T.C. M em o . 2 0 1 9 -1 6 6

UNITED STATES TAX COURT

M ICHAEL GORDON BANKS, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 5 7 8 3-1 8L. Fi l edDecem b er 1 9 , 2 01 9
.

M i ch ael Go rd o n Ban k s , p ro s e. Sh aryn M . Ort eg a, fo r res p o n den t
.

M EM ORANDUM FINDINGS OF FACT AND OPINION KERRIGAN, J u dg e: Th i s co l l ect i o n du e p ro ces s (CDP) cas e was
co m m en cedi n res p o n se t o a No t i ce o f Det erm i n at i o n Co ncern i n g Co l l ect i o n Act i o n (s ) Un d er Sect i o n 6 3 2 0 an d/ o r 6 3 3 0 (n o t i ce o f d et erm i n at i o n ) d at ed Feb ru ary 2 7 , 2 0 1 8 , s u s t ai n i n g th e fi l i n g o f a Fed eral t ax l i en i n rel at i o n t o p et i t i o n er’ s u npai dt ax l iab i l i t i es fo r 2 0 1 3 an d2 0 1 5 (y ears ati ss ue). Th e i s s u e fo r- 2
-

[* 2 ] o u r co n s i d erat i o n i s wh et h er res p o n den t ’ s d et erm i n at i o n t o s u s t ai n th e
co l l ect i o n act i on was p ro p er. Un l es s o th erwi s e i n d i cat ed , al l s ect io n referen ces are t o th e In t ern al Rev enu e Co de i n effect atal l rel ev an tt i m es . W e ro u n dal l m o n et ary am o u n t s t o th e n eares td o l l ar. FINDINGS OF FACT So m e o f t h e fact s h av e b een s ti p u lat ed an dare s o fo u n d. Th e s t ip u l at i o n o f fact s an dth e at t ach ed ex h i b i ts are i n co rp o rat ed h erei n b y th i s referen ce. 1 Pet i t io n er res i dedi n Cal ifo rn i a wh en h e t i m el y fi l edh i s p et i t i o n . OnM ay 3 0 , 2 0 1 7 , res p o n d en ts en tp et i t i o n er a No ti ce o f Fed eral Tax Li en Fi l i n g an dNo t i ce o f Yo u r Ri g htt o a Heari n g Un d er IRC 6 3 2 0 reg ard i n g p et i t i o n er’ s u npai dt ax l iab i l i t i es o f $ 3 68 fo r 2 0 1 3 an d $ 2 1 ,9 1 7 fo r 2 0 1 5
. Pet i t io n er t i m el y

fi l eda Fo rm

1 2 1 5 3 , Requ es tfo r a Co l l ect i o n Du e Pro ces s o r Equ iv al en tHeari n g . Onth e Fo rm 1 2 1 5 3 p et i t i o ner i n d i cat edth ath e was i n t eres t edi n an o ffer-i n -co m pro m is e as wel l as a wi th drawal o f t h e n o t i ce o f Fed eral t ax l i en (NFTL). He co n t en d edth atth e NFTL was n o t p ro p erl y fi l ed
. Pet i t i o ner’ s CDP h eari n g req u es t was as s i gn edt o a s et t l em en to ffi cer. On Sep tem b er 2 7 , 2 0 1 7, the s et t l em en to ffi cer m ai l edp et i t i o n er a l et t er ad vi s i n g h i m

1 Th es e fact s are rel ev an tp o rt i o n s o f t h e ad m i n i s trat i v e reco rd
.- 3
-

[* 3 ] th ath is CDP h eari n g req u es t was b ei n g p o s tp o n edu n ti l act i o n was t ak en o n h i s o ffer-i n -co m

pro m i se, wh i ch was p en d in g b efo re t h e s t arto f co l l ect i o n p ro ceed in g s . 2 Wh en p et i t i o n er h adreq ues t ed an o ffer-i n -co m p ro m i s e, h e was ad v is edth atwh i l e h i s o ffer was b ei n g i n v es t i g at ed , an NFTL m ig htb e fi l edt o p ro t ectth e Go v ern m en t ’ s i n t eres t . Sub s equ en t ly , th e s et t l em en to ffi cer fo u n do u t th atp et i t i o n er’ s o ffer-i n -co m p ro m i s e h adb een p rev i ou s ly reject edan dth ath e h ad req u es t edan ap p eal o f th e reject i o n . Pet it i on er’ s ap p eal o f h i s reject i o n was th en
reas si g n edt o t h e s am e s et t lem en to ffi cer wh o was h an d l i ng th e CDP h eari ng req u es t
. Th e s et t l em en to ffi cer rev i ewedp et i t i o n er’ s Fo rm 1 3 7 1 1 , Req u es tfo r Ap p eal o f Offer i n Co m

p ro m i s e. OnNo v em

b er 1 3, 2 0 1 7 , th e s et t l em en to ffi cer
s en tp et i t i o n er a l et t er s ch edu l i n g a t el ep h o n e CDP h eari n g fo r Decem b er 1 4 , 2 0 1 7 . Th e l et ter ex p l ai n edt o p et i t i o n er t h ath i s reject edo ffer-i n -co m p ro m i s e h ad b een rev iewedan d t h atth ere was n o ch an g e t o th e d et erm i n at i on . Th e l et t er

2 Pet i t i on er fi leda Fo rm

6 5 6 , Offer i n Co m

pro m i s e, o n No v em

b er 1 6, 2 0 1 6
. OnJ u l y 1 1 , 2 0 17 , res p o nd en ts en tp et i t i o n er a l et t er s t at i n g th ath i s o ffer-i n co m p ro m i s e co u l d n o t b e accep t edan d t h ati f h e d i dn otco n t actres p o n d en twi t h i n 1 0 d ay s , h i s o ffer wo u l dco n t i nu e t o b e p ro ces s edo n th e b as i s o f t h e i n fo rm at i o n p et i t i o n er h adal read y

s ub m i tt ed . OnAu gu s t1 4 , 2 0 1 7 , res p o n d en t ’ s Cen tral i zed Offer i n Co m

p ro m i se u n i t(COIC) i ss u edp et it i o n er a l et t er s t at in g th ath i s o ffer was reject edb ecau s e h e h adn etequ i ty o f $ 1 1 0 ,9 6 0 av ai l ab l e t o p ay h i s $ 23 ,4 3 1 t ax l i ab i l i ty

i n fu l l . OnSep t em

b er 1 1 , 2 0 1 7 , p et it i on er ap p eal edth e reject i o n .- 4
-

[* 4 ] fu rt her s t at edth ath i s b al an ce du e acco u n t s co u l db e p l aced i n cu rren t l y
n o n co l l ect i b l e (CNC) s tatus , res u l t i n g i n s us p en si o n o f co l l ect i on act i o n , an dth at h i s acco u n t s co u l db e rem o vedfro m CNC s t atu s i f h i s fi n an ci al s t atu s i m pro v ed
. OnDecem

b er 1 , 2 0 17 , p et i ti o ner s en tth e s et t l em en to ffi cer a l et ter ad dres s i n g h i s d i s ag reem en t s reg ard i n g th e reject io n o f h i s o ffer-i n -co m p ro m i s e. In th e l et t er p et it i on er al l eg edth atres p o n d en tm i g hth av e en g ag ed i n cri m i n al act i vi ty an dreq u es t edth atth e CDP h eari n g b e d el ay ed . Inres p o n s e t o p et i t i o n er’ s l et t er t he s et t lem en to ffi cer s en tp et i ti o n er a l et t er res ch edu li n g th e CDP h eari n g fo r J an u ary

9 , 2 0 1 8 . Th e l et t er rei t erat edth e o ffer t o p l ace h i s b al an ce du e
acco u n t s i n CNC s tatu s . OnDecem

b er 1 2, 2 01 7 , p et i t i on er s en t th e s et t l em en t o ffi cer an o th er l et t er
ex p res s i n g h i s co n cern s ab o u t th e reject i on o f h i s o ffer-i n -co m p ro m is e. Hi s l et t er d i dn o t i n cl u d e fi n an ci al d o cu m en ts i n s up p o rto f h i s p o si t i o n . In p rep arat i o n fo r th e CDP h eari n g t h e s et t l em en to ffi cer rev i ewedth e o fferi n -co m p ro m is e an dco n cl u d edth ati twas reject edp ro perl y b ecau s e p et i t i o n er h ad
s u ffi ci en tn etequi ty in h i s as s et s o f $ 1 10 ,9 6 0 av ai lab l e t o p ay h i s $ 2 3 ,4 31
o u t s t an d i n g t ax l i ab i l i ty i n fu l l
. Th e CDP h eari n g was h el do n J anu ary 9 , 2 0 1 8
. Th e s et t l em en to ffi cer ex p l ai n edt o p et it i o n er t h at s he h adn o trecei vedan y ad d it i o n al i n fo rm at i o n t o s up p ortp et i t i o n er’ s ap p eal o f t h e reject i o n o f h i s o ffer-- 5
-

[* 5 ] i n -co m

p ro m is e. Pet i ti on er d i dn o t rai s e h is u n d erl y i n g l iab i l i t i es b u targ u ed th atth e fi l in g o f t h e NFTL was p rem atu re an dth atth e NFTL s h o u l d b e wi th drawn . Aft er t h e h eari n g p et i t i o ner s en t th e s et t l em en t o ffi cer a l et t er co m p l ai n i n g ab o utres p o n d en t ’ s Fres h St art Pro g ram . W i th th e l et ter h e s en t v ari o u s at t ach m en t s , i n cl u d i n g a l et t er h e h adrecei v edfro m th e Tax p ay er Ad v o cat e Serv i ce (TAS). Th e TAS l et ter, d at edAu g u s t1 0, 2 0 1 7 , was i n res po n s e t o p et i t i o n er’ s i n qu i ry

d at edJ u l y

7 , 2 0 1 7 . Th e l et t er i n fo rm edp et i t i o n er t h at h i s
o ffer-i n -co m

p ro m i se was b ei n g reject ed
. Th e l et ter fu rt h er s t at ed : “ Th e IRS h as d et erm i n edth atth e l i en s h o u l db e wi th drawn .” Up o n recei p t o f p et i t io n er’ s l et t er t h e s et t l em en to ffi cer fo l l o wedup wi th th e TAS reg ard i n g t h e s tatu s o f t h e NFTL wi thd rawal . Sh e at t em p t edt o co n t act th e ap p ro p ri at e p ers o n wi th th e TAS an dl efta m es s ag e reg ard i n g th e NFTL. Th e
s et t l em en to ffi cer co ncl u d edth at th ere was n o n ew fi n an ci al i n fo rm at i o n i n
s up p orto f p et i t i on er’ s ap p eal o f t h e reject i o n o f h i s o ffer-i n -co m pro m i s e. Th e
s et t l em en to ffi cer v eri fi edth atal l l eg al an dp ro cedural req u i rem en t s h adb een m et
an d th e co l l ect i o n act i o n t ak enwas ap p ro p ri at e u n d er t h e ci rcu m s t an ces .- 6
-

[* 6 ] OnFeb ru ary 2 7 , 2 0 1 8, res p o n d en t i s s uedt o p et it i on er t h e n o ti ce o f d et erm i n at i o n s us t ai n i n g th e NFTL fi li n g fo r t h e y ears ati s s u e. 3 Pet it i on er rai s ed th e fo l lo wi n g i s su es i n h i s p et i t i o n : (1 ) an ag en to f res p o n d en tfal s i fi ed i n fo rm at i o n ; (2 ) t h e b al an ce due d o es n o t refl ectam o u nt s th ath av e b een p ai d ; (3 ) h i s ab i l i ty

t o p ay s h o ul db e co ns i d ered ; an d(4 ) th e am o u n to f t h e l i en fo r 2 0 1 3 i s i n accu rat e an dthe l i en s h o u l d b e wi th drawn as referen cedi n th e l et t er fro m th e TAS. 4 OPINION I. St an dardo f Rev i ew Th e Secret ary i s req u i redt o p ro v i de a t ax p ay er wi th wri tt en n o t i ce o f t h e fi li n g o f an NFTL ag ai n s tth e t ax p ay er’ s p ro p ert y o r ri g h t s t o p ro pert y . Sec. 6 3 2 0 (a)(1 ). Th e n o t ice m u s tal s o i n fo rm

th e t ax p ay er o f h i s o r h er ri gh tt o a CDP h eari n g b efo re an i m

p art i al o ffi cer o r em

p l o y ee o f th e Ap p eal s Offi ce. Sec. 6 3 2 0 (a)(3 ), (b ). At

the CDP h eari n g th e t ax p ay er m ay rai s e an y rel ev an ti s s u e rel at i n g t o th e u np ai dt ax o r t h e NFTL, i n cl u d i n g s p o u s al d efen s es , ch al l en g es t o

3 Th e ch arto n p ag e 1 o f t h e Ap p eal s Cas e M em o ran dum at t ach edt o res p o n d en t’ s n o t i ce o f d et erm i n at i o n co n t ai n s a t y p o g rap h i cal erro r, l i s t i n g t ax y ear 2 0 1 6 wh ere i ts h o u l dl i s t2 0 1 5
.

4 In h i s p et i t i o n , p et i t i o n er i n co rrect l y refers t o s ep arat e l ien s fo r t ax y ears 2 0 1 3 an d2 0 1 5 . Res p o n den tfi l edo n l y o n e NFTL reg ard i ng p et i ti o ner’ s u np ai d t ax l i ab i l i t i es fo r b o th y ears at i s s u e.- 7
-

[* 7 ] th e ap pro p ri at en es s o f t h e co l l ect i o n act i on , an do ffers o f co l l ect i o n al t ern at i v es . Secs . 6 3 2 0 (b )(4 ), 6 3 3 0 (c)(2 )(A). Th e t ax p ay er m ay ch al l en g e t h e
ex i s t en ce o r t h e am ou n to f t h e u n d erl y in g t ax l iab i li ty fo r an y p eri o d o nl y

i f h e o r
s h e d idn o t recei v e a n o t i ce o f d efi ci en cy o r d i dn o to th erwi s e h av e an o p po rtu n i t y t o d i s p u t e t h e l i ab i l i ty . Sec. 6 3 3 0 (c)(2 )(B); Seg o v . Co m m i s s i o ner, 1 1 4 T.C. 6 0 4 , 6 0 9 (2 00 0 ). Fo l l owi n g th e h eari n g th e s et t l em en to ffi cer m u std et erm i n e wh et h er p ro ceed in g wi th th e p ro p o s edco l lect i o n act io n i s ap p ro p ri at e. In m ak i n g th at d et erm i n at i o n th e s et t l em en to ffi cer i s req u i redt o t ak e i n t o co n s i d erat i o n : (1 ) wh et h er t h e req ui rem en t s o f an y ap p li cab l e l aw o r adm i n i s trat iv e p ro cedu re h av e b een m et , (2 ) an y

rel ev an ti s s u es rai s edb y th e t ax p ay er, an d (3 ) wh et h er t h e p ro p os edco l l ect i o n act i o n b al an ces th e n eedfo r th e effi ci en t co l l ect i o n o f t ax es wi th th e l eg i t i m at e co n cern o f t h e t ax pay er t h atth e co l l ect i o n act i o n b e n o m o re i n tru si v e t h an n eces s ary . Secs . 6 3 2 0 (c), 6 3 30 (c); s ee al s o Lu n s fo rdv . Co m m i s s i o n er, 1 1 7 T.C. 1 8 3 , 1 8 4 (2 0 0 1). Th e Co u rtco n si d ers an u n d erl y i n g l iab i l i ty o n rev i ew o n ly

i f t h e t ax p ay er p ro p erl y rai s edth e i s s ue du ri n g th e CDP h eari n g . Sec. 3 0 1 .6 3 20 -1 (f)(2 ), Q&AF3 , Pro ced . & Ad m i n . Reg s.; s ee al s o Gi am el l i v . Co m m i s s i o ner, 1 2 9 T.C. 1 0 7 ,- 8
-

[* 8 ] 1 1 5 (2 0 0 7 ). Pet i ti o ner d i dn o trai s e t h e u n d erl y i n g l i ab il i ti es fo r t h e y ears at i s su e du ri n g h i s CDP h eari n g . Wh ere t h e v al id i ty

o f t h e u n d erl y i n g t ax l i ab i l i ty i s n o t ati s s u e, we rev i ew th e s et tl em en to ffi cer’ s ad m i n is trat i v e d et erm i n at i o n s reg ard in g n on l i ab i li ty i s s u es fo r ab u s e o f d i s cret i o n . Seg o v . Co m m i s s i o ner, 1 1 4 T.C. at6 1 0 . Ab u s e o f d i s cret i o n ex i s t s wh en a d et erm i n at i o n i s arb i trary , cap ri ci o u s , o r wi th o uts o u n d b as i s i n fact o r l aw. See M urp hy v . Co m m i s s i o n er, 1 2 5 T.C. 3 0 1 , 3 2 0 (2 0 0 5 ), aff’ d , 4 6 9 F.3 d2 7 (1 s tCi r. 2 0 0 6 ). Th e Co urtd o es n otco n du ctan i n d ep en d en t
rev i ew an ds ubs t itu te i t s ju d g m en tfo r t h ato f t h e s et t lem en to ffi cer. Id . If th e
s et t l em en to ffi cer fo l l o ws al l s tatu t o ry an dad m i n is trat i v e g ui d el i n es an dp ro v i d es
a reas on ed , b al an cedd eci s i o n , th e Co u rtwi l l n o t rewei g h th e eq u it i es . Li nkv . Co m m i s s i o n er, T.C. M em o . 2 0 1 3 -5 3 , at* 1 2 . Th e s et t lem en to ffi cer v eri fi edth at al l l eg al p ro cedu res were fo l l o wed
. Th i s Co u rtm ay

rev i ew t h e s et t l em en to ffi cer’ s v eri fi cat i o n u n d er s ect i o n 6 3 3 0 (c)(1 ) wi th o u treg ardt o wh et h er t h e t ax p ay er rai s ed i tatth e CDP h eari n g . Secs . 6 32 0 (c), 6 3 3 0 (c)(1 ), (3 )(A); s ee al s o Ho y l e v . Co m m is si o n er, 1 3 1 T.C. 1 9 7 , 2 0 2 -2 0 3 (2 0 0 8 ), s up p l em en t edb y 1 36 T.C. 4 6 3 (2 0 1 1 ). A s et tl em en t o ffi cer i s req u i redt o b as e t h e n o t i ce o f d et erm i nat i o n , i n p art , o n t h e v eri fi cat i o n o b tai n ed
u n d er s ect i o n 6 3 3 0 (c)(1 ) b y en s u ri n g thatal l l eg al req u i rem en t s h av e b een m et
.- 9
-

[* 9 ] Ho y l e v . Co m

m is s i o n er, 1 3 1 T.C. at2 0 1 -2 0 2 ; s ee al s o s ec. 6 3 2 0 (c). Th e
s ect i on 6 3 3 0 (c)(1 ) v eri fi cat i o n i s req u i redfo r ev ery d et erm i n at i o n. Ho y l e v . Co m m i s s i o n er, 1 3 1 T.C. at2 0 2. II. Sco p e o f Rev i ew Ab s en ta s t i p u l at i o n t o th e co n trary , an ap p eal i n th is cas e wo u l dn o rm al l y l i e wi th th e U.S. Co u rto f Ap p eal s fo r th e Ni nt h Ci rcu i t . See s ec. 7 4 8 2 (b )(1 )(G)(i ). Un d er Ni n th Ci rcu i tp reced en tth e s co p e o f o u r rev i ew i s g en eral l y l i m i tedt o th e ad m i n is trat i v e reco rd . See Kel l er v . Co m m i s s i o n er, 5 6 8 F.3 d7 1 0, 7 1 8 (9 th Ci r. 2 0 0 9 ) (ad o p t i n g Ro b i n et t e v . Co m m i s s io n er, 4 3 9 F.3 d4 5 5 , 4 5 9 -4 6 0 (8 th Ci r. 2 0 0 6 ), rev ’ g 1 2 3 T.C. 8 5 (2 0 0 4)), aff’ g i n p artas t o th is i s s u e T.C. M em o . 2 0 0 6- 1 6 6 , an daff’ g i n p art , v acat i n g i n p artd eci s io n s i n rel at edcas es . Sect io n 3 0 1 .6 3 3 0 -1 (f)(2 ), Q&A-F4 , Pro ced . & Ad m in . Reg s . , d efi n es th e ad m i n i s trat i v e
reco rdas Ap p eal s ’ cas e fi l e, i n cl u d i n g “ an y * * * d o cu m en t s o r m at eri al s rel i ed
up o n b y th e Ap p eal s o ffi cer * * * i n m ak i n g th e d et erm i n at i o n u n d er s ect io n 6 3 3 0 (c)(3 )”. III. Ab u se o f Di s cret i on A. Reject i o n o f t h e Offer-i n -Co m p ro m i s e Sect io n 7 1 2 2 (a) au th o ri zes th e Secret ary t o co m p ro m i s e an y ci v i l o r cri m i n al cas e ari s i n g u n d er th e i n t ern al rev en u e l aws . Reg u l at i o n s i m p l em en t i ng- 1 0 -

[* 1 0 ] s ect i o n 7 1 22 s etfo rt h th ree g ro u n d s fo r t h e co m pro m i s e o f a l iab i l i ty : (1 ) d o ub tas t o l i ab il i ty , (2 ) d o ub tas t o co l l ect i b i l i ty , an d(3 ) p ro m o t i o n o f effect i v e t ax ad m i n i s trat i o n . Sec. 3 0 1 .7 1 2 2-1 (b ), Pro ced . & Ad m in . Reg s . Do ub t
as t o co l l ect i b i l i ty

ex is t s wh ere t h e t ax pay er’ s as s et s an d i n co m e are l es s t h an th e fu l l am o u n to f t h e l i ab i l i ty . Id . s ub p ara. (2 ). Th e o ffer m u s ti n cl u d e al l u np ai dt ax l i ab i l i t i es an dp eri o d s fo r wh ich th e t ax pay er i s l i ab le. M urp h y v . Co m m i s s i o n er, 1 2 5 T.C. at3 09 ; s ee al s o In t ern al Rev en u e M an u al (IRM ) p t . 5 .8 .1 .7 (1 ) (J an . 1 , 2 0 1 6 ). Pu rs uan tt o th e au th o ri ty g ran t edi n s ect i o n 7 1 2 2 (d ) th e Secret ary h as d ev el o p ed g u i del i n es an dp ro cedu res t o ev al uat e t h e ad equ acy o f ano ffer-i n co m p ro m i s e, i n cl u d i n g reg u l at i o n s , th e IRM , an d o th er p ub li cat i o n s u s edb y th e In t ern al Rev enu e Serv i ce (IRS). See al s o Rev . Pro c. 2 0 0 3 -7 1 , s ec. 2 .0 2, 2 0 0 3 -2 C.B. 5 1 7 , 5 1 7 . Th e IRM i n fo rm s a s et t l em en to ffi cer t h atth e COIC u n i t d et erm i n es wh et h er an o ffer-i n-co m p ro m i s e i s p ro ces s ab l e. If t h e COIC reject s an o ffer-i n -co m p ro m i s e as n o tb ei ng p ro ces s ab l e, a t ax p ay er m ay

ap p eal th e d eci s i o n t o th e IRS Offi ce o f Ap p eal s, wh i ch wi l l
co n si d er d i s p u t ed i t em s an dm ak e a fi n al d et erm i n at i o n fo l l o wi n g IRM p t
. 8 .2 3.3 .3 , Ap p eal s OIC Ev al u at i o n Pro cedu res . IRM p t . 8 .2 2
. 7 .1 0 .1 .1 (3 ) (Sep t . 2 3 , 2 0 1 4 ). In m ak i n g a fi n al d et erm i n at i o n th e s et tl em en to ffi cer s h o u l d co n s i d er an y- 1 1 -

[* 1 1 ] n ew i n fo rm at i o n , p art i cu l arl y i f i tp ert ai n s t o an i s s u e d i s p u t edatth e t i m e o f reject i o n . IRM p t. 8
. 2 3 .3 .3 (5 ) (Au g . 1 8 , 2 01 7 ). Th e s et t l em en to ffi cer rev i ews th e t ax p ay er’ s o ffer-i n -co m

pro m i s e t o d et erm i n e wh et h er t h e b as i s fo r th e reject i o n
was ap p ro p ri at e. IRM p t . 5 .8 .1 2 .6 .1 (1 ) (Ap r. 2 6 , 2 0 18 ). Th e s et tl em en t o ffi cer
s h o u ldas s es s wh et her t h e d et erm i n at io n o f t h e t ax p ay er’ s reas on ab le co ll ect i o n p o t en t i al i s fu l l y

s up po rt edb y

th e d o cu m en tedfact s an dci rcu m st an ces i n th e cas e fi le. IRM p t . 5 .8 .1 2 .6 .1 (3 ) (Oct . 2 8 , 2 0 1 4 ). W e co ncl u d e t h at th e s et t l em en t o ffi cer’ s d eci s i o n t o s u s tai n the COIC’ s reject i o n o f p et i ti o n er’ s o ffer-i n -co m pro m i s e was n otan ab u s e o f d i s cret io n . On th e Fo rm 6 5 6 p et i t i on er o ffered t o p ay $ 1 2 ,0 00 t o s et tl e h i s $ 2 3 ,4 3 1 o f o u t s t an di n g t ax l i ab i l i t i es . Th e COIC h adreject edp et i t i o n er’ s o ffer-i n -co m p ro m is e b ecau s e p et i t i o n er h adas s et s th atwo u l dal l o w h i m t o p ay h i s t ax l i ab i l i t i es i n fu l l . Th e
s et t l em en to ffi cer rev i ewed p et i t i o n er’ s cas e fi le an d d et erm i n edth ath i s o ffer-i n co m p ro m i s e was p ro p erl y

reject edb ecau s e o f t he v al u at i o n o f h i s as s et s , wh i ch
s h o wedth at h e h adn etequ it y o f $ 1 1 0 ,9 6 0 av ai l ab l e t o p ay h i s o u t s t an di n g t ax l i ab i l i t i es i n fu l l
. Pet i t i o ner co n ten d s th atres p o n d en tfal s i fi edi n fo rm at io n , b u th e n ev er p ro duced ev id en ce o f an y cri m i n al act i v i ty . He as s ert edthath i s ab i l i ty t o p ay
s h o u ldb e co n s i d eredev en th o u g h h e d idn o t d i s p u t e t h e as s et v al u at i o n , wh i ch i s- 1 2 -

[* 1 2 ] s u ffi ci en tg ro un d s fo r reject i n g h i s $ 1 2 ,0 00 o ffer. Nev ert h el es s , th e
s et t l em en to ffi cer p ro v i dedp et i t i o n er wi th an o p p o rtu n i ty t o p ro du ce ad d i t i o n al i n fo rm at i o n t o s h ow t h atth e COIC’ s reject i o n was i n ap p ro pri at e i n acco rd an ce wi th th e p ro cedu res l ai d o u ti n IRM p t
. 8 .2 3 .3 .3 (5 ). Th e s et t l em en to ffi cer al s o p ro v id edp et i t i o n er ad d i t io nal t i m e t o p rep are fo r th e CDP h eari n g wh enp et i t i o n er req u es t edan ex t en s i o n . Pet i t i o ner d i dn o tp ro v i d e an y n ew i n fo rm at i o n t o s up p o rth i s d i s p u t e o f t h e COIC’ s reject io n. Th e s et t l em en to ffi cer’ s o ffer t o p l ace p et i t io n er’ s acco u n ti n CNC s t atu s an d s u s p en dco l l ect i o n act iv i t i es d em o n s trat es res p on d en t ’ s wi l l i ng n es s t o as s es s reas o nab l y an dfai rl y p et i t i o n er’ s ab i l i ty t o p ay h i s t ax l i ab i l i t i es . Acco rd i n gl y , we fi n dth atth e s et t l em en t o ffi cer d i d n o t ab u s e h er d i s cret i o n i n s u s t ai ni ng th e COIC’ s reject i o n o f p et i t i o n er’ s o ffer-i n -co m pro m i s e. B. W i th drawal o f t h e NFTL Sect io n 6 3 2 3 (j)(1 ) p ro vi d es i n p art : In g en eral .--Th e Secret ary m ay wi th draw a n o t i ce o f a l i en fi l ed u n d er th i s s ect io n an dth i s ch ap t er s h al l b e ap p l i edas i f t h e wi th drawn n o t i ce h as n o tb een fi l ed , i f t h e Secret ary d et erm i n es that

-- (A) t h e fi l i ng o f s u ch n ot i ce was p rem atu re o r o th erwi s e n ot i n acco rd an ce wi th ad m i n i s trat i v e p ro cedu res o f t h e Secret ary ,- 1 3 -

[* 1 3 ] (B) t h e t ax pay er h as en t eredi n t o an ag reem en t u nd er

s ect i o n 6 1 5 9 t o s at i s fy th e t ax l i ab i l i ty fo r wh i ch th e l i en was i m p o sedb y m ean s o f i n s t al lm en tp aym en t s , u n l es s s u ch ag reem en tp ro v id es o therwi s e, (C) t h e wi th drawal o f s u ch n o t i ce wi l l faci l i t at e t h e co l lect i o n o f t h e t ax l i ab i l i ty , o r (D) wi th th e co n s en t o f t h e t ax p ay er o r t h e Nat i o n al Tax p ay er Ad v o cat e, t h e wi th drawal o f s uch n ot i ce wo u l db e i n th e b es t i n t eres t s o f t h e t ax pay er (as d et erm i n edb y th e Nat i on al Tax p ay er Ad v o cat e) an dth e Un i t edSt at es . Pet i t i o ner was ad vi sed i n ad v an ce t hata l ien co u l db e fi l ed . Res p o n d en t p ro v id edp et i t i o n er wi th req u i si t e n o t i ce wi th i n th e requ ired p eri o d
. Pet i t i o ner co n ten d s th atth e NFTL s ho u l dn o t h av e b een fi l edb ecau se h e
m ad e an o ffer-i n -co m

p ro m i s e. Res p on d en tco n ten d s th atth e NFTL was fi l edt o p ro t ectth e Go v ern m en t ’ s i n t eres t . Sect io n 6 32 1 i m po s es a Fed eral t ax l i en i n fav o r o f t h e Un i tedSt at es o n al l p ro p ert y an dri g h t s t o p ro p ert y

o f an y p ers o n wh en a d em an d fo r p aym en to f an o u t s t an d i n g t ax l i ab il i ty h as b een m ad e an dth e p ers o n fai l s t o p ay . Pet i t i o ner h as n o t p ai dh i s o u t st an d in g t ax l i ab i li t i es . Th e fact th atp et i t i o n er m ad e an o ffer-i n -co m p ro m is e d i d n o t p recl u d e res po n d en tfro m
m ai n t ai n i n g a l i en wh i le t ax i s s t i l l o u t st an d in g . See Ram i rez v . Co m m i ss i o n er, T.C. M em o . 2 00 5 -1 7 9 ; s ec. 3 0 1 .6 3 2 3 (j)-1 (c), Pro ced . & Ad m i n. Reg s .- 1 4 -

[* 1 4 ] Pet i t i o ner al s o co n t en d s th e NFTL s ho u l db e wi th drawn as referen cedi n th e TAS l et ter. Ho wev er, p et i t i o n er d i dn o t p ro du ce an y ev i den ce t o s up p ort
rem o v in g th e l i en . Hi s co n t en ti o n thatth e l i en s h o u l db e wi th drawn i n acco rd an ce wi th th e TAS l et t er i s wi tho u tm eri t
. Sect io n 6 3 2 3 (j)(1 )(D) p ro v i d es th atan NFTL m ay b e wi th drawn i f t he Secret ary d et erm i n es thatwi th drawal wo u l db e i n th e b es ti n t eres t s o f b o th t h e t ax p ay er an dthe Un i t edSt at es . Wh i l e t h e s tatu t e req u ires th e TAS t o d et erm i n e wh et h er wi th drawal wo ul db e i n th e b es ti n t eres to f t h e t ax p ay er, i tal s o ex p l i ci t l y req u i res a d et erm i n at io n b y th e Secret ary

o r h i s d es i g n ee t h atwi th drawal i s i n th e b es ti n t eres to f t h e Un i t ed St at es . IRM p t . 5 .1 2
. 9 .3 .4 (1 ) (Oct
. 1 4 , 2 0 1 3 ). Nei th er th e Secret ary

n o r h i s d es i g n ee d et erm i n edth atth e wi th drawal o f th e NFTL was i n th e b es ti n teres t o f t h e Un i t edSt at es . Sect io n 6 3 2 3 (j)(1 ) i s p erm i s s i v e. Cri s an v . Co m m i s s i o n er, T.C. M em o . 2 0 0 7 -6 7 , s l i p o p . at7 . Th e Co m m i s s i o ner m ay

wi th draw an NFTL p urs u an tt o
s ect i on 6 3 2 3 (j)(1 ), b u tres p o nd en t’ s fai l u re t o d o s o i n th i s cas e i s n o t an ab u s e o f d i s cret i o n . See i d ., s l i p o p . at 7-8 . W e fi n dthatres p o n d en tfo l lo wedp ro per p ro cedures i n acco rd an ce wi th th e l aw wi th res p ectt o th e fi l i n g o f t h e NFTL. Th e
s et t l em en to ffi cer d i dn o t ab u s e h er d i s cret io n i n s u s t ai n i n g th e fi l i n g o f th e NFTL.- 1 5 -

[* 1 5 ] C. Co n cl u si o n W e co ncl u d e t h e s et t l em en to ffi cer d i dn o tab u s e h er d i s cret i o n . W e h av e
co n si d eredal l o th er arg um en t s m ad e i n reach in g o u r d eci si o n , an dt o t h e ex t en t
n o td i s cu s s edab o v e, we co ncl u d e t h atth ey are m o o t , i rrel ev an t , o r wi th o u tm eri t
. To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t eredfo r
res p o nd en t
.