T.C. Memo. 2006-102

UNITED STATES TAX COURT

DANIEL J. FORD, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 3708-05L. Filed May 11, 2006.

Daniel J. Ford, pro se.

William J. Gregg, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

WELLS, Judge: Pursuant to section 6330(d), petitioner seeks

judicial review of respondent’s determination to proceed with a

proposed levy. The issue to be decided is whether respondent’s

determination was an abuse of discretion. All section references

are to the Internal Revenue Code, as amended.
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1Petitioner does not dispute the underlying liabilities that

are the subject of the instant proceeding. Those liabilities

were set forth in respondent’s Form 4340, Certificate of

Assessments and Payments, for each of the taxable years in issue. 

Respondent appears to have computed these liabilities by

subtracting petitioner’s payments, withholding, and excess FICA

from the sum of petitioner’s income tax, estimated tax penalty,

late filing penalty, failure to pay penalty, interest, and

fees/collection costs. We note that respondent’s trial

memorandum reported the liability for petitioner’s 1996 taxable

year as $6,648 rather than $6,448. The record demonstrates that

additional interest, penalties, and additions to tax accumulated

subsequent to the initial assessments. As of June 2, 2004,

respondent determined that petitioner owed aggregate interest 

of $56,540 and penalties/additions to tax of $13,754.57.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. 

The stipulated facts and the accompanying exhibits are

incorporated herein by this reference.

At the time of the filing of the petition, petitioner

resided in Columbia, Maryland. Petitioner filed Federal income

tax returns for 1990, 1991, 1994, 1995, 1996, 1997, 1998, and

2002. Because insufficient taxes were withheld or paid with

respect to those returns, respondent assessed the following

income tax liabilities:1

 

 
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 Taxable

 Year Liability

1990 $14,276.52

1991 5,185.82

 1994 7,125.11

 1995 21,075.43

 1996 6,448.00

1997 13,362.68

1998 21,936.82

2002 2,969.31

$92,379.69

On June 2, 2004, respondent mailed to petitioner a Final Notice -

Notice of Intent to Levy and Notice of Your Right to a Hearing,

for petitioner’s 1990, 1991, 1994, 1995, 1996, 1997, 1998, and

2002 taxable years. In response, petitioner timely filed a Form

12153, Request for a Collection Due Process Hearing. With the

Form 12153, petitioner submitted a statement contending, inter

alia, that petitioner was incapable of paying the accrued

interest and penalties, that the IRS misplaced three separate

offers-in-compromise previously submitted by petitioner, that

moving to a less expensive home was not financially feasible, and

that petitioner supports a child. 

Respondent’s Appeals Office assigned the case to Settlement

Appeals Officer Frank Kowalkowski (Appeals Officer Kowalkowski),

who had no prior experience with petitioner’s tax years in issue. 

On December 16, 2004, Appeals Officer Kowalkowski conducted a

section 6330 hearing with petitioner by telephone. On January

26, 2005, respondent’s Appeals Office issued petitioner a Notice

of Determination Concerning Collection Action(s) Under Section 
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6320 and/or 6330, sustaining the proposed levy. Petitioner

timely petitioned the Court.

OPINION

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 respondent’s 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. 

The Appeals officer may rely on a Form 4340 for purposes of

complying with section 6330(c)(1). Nestor v. Commissioner, 118

T.C. 162, 166 (2002). 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). The person may challenge the

existence or amount of the underlying tax liability, however,

only if the person did not receive any statutory notice of

deficiency for such tax liability or did not otherwise have an

opportunity to dispute such tax liability. Sec. 6330(c)(2)(B). 

In the instant case, petitioner does not challenge the

underlying liabilities. Consequently, we review respondent’s

determination for abuse of discretion. See Goza v. Commissioner,

114 T.C. 176, 181-182 (2000); Sego v. Commissioner 114 T.C. 604,
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610 (2000). We understand petitioner to contend that the failure

of respondent’s Appeals Office to accept a collection alternative

constitutes an abuse of discretion.

During the section 6330 hearing, petitioner and Appeals

Officer Kowalkowski reviewed petitioner’s Form 433-A, Collection

Information Statement for Wage Earners and Self-Employed

Individuals (collection information statement), dated November

27, 2002. On the collection information statement, petitioner

reported that he received monthly wage income of $9,500 as

Finance Director of Rosenthal Acura and incurred the following

monthly expenses:

Item Amount

Food, clothing, and misc. $1,000

Housing and utilities 2,000

Transportation 600

Health care 290

Taxes (income and FICA) 1,828

Court-ordered payments 500

Child/dependent care 200

Life insurance 210

Other expenses 2,000

 Total Living Expenses 8,628

Based upon the aforementioned income and expenses, Appeals

Officer Kowalkowski determined that an acceptable installment

agreement would require monthly payments of approximately $1,900

rather than the $900 monthly payments proposed by petitioner

prior to the section 6330 hearing. In addition to the

possibility of an installment agreement, petitioner and Appeals

Officer Kowalkowski discussed the opportunity for petitioner to
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2As noted above, petitioner did not submit a collection

alternative for the consideration of respondent’s Appeals officer

either during or after the sec. 6330 hearing. Furthermore,

petitioner offered no credible evidence to demonstrate that

petitioner could not pay $1,900 per month.

submit an offer-in-compromise or to discharge the tax liabilities

in bankruptcy. Appeals Officer Kowalkowski and petitioner did

not agree to a collection alternative during the section 6330

hearing. However, Appeals Officer Kowalkowski agreed to send

petitioner transcripts of petitioner’s accounts for each tax year

in issue and to consider collection alternatives proposed by

petitioner as of January 14, 2005. Although Appeals Officer

Kowalkowski subsequently mailed the transcripts, petitioner did

not submit a collection alternative for Appeals Officer

Kowalkowski’s consideration.

As noted above, Appeals Officer Kowalkowski had no 

involvement with respect to the unpaid tax liabilities prior to

the section 6330 hearing. Based on our review of the record, we

conclude that Appeals Officer Kowalkowski’s determination that an

acceptable installment agreement would require monthly payments

of $1,900 is not an abuse of discretion.2 Petitioner did not

challenge the appropriateness of the intended method of

collection or raise a spousal defense. Furthermore, petitioner

has made no contention and offered no evidence that Appeals

Officer Kowalkowski either failed to properly verify that all

applicable laws and administrative procedures were followed or
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3At trial, petitioner testified that his income and expenses

have changed since the filing of the collection information

statement. As of Dec. 8, 2005, petitioner testified that he

earned a $125,000 per year salary from Rosenthal Acura, that

petitioner’s housing and utilities expenses had risen to $5,000

per month, and that petitioner’s health care expenses had risen

to $700 per month. Petitioner offered at trial to make a lump

sum payment of $50,000 and monthly installment payments of $900. 

We note that the aforementioned changes to petitioner’s income

and expenses, even were we to consider them, would not alter our

decision that respondent’s determination did not constitute an

abuse of discretion.

failed to balance the need for the efficient collection of taxes

with the concern that the collection action be no more intrusive

than necessary.

 Based on the foregoing, we hold that respondent’s

determination to proceed with the collection of petitioner’s tax

liabilities for 1990, 1991, 1994, 1995, 1996, 1997, 1998, and

2002 was not an abuse of discretion.3

To reflect the foregoing,

 An appropriate decision will

 be entered.