1Unless otherwise indicated, all section references are to

the Internal Revenue Code, as amended. 

T.C. Memo. 2005-175

UNITED STATES TAX COURT

DONALD A. AND VIRGINIA M. SINGER, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 147-04L. Filed July 18, 2005.

Donald A. Singer and Virginia M. Singer, pro sese.

Pamela L. Mable, for respondent.

MEMORANDUM OPINION

WELLS, Judge: Respondent issued petitioners a Notice of

Determination Concerning Collection Action(s) under Section 6320

and/or 6330 (notice of determination).1 In response to that

notice, petitioners timely filed a petition for lien or levy
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2On Form 12153, petitioners incorrectly marked the line

contesting the filing of a notice of Federal tax lien, but later,

on May 9, 2003, petitioners sent a letter by facsimile correcting

the mistake and challenging the proposed levy action.

action under Code section 6320(c) or 6330(d). We review for

abuse of discretion respondent’s notice of determination.

Background

Some of the facts have been stipulated. The stipulation of

facts and the attached exhibits are incorporated herein by this

reference. Petitioners are husband and wife. At the time of

filing the petition, petitioners resided in Gainesville, Georgia.

On July 1, 2002, respondent sent petitioners a final notice

of intent to levy pursuant to section 6330 for taxable years 1997

and 1999. Subsequently, respondent received from petitioners a

timely Form 12153, Request for Collection Due Process Hearing.2

The handwritten Form 12153 stated: “WE DO NOT DISPUTE AMOUNTS

DUE, HOWEVER, DUE TO DIFFICULTIES IN GAINING INCOME ON THE PART

OF TAXPAYER DONALD A. SINGER, AND DIFFICULTY IN GAINING

EMPLOYMENT A TAX LIEN ON PROPERTY AT THIS TIME WOULD SEVERELY

HURT CHANCES OF GAINING EMPLOYMENT OR INCOME.”

On April 14, 2003, petitioners submitted Form 656, Offer in

Compromise, and Form 433-A, Collection Information Statement for

Individuals, setting forth an offer in compromise based on doubt 
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3Petitioners did not check any of the boxes in sec. 6 of

Form 656 to indicate the offer was based on doubt as to

collectibility or otherwise. However, the statement attached to

petitioners’ Form 656 claims they are unable to pay and mentions

no exceptional circumstances, such as permanent disability, that

would merit compromise based on effective tax administration.

as to collectibility.3 Petitioners offered to pay $10,000, with

$3,000 as an initial payment and 21 monthly payments of $333

thereafter. As of June 18, 2003, petitioners owed approximately

$33,006.31 in taxes, penalties, and interest for the years in

issue. Both the offer in compromise and the hearing request were

assigned to Settlement Officer Marilyn Q. Alls. 

On July 7, 2003, a hearing was conducted by telephone

between Settlement Officer Alls and petitioner Donald A. Singer. 

Settlement Officer Alls had no prior involvement with the taxes

that were the subject of the proceeding. In the hearing,

Settlement Officer Alls verified that all legal and procedural

requirements had been met. Amounts due had been properly

assessed, notice and demand had been made, the taxes were still

outstanding, and a levy source was identified and available. 

Settlement Officer Alls verified that the proposed action

balanced the need for efficient collection of taxes with the

concern that any collection action be no more intrusive than

necessary. 

In her review, Settlement Officer Alls determined that

petitioners had the ability to pay the liability in full over the 
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4This determination was summarized in a “Rejection Narrative

Doubt as to Collectibility” dated Nov. 13, 2003. 

life of the collection period. Consequently, the offer was

rejected.4

Settlement Officer Alls explained to petitioner Donald A.

Singer that the offer was rejected because petitioners had the

ability to pay their tax liability in full over the life of the

collection period. Settlement Officer Alls proposed a collection

alternative in the form of an installment plan requiring a

$10,000 downpayment and monthly payments of $275. She orally

requested that petitioners respond to her offer or propose an

alternative method for paying the full amount by July 31, 2003. 

However, petitioners did not respond. They neither offered an

alternative payment plan nor submitted any additional information

regarding changed financial circumstances.

Having reached no agreement on an installment payment

amount, respondent issued the notice of determination to

petitioners by certified mail on December 5, 2003. Subsequently,

petitioners timely petitioned the Court in the instant lien or

levy action, requesting lower monthly installment payments on the

basis of changed financial circumstances. The petition stated:

 Seek relief in the form of a reduction in the

monthly payment set forth in the notice of

determination dated 12/52003 [sic]. Since the

submission of our Offer In Compromise and the notice of

determination our monthly expenses have increased. 

Monthly term life insurance premiums have increased
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$50.00 on a five year renewable basis, prescription

drug co-payments have increased and city and county

property taxes on our home have increased. Also, no

consideration was given to the monthly interest

payments which we will incur on the $10,000 line of

credit we will need for the initial payment. 

Discussion

Section 6330 provides that no levy may be made on any

property or right to property of a person unless the Secretary

first notifies the person in writing of the right to a hearing

before the Appeals Office. Section 6330(c)(1) provides that the

Appeals officer must verify at the hearing that applicable laws

and administrative procedures have been followed. At the

hearing, the person may raise any relevant issue relating to the

unpaid tax or the proposed levy, including appropriate spousal

defenses, challenges to the appropriateness of collection

actions, and collection alternatives. Sec. 6330(c)(2)(A). 

However, the person may challenge the existence or amount of the

underlying tax liability only if the person did not receive any

statutory notice of deficiency for the tax liability or did not

otherwise have an opportunity to dispute the tax liability. Sec.

6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 610 (2000).

In the instant case, petitioners do not dispute the

underlying tax liability. Rather, petitioners dispute

respondent’s rejection of the offer in compromise. Accordingly,

we review the administrative determination for abuse of 
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5The “Rejection Narrative Doubt as to Collectibility”

prepared by Settlement Officer Alls shows that petitioners had

Net Realizable Equity consisting of bank accounts, a pension

account, and real estate totaling $12,054.38. Petitioners’

monthly gross income was $5,089.50 and allowable expenses only

$4,404.93, leaving a net difference of $684.57. This indicates

an ability to pay more than $50,000 over the life of the

collection period, exceeding the liability of $33,006.31. 

6We note that, at trial, petitioner presented no evidence of

increased expenses. Nevertheless, Settlement Officer Alls

testified that, at respondent’s request, she had reviewed

petitioners’ file before trial, and, even after she made

additional allowances for expenses, including interest on the

possible $10,000 line of credit and $50 more for insurance,

petitioners do not qualify for an offer in compromise based on

(continued...)

discretion. See Sego v. Commissioner, supra at 610; Goza v.

Commissioner, 114 T.C. 176, 181-182 (2000).

Section 7122(a) authorizes the Secretary to compromise any

civil case arising under internal revenue laws. The Secretary

may compromise a liability for doubt as to collectibility when

“the taxpayer’s assets and income are less than the full amount

of the assessed liability.” Sec. 301.7122-1(b)(2), Proced. &

Admin. Regs. 

Settlement Officer Alls reviewed petitioners’ submitted

financial information and determined that an offer in compromise

was not appropriate on the basis of doubt as to collectibility

because petitioners had the ability to pay the liability in full

over the life of the collection period.5 We conclude that

Settlement Officer Alls reasonably determined that petitioners

had sufficient income and assets to satisfy the tax liability.6
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(...continued)

doubt as to collectibility. Thus, we believe that it is neither

necessary nor productive to remand this case to IRS Appeals to

consider petitioners' arguments. See Lunsford v. Commissioner,

117 T.C. 183, 189 (2001).

Consequently, respondent’s refusal to enter into an offer in

compromise was not an abuse of discretion. See Crisan v.

Commissioner, T.C. Memo. 2003-318 (holding the Commissioner’s

refusal to enter into an offer in compromise was not an abuse of

discretion on the basis of a review of the financial information

submitted to the settlement officer). 

On the basis of the foregoing, we conclude that all the

requirements of section 6330 have been satisfied, and respondent

may proceed with his proposed collection actions.

To reflect the foregoing, 

Decision will be entered

for respondent.