1Although the Court ordered petitioner to file a response to

respondent’s motion, petitioner failed to do so.

T.C. Memo. 2004-164

UNITED STATES TAX COURT

KATHRYN D. MILLS, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 18442-03L. Filed July 13, 2004.

Donald Louis Herskovitz, for petitioner.

Jeffrey E. Gold, for respondent.

MEMORANDUM OPINION

CHIECHI, Judge: This case is before the Court on respondent’s motion for summary judgment (respondent’s motion).1 We

shall grant respondent’s motion.
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2All section references are to the Internal Revenue Code in

effect at all relevant times. All Rule references are to the Tax

Court Rules of Practice and Procedure.

Background

The record establishes and/or the parties do not dispute the

following.

Petitioner resided in Prospect, Connecticut, at the time she

filed the petition in this case. 

On April 15, 2001, petitioner filed a Federal income tax

(tax) return for her taxable year 2000 (2000 return). In her

2000 return, petitioner reported total income of $628,613,

taxable income of $608,188, total tax of $223,186, tax withheld

of $87,586, and tax due of $135,600. Petitioner did not remit

with that return payment of the tax shown due. 

On May 28, 2001, respondent assessed petitioner’s tax, an

addition to tax under section 6651(a)(2),2 and interest as provided by law for her taxable year 2000. On July 23, 2001,

respondent credited $300 to petitioner’s account for that taxable

year. On the same date, respondent assessed an additional

addition to tax under section 6651(a)(2) and interest as provided

by law for petitioner’s taxable year 2000. On March 10, 2003,

respondent applied an overpayment credit of $1,452 for petitioner’s taxable year 2002 to petitioner’s taxable year 2000. 

(We shall refer to any unpaid assessed amounts, as well as any

accrued and unassessed interest as provided by law, for peti-
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tioner’s taxable year 2000 as petitioner’s unpaid liability for

2000.)

Respondent notified petitioner of the balance due with

respect to petitioner’s unpaid liability for 2000, as required by

section 6303.

Around mid-October 2001, petitioner submitted to respondent

an offer-in-compromise (petitioner’s offer) proposing to pay

$1,000 to compromise petitioner’s unpaid liability for 2000. 

Around September 13, 2002, respondent’s representative (respondent’s offer examiner) assigned to consider petitioner’s offer

requested that petitioner send on or before October 15, 2002,

additional financial information in support of that offer. 

Petitioner requested, and respondent’s offer examiner granted, an

extension until October 21, 2002, of the time within which she

was to submit additional financial information to respondent’s

offer examiner. Petitioner did not submit such information to

respondent’s offer examiner and consequently petitioner’s offer

was returned to petitioner. 

On November 15, 2002, respondent issued to petitioner a

notice of Federal tax lien filing and your right to a hearing

(notice of tax lien) with respect to her taxable year 2000. On

December 9, 2002, petitioner filed Form 12153, Request for a

Collection Due Process Hearing (Form 12153), and requested a

hearing with respondent’s Appeals Office (Appeals Office). In
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petitioner’s Form 12153, petitioner alleged (1) that she filed an

offer-in-compromise, (2) that there was an improper determination

of collection values, and (3) that there was “Financial hardship-

-impairment of employment”.

On March 13, 2003, the settlement officer sent a letter

(March 13, 2003 letter) to petitioner acknowledging receipt of

petitioner’s Form 12153. The March 13, 2003 letter stated in

pertinent part:

If you would like me to consider collection alternatives such as an offer in compromise, an installment

agreement, etc., or alternatives to a filed Notice of

Federal Tax Lien in your hearing, the items listed and

checked below must be provided:

[X] A completed Collection Information Statement (Form

433-A for individuals and/or Form 433-B for businesses; forms enclosed for your convenience) using

current information.

[X] Proof of sufficient estimated income tax payments

or withholding for the period(s) listed below: 

12-31-2003

[X] Other:

-Please provide copies of Form 1040 for 2000,

2001, and 2002.

-Please document the disposition/current status of

the income that you reported on your Form 1040 for

2000.

-Please provide a statement detailing your proposed alternative to the filed Notice of Federal

Tax Lien.

-A copy of Form 12153 is enclosed. The signature

on this form does not appear to be yours or that

of your representative. If you wish to continue

with your Collection Due Process Request, please

either verify that the signature is yours or your

representatives, or resubmit the form with an

authorized signature.

-Form 12153 indicates that you have an offer in
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3Of the total $487,738.50 transferred from one of the Schwab

accounts to the other, $10,000 was transferred in April 2000,

$320,000 was transferred in May 2000, and $157,738.50 was transferred in December 2000.

compromise filed. The offer in compromise was

returned to you. It is not pending at this time.

The items listed above should be provided to me within

30 days of the date of this letter. I will contact you

after that date to schedule a hearing.

If you do not provide the returns and/or information

requested, I cannot consider certain collection alternatives in your hearing. These include selecting an

Offer in Compromise or an Installment Agreement, as

alternatives for resolving your case. * * *

In response to the March 13, 2003 letter, petitioner submitted to the settlement officer, inter alia, Form 433-A, Collection

Information Statement (Form 433-A). Petitioner did not provide

the monthly income and expense information requested by Form 433-

A, and the only asset that she listed in that form was a Jeep

with a loan balance of $20,191. 

In response to the March 13, 2003 letter, petitioner also

submitted to the settlement officer a document that purported to

list transactions relating to each of two accounts at Charles

Schwab (Charles Schwab accounts) for the period April-December

2000. On April 14, 2000, the opening balance in one of the

Charles Schwab accounts was $517,089.24. During the period

April-December 2000, a total of $487,738.50 was transferred from

that account to the other Charles Schwab account.3 The Charles

Schwab account to which that amount was transferred showed
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disbursements of, inter alia, $299,850 to Triple R Construction,

$90,169.19 to GE Elfun Account, $24,000 to a Jeep dealership,

$23,857.22 to MB, $16,600 to John Lawncare, $15,000 to Best

Prices, $12,014.04 to Mudricks, as well as other disbursements of

thousands of dollars to, inter alia, each of Aquarius Pools and

Spas, Reese’s Delivery Services, Thomaston Oil, Soundworks and

Security, Benders, and Angelo’s. 

On April 7, 2003, in response to the March 13, 2003 letter,

petitioner also sent a letter to the settlement officer which

stated in pertinent part:

Below is my statement detailing my proposed alternative

to the filed Notice of Federal Tax Lien.

I no longer own the property at 919 Wilcoxson Avenue,

Stratford, CT. It was deeded to my son and daughterin-law per the attached Quit Claim Deed. 

On June 25, 2003, the settlement officer held an Appeals

Office hearing with petitioner with respect to the notice of

lien. During that hearing, the settlement officer discussed

possible collection alternatives with petitioner, including

posting a bond, substituting collateral, or paying in full

petitioner’s unpaid liability for 2000. In addition, the settlement officer considered whether there were grounds under section

6323(j) to withdraw the notice of lien. At no time in connection

with the Appeals Office hearing did petitioner submit an offerin-compromise to the settlement officer or request an installment

agreement. Petitioner did not dispute the existence or the
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amount of petitioner’s unpaid liability for 2000 at the Appeals

Office hearing or in the petition that she filed in this case. 

On September 25, 2003, the Appeals Office issued a notice of

determination concerning collection action(s) under section 6320

and/or 6330 (notice of determination) to petitioner. An attachment to that notice stated in pertinent part:

Summary & Recommendation

* * * * * * *

You have not put forth an appropriate alternative to

the Notice of Federal Tax Lien. Therefore, it is the

determination of Appeals that the lien should remain on

file until the balance due in question is fully paid.

Brief Background

You submitted an offer in compromise. The offer in

compromise was returned to you, because you did not

provide the information requested by the offer examiner. The Notice of Federal Tax Lien was filed in

conjunction with the return of your offer. In response

to the lien filing, you filed Form 12153.

It was determined that you do not have the ability to

pursue any alternatives to the lien at this time.

Verification that Law and Procedure were Followed

Information in the administrative case file and related

computer records shows that the IRS followed law and

procedure in this case. The assessment in question is

based upon a return filed by you. IRS records show

that the assessment was properly made under IRC Section

6201. Notice and demand was sent to you as required

per IRC Section 6303. There was a balance due at the

time the Collection Due Process Notice was issued as

required by IRC sections 6322 and 6331(a). The IRS

gave you opportunities to pay the balance due voluntarily, but you failed to do so. The Compliance Division recorded the Notice of Federal Tax Lien to protect

the Government’s interest.
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* * * * * * *

Relevant Issues Raised by the Taxpayer

On Form 12153, you raised several issues including that

you had an offer in compromise on file, there was an

improper determination of collection value, and financial hardship--impairment of employment.

At your collection due process hearing you explained

the events, which caused the liability. Alternatives

to the lien were reviewed such as posting a bond,

substitution of collateral, or full payment of the

account. None of these options are available to you at

this time.

Balancing Efficient Collection with the intrusiveness 

of the Collection Action

You have produced no evidence that indicates that the

withdrawal of the Notice of Federal Tax Lien would

facilitate collection of the liability, or that any of

the other grounds for withdrawal under IRC section

6323(j) are applicable. You have offered no collection

alternatives that would permit the release of the lien.

A withdrawal of the lien would create a detriment to

the government’s position. Thus, absent some statutory

basis to withdraw the Notice of Federal Tax Lien, or

release the lien, maintaining the filed lien balances

the need for the efficient collection of taxes with

your legitimate concern that any collection action be

no more intrusive than necessary.

In the petition that she filed in this case, petitioner

alleged:

The relief requested is that the IRS should release a

federal tax lien that the IRS has filed against the

taxpayer. The reasons for such relief are that the IRS

abused its discretion in failing to consider the information that the taxpayer submitted to support its offer

in compromise, there was an improper determination of

collection value, and the taxpayer’s financial

hardship-impairment of employment. A withdrawal of the

lien would facilitate collection action.
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Discussion

The Court may grant summary judgment where there is no

genuine issue of material fact and a decision may be rendered as

a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner,

98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). We

conclude that there is no genuine issue of material fact regarding the questions raised in respondent’s motion.

Petitioner did not dispute the existence or the amount of

petitioner’s unpaid liability for 2000 at the Appeals Office

hearing or in the petition that she filed in this case. We shall

review the notice of determination for abuse of discretion. See

Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). 

The settlement officer considered all of the allegations and

contentions in petitioner’s Form 12153 and in her submissions to

such settlement officer. During the Appeals Office hearing that

the settlement officer held with petitioner, the settlement

officer discussed possible collection alternatives with her,

including posting a bond, substituting collateral, or paying in

full petitioner’s unpaid liability for 2000. In addition, the

settlement officer considered whether there were grounds under

section 6323(j) to withdraw the notice of lien. At no time in

connection with the Appeals Office hearing did petitioner submit

an offer-in-compromise to the settlement officer or request an
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4We have considered all of petitioner’s allegations and

contentions that are not discussed herein, and we find them to be

without merit and/or irrelevant.

installment agreement. Based upon our examination of the entire

record before us, we find that respondent did not abuse respondent’s discretion in determining to proceed with the collection

action as determined in the notice of determination with respect

to petitioner’s taxable year 2000.4

On the record before us, we shall grant respondent’s motion.

To reflect the foregoing,

An appropriate order granting

respondent’s motion and decision

will be entered for respondent.