T.C. Mem o. 2 01 4- 53

UNITED STAT ES TAX COURT

LEE AN G, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 13 30 9- 12 L. File d M arch 31 , 20 14
.
Ro na ldJay Coh en , forpe ti ti on er. Mar is saJ. Sav it , forres po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION LARO, Ju dg e: Thi s ca se in vo lv es a no m in ee an d jeo pa rdy lev y is su edwith
res pe ctto pe ti ti on er’s unp ai d t ax li ab il it ie s fo r 19 98 , 19 99 , 20 00 , and20 01 (y ears atis su e). Pet it io ne r pe ti ti on edth e Co urt u nd er s ect io n 6 33 0( d) (1 ) to rev ie w th e

1 2
Inhi s p et it io n, p et it io ne r al so rai se d h is 20 02 an d 2 00 6 t ax y ears . Purs ua nt 1 (co nt in ue d...)- 2 -

[* 2] de te rm in at io n o f th e In te rn al Rev enue Serv ic e (IR S) Offi ce o f App eal s (Ap pe al s) su st ai ni ng th e n om in ee an d jeo pa rdy lev y . FINDINGS OF FACT Pet it io ne r is a se cu rit ie s trad er res id in g i ll eg al ly in the Uni te d S ta te s. In o r 3
aro un d 1 99 5, s ho rtl y

aft er h e rec ei ve d am as te r of bu si ne ss de gr ee fr om

New York Uni ve rs ity , pet it io ne r be ga n trad in g e qu ity st oc ks us in g apro pr ie tary m etho d in vo lv in g h eav y

lev erag e. Thro ug h trad in g p ur su an t t o h is pro pr ie tary m etho d, pe ti ti on er g rew $ 11 ,00 0 tha t h is un cl e le nthi m in to m or e th an$2 0 m il li on ov er a (...co nt inue d) 1 to ou r or de r da te d M arch 25 , 20 13 , pet it io ne r’s 20 02 an d 2 00 6 t ax y ears were di sm is se d fo r la ckof ju ris di ct io n. All sec ti on refe ren ces are t o the Int ern al Rev enue Co de ineffe ctat a ll 2 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 Pro cedur e. Pet it io ne r di sp ut es th athe res id es inth e Uni te d S ta te s i ll eg al ly. On 3 Nov em be r 4, 2 01 3, the Co urt o rd eredeach pa rty to f il e a m em or an du m

of l aw se tt in g fo rth pe ti ti on er’s i m m ig rat io n s ta tu s. OnNov em be r 15 , 20 13 , th e p art ie s subm it te d b rie fs ad dr es si ng pe ti ti on er’s i m m ig rat io n h is to ry . On Dece m be r 20 , 19 87 , pet it io ne r en te redth e Uni te d S ta te s o n aB-2 vi si to r vi sa . Afterwa rd , pe ti ti on er re m ai ne d i n the Uni te d S ta te s, fi rs t o n an F -1 stud en t v is a an d l at er o n anH-1B pro fes si on al work er v is a. On M arch 15 , 20 00 , pet it io ne r fi le d aform I-4 85 ap pl ic at io n fo r pe rm an en t re si de nc e st atus with the U.S. Im m ig rat io n a nd Natu ral iz at io n S erv ic e. Pet it io ne r’s fo rm I-4 85 ap pl ic at io n was de ni edon Sep te m be r 21 , 20 04 . Sin ce Se pt em be r 21 , 20 04 , pet it io ne r ha s re m ai ne d i n the Uni te d S tate s wi th no va li d i m m ig rat io n s ta tu s. At tria l p et it io ne r cl ai m edth athe ch os e to ab an do n h is pe rm an en t re si de ntap pl ic at io n b ecau se of t he ne ga ti ve tax co ns eque nc es of b eco m in g ape rm an en t re si de ntof t he Uni te d S ta te s.- 3 -

[* 3] nu m be r of y ears . Peti ti on er cl ai m s tha t i n o r aro un d 1 99 5 h e an d h is un cl e en te redin to anag reem en t wh ereb y pe ti ti on er’s trad in g p ro fit s wo ul d b e sp li t, 9 3% to hi s u nc le an d 7 % to pe ti ti on er, i n re tu rnfor hi s u nc le ’s for gi ve ne ss of t he $1 1,0 00 lo an . This pu rp orte d p ro fit -s ha rin g a gr eem en t h adno en d d at e. In ad di ti on , pet it io ne r’s un cl e h adno in vo lv em en t i n p et it io ne r’s tra di ng act iv it ie s. 1. Tax Returns for

19 98 Thro ug h 2 00 1 Pet it io ne r fai le d t o t im el y fil e h is tax returns forth e y ears at i ss ue to rep ort hi s trad in g i nc om e. Pet it io ne r’s 19 98 , 19 99 , and20 00 returns were fi le d o n J ul y 21 , 20 03 , andhi s 2 00 1 re tu rnwas fi le d o n J ul y 24 , 20 03 . In Ap ril 20 06 , bef or e th e ex pi rat io n o f th e p eri od s o f li m it at io n o n a ss es sm en t, the pa rti es ex ecu te d Fo rm s 8 72 , Con se ntto Ext en d the Tim e to Ass es s Tax , ext en di ng th e p eri od s o f li mit at io n o n a ss es sm en t fo r eac h o f th e y ears at i ss ue un ti l Dec em be r 31 , 20 07 . In Mar ch20 07 th e p art ie s ex ecu te d a n a dd it io na l Fo rm 87 2 t o e xt en d the pe rio ds of li mit at io n o n a ss es sm en t unt il Decem be r 31 , 20 08 . Each F orm 87 2 was si gn edby pe ti ti on er’s at to rn ey

Jo e B. Co x. 4 Pet it io ne r arg ue s tha t the se Fo rm s 8 72 were n otpro pe rly exec ut edan d thu s 4 were i nv al id . The rec or d d oe s n otsupp ort p et it io ne r’s as se rti on . Peti ti on er ex ecu te d aFo rm

28 48 , Powe r of

Att orne y an d Dec larat io n o f Rep res en tati ve , au th or iz in g J oe B. Co x t o b e h is rep res en ta ti ve , andMr. Co x s ig ne d the Fo rm s 8 72 to ex te ndth e p eri od s o f li m it at io n o n a ss es sm en t. Each of t he se Fo rm s 8 72 was al so si gn edby a repr es en ta ti ve of t he IRS. We the refo re fi ndth atth e p eri od s o f (co nt in ue d...)- 4 -

[* 4] 2. Pri orTax C ou rt P ro ceed in g On Se pt em

be r 17 , 20 07 , res po nd en t i ss ue d ano ti ce o f de fic ie nc y with
res pe ctto th e y ears at i ss ue . On Dece m be r 5, 2 00 7, p et it io ne r fi le d ape ti ti on with th is Co urt atdo ck etNo. 2 81 43 -0 7. Sh ortl y be fo re tria l was to co m

m en ce o n Ja nu ary 11 , 20 10 , th e p art ie s en te redin to a st ip ul at io n o f se tt le m en t wh ic h de ta il edth e fac ts of t he de fic ie nc y cas e. Am on g the fact s p et it io ne r ackno wled ge d
was th athe ha d re cei ve d i nc om e fro m acco un ts th atwere h el d i n h is rel at iv es ’
na m es . On Fe brua ry

25 , 20 10 , th e p art ie s en te redin to a de ci si on do cum en t wh ic h
se t fo rth th e fo ll owi ng de fic ie nc ie s i n i nc om e ta x a ndad di ti on s t o t ax : Add it io ns to tax Year Defi ci en cy Sec. 6 65 1( a)(1 ) Sec. 6 65 4 19 98 $5 9,4 23 $2 01 ,91 9 -0
- 19 99 3,9 62 ,41 1 1,2 09 ,68 1 -0
- 20 00 3,9 22 ,83 9 98 4,7 10 -0
- 20 01 1,4 75 ,79 1 36 9,9 39 $6 29

(...co nt inue d) 4 li mit at io n o n a ss es sm en t wer e v al id ly ext en de d.- 5 -

[* 5] The de ci si on do cum en t fu rth er s ti pu late d tha t i nt eres t wo ul d b e as se ss edas pr ov id edby law on th e d efi ci en ci es an d a dd it io ns to tax . On Apr il 13 , 20 10 , res po nd en t as se ss edth atin te res t i n the fol lo win g a m ou nt s: Year In te res t 19 98 $6 46 ,69 7.4 2 19 99 5,0 05 ,91 9.6 5 20 00 3,5 49 ,28 3.0 1 20 01 1,1 11 ,38 0.1 2 Into ta l, p et it io ne r’s unpa idtax li ab il it ie s fo r th e y ears at i ss ue were ap pr ox im at el y

$2 2 m il li on in20 10
. 3. Je op ardy

Levy On Ap ril 13 , 20 10 , res po nd en t as se ss edall un de rlyin g t ax de fic ie nc ie s an d ad di ti on s t o t ax for

th e y ears at i ss ue . 5 Ina de ta il ed13 -p ag e Offi ce o f Ch ie f Co un se l m em or an du m da te d J un e 1 0, 20 11 , IRS at to rn ey

Ju st inCam

po li et a rec omm en de d tha t a n ot ic e o f jeop ardy lev y

The de ci si onof t hi s C ou rt b ecame fin al on Feb ru ary 25 , 20 10 , andth e 5 pe rio ds of l im it at io n o n a ss es sm en t re m ai ne d s us pe nd edfor 60 day s, i .e., un ti l Apr il 26 , 20 10 . See s ec. 6 50 3( a)(1 ). Ther efo re, res po nd en t as se ss edall un de rlyin g t ax de fic ie nc ie s an d a dd it io ns to tax for th e y ears at i ss ue be fo re the li mit at io n p eri od s h adexpi red
.- 6 -

[* 6] be serve d. Mr . Cam po li et a su m

m ari zedth e b ack gr ou ndof p et it io ne r’s cas e as fol lo ws: Lee An g, a jo in t ci ti zenof S in gapo re an d B el iz e, is a ve ry su cces sf ul sec ur it ie s trad er l iv in g i ll eg al ly in the Uni te d S ta te s. Dur in g the tax y ears 19 98 th ro ug h 2 00 1, M r. Ang earn edm il li on s o f do ll ars intra di ng pro fit s * * * [b]uthe di d n otim m ed iate ly file in co m e ta x re tu rn s re po rti ng th is in co m e. It was n’t u nt il aft er the Serv ic e o pe ne d asubs ti tu te -fo r-re tu rnex am in at io n o f Mr. An g’s ta xabl e y ear 1 99 8 tha t h e subm it te d d el in qu en t re tu rn s fo r th e ta xabl e y ears 19 98 th ro ug h 2 00 2, dur in g J ul y of 2 00 3. Eachof t he returns , with the ex cep ti on of t he return fo r th e ta xabl e y ear 2 00 2, re po rte d asi gn ifi can t am ou ntof g ro ss in co m e, bu t Mr. An g t oo k the po si ti onth at93 % of t ha t i nc om e was all oc ab le to hi s u nc le , a fo rei gn nati on al , un de r a v erb al ag reem en t t o s pl itpro fit s, whi chMr. An g c la im edhe ne go ti at edwith h is un cl e sh ortl y aft er gr adua ti ng fro m

N.Y.U. bu si ne ss sch oo l i n 1 99 5. By tak in g thi s po si ti on , Mr. Ang dra st ic al ly redu cedhi s t ax ab le in co m e an d re po rte d rel at iv el y in si gn ifi can t i nc om e ta x l iabi li ti es forth e ta xabl e y ears 19 98 th ro ug h 2 00 1. [Em ph as is ad de d.] The m em or an du m

als o d et ai le d the fin di ng s o f anin ve st ig at io n c on du ct ed by the IRS Offi ce o f Ch ie f Co un se l dur in g p et it io ne r’s de fic ie nc y cas e. Thes e fin di ng s wer e b as edona si gn ifi can t num be r of di sc ov ery reque st s s erv edon pe ti ti on er, d oz en s o f th ird -p arty co nt act s, wi tn es s i nt erv ie ws, an d n um ero us subp oe na s. Th e IRS Offic e o f Ch ie f Co un se l’s i nv es ti ga ti on un co ve redth at

Mr. An g p la cedsi gn ifi can t as se ts , in cl ud in g m ark et ab le an d cl os el y -h el d s ecu rit ie s an d re al pro pe rty, in the na m es of c lo se fam il y m em be rs . In p art ic ul ar, h e p la cedcas h i n h is m ot he r’s HSBC ac co un t in ord er t o p ur ch as e a v al uabl e p ie ce o f pr op erty inQuee ns th atwas- 7 -

[* 7] ul ti m at el y

de ed edto hi s u nc le
. Mr. Ang als o p la cedm il li on s [ 6 ] of do ll ars of p ers on al fun ds inhi s m ot he r’s an d u nc le ’s Sch wab tra di ng acco un t. He trad edwith the se fun ds an d e arn eda si gn ifi can t am ou ntof p ro fit s b utfai le d t o re po rt t he se pro fit s o r di sc lo se th es e acco un ts to th e Servi ce. Mi ll io ns of d ol lars of f un ds inhi s m ot he r’s tra di ng acco un t wi re [s ic ] wire d o ff-s ho re. Mo strece nt ly, a la rg e [ 7 ] wire tra ns fer was m ad e fro m hi s m othe r’s acco un t t o s at is fy a m ortg ag e o n api ece o f pr op erty he ldinth e n am e o f 19 16 OceanAve, LLC. Mr. Ang als o p ur ch as eda si gn ifi can t am ou ntof s to ckintwo [ 8 ] cl os el y -h el d c or

po rat io ns (USA Tele po rt, In c. an d C -Sp ectra, In c.) an d p la cedth e m ajor ity

of thi s s to ckinth e n am es of f am il y m em be rs , At tria l p et it io ne r adm it te d tha t a h ou se was p ur ch as edinQuee ns inhi s 6 un cl e’s na m e, bu t cl ai m edth atitwas adi strib ut io n t o h is un cl e und er the ir p ro fit
sh ari ng ag reem en t. Pet it io ne r, ho wev er, ad m it s tha t h is un cl e can no t trav el to th e Uni te d S tate s b ecau se of h eal th pro bl em s. Inad di ti on , th e Offi ce o f Ch ie f Co un se l’s i nv es ti ga ti on rev eal edth atth e p ro pe rty was o rig in al ly pur ch as edinth e na m e o f pe ti ti on er’s m ot he r, Ngaw Che e Ang , andwas l at er tran sf erre d t o h is un cl e. The i nv es ti ga ti on furth er re ve al edth atpe ti ti on er co ns is te nt ly sup pl ie d the ad dr es s o f th e Que en s p ro pe rty as h is ho m e ad dr es s o n d oc um en ts subm it te d t o ba nk s an d o th er fi na nc ia l i ns ti tu ti on s. Fo r ex am pl e, acc or di ng to Rev enue Offic er Ma rkSk in ne r’s cas e n ot es fro m 7 Apr il 26 , 20 11 , IRS i nv es ti ga ti on s re ve al edth at$1 m il li on fro m th e IB ac co un t ha d b eentra ns ferr edto a Ch arl es Sch wab acco un t i n M s. An g’s n am e, an d s ev eral wire tra ns fers ha d b eenm ad e fro m th e Ch arl es Sch wab acco un ts to for ei gn ba nk acco un ts . At tri al pe ti ti on er t es ti fie d tha t al th ou ghhe rou ti ne ly tran sf erre d m on ey be twee n a cco un ts to cle ar trad es , pay real e st at e d ev el op m en t co st s, an d p ay ho us eh ol d e xp en se s, h e h adno t tran sf erre d any mon ey

ab ro adinth e p as t n in e y ears , asi de fro m

a $5 0,0 00 tra ns fer t o h is fathe r an d u nc le . Howev er, we fo un d pe ti ti on er’s t es ti m on y

to be sel f-s erv in g, ev as iv e, an d i m pr ob ab le , andwe de cl in e to acce ptsu chun co rro bo rat edtes ti m on y as tru e. See To ka rs ki v. Co m m is si on er, 87 T.C. 74 , 77 (19 86 ). 19 16 OceanAve., LLC, o wns th ree r eal est at e p ro pe rti es inBro ok lyn, New 8 York, o ne of wh ic h i s a r eal est at e p ro ject c urren tl y

un de r de ve lo pm en t at19 16 Ocean Aven ue .- 8 -

[* 8] in cl ud in g h is m ot he r, Ngaw Che e Ang [(s om et im es refe rredto as Ms . Ang )], an d u nc le , Yon g S ai Ang
. [ 9 ] The in ve st ig at io n fu rth er re ve al edth atpe ti ti on er h adno ass et s i n h is na m e 1 0
an d tha t al l o f hi s as se ts (cas h, s ecu rit ie s, re al pro pe rty, etc.) were he ldinth e na m es of f

am il y m em be rs an d n om in ee en ti ti es . One of t he fin an ci al acco un ts th atth e Offi ce o f Ch ie f Co un se l d is co ve red du rin g i ts in ve st ig at io n was anon li ne Int erac ti ve Bro ke rs (IB) t rad in g a cco un t tha t pe ti ti on er h adop en edinhi s m othe r’s na m e. The IB acco un t was fun de d wi th wire tra ns fers fro m

acco un ts he ldinhi s u nc le ’s nam e an d fr om Glo ba l Ag gr es si ve Sp ecu la ti ve Fund , an e nt ity pe ti ti on er o rg an iz edan d fu nd edto co nduc t p ers on al tra di ng act iv it ie s. With reg ardto th e IB ac co un t, the Offic e o f Ch ie f Co un se l
co nc lu de d tha t At v ari ou s t im es fro m

20 06 th ro ug h the pre se nt , fun ds ha ve be en wire d i nt o a ndou t o f th e IB ac co un t fr om nu m ero us so ur ces , in cl ud in g d om es ti c an d o ffs ho re b an k a cco un ts he ldinth e n am es of Mr. An g’s fa m il y

m em be rs . [ 1 1 ]
At tria l p et it io ne r adm it te d tha t h e h adreg is te redva rio us in ve st m en t s ha res 9 in hi s u nc le ’s nam e wit h the Secu rit ie s an d Ex ch an ge Co m m is si on . At tria l p et it io ne r admit te d tha t h e h as no ba nkacco un ts inhi s n am e 1 0 withi n the Uni te d S ta te s. The in ve st ig at io n u nc ov eredth atinon e o f th es e tr an sf ers , $2 50 ,00 0 h ad 1 1 be enwire d i nt o the IB acc ou ntfro m anacco un t wh ic h h adbe enop en edus in g h is (co nt in ue d...)- 9 -

[* 9] Altho ug h the IB acc ou ntis he ld , inna m e, by Mr. Ang ’s m ot he r, Mr. An g i s i n c on tro l o f th e acc ou nt , andas e xp la in edab ov e, us es th e fu nd s i n the acco un t fo r hi s o wn p ers on al in ve stm en t pu rp os es . A nu m

be r of ch eck s an d re cen t wi re tran sf ers were p ai d t o Mr. An g a ndto en ti ti es * * * co nt ro ll edby Mr. Ang . Mor eo ve r, itis cl ear t ha t M r. Ang ha s co nt ro l o ve r th e fu nd s i n the IB acc ou nt . Whi le Ngaw C he e Ang li ve s i n S in gapo re, the IP ad dr es se s u se d t o lo g i nt o the IB acc ou ntin di cat e th atall on li ne act iv ity ha s t ak enpl ace in an d a ro un d the gre at er New Yo rkCit y areawher e Mr. An g l iv es . [ 1 2 ] As o f Feb ru ary 20 11 , th ere was rou gh ly $3.4 mil li on inequi ty (cas h a ndsec ur it ie s p os it io ns ) in th e IB ac co un t. Giv enMr. An g’s kn owl ed ge of t he Serv ic e’s co ll ect io n a ct iv ity , coupl edwith the eas e an d fr eque nc y

with wh ic h h e m ov es m on ey inan d o utof t hi s ac co un t (in cl ud in g o ffs ho re), i t i s h ig hl y un li ke ly that the se fun ds wil l re m ai n in th is acco un t fo r anex te nd edpe rio d o f ti m e. On the ba si s o f th es e fac ts , Mr. Cam po li et a rec omm en de d tha t the IRS t ak e imm ed ia te act io n t o c ol le ctfro m pe ti ti on er’s num ero us no m in ees , in cl ud in g the IB
acco un t h el d i n h is m ot he r’s na m e. On Au gu st18 , 20 11 , res po nd en t s erv eda jeop ardy lev y on th e IB ac co un t. 1 3 (...co nt in ue d) 1 1 un cl e’s pa ss po rt a ndfun de d wi th a $2 50 ,00 0 c he ck . Bot h the si gn atur e o n the pa ss po rt a ndth e si gn atur e o n the ch eck , ho wev er, h adbe enfor ge d. At tria l p et it io ne r admit te d tha t h e h as ful l co ntro l o ve r th e IB ac co un t, an d 1 2 th athi s m ot he r, who do es no t s pe akEng li sh or kno w ho w to us e a co m pu te r, is no t in vo lv edwith the m an ag em en t o f th e acc ou nt . The adm in is tra ti ve reco rdis am bi gu ou s as to whet he r th e jeop ardy lev y 1 3 was serve d o n Au gu st17 , 20 11 , or Au gu st18 , 20 11 . Howev er, MarkSk in ne r, th e rev enue off

ic er wh o h adserve d the jeop ardy lev y on pe ti ti on er’s IB a cco un t,

(co nt in ue d...)- 10 -

[* 10 ] On Au gu st23 , 20 11 , res po nd en t i ss ue d aLett er 2 43 9, No ti ce o f Je op ardy Lev y an d R ig htof Ap pe al , to pe ti ti on er. The Lett er 2 43 9 n ot ifi edpe ti ti on er tha t res po nd en t h adlev ie d upo n the IB acc ountbe cau se res po nd en t h adde te rm in ed th atpe ti ti on er was m ov in g a ss et s o utof t he Gov ern m en t’s re ach
. 1 4 4. Co ll ect io n Du e Pro ces s Pr oc eed in gs On Se pt em

be r 20 , 20 11 , pet it io ne r se nta se lf- m ad e d oc um en t en ti tl ed

“ Reque stforAdm in is tra ti ve Rev ie w of J eo pa rdy Levy” to res po nd en t, i n wh ic h pe ti ti on er s ta te d tha t h e was inth e p ro ces s o f ne go ti at in g an i ns ta ll m en t p aym en t sc he du le to m eethi s Fe de ral tax pa ym en t o bl ig at io ns when th e jeop ardy lev y was se rv ed
. On Sep te m

be r 22 , 20 11 , pet it io ne r m ai le d aFo rm 12 15 3, Re qu es t fo r a 1 5 Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g, t o re sp on de nt . Peti ti on er p ro po se d

(...co nt in ue d) 1 3 cred ib ly test ifi edat t ria l tha t i t h adbe endate d Au gu st17 , 20 11 , bec au se jeop ardy le vi es requi redpri orap pr ov al fro m a gr oup m an ag er, b utth atitwas n otm ai le d un ti l Au gu st18 , 20 11 . Mr. Sk in ne r’s te st im on y is furth er co rro bo rat edby his no te s i n the Int eg rat edCo ll ect io n S y st em hi st ory tra ns cri pt . Co nt rary to p et it io ne r’s as se rti on s, the Lett er 2 43 9 was si gn edby a 1 4 rep res en ta ti ve of t he IRS, Mr . Ski nn er, an d i nc lu de d h is co nt acttel ep ho ne nu m be r. Ina m em or an du m

of l aw da te d Dec em

be r 9, 2 01 3, re sp on de ntco nc ed ed 1 5 th atpe ti ti on er’s l et te r was a pr op er re qu es t fo r adm in is tra ti ve rev ie w un de r se c. 74 29 (a)( 2)
.- 11 -

[* 11 ] anoff

er-i n- co m pr om is e as a co ll ect io n a lt ern at iv e an d o bjec te d t o the jeop ardy lev y . a. Pet it io ne r’s Offer- in -Co m pr om is e On Oct ob er 6 , 20 11 , pet it io ne r’s th enatt orne y , Ste ph enB. Kass , fax eda m es sa ge to res po nd en t re qu es ti ng withd rawal of t he lev y . On Oct ob er 2 0, 2 01 1, pe ti ti on er m ai le d t o re sp on de nta Fo rm 65 6, Offe r in Co m

pr om is e, of

feri ng to co m pr om is e h is unpa idtax li ab il it ie s fo r $8 ,87 7,9 00 ba se d o n d oubtas t o co ll ect ib il ity . The u np ai d t ax li ab il it ie s wer e to be pa idin10 1 m on th ly in st al lm en ts of $ 87 ,90 0. At ta ch edwas aFo 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, an d fi na nc ia l do cu m en ts whi chpu rp orte d t o s ho w pet it io ne r’s ne t wo rth to be $8 ,88 2,4 11
. Pet it io ne r ba se d h is off

er o n the fol lo win g a ss et s: (1 ) $1 ,41 1 c as h fr om

hi s b an k a cco un ts ; (2 ) su ndry

ass et s h e v al ue d a t $ 12 ,00 0; (3 ) a Sp y de r rac e carva lu edfortax purp os es at $ 48 ,00 0; (4 ) anin te res t i n 1 91 6 Oce anAve., LLC, whi chhe va lu edat $ 3,2 72 ,00 0;
an d (5 ) in ve stm en t ac co un ts (no de ta il edli st in g p ro vi de d) to ta li ng $5 ,54 9,0 00
.- 12 -

[* 12 ] On Oct ob er 3 0, 2 01 1, re sp on de ntsen t p et it io ne r a l et te r st at in g tha t h e wou ldbe co nt act edreg ard in g h is off er-i n- co m pr om is e b y

Jan ua ry 28 , 20 12 . The le tt er i nf orm edhi m

th athe was re qu ire d t o m ak e th e p ro po se d $ 87 ,90 0 m on th ly pa ym en ts whi le res po nd en t ev al ua te d h is off er-i n- co m pr om is e. The l et te r fu rth er st at edth at“ [f]ail ur e to m ak e th e p aym en ts m ay res ul t i n re tu rn in g your of fer witho utfurth er co ns id erat io n.” Pet it io ne r ne ve r m ad e an y of t he pro po se d pa ym en ts . The cas e was ass ig ne d t o S et tl em en t Offi cer J oyce Pech era ( Set tl em en t Offi cer P ech era) on Nov em be r 28 , 20 11 . On Nov em be r 28 an d Dec em

be r 19 , 20 11 , res po nd en t m ai le d l et te rs to pe ti ti on er i nf orm in g h im

th athi s re qu es t fo r a co ll ect io n due pro ces s (C DP) h eari ng ha d b eenrece iv edan d tha t Se tt le m en t Offi cer P ech era wo ul d b e h is po in t o f co nt act . On Dec em

be r 6, 2 01 1, p et it io ne r cal le d S et tl em en t Offi cer P ech era, wh o in fo rm edhi m

th atalt ho ug h ano ti ce o f le vy hadbe enserve d, the m on ey wou ldbe

“ on ho ld ” unt il sh e m ad e a d eci si on on th e o ffer -in -co m pr om is e, un le ss co ll ect io n be cam e jeop ard iz ed . Thatsame day , Set tl em en t Offi cer P ech era a dv is edMr. Kas s th atpe ti ti on er was requi redto m ak e h is pro po se d m on th ly paym en ts an d tha t i f th ey were n otm ad e, sh e wou ldreturn the off er-i n- co m pr om is e.- 13 -

[* 13 ] Upo n re vi ew of

pe ti ti on er’s o ffer -in -co m pr om is e, Settl em en t Offi cer Pech era n ot edth atwhi le pe ti ti on er p ro vi de d ali stof h is ba nkacco un ts an d ba lanc es , he d idno t i nc lu de th e und erl y in g b an k s tate m en ts . On Ja nu ary 9, 2 01 2, Set tl em en t Offi cer P ech era s en t t o p et it io ne r a l et te r en ti tl ed“ App eal s R ecei ve d You r Reque stfora Co ll ect io n Du e Pro ces s Hea rin g” , inwhi chsh e in fo rm edhi m th atanin -p ers on CDP h eari ng ha d b eensch edul edforFeb ru ary 9, 2 01 2. Sh e furth er i nf

orm edpe ti ti on er tha t h e n eed edto pro vi de sp eci fic fin an ci al do cu m en ts withi n 1 4 d ay s o f th e is su an ce o f th e le tt er an d tha t h e n eed edto imm ed ia te ly be gi n p ay in g the pro po se d m on th ly ins ta ll m en ts of $ 87 ,90 0. At p et it io ne r’s reque stth e d ead li ne to subm itth e fi na nc ia l d oc um en ts was ex te nd edto Feb ru ary 23 , 20 12 , andth e CDP h eari ng was re sc he du le d fo r Mar ch8, 20 12 . Sett le m en t Offi cer P ech era r ecei ve d a dd it io na l d oc um en ta ti onfro m pe ti ti on er an d re vi ewediton Marc h 7 , 20 12 . On th e b as is of apre li m in ary an al y si s o f th e d oc um en ta ti on , Set tl em en t Offi cer P ech era d et erm in edth at pe ti ti on er h addi ss ip at ed$4 m il li on fro m th e IB ac co un t, $ 27 ,75 2.7 1 fr om an App le Ban k a cco un t, an d $ 27 ,00 0 o f sa le s p ro ceed s fo r a Ferrari
. The ad di ti on al do cu m en ta ti on , ho wev er, d idno t en ab le Set tl em en t Offi cer Pech era t o i nd ep en de nt ly veri fy pe ti ti on er’s fi na nc ia l s itua ti on fora nu m be r of
reas on s. Fi rs t, the in fo rm at io n p et it io ne r pr ov id edwas the same m at eri al th atwas- 14 -

[* 14 ] pr es en te d wi th th e o ffer -in -co m pr om is e. Her n ot es st at e th at“ I’m un ab le to
us e th is in fo rm at io n a s TP [i .e., pet it io ne r] didno t p ro vi de de ta il s o n s ou rce o f in co m e an d l iabi li ti es . TP creat edanex cel sh eeton a y earl y ba si s wh ic h I h av e n o way of v eri fy in g the in fo rm at io n p ro vi de d.” Seco nd , whi le pe ti ti on er s ub m it te d In te rn etpri nt ou ts of h is len di ng acco un ts , he d idno t p ro vi de in fo rm at io n s ho win g th e to ta l i nv es tm en ts inth e acc ou nt s. Th ird , pet it io ne r fai le d t o p ro vi de do cu m en ta ti on to ve rif

y th athe he ld$2 m il li oninass et s i n thr ee o ffs ho re b an k
acco un ts at B an k o f Lux em bo ur g, Cr ed itSu is se , andPic te t Se curit ie s. Fo urth , pe ti ti on er as se rte d tha t h e h el d a5% i nt eres t i n a n e nt ity cal le d “ Po lm ero Trus t”
an d tha t h is un cl e h el d the rem ai ni ng 95 %, bu t p ro vi de d n o d oc um en ta ti on to subs tant ia te th e cl ai m . Fin al ly, pe ti ti on er fa il edto pro vi de do cu m en ta ti on to 1 6
es tabl is h the va lu e o f th ree r eal est at e p ro pe rti es own edby 191 6 Oce anAve., LLC. b. CDP Hear in g On M arch 8, 2 01 2, Se tt le m en t Offi cer P ech era h el d the CDP h eari ng with pe ti ti on er an d M r. Kass . Sett le m en t Offi cer P ech era e xp la in edth atbe cau se of t he
am ountat i ss ue , acce pt an ce o f pe ti ti on er’s o ffer -in -co m pr om is e wou ldrequi re Thi s p ur po rte d 9 5/ 5% o wne rs hi p a rran ge m en t i s i n c on fli ctwith 1 6 pe ti ti on er’s t es ti m on y

th ro ug ho uttri al of apu rp orte d 9 3/ 7% o wne rs hi p arra ng em en t wi th hi s u nc le
.- 15 -

[* 15 ] ap pr ov al by IRS he ad qu art ers an d the Department o f Ju st ic e (DOJ) . The
en ti re ap pr ov al pro ces s wo ul d t ak e atlea stsi x m on th s. Pet it io ne r as ke d Set tl em en t Offi cer P ech era t o e xp ed it e th e p ro ces si ng of h is off er-i n- co m pr om is e. Indi sc us si ng th e o ffer -in -co m pr om is e, pe ti ti on er d is cl os edth atm os t o f hi s as se ts were h el d i n the na m es of r el at iv es , var io us LLCs, an d tru st s. Pet it io ne r ex pl ai ne d tha t An g & Ang , LLC, was a h ol di ng co m pa ny whic h o wne d n um ero us as se ts , in cl ud in g the off

sh or e b an k a cco un ts , 95 % of Oce anAve., LLC, an d the le vi edIB acc ou nt , whi chpe ti ti on er s tate d was he ldinhi s m ot he r’s na m e. Pet it io ne r al so ass ert edth athe he lda 7% i nt eres t i n An g & Ang , LLC, with hi s un cl e o wni ng th e b al an ce. Howe ve r, pe ti ti on er s ta te d fo r pu rp os es of the off er-i nco m pr om is e, he an d h is un cl e ag reedto co ns id er the ass et s as 10 0% o wne d b y pe ti ti on er. W ith re sp ectto hi s fi na nc ia l s itua ti on , pet it io ne r ex pl ai ne d tha t h e h adno in co m e. In st ead , he p ai d h is $9 ,00 0 p er m on th li vi ng expe ns es by tak in g fu nd s fro m Ang & Ang , LLC. Speci fic al ly, he st at edth atth e m on ey cam e fro m

th e IB
acco un t as well as o th er i nv es tm en t ac co un ts . Sett le m en t Offi cer P ech era r ep li ed th atif An g & Ang , LLC, was a p artne rs hi p, the m on ey he rece iv edwas a

“ di strib ut io n o r a draw”. Pet it io ne r rep li ed : “ Bu t i t’s al l i n o ne um br el la ”.- 16 -

[* 16 ] Pet it io ne r fai le d t o b rin g d oc um en ta ti on to th e CDP h eari ng to subs tant ia te hi s o wne rs hi p c la im s o r hi s as se t v al ua ti on s. Set tl em en t Offi cer P ech era g ran te d pe ti ti on er ad di ti on al ti m e to pro vi de th e d oc um en tati onsh e n eed edinord er t o pr op erl y ev al ua te pe ti ti on er’s as se ts an d h is co ll ect io n p ot en ti al . The p art ie s ag reedto a du e d at e o f Mar ch30 , 20 12 . Sett le m en t Offi cer P ech era t ol d p et it io ne r to cal l h er fo r anex te ns io n i f he co ul d n otm ak e th atde ad li ne . Dur in g thi s m eet in g the pa rti es ne ve r di sc us se d the no m in ee an d jeo pa rdy le vy det erm in at io n. Al th ou gh Settl em en t Offi cer P ech era was aware o f pe ti ti on er’s reque stforadm in is tra ti ve rev ie w of the jeop ardy lev y , pet it io ne r’s reque stwas n otact edup on . c. Set tl em en t Offi cer P ech era’s Re jecti onof P et it io ne r’s Offer- in -Co m

pr om is e Pet it io ne r di d n otpro vi de th e reque st eddo cu m en ta ti on by the Marc h 3 0, 20 12 , dea dl in e, no r di d h e reque stad di ti on al ti m e to do so . As a res ul t, 1 7 Set tl em en t Offi cer P ech era was un ab le to ev al ua te hi s co ll ect io n p ot en ti al an d reject edhi s o ffer -in -co m

pr om is e. On Ap ril 17 , 20 12 , Set tl em en t Offi cer P ech era cl os edth e cas e.

At tria l M r. Kass tes ti fie d tha t p et it io ne r di d n otord er an ap pr ai sa l fo r th e 1 7 real est at e d ev el op m en t at19 16 OceanAven ue un ti l Dec em be r 20 12
.- 17 -

[* 17 ] On the ba si s o f th e Offi ce o f Ch ie f Co un se l m em or an du m , th e CDP h eari ng , an d h er o wn i nv es ti ga ti on , Set tl em en t Offi cer P ech era d et erm in edth atth e jeop ardy lev y was re as on ab le . Purs ua ntto he r own in ve st ig at io n, Se tt le m en t Offi cer P ech era d is co ve redth atth e b ui ld in g a t 1 91 6 Oce anAven ue ha d b een li st edforsal e--afactth atpe ti ti on er h adno t d is cl os eddu rin g the CDP co nf eren ce on Marc h 8 , 20 11 . After c lo si ng th e cas e, Settl em en t Offi cer P ech era r eque st ed ap pr ov al to su st ai n the jeop ardy lev y act io n, s ta ti ng : “ Rev ie w of the fact s pr es en te d s ho ws TP i s p la ci ng hi s as se ts be y on d the reac h o f th e Gov ern m en t b y tra ns ferr in g i t t o n om in ees an d a lt er eg o e nt it ie s, thu s jeo pa rdy lev y is warran te d”
. Set tl em en t Offi cer P ech era i ss ue d ano ti ce o f de te rm in at io n o n Ap ril 25 , 20 12 . In the no ti ce, Set tl em en t Offi cer P ech era v eri fie d tha t n ot ic e an d d em an d ha d b eenis su edan d tha t n ot ic e o f pe ti ti on er’s ri gh t t o aCDP rev ie w hadbe en ti m el y is su edpu rs ua ntto sec ti on 63 30 (f). Ho wev er, Set tl em en t Offi cer P ech era st at ederro ne ou sl y

th atpe ti ti on er’s reque stforadm in is tra ti ve rev ie w of the jeop ardy lev y , dat edSep te m

be r 20 , 20 11 , was u nt im el y . W ith re sp ectto pe ti ti on er’s o ffer -in -co m

pr om is e, Set tl em en t Offi cer P ech era s tate d: “ W e are un ab le to pro pe rly eval ua te y ou r of fer i n c om

pr om is e wit ho utth e in fo rm at io n we reque st ed . There fo re y ou r OfferinCo m pr om is e is reject ed .” W ith re sp ectto th e jeop ardy lev y , sh e st at ed : “ The fact s p res en te d andin fo rm at io n c on ta in ediny ou r- 18 -

[* 18 ] admin is tra ti ve fil e m etou r cri te riaun de r whi cha jeop ardy lev y canbe is su ed . There fo re, the is su an ce o f th e Not ic e o f Je op ardy Levy was reas on ab le in y ou r cas e.” 5. Ms . Ang ’s Ban krup tc y Pro ceed in gs Whi le hi s o ffer -in -co m

pr om is e was pe nd in g, p et it io ne r so ug htto pre ve nt co ll ect io n o n a no th er fro nt . On Oct ob er 7 , 20 11 , sh ortl y aft er re sp on de ntha d le vi edup on th e IB ac co un t, p et it io ne r’s m othe r fi le d fo r bankrupt cy pro te ct io n un de r ch ap te r 11 of the Ban krup tc y Co de to pre ve ntth e IRS fro m sei zi ng th e m on ey inth e acc ou nt . At th e en d o f Ju ly 201 2, M s. An g’s b an krup tc y cas e was di sm is se d a ndInt erac ti ve Bro ke rs rel eas ed$1 .9 m il li on to th e IRS . Im m ed ia te ly th erea fte r, an d b efo re the IRS co ul d c ol le ctth e fu nd s, M s. An g a ga in fil edfor ba nkrupt cy

rel ie f, th is ti m e und er ch ap te r 13 of t he Ban krup tc y Co de
. Altho ug h p et it io ne r an d h is m ot he r ha d s ep arat e at to rn ey s re pr es en ti ng th em , pet it io ne r m ad e al l the de ci si on s i n h er b an krup tc y pro ceed in gs . Mor eo ve r, pe ti ti on er’s at to rn ey s ra th er tha n M s. An g’s at to rn ey s d eal t ex te ns iv el y with the Dep artm en t o f Ju st ic e in co nn ect io n wi th Ms . Ang ’s ban krup tc y cas e. Fin al ly, bo th pe ti ti on er’s an d h is m othe r’s at to rn ey s wer e p ai d fr om th e sa m e “ who le fam il y um br el la ”.- 19 -

[* 19 ] OPINION Thi s ca se in vo lv es a rev ie w of re sp on de nt ’s det erm in at io n t o p ro ceedwith th e co ll ect io n o f pe ti ti on er’s unp ai d t ax li ab il it ie s fo r 19 98 th ro ug h 2 00 1. I. CDP Re vi ew of

Jeo pa rdy Levy Co ll ect io n i s i n jeo pa rdy

when at l eas t o ne of t he fol lo win g c on di ti on s ex is ts : (1 ) “ ‘T he tax pay er i s o r ap pe ars to be de si gn in g qui ck ly to d ep artfro m th e Uni te d S tate s o r to co nc eal hi m se lf o r he rs el f’”; (2 ) “ ‘T he tax pa y er i s o r ap pe ars to be de si gn in g qui ck ly to p la ce h is , or h er, o r it s p ro pe rty beyondth e rea chof t he Gov ern m en t ei th er b y

rem ov in g i t fr om

th e Uni te d S ta te s, b y

co nc eal in g i t, b y di ss ip at in g i t, o r by tran sf erri ng itto othe r pe rs on s’”; o r (3 ) “ ‘T he tax pa y er’s fin an ci al so lv en cy

is or app ears to be im

pe ril ed .’ ” Pri nc e v . Comm is si on er, 1 33 T.C. 27 0, 2 76 -2 77 (20 09 ) (quo ti ng sec ti on1.6 85 1- 1( a)(1 ), In co m e Tax Reg s.). Whe n the Co m

m is si on er d et erm in es th atth e co ll ect io n o f ta x i s i n jeo pa rdy , th e ta xp ay er i s n otaffo rd eda pr io r op po rtu ni ty for a h eari ng pu rs ua ntto sec ti on 63 30 to ch al le ng e th e ap pr op ria te ne ss of t he lev y be fo re i t i s i ss ue d. Se e se c. 63 30 (f)(1 ). Howev er, s ect io n 6 33 0( f)(4 ) pr ov id es th atth e ta xp ay er ag ai ns t wh om a jeop ardy

lev y is is su edsh al l b e g iv enth e o pp ortu ni ty for the he ari ng de sc rib ed in sec ti on 63 30 withi n areas on ab le ti m e aft er the lev y . Thu s s ub se ct io ns (d) an d (f) o f se ct io n 6 33 0 c on fer upo n atax pa y er ag ai ns t wh om a jeop ardy

lev y ha s b een- 20 -

[* 20 ] is su edanun qu al ifi edrig htto a po st le vy hear in g (i f ti m el y reque st ed ) an d jud ic ia l re vi ew by thi s C ou rt. Bu ss el l v . Comm is si on er, 1 30 T.C. 22 2, 2 36 -2 37 (2 00 8) . As pa rt o f th e h eari ng , th e Co m m is si on er m

us t v eri fy “ th atth e requi rem en ts of a ny app li cab le law o r admin is tra ti ve pro cedur e h av e b eenm et .” Sec. 6 33 0( c)(1 ). 1 8 If the Secr et ary m ak es a fi nd in g tha t the co ll ect io n o f ta x i s i n jeo pa rdy , no ti ce an d d em an d fo r imm ed ia te pa ym en t o f th e ta x m ay be m ad e. Sec. 6 33 1( a). Purs ua ntto sec ti on 74 29 (a)( 2) , a tax pa y er m ay see k a dm in is tra ti ve rev ie w of a jeop ardy lev y m ad e und er s ect io n 6 33 1( a) wi th in 30 da y s o f rec ei vi ng writ te n no ti ce o f th e le vy. Whe n s uc h areque stforrev ie w is ti m el y m ad e, th e Sec ret ary sh al l d et erm in e whe th er the jeop ardy lev y “ is reas on ab le un de r th e ci rcu m st an ces ”. Sec. 7 42 9( a)(3 ). Reas on ab le ne ss is so m ethi ng m or e th an“ ‘not arb itrary or cap ric io us ’” andso m ethi ng les s tha n “ ‘sub st an ti al ev id en ce’.” McWil li am s v . Comm is si on er, 1 03 T.C. 41 6, 4 22 (19 94 ) (quo ti ng Davi s v . Uni te d St at es , 51 1 F . Sup p. 1 93 , 19 7 (D. Kan . 19 81 )). The Co m m is si on er b ears th e
Bec au se anApp eal s o ffi cer m us t co ns id er co m

pl ianc e wit h app li cab le law 1 8 in a se c. 63 30 de te rm in at io n re ga rd le ss of wh ethe r itis rai se d b y th e p ers on ch al le ng in g the co ll ect io n a ct io n a t the App eal s h eari ng , th is Co urt wi ll rev ie w th e App eal s o ffi cer’s v eri fic at io n u nd er s ec. 6 33 0( c)(1 ) witho utreg ardto whet he r th e ta xp ay er ra is editat t he App eal s h eari ng . Hoy le v. Co m m is si on er, 1 31 T.C. 19 7, 20 2- 20 3 (2 00 8)
.- 21 -

[* 21 ] bu rd enof p ro vi ng th atth e le vy was “ reas on ab le un de r th e ci rcu m st an ces ”. Sec. 7 42 9( g)
. Inth e n ot ic e o f de te rm in at io n S et tl em en t Offi cer P ech era e rro ne ou sl y de te rm in edth atpe ti ti on er’s reque stfor adm in is tra ti ve rev ie w of the jeop ardy lev y , da te d S ep te m

be r 20 , 20 11 , was u nt im el y . Peti ti on er, h owe ve r, was n otpre jud ic ed th ereb y forsev eral reas on s d is cu ss edbe lo w. Furt he rm or e, fo r th es e sa m e rea so ns , we do no t b el ie ve th ata rem an d i ns tru ct in g re sp on de ntto co nduc t a r ev ie w of the jeop ardy lev y pu rs ua ntto sec ti on74 29 wou ldbe pro du ct iv e. 1 9 Fi rs t, i n re qu es ti ng adm in is tra ti ve rev ie w of ajeop ardy lev y , a tax pa y er i s requi redto subm itev id en ce tha t the lev y is un reas on ab le . Sec. 3 01 .74 29 -2 , Pro ced . & Adm in . Reg s. (“ [A reque stforth e rev ie w of ajeop ardy lev y un de r se ct io n 7 42 9( a)(2 )] sha ll be inwrit in g, s ha ll st at e fu ll y th e rea so ns forth e reque st , an d s ha ll be supp orte d b y su chev id en ce as wil l en ab le th e d is tri ctdi rect orto m ak e th e red et erm in at io n d es cri be d i n s ect io n 7 42 9( a)(3 ).”). Pet it io ne r’s reque stfor adm in is tra ti ve rev ie w di d n otin cl ud e an y supp orti ng ev id en ce an d c on ta in edon ly hi s s umm ary de ni al th athe was m ov in g a ss et s o utof t he Gov ern m en t’s re ach
.
Inou r di sc ret io n, we m ay rem an d aco ll ect io n c as e to th e App eal s Off ic e 1 9 fo r fu rth er adm in is tra ti ve rev ie w. Marl ow v . Comm is si on er, T.C. Mem o. 20 10 -1 13 , 99 T.C.M. (CCH) 1 46 2, 1 46 6- 14 67 (20 10 ) (ci ti ng Hoyle v. Co m m is si on er, 1 31 T.C. 19 7 (2 00 8) ). W e d ecl in e to do so he re.- 22 -

[* 22 ] Seco nd , du rin g h is CDP h eari ng , pet it io ne r co ul d h av e, bu t d idno t, ch al le ng e th e ap pr op ria te ne ss of t he jeop ardy lev y . See s ec. 6 33 0( c)(2 )(A) (p ro vi di ng th atdu rin g aCDP h eari ng , a tax pa y er m ay rai se any rel ev an t i ss ue with reg ardto th e co ll ect io n a ct iv it ie s, i nc lu di ng ch al le ng es to th e ap pr op ria te ne ss of
co ll ect io n a ct io ns ). W

hi le pe ti ti on er arg ue d i n h is CDP h eari ng reque stth atth e jeop ardy lev y was i napp ro pr ia te , du rin g h is CDP h eari ng , he aba nd on edth e is su e an d c ho se to foc us ex cl us iv el y on hi s o ffer -in -co m

pr om is e. 2 0 Thi rd , as p artof t he CDP rev ie w, Sett le m en t Offi cer P ech era i nd ep en de nt ly
co nc lu de d tha t the jeop ardy lev y was re as on ab le . W e rev ie w Set tl em en t Offi cer Pech era’s d et erm in at io n fo r ab us e o f di sc ret io n. See Se go v. Co m m is si on er, 1 14 2 1 On b rie f pe ti ti on er ch al le ng es th e jeop ardy lev y on th e b as is th atitwou ld 2 0 cau se hi m

eco no m ic ha rd sh ip . See s ec. 3 01 .63 43 -1 (b )(4 ), Pro ced . & Adm in
. Reg s. Pet it io ne r, ho wev er, d idno t ra is e th e is su e o f eco no m ic hard sh ip at h is CDP h eari ng no r as a ba si s fo r hi s o ffer -in -co m pr om is e. Ther efo re, p et it io ne r m ay no t ra is e th is is su e fo r th e fi rs t t im e b efo re thi s C ou rt. Se e Gia m el li v. Co m m is si on er, 1 29 T.C. 10 7, 1 15 (20 07 ). Res po nd en t ar gu es sec . 74 29 (b )(2 )(A) p recl ud es th is Co urt fr om 2 1 rev ie win g the reas on ab le ne ss of ajeop ardy lev y . W e d is ag ree. Se c. 74 29 (b )(2 )(A) p ro vi de s tha t, as a ge ne ral m at te r, th e Dis tri ctCo urts of the Uni te d St at es ha ve ex cl us iv e juri sd ic ti on ov er an y civ il act io n b ro ug htun de r se c. 74 29 (b ). Inth is cas e, we de riv e o urjuri sd ic ti on to rev ie w res po nd en t’s ac ti on s, i nc lu di ng th e rea so nabl en es s o f th e jeop ardy lev y , un de r se c. 63 30 (d ). See Bu ss el l v
. Co m m is si on er, 1 30 T.C. 22 2, 2 36 -2 37 (20 08 ) (h ol di ng th atsec . 63 30 (d ) co nf ers up on a ta xp ay er an un qu al ifi edrig htto a po st le vy hear in g a ndjud ic ia l re vi ew by th is Co urt o f, in te r al ia , whet he r th e Co m m is si on er i m

pr op erl y lev ie d upo n the (co nt in ue d...)- 23 -

[* 23 ] T.C. 60 4, 6 10 (20 00 ). An ab us e o f di sc ret io n i s d efi ne d a s an y act io n tha t i s un reas on ab le , arb itrary or cap ric io us , cle arl y un lawfu l, o r la ck in g i n s ou ndba si s i n factor l aw. See Th orPo wer Too l Co . v. Co m m is si on er, 4 39 U.S. 52 2, 5 32 -5 33 (1 97 9) ; Woo dr al v. Co m

m is si on er, 1 12 T.C. 19 , 23 (19 99 ); s ee al so Dalt on v. Co m m is si on er, 6 82 F.3d14 9, 1 56 (1s t Ci r. 20 12 ) (h ol di ng th ata rev ie win g c ou rt co ns id ers “ whe th er the factua l an d l eg al co nc lu si on s re ach edat aCDP h eari ng are reas on ab le , no t wh ethe r th ey are co rrec t” ), rev ’g 13 5 T.C. 3 93 (20 10 ) an d T.C. Mem o. 2 01 1- 13 6. On the ba si s o f th e adm in is tra ti ve reco rd , we ho ldth atSet tl em en t Offi cer Pech era d idno t ab us e h er d is cret io n i n c on cl ud in g tha t the jeop ardy lev y was reas on ab le . Sett le m en t Offi cer P ech era b as edhe r de te rm in at io n o n the res ul ts of a de ta il edan d c om

pr eh en si ve in ve st ig at io n b y th e Offi ce o f Ch ie f Co un se l, h er o wn in ve st ig at io n, an d the CDP h eari ng . Firs t, o n the ba si s o f a p rel im in ary an al y si s o f th e fi nanc ia l d oc um en ta ti onth atpe ti ti on er p ro vi de d wi thhi s o ffer -in -co m pr om is e, Set tl em en t Offi cer P ech era d et erm in edth atpe ti ti on er h addi ss ip at ed$4 m il li on fro m th e IB ac co un t, $ 27 ,75 2.7 1 fr om anApp le Ban k a cco un t, an d $ 27 ,00 0 o f sa le pr oc eed s fr om

a Ferr ari . Seco nd , aft er co nduc ti ng th e CDP h eari ng an d re vi ewin g (...co nt in ue d) 2 1 ta xp ay er’s as se ts .); Do rnv. Co m m is si on er, 1 19 T.C. 35 6, 3 59 (20 02 ).- 24 -

[* 24 ] th e Offi ce o f Ch ie f Co un se l m em or an du m , Set tl em en t Offi cer P ech era de te rm in edth atpe ti ti on er was co nc eal in g a ss et s fr om th e Gov ern m en t b y

pl aci ng as se ts inhi s re lati ve s’ nam es an d i n v ari ou s LLCs an d tru st s. Inad di ti on , pu rs ua nt to he r own in ve st ig at io n, Se tt le m en t Offi cer P ech era d is co ve redth atth e b ui ld in g at19 16 OceanAvenue ha d b eenli st edforsal e--afactth atpe ti ti on er h adno t di sc lo se d. Onth e b as is of the se fact s, we co nc lu de th atSet tl em en t Offi cer Pech era d idno t ab us e h er d is cret io n i n c on cl ud in g tha t the jeop ardy lev y was reas on ab le un de r th e ci rcu m st an ces . See Drak e v . Comm is si on er, 5 11 F.3d65 , 70 (1 stCir . 20 07 ) (h ol di ng th atjeop ardy lev y was re as on ab le wher e th e ta xp ay er tra ns ferr edsal e p ro ceed s t o h is so ns an d tho se pro ceed s wer e th erea fte r he ldin br ok erag e acc ou nt s i n the so ns ’ na m es ), aff’g T.C. Me m o. 2 00 6- 15 1 a nd12 5 T.C. 20 1 (2 00 5) ; Bi bb y

v. Co m mis si on er, T.C. Mem o. 2 01 3- 28 1, at*8 (ho ld in g tha t jeop ardy lev y was re as on ab le wher e th e ta xp ay er was di ss ip at in g fu nd s an d tra ns ferr in g fu nd s t o thi rdpa rti es ). At tria l p et it io ne r vi go ro us ly den ie d tha t h e was co nc eal in g a ss et s fr om th e Gov ern m en t o r th atan y

ris k e xi st edof a ss et s’ bei ng tra ns ferr edor d is si pa te d. Howev er, the ev id en ce p et it io ne r in tro du cedat tria l b ut tre ss es , rathe r th anrefu te s, res po nd en t’s jeo pa rdy

lev y de te rm in at io n.- 25 -

[* 25 ] Fi rs t, p et it io ne r te st ifi edth athe ha s re si de d i n the Uni te d S ta te s fo r ov er 2 0 y ears . Yet p et it io ne r adm it s tha t wh il e h e h as m ad e o ve r $2 0 m il li on by trad in g se cu rit ie s, h e h as no ass et s i n h is na m e withi n the Uni te d S ta te s. In st ead , all of t he
as se ts inth e “ who le fam il y um br el la ” are he ldinth e n am e o f hi s m othe r orhi s un cl e, ne ithe r of

who m sp eak s En gl is h a ndne ithe r of who m li ve s i n the Uni te d St at es . Peti ti on er h as no t p ro vi de d asat is fact ory ex pl an at io n fo r why all hi s U.S.- ba se d a ss et s ar e h el d i n h is rel at iv es ’ na m es . This factis pro ba ti ve ev id en ce tha t pe ti ti on er en ga ge d i n asch em e to co nc eal hi s as se ts fro m th e IRS
. Seco nd , pet it io ne r at te m

pt edto av oi d t ax at io n o f th e ap pr ox im at el y $2 0
m il li on th athe earn edtra di ng sec ur it ie s b y cla im in g apu rp orte d 9 3/ 7 p ro fit
sh ari ng ag reem en t wi th hi s u nc le , a fo rei gn nati on al who is ex em ptfro m U.S. ta xa ti on . On th e sa m e b as is , pet it io ne r se ek s t o a vo idco ll ect io n o f hi s unp ai d t ax li ab il it ie s b y

cla im in g o wne rs hi p o f m erel y 7% o f va rio us ass et s i n the “ who le fam il y um br el la ”. Acco rd in g t o p et it io ne r, th is purp orte d a rran ge m en t was co ns id erat io n fo r hi s u nc le ’s for gi ve ne ss of a n $ 11 ,00 0 d eb t. Ho wev er, the pu rp orte d 9 3/ 7 p ro fit -s ha rin g a gr eem en t i s wh ol ly dev oi d o f rat io na l ec on om ic ba si s. A tr an sf

er’s eco no mic real ity

pre va il s o ve r it s fo rm , anda fi nd in g o f
eco no m ic real ity

tu rn s o n wh ethe r th e tr an sf er wo ul d h av e fo ll owe d the same form ha d i t b eenbe twee n the trans fere e an d a n i nd ep en de ntlen de r. Est at e o f Ro se n v .- 26 -

[* 26 ] Co m

m is si on er, T.C. Mem o. 2 00 6- 11 5, 9 1 T.C.M . (CCH) 1 22 0, 1 23 6 (2 00 6)
. Tran sf ers be twee n re late d p art ie s ar e ex am in edwith s pe ci al scr ut in y . Id. Co urts
m ay di sr eg arda tr an sa ct io n tha t as a who le do es no t h av e a rat io na l ec on om ic ba si s co m pe ll edby bus in es s re al it ie s, s ep arat e an d apa rt f ro m th e res ul ti ng tax be ne fit s. Bu y

ukLLC v. Co m

m is si on er, T.C. Mem o. 2 01 3- 25 3, at*7 3 (c it in g Fran k Lyon C o. v . Uni te d S ta te s, 4 35 U.S. 56 1, 5 83 -5 84 (19 78 )). Pet it io ne r’s pu rp orte d p ro fit -s ha rin g a gr eem en t wi th hi s u nc le is in co ns is te ntwith e co no m ic
an d b us in es s re al it ie s. We are co nv in cedth atno eco no m ic al ly rati on al act or de al in g a t arm ’s len gt h wo ul d a ss ig n 9 3% o f hi s s ub st an ti al tra di ng pro fit s t o an ot he r pe rs on , witho utany term in at io n c on di ti on s, i n e xc ha ng e fo r th e fo rg iv en es s o f an$1 1,0 00 de bt . W e are equa ll y co nv in cedth atno eco no m ic al ly rat io na l ac to r, un m ot iv at edby taxco ns id erat io ns , wou ldha ve st ay edinsu chan arra ng em en t as hi s p ro fit s s oa redto ap pr ox im at el y $2 0 m il li on . Accor di ng ly, we co nc lu de th atth e p ur

po rte d p ro fit -s harin g a gr eem en t was de vi se d a s p artof apl an by pet it io ne r to av oi d p ay in g i nc om e ta x t o the IRS an d t o i m pe de th e IRS ’
co ll ect io n e ffo rts . Thi rd , pet it io ne r cl ai m edth athi s m ot he r own ed$1 mil li on inth e IB
acco un t. Ho wev er, al th ou gh pe ti ti on er cl ai m edth athe gave hi s m ot he r $5 00 ,00 0 in 20 04 an d $ 50 0,0 00 in20 05 , he d idno t fi le gi ft t ax returns di sc lo si ng su chgi fts- 27 -

[* 27 ] un ti l 2 01 0, af

te r hi s t ax tro ub le s h adbe gu n. Fu rth erm or e, pe ti ti on er adm it te d tha t h e ch os e th e $ 1 m il li on am ou ntbe cau se hi s re se arch ledhi m to co nc lu de th atan y

gi ft up t o $ 1 m il li on wou ldbe ex em ptfro m gi ft t ax . Fin al ly, pe ti ti on er ad m it te d tha t h e d oe s n otrem em be r whe re the m on ey

cam e fro m , othe r th anth atitwas fr om

th e “ who le fam il y

um br el la ”. Inth e li gh t o f th es e fac ts , we are c on vi nc edth atth is so -cal le d g iftis no m or e th ana st ory co nc oc te d b y pe ti ti on er t o d el ay

res po nd en t’s co ll ect io n e ffo rts . 2 2 Fo urth , pet it io ne r admitte d tha t the purp os e o f hi s m ot he r’s two ba nkrupt cy fil in gs was t o s ta ll res po nd en t’s co ll ect io n e ffo rts . Gabri el le Hirz , th e DOJ at to rn ey ass ig ne d t o M s. An g’s b an krup tc y cas es , tes ti fie d c red ib ly tha t p et it io ne r, no t h is m ot he r, m ad e th e d eci si on s i n the ba nkrupt cy pro ceed in gs . In o th er wo rd s,

W e n ot e th atpe ti ti on er d idno t ar gu e athi s C DP he ari ng th atth e IB 2 2 acco un t was wron gf

ul ly lev ie d upo n b ecau se of M s. An g’s o wne rs hi p. We furt he r no te th atev enif s om e o f th e fu nd s i n the IB acc ountdi d b el on g t o M s. An g, pe ti ti on er d oe s n othave st an di ng to ass erthe r cl ai m of o wne rs hi p. Th is Co urt co ns id ers th e d oc tri ne of s tand in g t o b e “ ‘inh eren tl y ap pl ic ab le to our pr oc eed in gs .’ ” Pri nc e v . Comm is si on er, 1 33 T.C. 27 0, 2 74 (20 09 ) (quo ti ng Ant ho ny v. Co m

m is si on er, 6 6 T.C. 3 67 , 37 3 (1 97 6) , aff’d, 5 66 F.2d11 68 (3dCir
. 19 77 )) (“ Pet it io ne r do es no t h av e st an di ng inth is pro ceed in g t o s eekth e return o f m on ey or p ro pe rty tha t d oe s n otbe lo ng to hi m .”). Und er thi s d oc tri ne , a pl ai nt iff ge ne ral ly m

us t as se rt h is ownleg al rig ht s an d i nt eres ts an d c an no t re sthi s cl ai m to rel ie f on th e le ga l ri gh ts of t hi rdpa rti es . Id. Mo reo ve r, se c. 74 26 (a)( 1) pro vi de s th ata pe rs on , othe r th anth e ta xp ay er, wh o i s s ub ject t o awron gf

ul lev y m ay bri ng anact io n i n aDis tri ctCo urt. No su chact io n was ev er b ro ug htby Ms. Ang
.- 28 -

[* 28 ] pe ti ti on er ab us edth e p ro te ct io ns off eredby the U.S. ban krup tc y syste m to de lay res po nd en t’s co ll ect io n e ffo rts . Fi na ll y , pet it io ne r ex erci se d fu ll co nt ro l o ve r th e IB ac co un t an d c ou ld tra ns fer m on ey

fro m th e acc ou ntwitho utres tri ct io n. Attri al pe ti ti on er ad m it te d hi s m ot he r ne ithe r m an ag es no r ha s ac ces s t o the IB acc ou ntan d tha t h e h as ful l
co nt ro l o ve r it . In ad di ti on , pet it io ne r admit te d tha t h e wit hd rew $ 5 m il li on fro m th e IB ac co un t t o p ay

th e m ortg ag e fo r th e 1 91 6 Oce anAvenue bu il di ng , a pr op erty inwhi chMs . Ang ha s n o o wne rs hi p i nt eres t an d wh ic h h e v al ue d a t
m erel y $3 .27 2 m il li on inhi s o ffer -in -co m pr om is e. Fin al ly, Bri anHanl ey of I BG, LLC, th e p aren t co m

pa ny of IB, cr ed ib ly test ifi edth atas a n e nr ol le e o f IB’s
se cu redtra ns act io n p ro ces si ng pro gr am , pet it io ne r co ul d tran sf er u nl im it ed
am ount s fr om

hi s IB acco un t atan y

ti m e. Fo r th es e rea so ns , th e ev id en ce p et it io ne r in tro du cedat t ria l b ol st ers res po nd en t’s jeo pa rdy

lev y de te rm in at io n. II. Offer- in -Co m

pr om is e Pet it io ne r al so ass ert s tha t Se tt le m en t Offi cer P ech era i m pr op erl y reject ed hi s o ffer -in -co m

pr om is e. Whe re the va li di ty of th e und erl y in g l iabi li ti es is no t- 29 -

[* 29 ] pr op erl y

at i ss ue , we rev ie w th e d et erm in at io n o f th e se tt le m en t o ffi cer f or 2 3 ab us e o f di sc ret io n. Se go v. Co m m is si on er, 1 14 T.C. at 6 10 ; Go za v . Co m m is si on er, 1 14 T.C. 17 6, 1 82 (20 00 ). 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 offerin -co m pr om is e. Sec. 6 33 0( c)(2 )(A); see als o S eg o v . Comm is si on er, 1 14 T.C. at 60 9. Tax pa y ers are ex pe ct edto pro vi de all rel ev an t i nf orm at io n re qu es te d b y

th e se tt le m en t o ffi cer, i nc lu di ng fin an ci al st at em en ts , for hi s co 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. A tax pa y er i s p recl ud edfro m co nt es ti ng th e ex is te nc e o r am ountof t he 2 3 un de rlyin g t ax li ab il ity

at t he CDP h eari ng un le ss th e ta xp ay er d idno t re cei ve a st atut ory no ti ce o f de fic ie nc y

or d idno t o th erwi se ha ve anop po rtu ni ty to d is pu te th e und erl y in g t ax li ab il ity . Sec. 6 33 0( c)(2 )(B) . Peti ti on er re cei ve d ano ti ce o f de fic ie nc y , fil eda pe ti ti on inth is Co urt, an d s et tl edhi s ca se . Con se qu en tl y , hi s ta x l iabi li ti es are n otpro pe rly at is su e inth is m at te r. See Deu ts chv. Co m m is si on er, 4 78 F.3d45 0, 4 51 -4 52 (2dCir . 20 07 ) (h ol di ng th ata ta xp ay er was pr ecl ud edfro m

lat er ch al le ng in g h is un de rlyin g t ax li ab il ity wher e h is att orne y co ns en te d t o the tax ass es sm en t, the reb y waiv in g h is rig htto co nt es t l iabi li ty), aff’g T.C. Me m o. 2 00 6- 27
.- 30 -

[* 30 ] 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 . Sec. 3 01 .71 22 -1 (b ), Pro ced . & Adm in . Reg s. Pet it io ne r ba se d h is off er-i n- co m pr om is e o n d oubtas t o co ll ect ib il ity , whi ch“ ex is ts inany cas e whe re the tax pa y er’s as se ts an d i nc om e are le ss th anth e fu ll am ou ntof t he li ab il ity .” Sec. 3 01 .71 22 -1 (b )(2 ), Pro ced . & Adm in . Reg s. 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 rea so nabl e co ll ect io n p ot en ti al , “ i.e., tha t am ou nt , 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 a s ad m in is tra ti ve an d ju di ci al co ll ect io n rem ed ie s” . Mur

ph y v. Co m m is si on er, 1 25 T.C. 30 1, 3 09 (20 05 ), aff’d, 4 69 F.3d 27 (1s t Ci r. 20 06 ); S al azarv. Co m m is si on er, T.C. Mem o. 2 00 8- 38 , 95 T.C.M. (CCH) 11 49 , 11 54 (20 08 ), aff’d, 3 38 Fed . App x. 7 5 (2 d C ir. 2 00 9)
. Pet it io ne r arg ue s tha t Se tt le m en t Offi cer P ech era abu se d h er d is cret io n whe n s he “ su dd en ly andarb itrari ly clo se d the cas e” an d tha t s he di d n otco nduc t a va li d a ndleg it im at e stud y of h is reas on ab le co ll ect io n p ot en ti al . W e d is ag ree. Pet it io ne r ba se d h is off

er-i n- co m pr om is e o n h is owncal cu la ti on of h is
reas on ab le co ll ect io n p ot en ti al , andhe subm it te d s om e d oc um en ts reg ard in g h is- 31 -

[* 31 ] as se ts . In o rd er fo r a s et tl em en t o ffi cer t o c al cu la te a ta xp ay er’s rea so nabl e co ll ect io n p ot en ti al , th e ta xp ay er m us t p ro vi de all rel ev an t fi nanc ia l i nf orm at io n. See s ec. 3 01 .63 30 -1 (e)( 1) , Pro ced . & Adm in . Reg s. Itis well set tl edth ata se tt le m en t o ffi cer p ro pe rly exer ci se s h er d is cret io n i n re jecti ng a co ll ect io n al te rn at iv e su chas a n o ffer -in -co m pr om is e o n the gro un d tha t the tax pa y er fa il ed to pro vi de all fin an ci al in fo rm at io n n eces sary to ful ly eval ua te th e ta xp ay er’s ab il ity to pa y . Ram da s v . Comm is si on er, T.C. Mem o. 2 01 3- 10 4, at*2 4; see Orum v. Co m m is si on er, 1 23 T.C. 1, 1 3 (2 00 4) , aff’d, 4 12 F.3d81 9 (7 th Cir . 20 05 ); Kan sky v. Co m m is si on er, T.C. Mem o. 2 00 7- 40 , 93 T.C.M. (CCH) 9 21 , 92 5 (2 00 7)
. Set tl em en t Offi cer P ech era r eque st edth atpe ti ti on er p ro vi de fin an ci al do cu m en ta ti on to ve rif

y hi s re as on ab le co ll ect io n p ot en ti al cal cu lati on . Alth ou gh sh e o rig in al ly gav e h im

14 da y s t o c om

pl y , at h is reque stsh e ex te nd edth e de ad li ne by a m on th . Whe n s he rece iv edpe ti ti on er’s s ub m is si on , Set tl em en t Offi cer P ech era n ot edth atitco ns is te d o f th e sa m e d oc um en ts pre vi ou sl y subm it te d wi th hi s o ffer -in -co m pr om is e an d thu s d idno t v eri fy hi s cl ai m s. At t he CDP h eari ng , Set tl em en t Offi cer P ech era i ns tru ct edpe ti ti on er t o p ro vi de he r with th e reque st eddo cu m en ta ti on by March30 , 20 12 , to all ow h er t o v eri fy hi s reas on ab le co ll ect io n p ot en ti al cal cu la ti on . Whe n the de ad li ne cam e an d wen t,- 32 -

[* 32 ] Set tl em en t Offi cer P ech era d et erm in edth atsh e was un ab le to pro pe rly
ev al ua te pe ti ti on er’s o ffer -in -co m pr om is e. Co ns eque nt ly, sh e reject edit
. Pet it io ne r adm it s tha t h e d idno t t im el y pro vi de th e reque st eddo cu m en ta ti on no r reque stanex te ns io n o f ti m e. Whi le set ti ng un reas on ab le de ad li ne s ca n c on st itut e anab us e o f di sc ret io n, s ee Sh an le y v. Co m m is si on er, T.C. Mem o. 2 00 9- 17 , 97 T.C.M. (CC H) 10 62 , 10 65 (20 09 ) (s ta ti ng th atanApp eal s o ffi cer’s unr eas on ab le de ni al of areque stfor

m or e ti m e to subm itth atev id en ce wo ul d b e anab us e o f di sc ret io n) , Set tl em en t Offi cer P ech era e xt en de d d ead li ne s o n m ul ti pl e o ccas io ns an d e ve n o ffer edan ot he r ex te ns io n upo n re qu es t. We the refo re fi ndth at Set tl em en t Offi cer P ech era d idno t ab us e h er d is cret io n i n re jecti ng pe ti ti on er’s of fer- in -co m

pr om is e. At tria l p et it io ne r admitte d tha t h e d idno t d is cl os e a num be r of ba nk
acco un ts inhi s o ffer -in -co m pr om is e b utcla im s tha t tho se acco un ts were

“ irr el ev an t” be cau se th ey eachco nt ai ne d l es s tha n $ 10 ,00 0. Where anoff er-i nco m pr om is e is ba se d o n atax pa y er’s ab il ity to pa y , a tax pa y er m ay

no t p ic k a nd ch oo se whi chass et s t o d is cl os e to th e Co m m is si on er. See sec . 30 1.6 33 0- 1( e)(1 ), Pro ced . & Adm in . Reg s. (“ Tax pa y ers wil l b e expe ct edto pro vi de all rel ev an t in fo rm at io n re qu es te d b y App eal s, i nc lu di ng fin an ci al st at em en ts , forit s co 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 .” (Em ph as is ad de d.))
.- 33 -

[* 33 ] Mo reo ve r, inrel at io n t o the $1 ,41 1 c as h fr om ba nkacco un ts th atpe ti ti on er di d d is cl os e, th es e acc ou nt s wer e h ig hl y rel ev an t. Set tl em en t Offi cer P ech era wou ldha ve be enwithi n h er d is cret io n t o re ject p et it io ne r’s of

fer- in -co m

pr om is e on th is ba si s al on e. Furth erm or e, pe ti ti on er n ev er m ad e an y of the m on th ly $87 ,90 0 p aym en ts he pro po se d a s p artof h is off er-i n- co m pr om is e. Ther efo re, Set tl em en t Offi cer Pech era wo ul d h av e b eenwithi n h er d is cret io n t o re ject p et it io ne r’s of

fer- in
co m pr om is e o n thi s b as is as we ll . See s ec. 7 12 2( c)(1 )(B) , (d) (3 )(C) ; cf . Nasi r v. Co m m is si on er, T.C. Mem o. 2 01 1- 28 3, 1 02 T.C.M. (CCH) 5 58 , 56 3 (2 01 1) (h ol di ng th ata ta xp ay er’s fai lu re t o m ak e p ro po se d p aym en ts en ab le d the IRS t o tre athi s o ffer -in -co m

pr om is e as withd rawn ). Inreac hi ng ou r ho ld in gs , we hav e co ns id eredall arg um en ts m ad e, an d, t o th e 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 ut
m eri t. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redfor
res po nd en t.