# PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b),THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.T.C. Sum m ary Opi ni on 20 13 -8 3

UNITED STAT ES TAX COURT

OLEN C. GRANT , SR., AND AL MA J . GRANT, Peti ti on ers v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 14 71 -1 2S L. File d Oct ob er 2 9, 2 01 3.

Olen C. Gran t, Sr., an d Al m a J. Gra nt , pro ses e. Tim ot hy A. Fro eh le , forres po nd en t.

SUMM ARY OPINION HAINES, Ju dg e: Thi s ca se was h eardpurs ua ntto sec ti on74 63 of t he In te rn al Rev enue Co de ineffe ctwhen th e p et it io n was fil ed
. Pur su an t t o s ect io n 1

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o the Int ern al 1 Rev enue Co de , as a m en de d a ndineffec t atall rel ev an t t im es .- 2 -

74 63 (b ), th e d eci si on to be en te redis no t re vi ewab le by any othe r co urt, an d thi s op in io n s ha ll no t b e tr eat edas p rece de ntforan y othe r cas e. Purs uantto sec ti on 63 30 , pet it io ne rs see k re vi ew of res po nd en t’s de te rm in at io n t o p ro ceedwith c ol le ct io n o f th ei r unpa id20 08 in co m e ta x o f $2 5,2 75 . The i ss ue for

de ci si on is whet he r th e In te rn al Rev enue Serv ic e (IR S) 2 App eal s Off

ic e ab us edit s d is cret io n i n s us ta in in g the IRS’ pro po se d l ev y act io n ag ai ns t p et it io ne rs an d d en y in g p et it io ne r’s pr op os edin st al lm en t ag reem en t. We ho lditdi d n ot . Bac kg ro un d So m e o f th e fac ts ha ve be enst ip ul at edan d a re s o fo un d. Th os e ex hi bi ts at ta ch edto th e st ip ul at io ns whi chwere fo un d a dm is si bl e are in co rp or at edby thi s refe ren ce. Pet it io ne rs res id edinCal ifo rn iawhen th e p et it io n was fil ed
. Res po nd en t m ai le d p et it io ne rs a Fi na l No ti ce o f In te ntto Levy andNot ic e of You r Ri gh t t o aHeari ng (le vy no ti ce) fo r th e unp ai d 2 00 8 t ax li ab il ity . In
res po ns e to th e le vy no ti ce, p et it io ne rs reque st eda se ct io n 6 33 0 c ol le ct io n due pr oc es s (C DP) h eari ng or a n e qu iv al en t h eari ng for 20 07 , 20 08 , and20 09 an d reque st edanin st al lm en t ag reem en t as a co ll ect io n a lt ern at iv e.

All am ou nt s ar e ro un de d t o the ne ares t d ol lar. 2- 3 -

Res po nd en t s en t p et it io ne rs a le tt er d en y in g the ir r eque stfora CDP h eari ng oranequi va le nthe ari ng for 20 07 an d 2 00 9. Th e reque stfor20 07 was d en ie d be cau se itwas n otrece iv edwithi n o ne y ear o f th e rel ev an t l ie n o r le vy no ti ce, m ak in g the reque stun ti m el y . See s ec. 6 33 0( a)(3 )(B) ; s ecs . 30 1.6 32 0- 1( i)( 2) , Q&A-I7 , 30 1.6 33 0- 1( i)( 2) , Q&A-I7 , Pro ced . & Adm in . Reg s. Th e reque stfor 20 09 was d en ie d b ecau se itwas m ad e b efo re an y li enor l ev y

no ti ce h adbe en is su edfor20 09 , m ak in g i t p rem atur e an d i nv al id . See An dr e v . Comm is si on er, 12 7 T.C. 6 8, 7 4 (2 00 6)
. The CDP h eari ng reque stfor20 08 was t im el y an d re sp on de ntass ig ne d Set tl em en t Offi cer Lo rrai ne O’ Sh au gh ne ss y (SO O’ Sh au gh ne ss y ) to co nduc t pe ti ti on ers ’ CDP h eari ng . SO O’ Sh au gh ne ss y sen t p et it io ne rs a le tt er s ch edul in g a CDP h eari ng an d re qu es ti ng pe ti ti on ers subm itto th e IRS App eal s Off ic e a Fo rm 43 3- A, Col le ct io n In fo rm at io n S ta te m en t fo r W ag e Earn ers an d S el f-Em pl oyed In di vi du al s, wi th supp orti ng do cu m en ta ti on . Peti ti on ers subm it te d the reque st ed fin an ci al in fo rm at io n, wh ic h S O O’ Sh au gh ne ss y rev ie wedbe fo re the sch edul ed CDP h eari ng . InDecem be r 20 11 SO O’ Sh au gh ne ss y he ldth e sc he du le d C DP he ari ng with pe ti ti on ers by tele ph on e co nf eren ce. Pet it io ne rs di d n otrai se th e und erl y in g t ax li ab il ity durin g the CDP h eari ng , no r di d the y rai se an y de fen se s o r ch al le ng es to- 4 -

th e ap pr op ria te ne ss of t he pro po se d c ol le ct io n a ct io n. Pe ti ti on ers di d, h owe ve r, pr op os e as a co ll ect io n a lt ern at iv e anin st al lm en t ag reem en t u nd er wh ic h the y wou ldm ak e m on th ly paym en ts of $ 75 0 t owa rdth ei r 20 08 tax li ab il ity . On the ba si s o f th e fi na nc ia l i nf orm at io n p et it io ne rs pro vi de d a ndothe r in fo rm at io n M r. Gran t p ro vi de d dur in g the CDP h eari ng , SO O’ Sh au gh ne ss y cal cu la te d tha t p et it io ne rs ha d g ro ss m on th ly inc om e o f $2 0,1 21 an d m on th ly al lo wab le ex pe ns es of $ 15 ,31 1, fo r to ta l d is po sabl e m on th ly inc om e o f $4 ,81 0. SO O’ Sh au gh ne ss y

de te rm in edth atsh e co ul d o fferpe ti ti on ers anin st al lm en t ag reem en t wi th a $1 ,33 0 p aym en t p er m on th forth e fi rs t year, anda $4 ,80 0 pa ym en t p er m on th th erea fte r. Pet it io ne rs m ai nt ai ne d tha t the y wou ldbe un ab le to affo rdth e o ffer edin st al lm en t p aym en ts bu t d idno t s ub m ita co un te ro fferforSO O’ Sh au gh ne ss y ’s con si de rat io n. Sh ortl y aft er the sch edul edCDP h eari ng SO O’ Sh au gh ne ss y is su eda de te rm in at io n n ot ic e su st ai ni ng th e p ro po se d c ol le ct io n a ct io n fo r 20 08
. Pet it io ne rs fil eda pe ti ti onwith thi s C ou rt c ha ll en gi ng th atde te rm in at io n. Pet it io ne rs di d n otch al le ng e res po nd en t’s d et erm in at io n tha t p et it io ne rs were n ot en ti tl edto a CDP h eari ng for 20 07 or 2 00 9.- 5 - Dis cu ss io n Whe n alev y

is pro po se d t o b e m ad e o n a ny pro pe rty or ri gh t t o p ro pe rty, a ta xp ay er i s en ti tl edto a no ti ce o f in te ntto lev y an d n ot ic e o f th e ri gh t t o afai r he ari ng be fo re an im

pa rti al off

ic er o f th e App eal s Off

ic e. Secs . 63 30 (a) and(b) , 63 31 (d ). If th e ta xp ay er re qu es ts a he ari ng , he m ay rai se inth athe ari ng any rel ev an t i ss ue rel at in g t o the unpa idtax or t he pro po se d l ev y , in cl ud in g c ha ll en ge s to th e ap pr op ria te ne ss of t he co ll ect io n a ct io n a nd“ of fers of c ol le ct io n al te rn at iv es , whi chm ay

in cl ud e th e p os ti ng of abo nd , th e subs ti tu ti onof o th er as se ts , an i ns ta ll m en t ag reem en t, o r anoff er-i n- co m pr om is e.” Sec
. 63 30 (c)( 2) (A)(i ii ). A det erm in at io n i s the n m ad e whi chtak es in to co ns id erat io n th os e is su es , th e v eri fic at io n tha t the requi rem en ts of app li cab le law an d adm in is tra ti ve pro cedur e h av e b eenm et , and“ whe th er an y pro po se d c ol le ct io n act io n b al an ces th e n eedforth e eff ic ie ntco ll ect io n o f ta xe s wi th th e le gi ti m at e co nc ernof the pe rs on th atan y co ll ect io n a ct io n b e n o m or e in tru si ve th an ne ces sa ry .” Sec. 6 33 0( c)(3 )(C)
. Whe re the va li di ty of th e und erl y in g t ax li ab il ity is no t p ro pe rly in i ss ue , we rev ie w th e Co m

m is si on er’s d et erm in at io n fo r ab us e o f di sc ret io n. Se go v. Co m m is si on er, 1 14 T.C. 60 4, 6 10 (20 00 ); B la ckv. Co m m is si on er, T.C. Mem o. 20 02 -3 07 (rev ie win g the Co m m is si on er’s d et erm in at io n re ga rd in g a n i ns ta ll m en t- 6 -

ag reem en t p ro po se d at a s ect io n 6 33 0 h eari ng un de r anab us e o f di sc ret io n st an da rd ), aff’d, 9 4 F ed . App x. 9 68 (3dCir . 20 04 ); S ch ul m anv. Co m m is si on er, T.C. Mem o. 2 00 2- 12 9. Gen eral ly, we m ay co ns id er o nl y

th os e is su es th atth e ta xp ay er ra is eddu rin g the CDP h eari ng . See s ec. 3 01 .63 30 -1 (f)(2 ), Q&A-F3 , Pro ced . & Adm in . Reg s.; see als o M ag an a v . Comm is si on er, 1 18 T.C. 48 8, 4 93 (2 00 2)
. Pet it io ne rs ha ve no t d is pu te d the tax li ab il ity for 20 08 . There fo re, the on ly rel ev an t i ss ue is whet he r SO O’ Sh au gh ne ss y ab us edhe r di sc ret io n b y reject in g pe ti ti on ers ’ pr op os edin st al lm en t ag reem en t fo r 20 08 . See Gia m el li v. Co m m is si on er, 1 29 T.C. 10 7, 1 14 (20 07 ). Inord er t o qua li fy

foranin st al lm en t ag reem en t t ax pa y ers m us t d is cl os e th ei r cu rren t fi na nc ia l co nd it io n t o the App eal s o ffi cer r ev ie win g the ir c as e. See Oru m v. Co m m is si on er, 1 23 T.C. 1, 1 3 (2 00 4) , aff’d, 4 12 F.3d81 9 (7 th Cir
. 20 05 ); I nt ern al Rev enue Man ua l p t. 5 .19 .1.5 .4.1 (i) (Nov . 3, 2 01 0) . Peti ti on ers pr op os edm on th ly paym en ts of $ 75 0 t owa rdth ei r $2 5,2 75 tax li ab il ity . SO O’ Sh au gh ne ss y

rev ie wedpe ti ti on ers ’ fin an ci al in fo rm at io n. Onth e b as is of t ha t in fo rm at io n, s he de te rm in edth atpe ti ti on ers were ab le to pa y $1 ,30 0 p er m on th for th e fi rs t year an d $ 4,8 00 pe r m on th th erea fte r. Pet it io ne rs co nt en d tha t the y can no t af fo rdth os e p aym en ts , bu t the y di d n otpre se ntany

furth er al te rn at iv es .- 7 -

W e rec ei ve d a s ex hi bi ts th e fi na nc ia l i nf orm at io n p et it io ne rs pre se nt edto SO O’ Sh au gh ne ss y . After r ev ie win g tha t i nf orm at io n, we fi ndth atSO O’ Sh au gh ne ss y ’s reject io n o f pe ti ti on ers ’ pr op os edin st al lm en t ag reem en t was no t arb itrary, capri ci ou s, o r witho utso un d b as is inlaw o r fac t. Pet it io ne rs di d n ot ot he rwis e p res en t an y

pe rs ua si ve ev id en ce o r arg um en ts de m on st rat in g tha t SO O’ Sh au gh ne ss y

ha d abu se d h er d is cret io n. Acco rd in gl y , we ho ldth e IRS App eal s Offi ce d idno t ab us e it s d is cret io n i n d en y in g p et it io ne rs ’ pr op os edin st al lm en t ag reem en t an d s us ta in in g the IRS’ pro po se d l ev y act io n a ga in stpe ti ti on ers . Inreac hi ng ou r ho ld in gs he rei n, we h av e co ns id eredall arg um en ts m ad e, an d, t o the ex te ntno t m en ti on edab ov e, we co nc lu de th ey are m oo t, i rrel ev an t, o r witho utm eri t. To re fle ctth e fo reg oi ng ,
Deci si on wil l b e en te redfor
res po nd en t.