T.C. Memo. 2015-2

UNITED STATES TAX COURT

DAVID C. SCHOLZ, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 404-13L. Filed January 5, 2015.

James G. McGee, Jr., for petitioner.

Horace Crump, for respondent.

MEMORANDUM OPINION

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

seeks review pursuant to section 6330(d)(1) of the determination by the Internal 1

All statutory references are to the Internal Revenue Code in effect at the 1

relevant times, and all Rule references are to the Tax Court Rules of Practice and

Procedure. All dollar amounts are rounded to the nearest dollar. 
- 2 -

[*2] Revenue Service (IRS or respondent) to uphold a notice of intent to levy for

the taxable years 2007, 2008, 2009, and 2010. Respondent has moved for

summary judgment under Rule 121, contending that there are no disputed issues of

material fact and that his action in sustaining the proposed levy was proper as a

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

Background

The following facts are derived from the parties’ pleadings and motion

papers, including attached exhibits and affidavits. See Rule 121(b). Petitioner is a

self-employed insurance salesman. He resided in Mississippi when he petitioned

this Court.

Petitioner filed late his Federal income tax returns for 2007-2010 and did 

not pay the full amounts of tax shown as due on those returns. The IRS subsequently assessed the tax shown as due. In an effort to collect these assessed

amounts, the IRS sent petitioner, on June 4, 2014, a Final Notice of Intent to Levy

and Notice of Your Right to a Hearing. Petitioner timely submitted Form 12153,

Request for a Collection Due Process or Equivalent Hearing. In his request, petitioner asked that his account be placed in currently not collectible status or,

alternatively, that the IRS consider a collection alternative in the form of an

installment agreement.
- 3 -

[*3] On October 11, 2012, a settlement officer (SO) from the IRS Appeals Office

wrote petitioner to schedule a CDP hearing for October 22, 2012. The SO informed petitioner that in order for him to consider a collection alternative, petitioner needed to submit a completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, together with supporting

financial information.

At the CDP hearing petitioner’s representative told the SO that petitioner’s

recent loss of a major client adversely had affected his financial situation. As a

result, petitioner was not able to provide updated financial information within the

timeframe the SO had set. The parties agreed that petitioner would provide the

requested information by November 14, 2012. The SO informed petitioner’s

representative that if the information was not received by that date, the proposed

levy would be sustained.

The SO did not receive the requested information by November 14, 2012,

and petitioner did not timely request additional time to submit it. The SO

nevertheless waited an additional two weeks before closing the file. Having heard

nothing from petitioner or his representative, the SO on November 29, 2012,

sustained the proposed levy by issuing a Notice of Determination Concerning

Collection Action(s) under Section 6320 and/or 6330. Petitioner timely petitioned
- 4 -

[*4] this Court for review on January 3, 2013. On February 19, 2014, respondent

filed a motion for summary judgment, and petitioner responded on April 9, 2014.

2

Discussion

A. Summary Judgment and Standard of Review

The purpose of summary judgment is to expedite litigation and avoid unnecessary and time-consuming trials. Fla. Peach Corp. v. Commissioner, 90 T.C.

678, 681 (1988). The Court may grant summary judgment when there is no genuine dispute as to any material fact and a decision may be rendered as a matter of

law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d

965 (7th Cir. 1994). Where the moving party properly makes and supports a

motion for summary judgment, “an adverse party may not rest upon the mere

allegations or denials of such party’s pleading,” but must set forth specific facts,

On October 31, 2013, petitioner filed a petition for bankruptcy in the U.S. 2

Bankruptcy Court for the Southern District of Mississippi. This filing triggered

the automatic stay under 11 U.S.C. sec. 362(a)(8) (2012). On November 22, 2013,

the bankruptcy court indicated that the automatic stay would be lifted if petitioner

failed to comply with a certain court order. Petitioner did fail to comply with that

order, and the bankruptcy stay was accordingly lifted on January 10, 2014. On

September 24, 2014, the bankruptcy court closed petitioner’s case by discharging

certain debts under 11 U.S.C. sec. 727 (2012), but it does not appear that the 2007-

2010 tax liabilities at issue here were discharged. Cf. Neilson v. Commissioner,

94 T.C. 1, 9 (1990) (Tax Court lacks jurisdiction to decide whether a taxpayer’s

deficiencies were discharged in a bankruptcy proceeding). In any event, neither

party contends that the bankruptcy stay or petitioner’s discharge in bankruptcy has

any effect on our jurisdiction to consider and resolve this case on the merits. 
- 5 -

[*5] by affidavit or otherwise, showing that there is a genuine dispute for trial. 

Rule 121(d).

Petitioner’s response to the motion for summary judgment alleges no dispute as to any material fact. In light of respondent’s motion, his supporting affidavits, and petitioner’s response thereto, we conclude that this case may be adjudicated summarily. 

Where (as here) there is no challenge to the amounts of a taxpayer’s underlying tax liabilities for the years at issue, the Court reviews the IRS determination

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

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).

B. Analysis

In deciding whether the SO abused his discretion in sustaining the proposed

levy, we consider whether he: (1) properly verified that the requirements of any

applicable law or administrative procedure have been met; (2) considered any

relevant issues petitioner raised; and (3) determined whether the 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
- 6 -

[*6] than necessary.” Sec. 6330(c)(3). It is clear from our review of the record

that the SO conducted a thorough review of petitioner’s filings and account

transcripts and verified that the requirements of applicable law and administrative

procedure were followed. 

The taxpayer may raise at his CDP hearing any relevant issue relating to the

collection action, including “offers of collection alternatives.” See sec.

6330(c)(2)(A)(iii). Petitioner’s hearing request included a statement that he

intended to propose an installment agreement. Section 6159 authorizes the IRS to

enter into a written agreement allowing a taxpayer to pay a tax liability in

installments if it concludes that the “agreement will facilitate full or partial

collection of such liability.” 

Though stating his intention to do so, petitioner never actually proposed an

installment agreement. The SO gave him a reasonable extension of time, which

afforded him more than six weeks to make such a proposal before the case was

closed. It is not an abuse of discretion for a settlement officer to decline to consider an installment agreement where the taxpayer does not place a specific proposal on the table. See McLaine v. Commissioner, 138 T.C. 228, 243 (2012). 

Moreover, petitioner neglected to furnish Form 433-A and the underlying

financial information that the SO had twice requested. As a prerequisite for con-
- 7 -

[*7] sideration of a collection alternative, it is incumbent on the taxpayer to

provide the financial information that will enable the IRS to make an informed

evaluation of his ability to pay. See, e.g., secs. 6159, 7122; Kindred v.

Commissioner, 454 F.3d 688, 697 (7th Cir. 2006); Olsen v. United States, 414

F.3d 144, 151 (1st Cir. 2005). A settlement officer does not abuse his discretion

when the taxpayer’s failure to provide financial information prevents the SO from

considering collection alternatives. See, e.g., Lance v. Commissioner, T.C. Memo.

2009-129; Schwersensky v. Commissioner, T.C. Memo. 2006-178. 

Petitioner contends that he “did not have a sufficient opportunity to explore

less intrusive collection means” because of his “change in financial status” and

supposed “inability to show such a change to the Appeals Officer.” Quite the

contrary: When petitioner’s representative informed the SO of petitioner’s change

in financial status, the SO afforded him a three-week extension of time in which to

submit a proposal with supporting financial information. After that deadline had

passed, the SO waited another two weeks before closing the case. Under these

circumstances, petitioner was perfectly capable of demonstrating his “change in

financial status” to the SO.

“There is no requirement that the Commissioner wait a certain amount of

time before making a determination as to a proposed levy.” Gazi v. Commis- 
- 8 -

[*8] sioner, T.C. Memo. 2007-342, 94 T.C.M. (CCH) 474, 479; see, e.g., Shanley

v. Commissioner, T.C. Memo. 2009-17, 97 T.C.M. (CCH) 1062 (finding no abuse

of discretion when an SO sustained a notice of determination after a taxpayer

failed to provide requested documentation within 14 days). When an SO gives a

taxpayer an adequate period of time in which to respond, it is not an abuse of

discretion for the SO to move ahead after encountering radio silence from the

taxpayer. See Maselli v. Commissioner, T.C. Memo. 2010-19 (citing Roman v.

Commissioner, T.C. Memo. 2004-20). Finding no abuse of discretion in any

respect, we will grant summary judgment for respondent and sustain the proposed

collection action. To reflect the foregoing,

An appropriate order and decision

will be entered.