T.C. M em o . 2 0 1 8 -1 3 9

UNITED STATES TAX COURT

KATHERINE M ARTE KOPSTAD, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 6 5 1 -1 7 L
. Fi l edAu gu s t 2 9 , 2 0 1 8
.

Kat h eri ne M art e Ko p s t ad , p ro s e. J eremy D. Cam ero n , fo r res p o n d en t.

M EM ORANDUM OPINION GUY, Sp eci al Tri al J u d g e: Th i s co l l ect i o n rev i ew cas e i s b efo re t h e Co u rt
o n res p o n d en t ’ s m o t i o n fo r s u m m ary ju d gm en t , wi th a s upp o rt i n g d ecl arat io n ,- 2
-

[* 2 ] fi ledp u rs u an tt o Ru l e 1 2 1
. 1 Pet i t i o n er fi l ed a res p o n s e, fo l l o wedb y a fi rs t
s up p lem en tt o res po n s e, i n o p p o s i t i o nt o res po n d en t ’ s m o t i o n . As d i scu s s edi n d et ai l b el o w, the reco rd s ho ws th atth ere i s n o g en u i n e d i s p u t e as t o an y m at eri al fact i n th i s cas e, an dres p o nd en ti s en t i tl ed t o ju d gm en t as a m at t er o f l aw
s u s t ai n i n g a p ro po s edl ev y act i o n t o co ll ectp et it i o n er’ s u np ai dFed eral i n co m e t ax l i ab i l i ty fo r t h e t ax ab l e y ear 2 0 1 2
. Back g ro u nd 2 I. Pet i t i o n er’ s Tax Retu rn fo r 2 0 0 9 OnOct o b er 1 7 , 2 01 1 , p et i t i on er s ub m i tt ed t o t h e In t ern al Rev en u e Serv i ce (IRS) a Fed eral i n co m e t ax return fo r t he t ax ab l e y ear 2 00 9 rep o rt i n g i n co m e t h at
s h e h adrecei v edfro m

h er fam il y ’ s b u s i n es s , Seab reeze In t ern at i o n al , In c. (SI). Pet i t io n er h ad n o tp rev i o u s l y fi l eda t ax retu rn fo r 2 0 0 9 b ecau s e s h e h adn o t i n i t i al l y been aware o f t he SI i n co m e. OnNo vem

b er 2 8, 2 0 1 1 , th e IRS as s es s edth e t ax thatp et i ti o n er h ad rep o rt ed
o n th e ret u rn , i n teres t , an dad d it i o n s t o t ax fo r fai l u re t o t i m el y fi l e t h e ret u rn

1 Un l es s o th erwi s e i nd i cat ed , al l s ect i o nreferen ces are t o th e In t ern al Rev enu e, as am en d edan di n effect atal l rel ev an t t i m es , an dal l Ru l e referen ces are t o the Tax Co u rtRu l es o f Pract i ce an dPro cedu re. M o n et ary am o u nt s are ro u n d ed t o the n eares td ol lar.

2 Th e reco rdes t ab l i s h es o r t h e p art i es d o n o td i sp u te t h e fo l l o wi ng b ack gro un dfact s .- 3
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[* 3 ] u n d er s ect i o n 6 6 5 1 (a)(1 ) an dfai l u re t o t im el y p ay th e t ax du e u n d er s ect i o n 6 6 5 1 (a)(2 ). Pet i t i o n er s ubs equ en tl y p ai dth e t ax an di n teres t , an dth e IRS ab at ed th e ad d i t i o n s t o t ax u n d er t he fi rs t -t i m e ab at em en tp ro g ram . 3 II. Pet i t i on er’ s Tax Retu rn fo r 2 0 12 OnOct o b er 4 , 2 0 1 3 , p et i t i o n er fi l eda d el i nqu en tFed eral i nco m e t ax retu rn fo r t h e t ax ab l e y ear 2 0 1 2. OnNo v em b er 1 1, 2 0 1 3 , th e IRS as s es s edt ax o f $ 1 3 ,1 7 4 rep o rt edo n th e ret u rn , i n t eres t o f $ 27 3 , an dad d i t i o n s t o t ax o f $ 2 , 9 6 4 fo r fai l u re t o t im el y

fi l e t h e ret u rn u n d er s ect i o n6 6 5 1(a)(1 ) an d $ 4 6 1 fo r fai l u re t o t i m el y pay

th e t ax du e u n d er s ect i o n6 6 5 1(a)(2 ) (ad d i t i o ns t o t ax ). Pet it i o n er
rem i t t ed$ 4 ,0 0 0 wi th h er ret u rn an dm ad e t h ree ad di t i o n al p aym en t s t o t al i n g $ 9 ,4 4 5 i n Decem

b er 2 0 1 3 an d J an u ary

2 0 1 4 i ns at i s fact i o no f t h e t ax an di n t eres t
s h e o w edfo r 2 0 12 . Sh e d i dn ot , h o wev er, p ay th e ad d i t i o n s t o t ax . It ap p ears th ato n o r ab o u tNo v em b er 1 1 , 2 01 3 , p et i ti o n er s en ta l et t er t o th e IRS req u es t i ng ab at em en to f t h e ad d i t i o n s t o t ax . Sh e s t at edi nth e l et t er t h atfo r t ax ab l e y ears p ri o r t o 2 0 1 2 , h er acco u n tan to r h er b o o kk eep er h adreq ues t edfi l i ng
ex t en s i o n s o n h er b eh al f b u t , fo r reas o n s u n kn o wn , n ei th er h ad d on e s o fo r 2 0 1 2
.

3 See In t ern al Rev en u e M an u al p t . 2 0 .1 .1 .3 .6 .1 . (No v . 2 5, 2 0 1 1 ) (d es cri b i n g th e fi rs t -t i m e ab at em en t p ro g ram ).- 4
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[* 4 ] Pet i t i o n er s pecu l at edthatn o req u es tfo r a fi li n g ex ten s i o nh adb een s ub m i tt ed
o n h er b eh al f b ecau s e o f a m i s co m m u n i cat io n . In m i d -J an u ary

2 0 1 4 th e IRS p u rp ort ed l y s en ta l et t er t o p et i t i o n er d en y i n g h er req u es tfo r ab at em en to f th e ad d i t i on s t o t ax (d en i al l et t er) an di n fo rm i n g h er
o f t h e o p p o rtun i ty

t o ap p eal th e m at t er t o the IRS Offi ce o f Ap p eal s (Ap peal s Offi ce) wi th i n 6 0 d ay s . Pet i t i o n er n ev er recei v edth e d en ial l et t er an dd i dn o tfi l e
an ap peal wi th th e Ap p eal s Offi ce. OnNo vem

b er 1 1, 2 0 1 3 , an dag ai n o nFeb ru ary 1 7 , 2 01 4 , res po n den tm ai l ed t o p et i ti o n er n o t ices an dd em an d s fo r p aym en t o f t h e b al an ce du e fo r 2 0 1 2
. Pet i t io n er d i dn o trem itp aym en t . OnM arch 3 , 2 01 6 , res p on d en tm ai ledt o p et i t i o n er a No t i ce o f In t en tt o Lev y an d No t i ce o f Yo u r Ri g h tt o a Heari n g reg ard in g th e unp ai d ad d i t i o n s t o t ax fo r 2 0 1 2 . Pet i t i o n er fi l edwi th th e Ap p eal s Offi ce a t i m el y req ues tfo r an ad m i n is trat i v e h eari n g u n der s ect i o n 6 33 0
. Pet i t i o ner’ s cas e was as s i g n edwi th i nth e Ap p eal s Offi ce t o Set tl em en t Offi cer Sh i rl ey

Ri v ers (SO Ri v ers ). On J ul y 2 0 , 2 0 1 6 , SO Ri v ers co n duct edan ad m i n is trat i v e h eari n g b y t el ep h o n e co n feren ce cal l wi th p et i t i o n er an d h er fat h er, To d d Ko ps t ad
. SO Ri v ers i n d icat edth ats h e wo ul dreco m m en dab at em en to f t h e ad d it i o n s t o t ax .- 5
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[* 5 ] OnSep t em

b er 1 9 , 2 0 1 6 , p et i t io n er’ s cas e was reas s i g nedt o Set t l em en t Offi cer J acqu al i ne Du n n (SO Du nn ). In rev iewi ng p et i t i o n er’ s fi l e, SO Du n n
co u ldn o td i s cern SO Ri v ers ’ reas o n (s ) fo r reco m m en d i n g ab at em en to f t he ad d it i o n s t o t ax . On No v em b er 2 , 2 0 1 6, SO Du n nco n du ct eda s eco n dt el ep h o n e
co n feren ce cal l wi th p et i t i o ner an dh er fat h er. Pet i t i o n er as s ert ed th atth e ad d it i o n s t o t ax s ho u l db e ab at edb ecau s e s h e h adn ev er recei vedth e J an u ary 2 0 1 4 d en ial l et t er an d , m o reo ver, h er acco u n t an th adm i s t ak en l y fai l edt o req u es ta fi li n g ex t en s i o n. Pet i t i o n er d i dn o treq u es tan y co l l ect i o n al t ern at i v e i nth e ev en t th ath er req u es tfo r ab at em en twas d en i ed
. OnDecem

b er 1 2, 2 01 6 , th e Ap p eal s Offi ce s en t t o p et i t i o n er a n o t ice o f d et erm i n at i o n d en y in g h er req u es tfo r ab at em en to f t h e ad d i t i o n s t o t ax an d
s u s t ai n i n g t h e p ro p o s edl ev y act i o n . OnJ an u ary

9 , 2 0 1 7 , p et i t i o n er fi l edwi th th e Co u rta t i m el y

p et i t i o n fo r rev i ew o f the d et erm i n at i o n . Atth e t i m e t h e p et i t i o n
was fi l ed , s h e res i d edi n Fl ori da. Aft er fi l i n g an an s wer t o th e p et i t i o n , res p o nd en tfi l eda m o t io nt o rem an d th e cas e t o th e Ap p eal s Offi ce t o i n v es t ig at e wh et h er th ere were an y reco rd s o r d o cu m en t s , b ey on dan acco u n ttran s cri p t , t o s h ow th atth e IRS h adi s s u edth e d en ial l et t er t o p et i t i on er i n J an u ary 2 0 1 4. In th e ab s en ce o f s u ch d o cu m en t at i o n , res p o n d en t i n d i cat ed th at th e Ap p eal s Offi ce wo u ldco n s i d er an y i n fo rm at io nth at- 6
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[* 6 ] p et i t i o n er m i gh tp res en t i n s up p o rto f h er req u es tfo r ab at em en t o f t h e ad d it i o n s t o t ax . Th e Co u rtg ran t edres p o n d en t ’ s m o t i o nan drem an d ed p et i t i o n er’ s cas e t o th e Ap p eal s Offi ce fo r a s up p l em en t al ad m i n i s trat i v e h eari n g . Onrem an d , Set t l em en tOffi cer M ari l ynDan iel s (SO Dan i el s ) d et erm i n ed th atth ere were n o ad d i t io nal d ocu m en t s t o s ho w th atth e IRS h adi s s u edthe d en i al l et t er t o p et i t i o n er. SO Dan i el s h el da t el ep h o n e co n feren ce cal l wi th p et i ti o n er
an d h er fat her an di n fo rm edp et i t i o n er t h ats h e s h o u l d p ro v i de i n fo rm at i on t o p erm i tthe Ap p eal s Offi ce t o ev al u at e h er req u es tfo r ab at em en to f t h e ad d i t i o n s t o t ax fo r 2 0 1 2 . Pet i t i o n er rei t erat edthatth e ad d i ti o n s t o t ax s h o u l db e ab at edo n th e g ro u nd s th ats h e h ad n ev er recei v edth e J an u ary 2 0 1 4 d en i al l et t er an d h er
acco u n t an th adm i s t ak en l y fai l edt o req u es ta fi l i n g ex t en si on . Pet i ti o n er’ s fat h er i n d i cat edth ath e wo u l dn eedm o re t i m e t o p ro vi de ad d i t io n al i n fo rm at i o n i n
s up p orto f p et i t i on er’ s ab at em en treq u es t . Al th o ug h SO Dan i el s o ffered a 1 4 -d ay
ex t en s i o n t o al l o w p et i t io ner t o co m p i l e an ds ubm i tad d it i on al i n fo rm at i o n , s h e
u l t i m at el y

d ecl i nedthe ex ten s i o n an di n d i cat edth ats h e wo ul d d i s cu s s t he m at t er wi th res p o n d en t ’ s co u n s el . OnJ an u ary 3 0 , 2 0 1 8 , th e Ap p eal s Offi ce s en t t o p et i t i o n er a s up p l em en t al n ot i ce o f d et erm i n at i o n d en y i n g h er req u es t fo r ab at em en to f t h e ad d i t io n s t o t ax an ds u s t ai n i n g th e p ro po s edl ev y act i o n .- 7
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[* 7 ] Di s cu ss i o n Su m m ary ju d g m en ts erv es t o “ ex p ed i t e l it i g at i on an d av o i d u n n eces s ary an d
ex p en s i v e t ri al s.” Fl a. Peach Co rp . v . Co m m i s s io n er, 9 0 T.C. 6 7 8, 6 8 1 (1 9 8 8 ). Ei th er p art y

m ay m ov e fo r s u m

m ary ju d g m en tupo nal l o r an y p arto f t he l eg al i s su es i n co n tro v ers y . Ru l e 1 2 1 (a). Th e Co u rtm ay g ran ts u m

m ary ju d g m en to n l y i f t h ere are n o g en u i n e d i s p ut es o r i s s ues o f m at eri al fact
. Ru le 1 2 1 (b ); Naft el v . Co m m i s s i o n er, 8 5 T.C. 5 27 , 5 2 8 -5 2 9 (1 9 8 5 ). Res p o n d en t , as th e m o v in g p art y , b ears th e b u rd en o f p ro v i ng th at n o g en ui n e d i s p u t e o r i s su e ex i s t s as t o an y m at eri al factan dth ath e i s en ti t l edt o ju d g m en tas a m at t er o f l aw. FPL Grp ., In c. & Sub s . v . Co m m i ss i o ner, 1 1 5 T.C. 5 5 4 , 5 5 9 (2 0 0 0); Bo n dv . Co m m i s s i o n er, 1 00 T.C. 3 2 , 3 6 (1 9 93 ). In d eci d i n g wh et h er t o g ran ts u m

m ary ju d gm en t , th e fact u al m at eri al s an dth e i n feren ces drawn fro m

th em m u s tb e co ns i d eredi nthe l i g h t m o s tfav o rab l e t o th e n o nm o v i n g p art y . FPL Grp
. , In c. & Subs . v . Co m m i s si on er, 1 1 5 T.C. at5 59 ; Bo ndv . Co m m i s s i o n er, 1 0 0 T.C. at3 6
. Wh en a m ot i o n fo r s umm ary ju dg m en ti s m ad e
an d p ro p erl y

s up p o rt ed , th e p art y

o p p o s i ng th e m o t io n“ m ay n o tres t up o nth e
m ere al l eg at i on s o r d en i al s o f h i s p l ead i n g , b u t * * * m u sts et fo rt h s peci fi c fact s
s h o wi n g th atth ere i s a g en ui n e i s su e fo r t ri al .” An ders o n v . Li b ert y Lo b by , In c., 4 7 7 U.S. 2 4 2 , 2 4 8 (1 9 8 6 ) (qu o t i n g Fed . R. Ci v . P. 5 6 (e)); s ee Ru l e 1 2 1 (d ).- 8
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[* 8 ] I. Co l l ect i o n Rev i ew Pro ceed i n g s Sect io n 6 3 3 1 (a) au th o ri zes th e Secret ary t o l ev y up on p ro pert y an dp ro p ert y ri gh t s o f a t ax p ay er l iab l e fo r t ax es wh o fai l s t o p ay tho s e t ax es wi th i n1 0 d ay s aft er a n o t i ce an d d em an dfo r p aym en ti s m ad e. Sect i on 6 3 3 1(d ) p ro v i des th atth e l ev y au th o ri zed i n s ect i o n 6 3 31 (a) m ay b e m ad e wi th res p ectt o u np ai dt ax o n l y i f th e Secret ary

h as g i v en wri tt en n o t i ce t o th e t ax p ay er 3 0 d ay s b efo re t h e l ev y . Sect i o n 6 3 3 0(a) req u i res th atth e wri t t en n o t i ce i n cl u d e th e am o un to f th e unp ai d t ax an dth e t ax p ay er’ s ri gh tt o an ad m i n i s trat iv e h eari n g . If an ad m i n i s trat i v e h eari n g i s req u es t ed , the h eari ng i s t o b e co n du ct edb y th e Ap p eal s Offi ce. Sec. 6 33 0 (b )(1 ). In ren d eri n g an ad m i ni s trat i ve d et erm i n at i o n i n a co l l ect i o n rev i ew p ro ceed i n g , th e Ap p eal s Offi ce m u st v eri fy th atthe req u i rem en t s o f an y

ap p l i cab l e l aw an dad m i n is trat i v e p ro cedu re h av e b een m eti n p ro ces s i n g th e t ax p ay er’ s cas e. Sec. 6 3 3 0 (c)(1 ), (3 )(A). Th e Ap peal s Offi ce al s o
m u stco ns i d er an y

i s s u es rai s edb y th e t ax p ay er rel at i n g t o th e co l l ect i o nact i o n , i n cl u d i n g o ffers o f co l l ect i on al t ern at i v es , ap p ro p ri at e s p o us al d efen s es , an d ch al l en g es t o t h e ap p ro p ri at en es s o f t h e co l l ect i o nact i on . Sec. 6 33 0 (c)(2 )(A), (3 )(B). A t ax p ay er m ay

ch al l en g e t h e ex i s t en ce o r am o u n to f h er u n derl y i n g t ax l i ab i l i ty bu to n l y

i f t h e t ax p ay er d i dn o t recei ve a n o t i ce o f d efi ci en cy o r d i dn o t
o th erwi s e h av e an earl ier o p p o rtu n i ty t o d i s p ut e t h e t ax l iab i l i ty . Sec.- 9
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[* 9 ] 6 3 3 0 (c)(2 )(B). Fi n al l y , th e Ap p eal s Offi ce m u s tco n si der wh et h er t h e
co l l ect i o n act i on b al an ces the n eedfo r effi ci en tco l l ect i on ag ai n stth e t ax p ay er’ s
co n cern th at co l lect i o n b e n o m o re i n tru s i v e th an n eces s ary . Sec. 6 3 30 (c)(3 )(C). Th i s Co u rth as juri sd i ct io nt o rev i ew adm in i s trat i ve d et erm in at i o n s i n
co l l ect i o n rev i ew cas es . Sec. 6 3 3 0 (d ); s ee Ian n o n e v . Co m m i s s i on er, 1 2 2 T.C. 2 8 7 , 2 9 0 (2 0 0 4). Wh ere t he u nd erl y i n g t ax l i ab i l i ty i s p ro p erl y

at i ss u e, we rev i ew th atm at t er d e n ov o . Seg o v . Co m m i s s i o n er, 1 1 4 T.C. 6 0 4 , 6 1 0 (2 0 0 0 ); Go za v . Co m m i s s i o n er, 1 1 4 T.C. 1 7 6 , 1 8 1 -1 8 2 (2 0 0 0). Oth erwi s e, we rev i ew th e Ap p eal s Offi ce ad m i n i s trat i ve d et erm in at i o n fo r ab u s e o f d i scret i o n. Go za v . Co m m i s s i o n er, 1 1 4 T.C. at1 8 1-1 8 2 . Anab u s e o f d i s cret i o no ccu rs i f t h e Ap p eal s Offi ce ex erci ses i ts d i s cret i on “ arb i trari l y , cap ri ci o u s l y , o r wi th ou ts o u n db as i s i n fact o r l aw.” W o o dral v . Co m m i s s i o n er, 1 1 2 T.C. 1 9 , 2 3 (1 9 9 9). II. Pet i t i on er’ s Un d erl y in g Tax Li ab i l i t i es Sect io n 6 6 5 1 (a)(1 ) i m

p o s es an ad d i t io nt o t ax fo r a t ax p ay er’ s fai l u re t o fi l e a req u i redretu rn o n o r b efo re t h e s p eci fi ed fi l i ng d at e, i n cl u d i n g ex t en s i o n s . Sect i o n 6 6 5 1(a)(2 ) i m

p o s es an ad d i t i o nt o t ax o f 0 .5 % p er m o n th up t o 2 5 % fo r fai l u re t o p ay

th e am o un ts h o wnas t ax o nth e ret u rn . A t ax p ay er m ay b e rel i ev ed
o f t h e ad d i ti o n t o t ax , h o wev er, i f s h e can d em on s trat e t h atth e fai l ure i s du e t o
reas on ab l e cau s e an dn o tdu e t o wi l l fu l n eg l ect . Sec. 6 6 5 1 (a)(1 ) an d(2 ). W i l l fu l- 1 0 -

[* 1 0 ] n eg l ectm ean s i n t en t i o n al fai l u re o r reck l es s i n di fferen ce. Un i t edSt at es v . Bo y l e, 4 6 9 U.S. 2 4 1 , 2 4 5 (1 9 8 5 ). Sect i o n3 0 1
. 6 6 51 -1 (c)(1 ), Pro ced . & Adm i n . Reg s., p ro v i des that , i f a t ax p ay er ex erci s es o rd i nary b u s i n es s care an dp ru d en ce
an d i s n ev ert hel es s u n ab l e t o fi l e o nt i m e, t hen th e d el ay i s du e t o reas o nab l e
cau s e. Pet i t i o ner’ s t ax retu rn fo r t h e t ax ab l e y ear 2 0 1 2 was du e t o b e fi l edo no r b efo re Ap ri l 1 5 , 2 0 1 3. See s ec. 6 0 7 2 (a). Pet i t io n er d o es n o t d i sp u t e t h ath er t ax retu rn was n o tt im el y

fi l edo r t h atn o req u es t fo r a fi l i n g ex t en s io n was s ub m i t t ed t o the IRS o n h er b eh al f. Pet i t i o ner m ai n t ai n s th ats h e co u n t edo nh er b o o kk eep er o r h er acco u n t an t t o req u es ta fi l in g ex t en s i o n o n h er b eh al f fo r t h e t ax ab le y ear. Un fo rtu nat el y n o req u es tfo r a fi l i n g ex t en s i o n was ev er s ub m i t tedt o th e IRS. Iti s wel l s et t l edth at a t ax p ay er’ s rel i an ce o n an acco u n tan to r a t ax p rep arer t o fi le a t i m el y t ax retu rn d o es no tco n s t i tu t e reas on ab l e cau s e wi th i nth e m ean i n g o f s ect i o n6 6 51 (a)(1 ). Un i ted St at es v . Bo y l e, 4 6 9 U.S. at2 5 2 . Acco rd i n g ly , p et i t i o ner h as n o ts h o wn th ath er fai lu re t o fi l e a t i m el y retu rnwas du e t o reas o n ab l e cau s e, an dwe h o l d- 1 1 -

[* 1 1 ] th ats h e i s l i ab l e fo r t h e ad d i t i o ns t o t ax as s es s edp u rs u an tt o s ect i o n 6 6 5 1 (a)(1 ) an d(2 ). 4 III. Pro cedu ral Req u irem en t s Pet i t i o ner as s ert s th atres p o n d en t fai l edt o fo l l o w p ro p er p ro cedure i nth at (1 ) res p o n d en t fai l edt o ab at e t he ad d i t io n s t o t ax u n d er t h e fi rs t -t i m e ab at em en t p ro g ram , (2 ) p et i t i o n er d i d n o trecei v e t h e J an u ary 2 0 1 4 d en i al l et t er, an d (3 ) res p o n d en t d el i berat el y d el et edSO Ri v ers ’ cas e act i vi ty n o t es . W e d i s ag ree. A. Fi rs t -Ti m e Ab at em en t Th e In t ern al Rev en u e M an u al (IRM ) p t . 2 0
. 1 .1 .3 .3 .2 (Au g . 5 , 2 0 1 4 ) d es cri b es an IRS p ro g ram u n d er wh i ch a t ax p ay er m ay req u es t ad m i n i s trat iv e rel i ef fro m ad d i t i o n s t o t ax (e.g ., un d er s ect i o n6 6 5 1 (a)(1 ) an d(2 )) th atwo u l d
o th erwi s e b e as s es s ed . See, e.g ., Lai d l aw v . Co m m i s s i o n er, T.C. M em o 2 0 1 7 -1 6 7 , at* 1 7 -* 1 8 . If fi rs t -t i m e ab at em en trel i ef i s g ran t edu s i n g th e “ Reas on ab l e Cau s e As s is t an t ”, a t ax p ay er’ s acco u n ttran s cri p t wi l l s ho w reas o n co d e “ 0 65 ” an d p en al ty reas o n co de “ 0 2 0 ”. IRM p t . 2 0 .1 .1 .3 .6 .2 (1 )a (Feb . 2 2 , 2 0 0 8 ); IRM Ex h i bi t 2 0 .1 .1 -2 (No v. 2 5 , 2 0 1 1 ). Th e Reas o nab l e Cau s e As s i s t an ti s a co m p u t er p ro g ram

4 Pet i t i on er fai l ed to cl earl y art i cu l at e a reas o n ab l e cau s e d efen s e t o th e ad d it i o n t o t ax th atth e IRS as s es s edu n d er s ec. 6 6 5 1 (a)(2 ) fo r fai l u re t o t i m el y p ay th e t ax o wedfo r the t ax ab l e y ear 2 0 1 2
.- 1 2 -

[* 1 2 ] u s edb y

th e IRS t o d et erm i n e wh et her a t ax p ay er s at i s fi es el i g i b i l i ty cri t eri a fo r t h e fi rs t-t im e ab at em en t p ro g ram . IRM p t. 2 0.1 .1
. 3
. 6 .1 (4 ) (No v . 2 5 , 2 01 1 ). Th e reco rdi n cl u d es a Fo rm 4 3 40 , Cert i fi cat e o f As s es s m en t s , Paym en t s , an d Oth er Sp eci fi edM at t ers , wh i ch s h ows th atfo r t he t ax ab l e y ear 2 0 0 9
res p o n d en t h aden t eredas s es s m en t s ag ai n s t p et i ti o n er fo r ad d i t i o n s t o t ax u n d er
s ect i on 6 6 5 1 (a)(1 ) an d (2 ). In ad d i t io n , res po n den tp ro du ceda TXM ODA tran s cri p to f acco u n tfo r t h e t ax ab l e y ear 2 0 0 9 wh ich s h o w s th atth e ad d i t io n s t o t ax u n der s ect i o n 6 6 5 1 (a)(1 ) an d(2 ) were ab at ed u s i n g th e co d e “ A DJ -RSNCD>0 6 5 –

0 2 0”--i n d i cat i n g th atp et i t i o n er q u al i fi edfo r rel i ef u n d er t h e fi rs t -t i m e ab at em en tp ro g ram . Al th ou g h p et i t i o n er d o es n o t s eem t o d i s p ut e t h atthe IRS g ran t edh er fi rs t -t i m e ab at em en trel i ef fo r t h e t ax ab l e y ear 2 0 0 9 , s h e ap paren t l y b el i ev es th at
n o ad d i t i o n s t o t ax s h o u ldh av e b een as s es s edfo r t h e t ax ab l e y ear 2 0 0 9 i nth e fi rs t p l ace. Th e Co urt ’ s juri sd i ct i on i n th i s cas e, h o wev er, i s l i m i t edt o a rev i ew o f
res p o n d en t’ s p ro p o s edl ev y act i o nfo r t h e t ax ab l e y ear 2 0 1 2 . W e l o okt o p et i t i o n er’ s acco u n tfo r th e t ax ab l e y ear 2 00 9 o n ly t o co ns i d er wh eth er s h e was g ran t edfi rs t -t i m e ab at em en trel i ef wi th in th ree y ears o f h er req u es tfo r ab at em en t fo r t h e t ax ab l e y ear 2 0 1 2.- 1 3 -

[* 1 3 ] Th e reco rds h o ws thatp et i t i o n er was g ran t edfi rs t -t im e ab at em en trel i ef fo r th e t ax ab l e y ear 2 0 09 , i .e., wi th i nth ree y ears o f t ax ab l e y ear 2 0 12 . Co n s i s t en t wi th IRM p t . 2 0 .1 .1 .3 .6 .1 (5 ) (No v . 2 5 , 2 0 11 ), b ecau s e t h e IRS h adg ran ted p et i t i o n er fi rs t -t i m e ab at em en trel ief i nres p ecto f ad d i t io n s t o t ax as s es s edfo r t h e 2 0 0 9 t ax y ear, s h e was n o tel ig i b l e fo r fi rs t-t i m e ab at em en trel i ef fo r t h e t ax ab l e y ear 2 0 1 2 . Ins u m , we can no ts ay o nth i s reco rdth atthe Ap p eal s Offi ce ab u s edi t s d i s cret i o n i n d en y i n g p et i t i o n er’ s req u es tfo r fi rs t-t i m e ab at em en trel i ef fo r t h e t ax ab l e y ear 2 01 2
. B. Den i al Let t er Res p o n d en twas u n ab l e t o p ro du ce t h e d en i al l et t er t h atthe IRS h ad p u rp ort ed l y

s en t t o p et i t i o n er i n J an u ary 2 0 14 . Gi v en th atp et i t i o n er h adn o th ada p ri o r o p p o rtu n i ty t o ch al l en g e h er l i ab il i ty fo r t h e ad d i t i o ns t o t ax i nqu es t i o n wi th i n th e m ean i n g o f s ect i on 6 3 30 (c)(2 )(B), s h e was en t i tl ed t o d o s o b efo re t he Ap p eal s Offi ce. Pet i t i o ner as s ert s th atres p o n d en t ’ s fai l u re t o s en d t h e d en i al l et t er t o h er
s o m eh o w b ars co l l ect i o n o f t h e ad d i t i o n s t o t ax i nd i s p u t e. W e d i s ag ree. Th e Co u rtrem an d ed p et i ti o n er’ s cas e t o th e Ap p eal s Offi ce t o p ro v i d e h er t h e
o p p o rtu ni ty

t o p res en t d o cu m en t at i o nan di nfo rm at i on i ns up p o rto f h er req u es tfo r ab at em en to f t h e ad d i t io n s t o t ax i nd i s p u t e. Itap pears th at p et it i on er o r h er fat h er- 1 4 -

[* 1 4 ] m is u n d ers t o o d th e p u rp o s e an ds co p e o f t h e s upp l em en t al h eari n g o n
rem an d, b ecau s e s h e fai ledt o s ub m i ti n fo rm at i o n at thatt i m e t h at wo u l dh av e p erm i t t edth e Ap p eal s Offi ce t o ev al u at e h er cl ai m . Co n traryt o p et i ti o n er’ s p o s i t i on , th e Ap p eal s Offi ce fo l l o wedth e req u i rem en t s o f an y ap p l icab l e l aw an d ad m i n is trat i v e p ro cedu re i n th i s cas e. C. SO Ri v ers ’ Cas e Act i v i ty No tes Pet i t i o ner s ug g es t s th atres p on d en td el i b erat el y d el et edSO Ri v ers ’ cas e act i vi ty n o t es o f co n v ers at i o n s wi th h er t h atwo u l dh av e ex p l ai n ed SO Ri v ers ’
reas on s fo r reco m

m en di n g ab at em en to f t h e ad d i t i o ns t o t ax . Al th o u g h res p o n d en t d o es no td is p u t e t hatSO Ri vers reco m m en d edab at em en t , the fact rem ai n s th at p et i t i o n er’ s cas e was reas si g nedt o SO Dan iel s b efo re a fi nal d et erm i n at i o nwas
ren d eredi n res p ect o f h er cl ai m fo r ab at em en t . Inth e en dth e Ap p eal s Offi ce ag reed , aft er rem an d , wi th SO Dan i el s ’ reco m m en d at i o nt o d en y

p et i t i o n er’ s req u es tfo r ab at em en t. Un d er t h e ci rcu m s t an ces , th ere s im p l y i s n o i n d i cat i o nth at th e Ap p eal s Offi ce ab u s edi t s d i s cret i o n i nth i s cas e. IV. Co n cl u s i o n Th e reco rds h o ws thatthe Ap p eal s Offi ce v eri fi edth at th e req u i rem en t s o f al l ap p l i cab l e l aws an d ad m i n i st rat i v e p ro cedu res were m eti nth i s cas e. Atn o
s t ag e o f t h es e p ro ceed i n gs h as p et i t i o n er o ffereda co l l ect i on al t ern at iv e t o th e- 1 5 -

[* 1 5 ] p ro p o sedl ev y

act i o n . Th e Co u rt i s s at i sfi edth atthe p ro p o s edl ev y act i o n b al an ces th e n eedfo r effi ci en tco l l ect i o no f t ax es wi th th e l eg i t i m at e co n cern o f p et i t i o n er t h atan y

co l l ect i o n b e n o m ore i nt ru s i v e t h ann eces s ary . Ins u m , we
co n cl u d e th e Ap p eal s Offi ce d idn o t ab u s e i t s d i s cret io n , an dres p o n den ti s en t i t l ed t o ju d g m en tas a m at t er o f l aw s u s t ai n i n g the s upp l em en tal n o t i ce o f d et erm i n at io n i s su edJ an u ary

3 0 , 2 01 8
. To refl ectthe fo reg o i n g , Anap p ro p ri at e o rd er an dd eci s i o n wi l l b e en t ered
.