offer in compromise. 
- 3 -

Under petitioner’s offer in compromise, petitioner offered

to pay a total of only $3,741 in 19 monthly installments of $200

each, in full compromise of petitioner’s cumulative total

outstanding Federal income tax liabilities for 1990 through 1999

of $91,120. In a number of significant respects, petitioner’s

offer in compromise is incomplete. 

In late 2000, petitioner filed with respondent his

delinquent Federal income tax returns for 1993 through 1999. 

Three of petitioner’s above-mentioned Federal income tax returns

were not filed until after respondent had issued audit summonses

with regard thereto.

On November 9, 2000, respondent’s Appeals officer sent a

letter to petitioner’s representative offering to meet regarding

the proposed levy and offer in compromise.

Petitioner’s representative declined to meet with

respondent’s Appeals officer, but on November 29, 2000,

petitioner’s representative did call respondent’s Appeals officer

and discussed with her petitioner’s offer in compromise.

On February 20, 2001, respondent’s Appeals officer forwarded

petitioner’s offer in compromise to an “offer group” within

respondent’s organization that reviews offers in compromise. 

On July 3, 2001, after reviewing financial information that

petitioner had submitted, respondent’s offer in compromise

specialist calculated that petitioner likely could afford to make
- 4 -

monthly installment payments over 60 months and pay off the full

cumulative total of the taxes petitioner owed for 1990, 1991, and

1992 (the years to which respondent’s levy relates) as well as

for 1993 through 1999, a cumulative total of $91,120. 

Respondent’s Appeals officer also noted that for the prior

10 years petitioner had a poor compliance history with regard to

the filing and payment of his Federal income tax liabilities and

that petitioner, as of July 3, 2001, still was not current with

regard to his Federal income tax liabilities (namely,

petitioner’s 2000 Federal income tax return had not yet been

filed, and petitioner’s estimated tax payments for 2001 were not

current). 

On July 3, 2001, respondent’s Appeals officer discussed on

the telephone with petitioner’s representative petitioner’s offer

in compromise and explained that the offer in compromise could

not be approved because petitioner’s financial information did

not demonstrate a genuine doubt as to collectibility of the taxes

owed and because of petitioner’s then current and long history of

delinquency with regard to his Federal income tax liabilities.

On July 18, 2001, petitioner filed with respondent’s Appeals

Office his 2000 Federal income tax return and additional

financial information. 

Respondent’s Appeals officer reviewed the additional

financial information submitted by petitioner and concluded that
- 5 -

petitioner still had not established sufficient doubt as to

collectibility of the full taxes due and that petitioner’s offer

in compromise should be rejected.

On August 7, 2001, the Appeals officer’s manager reviewed

and approved the rejection of petitioner’s offer in compromise

and signed the Form 5402-c, Appeals Transmittal Memorandum and

Case Memo.

On August 16, 2001, respondent issued to petitioner the

notice of determination rejecting petitioner’s offer in

compromise and sustaining respondent’s proposed levy. Therein,

respondent explained, among other things, as follows:

Your request for a collection due process hearing

stated that you would be filing returns for the taxable

years 1993, 1994, 1995, 1996, 1997, 1998, 1999 so that

an offer could be considered. These returns were all

filed in 2000, after you filed your request for a

Collection Due Process Hearing. Three of these returns

were filed only after a summons was issued for all

books and records in your possession relating to your

income and expenses for those years. You filed your

return for the 2000 tax year in June 2001. The

financial information that was provided during the

offer investigation shows that you have the ability to

full pay the liabilities. Thus you do not qualify for

an offer in compromise doubt as to collectibility. An

installment agreement was not considered an appropriate

alternative to the levy action due to your past lack of

compliance and credit problems.

The proposed levy action is appropriate in your case. 

It balances the need of the government to efficiently

collect taxes with your concerns of intrusiveness. 

Your past compliance history does not demonstrate a

good faith effort to comply with the tax laws other

than by enforcement actions such as the proposed levy.

* * *
- 6 -

Petitioner does not deny the facts relating to the late

filing of his Federal income tax returns and his history of

noncompliance with his Federal income tax filing and payment

obligations. 

On September 20, 2001, petitioner filed his petition herein.

Discussion

At no point herein has petitioner challenged the amount of

his underlying Federal income tax liabilities for the years in

issue.

Where the issue of the underlying tax liability is not

before the Court in connection with a collection hearing, the

Court reviews respondent’s Appeals Office determination only for

abuse of discretion. Magana v. Commissioner, 118 T.C. 488, 493

(2002); Sego v. Commissioner, 114 T.C. 604 (2000); Goza v.

Commissioner, 114 T.C. 176 (2000).

Respondent argues that summary judgment is appropriate on

the ground that the undisputed facts establish that petitioner

was not in current compliance with his Federal income tax

liabilities, and that respondent’s determination to reject

petitioner’s offer in compromise did not constitute an abuse of

discretion. We agree. 

Petitioner’s history of noncompliance, the late filing of

his Federal income tax return for 2000, and the delinquency on
- 7 -

1 4 Administration, Internal Revenue Manual (CCH), sec.

8.7.2.3.5(3)(f), at 27,282 (Nov. 13, 2001), among other things,

(continued...)

his estimated tax payments for 2001 establish petitioner’s

failure to be in current compliance with his Federal income tax

liabilities and support respondent’s determination to disapprove

of petitioner’s offer in compromise.

Relying on respondent’s temporary regulations under section

7122, petitioner asserts that respondent’s Appeals officer, prior

to rejecting petitioner’s offer in compromise, failed to have her

proposed rejection of the offer in compromise reviewed by an

“independent reviewer”. See sec. 301.7122-1T(e)(2), Temporary

Proced. & Admin. Regs., 64 Fed. Reg. 39026 (July 21, 1999). 

Petitioner apparently believes that respondent’s Appeals

officer manager who reviewed the Appeals officer’s determination

to reject petitioner’s offer in compromise does not qualify as an

“independent” reviewer under the above statute and regulation. 

To the contrary, in the context of a collection hearing before

respondent’s Appeals Office, the prescribed independent

administrative review of a proposed rejection of an offer in

compromise generally is to be performed by an Appeals manager,

which in this case occurred on August 7, 2001. 4 Administration,

Internal Revenue Manual (CCH), sec. 8.7.2.3.5(3)(f), at 27,282

(Nov. 13, 2001), promulgated under the legislative authority of

sec. 7122(d).1
- 8 -

1(...continued)

provides as follows:

The independent administrative review required for

rejected * * * [offers in compromise] will not be done

by Compliance on a CDP case. The required independent

review is done by the review of the Appeals manager and

signing of the Form 5402 * * *.

In light of our resolution of respondent’s motion for

summary judgment, other arguments made by petitioner need not be

decided.

The determination of respondent’s Appeals officer properly

verified that the requirements of applicable law and

administrative procedures have been met, considered the issues

raised by petitioner, and balanced the need for efficient

collection of taxes with the legitimate concern of petitioner

that the collection action be no more intrusive than necessary. 

As stated in the attachment to the notice of determination, the

Appeals officer considered all three of these factors under

section 6330(c)(3). Respondent’s Appeals officer did not abuse

her discretion under section 6330(c)(3). Further, no evidence

suggests any impropriety in the review by the Appeals manager of

the Appeals officer’s rejection of petitioner’s offer in

compromise. 
- 9 -

We shall grant respondent’s amended motion for summary

judgment, and we shall deny petitioner’s amended motion for

summary judgment. 

An appropriate order and

decision will be entered.