IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

GARFIELD ALLAN RODGER, §

 §

Plaintiff, §

 § Civil Action No. 3:05-CV-2406-D

VS. §

 §

UNITED STATES OF AMERICA, §

 §

Defendant. §

MEMORANDUM OPINION

 AND ORDER 

In this suit challenging an Internal Revenue Service Appeals

Office (“IRS Appeals”) determination to sustain levy actions

against plaintiff Garfield Allan Rodger (“Rodger”), defendant

United States of America (“the government”) moves for summary

judgment. The dispositive question presented is whether IRS

Appeals abused its discretion by refusing to grant Rodger a

requested installment plan to pay delinquent employment tax trust

fund penalties. Concluding that IRS Appeals did not abuse its

discretion, the court grants the motion and dismisses this case

with prejudice.

I

Rodger brings this action against the government seeking a

redetermination of a tax levy issued by IRS Appeals following a

collection due process proceeding. The IRS assessed employment tax

trust fund penalties against Rodger for the third quarter of 2000

through the third quarter of 2002. To collect these penalties, the

IRS issued levy notices to Rodger. Rodger requested a collection
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due process hearing with IRS Appeals. Rodger discussed the

contemplated levy action with Christopher Darling (“Darling”), the

IRS Appeals Officer assigned to the case. The discussions

primarily revolved around Rodger’s request to enter into a $4,000

per month installment plan. Darling agreed to consider the

request, but stated that such an installment plan would be granted

only if certain conditions were met, including, inter alia, that

Rodger’s businesses were currently in compliance with their tax

obligations. Darling addressed these conditions in a letter. In

response, Rodger provided several employment tax and corporate

income tax returns that Darling had requested. Rodger did not,

however, provide proof that all of his businesses were timely

depositing employment taxes. IRS Appeals required this information

because IRS transcripts showed that two of Rodger’s businesses were

not making timely deposits. Based on Rodger’s inability to keep

his businesses in current tax compliance, IRS Appeals issued a

determination letter sustaining the levy actions. Rodger alleges

that IRS Appeals abused its discretion by denying his request to

enter into an installment agreement. 

II

A

The government contends that IRS Appeals rationally decided

not to grant the requested installment plan based on Rodger’s

continued failure to timely file tax returns and deposit taxes.
1Because the question whether IRS Appeals abused its

discretion is a question a law, the existence of such fact issues,

if any, does not preclude the court from deciding this case on

motion for summary judgment. 

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Because the penalties underlying the levy actions originated from

Rodger’s history of non-compliance, the government argues that it

was not an abuse of discretion for IRS Appeals to condition the

requested installment plan on Rodger’s ability to stop accruing new

delinquencies. 

Roger does not contest that his businesses were non-compliant

with their tax obligations at the time of the appeal, nor does he

disagree that this fact was a basis for IRS Appeals’ decision.

Instead, Roger contends that the decision was based in large part

on “speculative, unfounded assumptions.” P. Br. 7. He argues that

there are genuine issues of material fact as to several of the

factors described in the determination letter as the basis for the

denial of the installment plan request.1 For example, the letter

concluded on the basis of certain tax returns that the value of the

interest owned by Rodger’s wife in one of his businesses seemed

greater than the value reported on certain business forms. Roger

contends that it is improper for IRS Appeals to base its

determination on speculation about this issue. He also points to

the part of the letter that considers whether some of the

businesses paid for the personal expenses of Rodger and his wife,

and it concludes that “[s]ome of these questions will need to be
2

Rodger also submits with his response brief evidence of

recent payments and other actions undertaken to bring his

businesses into compliance. Rodger contends that the government

fails to take note of these facts. Because these actions occurred

subsequent to the IRS Appeals’ decision, they are irrelevant in

determining whether IRS Appeals abused its discretion.

Accordingly, the court will not consider this information in

deciding the government’s summary judgment motion. See, e.g.,

Kitchen Cabinets, Inc. v. United States, 2001 WL 237384, at *1

(N.D. Tex. Mar. 6, 2001) (Lynn, J.) (holding that evidence of

payment of taxes accruing after notice of determination is

irrelevant to court’s review of decision of appeals officer). 

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explored in-depth before [the IRS Appeals Officer is] comfortable

approving an installment agreement.” Id. Rodger contends that IRS

Appeals failed to explore these issues before making its

determination. Rodger also argues that IRS Appeals failed to

substantiate its opinion that he had not “displayed sufficient

financial discipline and fiscal management skills.” Id. at 8. In

sum, Rodger contends that the decision to reject the proposed

installment plan was based on a “gut feeling,” and, as such, it

does not satisfy the government’s burden of establishing that the

determination was rational as a matter of law.2 

B

Where, as here, the underlying tax liability is not at issue,

the court reviews IRS Appeals’ decision under an abuse of

discretion standard. See Christopher Cross, Inc. v. United States,

461 F.3d 610, 612 (5th Cir. 2006) (adopting de novo standard of

review for underlying tax liability issues and abuse of discretion

standard for all other decisions). The court holds that IRS
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Appeals did not abuse its discretion when it decided not to allow

Rodger to make the unpaid tax payments under an installment plan.

Section 6330(c) of the IRS Restructuring and Reform Act of

1998 instructs IRS Appeals to consider the following three factors

in its collection determinations: first, verification of IRS

compliance with all applicable law and administrative procedures;

second, issues raised by the taxpayer; and third, whether the

proposed collection action balances “the need for the efficient

collection of taxes with the legitimate concern of the person that

any collection action be no more intrusive than necessary.” 26

U.S.C. § 6330(c). The determination letter discusses each of these

three factors. Rodger’s complaint concerns only the second

factor——whether IRS Appeals adequately considered the installment

plan proposal (the only taxpayer issue raised in the IRS Appeals

proceeding). 

The appeals case memorandum devotes most of its reasoning to

this specific issue, and it ultimately rejects the proposal based

on a combination of factors. The government contends that the

primary basis for the rejection was Rodger’s non-compliant status.

Although the letter does not explicitly state that this factor was

dispositive, it is clear that it was the primary reason for IRS

Appeals’ determination. The first three of the five factors cited

as the basis for not accepting the proposed installment plan relate

to non-compliance issues. Further, the record of conversations
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between Darling and Rodger also places primary emphasis on this

factor. See D. App. 16 (describing compliance as the first factor

that needs to be addressed in the installment plan determination).

Several courts have concluded that a taxpayer’s inability to

remain current on his tax obligations is a proper basis for

rejecting collection alternatives that the taxpayer proposes. See

Stop 26-Riverbend, Inc. v. United States, 2003 WL 1908747, at *3

(S.D. Ohio Mar. 12, 2003) (affirming IRS Appeals decision not to

extend installment plan on the basis that company was not current

on its tax obligations); Jon H. Berkey, P.C. v. Dep’t of the

Treasury, 2001 WL 1397680, at *5 (E.D. Mich. Sept. 20, 2001) (“A

proposed installment agreement may properly be rejected by the IRS

where the taxpayer . . . has a history of non-compliance with

payroll tax laws.”); AJP Mgmt. v. United States, 2000 WL 33122693,

at *2 (C.D. Cal. Nov. 27, 2000) (“The Court finds that [the appeals

officer] did not abuse his discretion to reject the proposed

collection alternatives for past liabilities when the plaintiff was

not meeting its current payroll tax obligations.”). Rodger has not

established that IRS Appeals abused its discretion in how it

evaluated his non-compliant status at the time of the appeal, nor

does he argue that non-compliance cannot of itself be reason to

deny a proposed installment plan.

Rodger’s argument focuses instead on the speculative nature of

the two final factors cited in the determination letter as the
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basis for the denial of the installment plan. These two factors,

which the court discusses above, do not appear to have been

dispositive, however, in IRS Appeals’ determination, and do not

diminish the primary reliance on the non-compliance considerations.

Considering the emphasis placed on the non-compliance factors,

Rodger has not shown, based on the secondary, somewhat speculative

considerations, that IRS Appeals abused its discretion in

determining to sustain the levy actions. 

IV

Rodger requests that the court deny the government’s motion

or, alternatively, hold it in abeyance for at least 60 days after

a Tax Court rules on his pending lawsuit in that forum. Rodger

requests this abeyance so that he can continue to negotiate a

resolution with the IRS of both lawsuits. The court declines to

grant this request. Although this court frequently stays

dispositive rulings when both sides seek such relief so that they

can pursue settlement negotiations, it does not do so based on a

unilateral request. Moreover, the court does not discern——and

Rodger does not explain——a basis on which a ruling of the Tax Court

on a different matter would affect the question presented in this

case. It appears that he is simply interested in a global

settlement of issues he has with the IRS. The court will not delay

its decision on this basis.
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 * * *

Accordingly, the court grants the government’s August 30, 2007

summary judgment motion and dismisses this action with prejudice by

judgment filed today.

SO ORDERED.

February 5, 2008.

_________________________________

SIDNEY A. FITZWATER

CHIEF JUDGE