United States Tax Court

T.C. Summary Opinion 2023-32

GEORGIANNA SHEPARD,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 1875-21SL. Filed November 28, 2023.

__________

Georgianna Shepard, pro se.

Jessica R. Nolen, for respondent.

SUMMARY OPINION

WEILER, Judge: This case was brought pursuant to the 

provisions of section 74631 of the Internal Revenue Code in effect when 

the Petition was filed. Pursuant to section 7463(b), the decision to be 

entered is not reviewable by any other court, and this Opinion shall not 

be treated as precedent for any other case.

This is a collection due process (CDP) case in which petitioner, 

Georgianna Shepard, seeks review pursuant to section 6330 of a 

determination by the Internal Revenue Service (IRS or respondent) 

1 Unless otherwise indicated, statutory references are to the Internal Revenue 

Code, Title 26 U.S.C. (I.R.C.), in effect at all relevant times, regulation references are 

to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, 

and Rule references are to the Tax Court Rules of Practice and Procedure. All monetary 

amounts are rounded to the nearest dollar.

Served 11/28/23
2

Independent Office of Appeals2 (Appeals) upholding a proposed levy 

collection action for tax years 2015 and 2016 (years at issue).

Respondent has filed a Motion for Summary Judgment under 

Rule 121, contending that there are no disputes of material fact and that 

Settlement Officer (SO) Christopher White did not abuse his discretion 

in sustaining the proposed levy. Pursuant to an Order of this Court, Ms. 

Shepard was instructed to file a response, if any, to respondent’s Motion 

by August 25, 2023. Ms. Shepard failed to do so. For the reasons set forth 

below, we will grant respondent’s Motion.

Background

The following facts are derived from the parties’ pleadings and 

Motion papers, including the Declaration and Exhibits attached thereto. 

See Rule 121(c). Ms. Shepard resided in Missouri when she timely filed 

her Petition. 

The collection action at issue arises from Ms. Shepard’s unpaid 

tax liabilities for the years at issue. The original total amount of Ms.

Shepard’s unpaid liabilities for tax years 2015 and 2016 was $4,830. 

During the pendency of her CDP hearing and throughout the proceeding 

in this Court, the Commissioner applied credit transfers from Ms.

Shepard’s timely filed tax returns for tax years 2017, 2018, 2019, 2020, 

2021, and 2022 against the unpaid liabilities for the years at issue. Ms. 

Shepard’s account transcripts demonstrate that these credit transfers 

were a result of timely filed Forms 1040, U.S. Individual Income Tax 

Return.3 Credit transfers from 2017, 2018, 2019, 2020, and 2021 were 

applied for tax year 2015. At the time of this report, the unpaid liability 

for tax year 2015 has been paid in full as a result of these credit 

transfers. Credit transfers from 2021 and 2022 have reduced Ms.

Shepard’s liability for tax year 2016 by $927. The credit transfers for tax 

years 2020, 2021, and 2022 were $901, $875, and $881, respectively. For 

tax year 2016 the remaining unpaid liability is $1,168, exclusive of 

penalties and accrued interest. The period of limitations on collections 

2 On July 1, 2019, the IRS Office of Appeals was renamed the IRS Independent 

Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, § 1001, 133 Stat. 981, 

983 (2019).

3 The account transcripts for the years at issue reflect that the credit transfers 

occurred for tax year 2017 on April 15, 2018, tax year 2018 on March 4, 2019, tax year 

2019 on March 9, 2020, tax year 2020 on March 8, 2021, tax year 2021 on March 21, 

2022, and tax year 2022 on March 6, 2023.
3

for tax year 2016 (before extension of the period based on this CDP 

hearing) expires on March 6, 2027.4

On March 4, 2019, the IRS mailed Ms. Shepard Form CP90, 

Intent to Seize Your Assets and Notice of Your Right to a Hearing. On 

March 28, 2019, Ms. Shepard timely submitted Form 12153, Request for 

a Collection Due Process or Equivalent Hearing, requesting a CDP 

hearing. Ms. Shepard checked the box labeled “I Cannot Pay Balance” 

and indicated that she receives a “fixed income” from a small pension 

and Social Security checks, is disabled, and is unable to work. On Form 

12153, Ms. Shepard also requested that her future tax refunds be 

applied against her unpaid tax liabilities.

SO Juan Covarrubias was originally assigned to Ms. Shepard’s 

CDP hearing, and on August 26, 2020, he sent her Letter 4837, Appeals 

Received Your Request for a Collection Due Process Hearing. Letter 

4837 confirmed receipt of Ms. Shepard’s CDP request and scheduled a 

CDP telephone conference for October 5, 2020. SO Covarrubias 

requested that Ms. Shepard submit Form 433–A, Collection Information 

Statement for Wage Earners and Self-Employed Individuals, and three 

months of bank statements. On October 5, 2020, SO Covarrubias sent 

Ms. Shepard a Letter 4000 after she failed to attend the scheduled 

telephone CDP conference. Letter 4000 provided Ms. Shepard an 

additional 14 days to contact SO Covarrubias and provide the requested 

information. Ms. Shepard did not respond to the Letter 4000. On 

December 16, 2020, SO Covarrubias mailed Ms. Shepard a notice of 

determination sustaining the proposed levy action.

On January 21, 2021, Ms. Shepard timely filed her Petition with 

this Court. On August 2, 2022, respondent filed a Motion to Remand this 

case indicating that Ms. Shepard had not received Letters 4837 or 4000 

from SO Covarrubias regarding the October 5, 2020, CDP conference. 

Respondent determined that SO Covarrubias had sent the CDP 

proceeding correspondence to an address previously associated with Ms. 

Shepard rather than her last known address. This Court granted the 

Motion to Remand, and this case was remanded to Appeals on August 

4, 2022. 

4 Section 6330(e)(1) provides that the running of the collection period of 

limitations is suspended during the entirety of the CDP process. This includes the CDP 

proceeding with Appeals as well as any appeals from the notice of determination to 

this Court.
4

SO White was assigned to Ms. Shepard’s supplemental CDP 

hearing, and on August 30, 2022, he sent her a Letter 4837, scheduling 

a telephone CDP conference for September 15, 2022. SO White 

requested a completed Form 433–A, three months of bank statements, 

and proof of monthly income and expenses. During the CDP hearing, SO 

White confirmed with Ms. Shepard that she was not challenging the 

underlying tax liabilities. Ms. Shepard sought only to have her account 

placed in currently-not-collectible (CNC) status based on hardship. 

Following the supplemental CDP hearing Ms. Shepard provided 

a completed Form 433–A to SO White. Ms. Shepard claimed monthly 

expenses of $2,500 stemming from food, clothing, and miscellaneous; 

housing and utilities; out of pocket health care costs; and secured debts. 

Form 433–A requires a list of the claimed secured debts to be attached 

to the Form. Ms. Shepard did not attach the requisite list. Financial 

analysis by IRS Collections determined that on the basis of Ms. 

Shepard’s monthly income of $2,500 and allowable expenses of $2,280, 

she could pay $220 per month towards her unpaid liabilities. 

In review of IRS Collections’ financial analysis, SO White allowed 

all of Ms. Shepard’s reported expenses, except the secured debts. SO 

White applied the standard amount allowed for a single taxpayer for 

food, clothing, and miscellaneous expenses, as well as the standard 

amount for out-of-pocket health care costs. Despite Ms. Shepard’s

reporting transportation expenses of zero, SO White likewise applied 

the standard expense amount for public transportation. SO White 

additionally allowed the $800 expense reported for housing, and factored 

in an additional expense of $300 for health insurance despite Ms. 

Shepard’s not reporting any health insurance amount on her Form 

433–A. 

In a letter to Ms. Shepard dated November 9, 2022, SO White 

informed her of the result of the financial analysis in which he 

determined her ability to make monthly payments and requested she 

respond with additional documentation should she disagree with the 

proposed monthly payment amount and scheduled a telephone 

conference for November 29, 2022. Ms. Shepard failed to respond to SO 

White’s letter, and she neither submitted the requested additional 

documentation nor called SO White on November 29, 2022, to

participate in the scheduled telephone conference. On December 29, 

2022, SO White issued a supplemental notice of determination 

sustaining the proposed levy and denying Ms. Shepard’s request for her 

account to be placed in CNC status. 
5

On August 4, 2023, respondent filed the Motion for Summary 

Judgment along with a Declaration in support thereof. On August 8, 

2023, pursuant to an Order from this Court, Ms. Shepard was provided 

until August 25, 2023, to file a response to respondent’s Motion. Ms. 

Shepard has not filed a response.

Discussion

I. General Principles

A. Summary Judgment Standard

The purpose of summary judgment is to expedite litigation and 

avoid unnecessary and time-consuming trials. FPL Grp., Inc. & Subs. v. 

Commissioner, 116 T.C. 73, 74 (2001); Fla. Peach Corp. v. Commissioner, 

90 T.C. 678, 681 (1988). We may grant summary judgment when there 

is no dispute of material fact and a decision may be rendered as a matter 

of law. Rule 121(a)(2); Elec. Arts, Inc. v. Commissioner, 118 T.C. 226, 238 

(2002). 

Had Ms. Shepard not elected to have this case heard as a “small 

tax case” under the provisions of section 7463, our decision would have 

been appealable to the U.S. Court of Appeals for the Eighth Circuit. See

I.R.C. § 7482(b)(1)(G). The Eighth Circuit has held that where de novo 

review is not applicable, the scope of review in a CDP case is confined to 

the administrative record. See Robinette v. Commissioner, 439 F.3d 455, 

461 (8th Cir. 2006), rev’g 123 T.C. 85 (2004). Ms. Shepard did not 

question the completeness of the administrative record; thus, in cases 

such as these, “summary judgment serves as a mechanism for deciding, 

as a matter of law, whether the agency action is supported by the 

administrative record and is not arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with law.” Belair v. 

Commissioner, 157 T.C. 10, 16–17 (2021) (quoting Van Bemmelen v. 

Commissioner, 155 T.C. 64, 79 (2020)).

B. Standard of Review

We have jurisdiction to review Appeals’ determination pursuant 

to section 6330(d)(1). See Murphy v. Commissioner, 125 T.C. 301, 308 

(2005), aff’d, 469 F.3d 27 (1st Cir. 2006). Where the underlying tax 

liability is not at issue, we review the determination of Appeals for abuse 

of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. 

Commissioner, 114 T.C. 176, 182 (2000). When we remand a case to 

Appeals, and it returns to us after a supplemental determination is 
6

issued, we review the supplemental notice of determination. Hoyle v. 

Commissioner, 136 T.C. 463, 467–68 (2011), supplementing 131 T.C. 197 

(2008). 

In reviewing for abuse of discretion we must uphold Appeals’ 

determination unless it is arbitrary, capricious, or without sound basis 

in fact or law. See Murphy, 125 T.C. at 320; Taylor v. Commissioner, T.C. 

Memo. 2009-27, 2009 WL 275721, at *9. We do not substitute our 

judgment for that of Appeals but consider “whether, in the course of 

making its determination, the Appeals Office complied with the legal 

requirements of an administrative hearing.” Charnas v. Commissioner, 

T.C. Memo. 2015-153, at *7.

C. Underlying Liability

A taxpayer may challenge the existence or amount of her 

underlying liability in a CDP proceeding only if the taxpayer “did not 

receive any statutory notice of deficiency for such tax liability or did not 

otherwise have an opportunity to dispute such tax liability.” I.R.C. 

§ 6330(c)(2)(B). To preserve a challenge to the underlying liability, a 

taxpayer must raise the issue of the underlying liability during the CDP 

proceeding. See Giamelli v. Commissioner, 129 T.C. 107, 112–15 (2007); 

Treas. Reg. § 301.6330-1(f)(2), Q&A-F3.

The administrative record before us does not indicate whether 

Ms. Shepard received a notice of deficiency with respect to the tax 

liabilities or had a prior opportunity to dispute them. However, on Form 

12153 and at her supplemental CDP hearing, Ms. Shepard did not 

contest the underlying tax liabilities and SO White confirmed with Ms. 

Shepard that she did not intend to contest them. Since the underlying 

liabilities are not properly at issue, we will review Appeals’ 

determination to sustain the proposed levy action on the basis of an 

abuse of discretion standard.

II. Abuse of Discretion 

In deciding whether SO White abused his discretion in sustaining 

the proposed levy action, we consider whether he (1) properly verified 

that the requirements of applicable law or administrative procedure 

have been met, (2) considered any relevant issues Ms. Shepard raised, 

and (3) weighed “whether any proposed collection action balances the 

need for the efficient collection of taxes with the legitimate concern of 

[Ms. Shepard] that any collection action be no more intrusive than 

necessary.” See I.R.C. § 6330(c)(3). 
7

A. Verification

Before issuing a notice of determination Appeals must verify that 

all requirements of applicable law and administrative procedure have 

been met. See I.R.C. § 6330(c)(1), (3)(A). We have authority to review an 

SO’s satisfaction of the verification requirement regardless of whether 

the taxpayer raised the issue at the CDP hearing. Kidz Univ., Inc. v. 

Commissioner, T.C. Memo. 2021-101, at *10 (citing Hoyle, 131 T.C. at 

200–03). Ms. Shepard did not assert in her Petition that SO White failed 

to satisfy this requirement and has not directed this Court’s attention to 

any facts that would support such a finding. See Rule 331(b)(4) (“Any 

issue not raised in the assignments of error shall be deemed to be 

conceded.”); Rockafellor v. Commissioner, T.C. Memo. 2019-160, at *12. 

In any event, and on the basis of our review of the administrative record, 

we find that SO White conducted a thorough review of the materials 

relevant to Ms. Shepard’s CDP request and verified that all applicable 

requirements were met. See I.R.C. § 6330(c)(1).

B. Issues Raised

The only issue raised in the first CDP hearing was Ms. Shepard’s 

inability to pay. On Form 12153, Ms. Shepard checked the box labeled 

“I Cannot Pay Balance” and stated that she has a “fixed income” of 

pension and Social Security checks. She further indicated that she is 

disabled and unable to work. As Ms. Shepard did not receive the letter 

scheduling the telephone CDP hearing, she was unable to raise any 

further issues during the first CDP proceeding. However, during her 

supplemental CDP hearing, the only issue Ms. Shepard raised was a 

request that her account be placed in CNC status based on hardship.

Suspension of collection activity is a collection alternative that a 

taxpayer may propose and that Appeals must consider. See I.R.C. 

§ 6330(c)(2)(A)(iii), (3)(B). To be entitled to CNC status as a collection 

alternative, a taxpayer must demonstrate that, on the basis of her 

assets, equity, income, and expenses, she has no apparent means to 

make payments on the outstanding tax liability. See Foley v. 

Commissioner, T.C. Memo. 2007-242, 2007 WL 2403732, at *2. A 

taxpayer’s ability to make payments is determined by calculating the 

excess of income over necessary living expenses. Rosendale v. 

Commissioner, T.C. Memo. 2018-99, at *9. In reviewing for abuse of 

discretion, the Court does not substitute its judgment for that of the SO 

or recalculate a taxpayer’s ability to pay. See O’Donnell v. 

Commissioner, T.C. Memo. 2013-247, at *15.
8

In determining Ms. Shepard’s ability to pay, SO White reviewed 

Form 433–A and other documentation she provided. Financial analysis 

of these documents by IRS Collections revealed that Ms. Shepard could 

pay $220 per month on the basis of the difference between her monthly 

expenses and monthly income. Further, SO White offered Ms. Shepard 

the opportunity to provide additional information if she disagreed with 

the proposed monthly payment amount at the November 29, 2022, 

conference. However, Ms. Shepard failed to avail herself of this 

opportunity. See Pough v. Commissioner, 135 T.C. 344, 351 (2010) 

(“[W]hen an Appeals officer gives a taxpayer an adequate timeframe to 

submit requested items, it is not an abuse of discretion to move ahead if 

the taxpayer fails to submit the requested items.”). Accordingly, we 

cannot say SO White abused his discretion in considering the issue 

raised at Ms. Shepard’s supplemental CDP hearing.

C. Balancing

Ms. Shepard does not allege in her Petition, nor argue at any later 

point, that SO White failed to consider “whether any 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.” See I.R.C. § 6330(c)(3)(C). Therefore, Ms. 

Shepard is deemed to have conceded this issue.5 See Rule 331(b)(4); see 

also Ansley v. Commissioner, T.C. Memo. 2019-46, at *19. 

5 While it is true Ms. Shepard conceded the “balancing issue,” we would note 

that when this CDP hearing commenced, Ms. Shepard’s original liability for the years

at issue was $4,830. Through credit transfers from timely filed tax returns for tax years 

2017, 2018, 2019, 2020, and 2021 the amount of unpaid liability for tax year 2015 has

since been paid in full. These credit transfers from timely filed tax returns for tax years 

2021 and 2022 have also reduced Ms. Shepard’s 2016 tax liability by $927. When 

requesting CNC status, Ms. Shepard suggested that her future refunds would be 

applied to offset any remaining tax liabilities. We note that between the time of Ms. 

Shepard’s CDP hearing and her proceeding in this Court, she has timely filed tax 

returns for three years, her tax liability for 2015 has been paid in full, and her tax 

liability for 2016 has been reduced. Ms. Shepard has made good on her proposal to 

repay her balances through future tax refunds, and the Commissioner has already 

successfully collected 76% of her total unpaid tax liability. The remaining tax liability 

is $1,168, exclusive of any penalties and accrued interest. The credits applied to reduce 

her unpaid liability for tax years 2020, 2021, and 2022 were $901, $875, and $881, 

respectively. Therefore, it is likely that respondent will be able to collect the remaining 

unpaid liabilities through future credit transfers, assuming Ms. Shepard continues to 

timely file her future tax returns. 

Ms. Shepard is some 75 years of age and is financially dependent upon her 

modest fixed monthly income. Requiring Ms. Shepard to make a monthly payment of 
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III. Conclusion

Finding no abuse of discretion by SO White in our review of the

mandatory verification requirements and the issues raised by Ms. 

Shepard at her CDP hearing under section 6330(c)(3)(A) and (B), and 

with her conceding the so-called balancing requirement under section 

6330(c)(3)(C), we are obligated to grant respondent’s Motion for 

Summary Judgment and affirm Appeals’ determination.

To reflect the foregoing, 

An appropriate order and decision will be entered.

$220 could be viewed as a financial hardship that outweighs the need for the efficient 

collection of taxes and therefore could be viewed by some as unnecessarily intrusive.