# PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b),THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.T.C. Summ ary Opi ni on 20 13 -1 01

UNITED STAT ES TAX COURT REZA FATEHI, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 12 14 3- 10 S L. Fil edDecem be r 9, 2 01 3.

Rez a Fat eh i, p ro se. Tab ithaAnel ayne Flo y d, fo r res po nd en t.

SUPPLEMENTAL SUMMARY OPINION W ELLS, Ju dg e: The i ns tantcas e was he ardpu rs ua ntto th e p ro vi si on s o f se ct io n 7 46 3 o f th e In te rn al Rev enue Co de ineffe ctwhen th e p et it io n was fil ed .-2 -

Purs ua ntto sec ti on 74 63 (b ), th e d eci si onto be en te redis no t re vi ewab le by any 1 ot he r co urt, an d thi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y othe r cas e. Res po nd en t s en t p et it io ne r a No ti ce o f Det erm in at io n C on cern in g Co ll ect io n Act io n( s) Und er Se ct io n 6 32 0 a nd/o r 63 30 (no ti ce o f de te rm in at io n) . Inres po ns e to th e n ot ic e o f de te rm in at io n, p et it io ne r ti m el y fil eda pe ti ti on pu rs ua ntto sec ti on 63 30 (d ). In o urpri orop in io n i n the in st an t ca se , Fat eh i v . Co m m is si on er, T.C. Su m

m ary Opi ni on 20 12 -2 6, 2 01 2 WL 96 76 65 (pr io r op in io n) , fil edon Marc h 2 2, 2 01 2, we re m an de d the in st an t ca se to res po nd en t’s App eal s Off

ic e to cla rif

y th e rec or d a s t o wh atres po nd en t’s em pl oyees re li edon to de te rm in e th atpe ti ti on er h adun rep orte d c as h i nc om e an d t o a rti cu la te fact s o n whi chth ey

ba se d the ir d et erm in at io n t o re ject p et it io ne r’s of

fer- in -co m

pr om is e. On Oct ob er 2 6, 2 01 2, re sp on de ntsen t p et it io ne r a Supp le m en ta l No ti ce o f Dete rm in at io n C on cern in g C ol le ct io n Act io n( s) Und er Se ct io n 6 32 0 a nd/o r 63 30 (s up pl em en ta l n ot ic e o f de te rm in at io n) . W e m us t n ow d eci de whet he r th e App eal s Offi ce ab us edit s d is cret io n wh enitreject edpe ti ti on er’s o ffer -in -co m pr om is e an d up he lda no ti ce o f Fed eral tax li en(NFTL) with re sp ectto pe ti ti on er’s Fed eral in co m e ta x l iabi li ti es forhi s 2 00 4, 2 00 5, an d 2 00 6 t ax y ears (y ears inis su e). Unl es s o th erwi se in di cat ed , sec ti on refe ren ces are t o the Int ern al Rev enue 1 Co de of 1 98 6, as am en de d (C od e) an d i n e ffec t atall rel ev an t t im es , andRu le refe ren ces are t o the Tax C ou rt Rul es of P ract ic e an d P ro cedur e.-3 - Bac kg ro un d Man y of t he un de rlyin g fa ct s ar e se t fo rth inde ta il inou r pr io r op in io n a nd are i nc or po rat edhe rei n b y

refe ren ce. We summ ari ze the factua l an d p ro cedur al ba ck gr oundbri efl y

inth is op in io n a ndm ak e ad di ti on al fin di ng s o f fac t b as edup on th e p art ie s’ fil in gs . At th e ti m e h e fi le d h is pe ti ti on , pet it io ne r was a res id en t o f Geo rg ia . Pet it io ne r is a se lf- em

pl oyed el ectric ian wh o t im el y fil edhi s t ax returns for th e y ears inis su e an d fu ll y pa idth e am ount s s ho wn o n h is returns . The In te rn al Rev enue Serv ic e (IR S) s el ect edhi s re tu rn s fo r ex am in at io n a nd , du rin g 2 00 8, as se ss edad di ti on al tax es of $ 9,8 32 , $1 0,7 07 , and$4 ,28 1 fo r hi s 2 00 4, 2 00 5, an d 20 06 tax y ears , res pe ct iv el y . Dur in g J un e 2 00 9, p et it io ne r pr ep aredan d s ub m it te d t o the IRS 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, i nd ic at in g tha t h is curren t m on th ly inc om e was $1 ,93 1 a ndth athi s cu rren t m on th ly exp en se s wer e $ 2,5 23 . Also du rin g J un e 2 00 9, p et it io ne r subm it te d F orm

65 6, Offe r in Co m

pr om is e, pr op os in g t o p ay $1 ,00 0 i n fi ve in st al lm en ts . On Oct ob er 1 5, 2 00 9, an IRS o ffer -in -co m pr om is e sp eci al is t m ai le d a le tt er t o p et it io ne r reject in g the off er an d i nd ic at in g tha t the IRS h adde te rm in ed-4 -

th atpe ti ti on er’s av erag e m on th ly inc om e was $3 ,50 0 a ndth atpe ti ti on er co ul d p ay hi s t ax li ab il it ie s i n fu ll . On Dec em

be r 18 , 20 09 , res po nd en t fi le d an NFTL with re sp ectto each of th e y ears inis su e. On Dec em be r 22 , 20 09 , res po nd en t s en t p et it io ne r, vi a certi fie d m ai l, a No ti ce o f Fed eral Tax Li enFil in g a ndYou r Ri gh t t o aHeari ng Und er IR C 63 20 . Peti ti on er t im el y

subm it te d aFo rm

12 15 3, Re qu es t fo r a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g. Onth e Fo rm 12 15 3, p et it io ne r ch eck edth e b ox es in di cat in g tha t h e wan te d re sp on de ntto co ns id er an in st al lm en t ag reem en t o r an of fer- in -co m

pr om is e. Pet it io ne r an d Y.B. Cr ear, a s et tl em en t o ffi cer i n the App eal s Off ic e, sc he du le d the co ll ect io n due pro ces s (C DP) h eari ng forMarc h 2 5, 2 01 0. Du rin g th e CDP h eari ng , pet it io ne r reque st edth atMs . Crearco ns id er a co ll ect io n al te rn at iv e, in cl ud in g h is pre vi ou sl y subm it te d a ndreject edoff er-i n- co m pr om is e. Ms . Crearreque st edth atpe ti ti on er upd at e th e Fo rm 43 3- A th athe ha d s ub m it te d du rin g J un e 2 00 9 t o re fle ctin fo rm at io n fr om hi s 2 00 9 t ax return, an d a ll owe d pe ti ti on er t o s ub m ithi s upd at edFo rm 43 3- A aft er h e h adfil edhi s 2 00 9 t ax return on Apri l 1 5, 2 01 0. OnApri l 1 6, 2 01 0, n othavi ng he ardfro m pe ti ti on er, Ms . Crear de te rm in edth atitwas app ro pr ia te to su st ai n the NFTL with ou t at te m pt in g t o-5 -

co nt actpe ti ti on er ag ai n. OnApri l 2 7, 2 01 0, re sp on de ntsen t p et it io ne r, vi a cert ifi edm ai l, the no ti ce o f de te rm in at io n. Afte r rec ei vi ng th e n ot ic e o f de te rm in at io n, p et it io ne r subm itte d t o M s. Crea r anup da te d F orm

43 3- A onMay 19, 2 01 0. OnMay 27, 2 01 0, p et it io ne r ti m el y fil edhi s p et it io n wi th th is Co urt. OnApri l 4 , 20 11 , th e in st an t ca se was reca ll edfor

tri al fro m

th e cal en da r of

th e Co urt atAtl an ta , Geor gi a. Afte r co ns id eri ng pe ti ti on er’s t es ti m on y an d the othe r ev id en ce i n the reco rd , we ord ered res po nd en t t o c on si de r pe ti ti on er’s o ffer -in -co m pr om is e. Fo ll owi ng th e tr ia l, p et it io ne r ag ai n s ub mitte d t o re sp on de ntth e Fo rm 43 3- A th athe ha d a tt em

pt edto subm itto Ms . Crearon May 19, 2 01 0. Onth atFo rm 43 3- A he i nd ic at edth athi s m on th ly inc om e was on ly $98 4 a ndth athi s m on th ly ex pe ns es ex ceed edhi s m on th ly inc om e. W ith h is Fo rm 43 3- A, pet it io ne r subm it te d ane w Form

65 6, Offe r in Co m

pr om is e, on whi chhe pro po se d t o s et tl e hi s t ax li ab il it ie s b y

pa y in g ato ta l o f $6 25 inon e in it ia l p aym en t o f $1 25 an d fi ve in st al lm en ts of $ 10 0 e ach . On o r ab ou t J ul y 7, 2 01 1, Offe r Sp eci al is t J oe Kenn edy se ntpe ti ti on er a l ette r reque st in g, am on g o th er i te m s, ad di ti on al do cu m en ta ti on of hi s b us in es s i nc om e an d a ss et s. Onor abo utJu ly 28, 2 01 1, p et it io ne r rep li edto Mr. Ken ne dy’ s l et te r an d s up pl ie d a dd it io na l d oc um en ta ti on . Peti ti on er an d M r. Ken ne dy spo ke on th e p ho ne on or abo utAug us t 2 , 20 11 , andMr. Ken ne dy sen t-6 -

hi m a le tt er o n o r ab ou t Au gu st3, 2 01 1, as ki ng hi m to letMr. Ken ne dy kn ow b y Aug us t 1 0, 2 01 1, wh ethe r he wou ldam en d h is off er-i n- co m pr om is e to pa y

$1 25 pe r m on th for24 m on th s (i ns te adof $ 62 5 o ve r fi ve m on th s) . It i s unc le ar wh ethe r pe ti ti on er re sp on de d t o M r. Ken ne dy’ s l et te r. On Au gu st23 , 20 11 , Mr. Ken ne dy sen t an em ai l t o re sp on de nt ’s cou ns el al ert in g h er t o h is de ci si on to rejectpe ti ti on er’s o ffer -in -co m pr om is e b ecau se he ha d d et erm in edth atpe ti ti on er was ab le to “ ge ne rat e anin co m e” g reat er tha n the am ountin di cat edon hi s re tu rn s o r on hi s Fo rm 43 3- A. Mr. Kenn edy

ap pa ren tl y ba se d h is de te rm in at io n t o re ject p et it io ne r’s of

fer- in -co m

pr om is e o n a n a ss ert io n fro m th e rev enue ag en t tha t co nduc te d p et it io ne r’s au di t tha t p et it io ne r was pa id fo r so m e o f hi s s erv ic es incas h andwas n otrep orti ng so m e o f th atin co m e. On o r ab ou t Se pt em

be r 27 , 20 11 , res po nd en t m ai le d p et it io ne r a l ette r no ti fy in g h im

th atMr. Ken ne dy hadreject edhi s o ffer -in -co m pr om is e. On Octo be r 26 , 20 11 , pet it io ne r se nta le tt er t o M r. Ken ne dy requ es ti ng ad di ti on al ex pl an at io n o f hi s d et erm in at io n t o re ject t he off

er-i n- co m pr om is e. On o r ab ou t Nov em be r 2, 2 01 1, re sp on de ntin fo rm edpe ti ti on er tha t h is off er-i n- co m pr om is e was be in g fo rward edto th e App eal s Off ic e. On J anua ry

6, 2 01 2, the App eal s Offi ce s us ta in edMr. Ken ne dy’ s re jecti on of p et it io ne r’s of

fer- in -co m

pr om is e be cau se th ere was a pe nd in g Un it edSta te s Tax Co urt ca se forth e y ears inis su e-7 -

an d the App eal s Off

ic e can no t co ns id er co ll ect io n a lt ern at iv es (e.g ., an o ffer -in co m pr om is e) o nc e a ca se ha s b eendo ck et ed . On M arch 22 , 20 12 , we fil edou r pr io r op in io n, i n wh ic h we o rd eredth atth e cas e b e rem an de d t o the App eal s Off ic e to clarif

y th e rec or d a s t o wh atitrel ie d o n to de te rm in e th atpe ti ti on er h adun rep orte d c as h i nc om e an d t o a rti cu la te fact s o n whi chitba se d i ts de te rm in at io n t o re ject p et it io ne r’s of

fer- in -co m

pr om is e. On Mar ch28 , 20 12 , we ord eredres po nd en t t o o fferpe ti ti on er an adm in is tra ti ve he ari ng at t he App eal s Off ic e o n o r be fo re Ma y

29 , 20 12 . On Ap ril 9, 2 01 2, re sp on de nt ’s cou ns el no ti fie d the App eal s Off ic e th atth e cas e was rem an de d t o a ll ow the App eal s Off ic e to co nduc t a s up pl em en ta l h eari ng , rev ie w th e reject io n o f pe ti ti on er’s o ffer -in -co m pr om is e, an d m ak e anin de pe nd en t de te rm in at io n a s t o wh ethe r th e o ffer -in -co m pr om is e sh ou ldbe acce pt ed . Res po nd en t’s co un se l al so in fo rm edth e App eal s Off ic e th at , if i t ag ai n re

jecte d pe ti ti on er’s o ffer -in -co m

pr om is e, itsh ou ld“ ex pl ai n i n d et ai l the reas on s fo r th e reject io n” an d d oc um en t ev id en ce t o s up po rt s uc h ade te rm in at io n. On Ap ril 16 , 20 12 , Ms . Crearco nt act edpe ti ti on er t o s ch edul e a t el ep ho ne co nf eren ce fo r Apr il 27 , 20 12 . Ms. Cr ear a ls o re qu es te d tha t p et it io ne r subm it , by Apr il 25 , 20 12 , supp le m en ta l i nf orm at io n (i nc lu di ng a Fo rm 43 3- A, ban k st at em en ts , Form s 1 04 0, U.S. In di vi du al Inc om e Tax Return, fo r ta x years 2 00 9 t o-8 -

20 11 , Form s 1 12 0, U.S. Co rp or at io n In co m e Tax Return, fo r ta x years 2 00 9 t o 20 11 , anda co m

pl et e Fo rm

43 3- B, Co ll ect io n In fo rm at io n S ta te m en t fo r Bu si ne ss es , forpe ti ti on er’s b us in es s) so th atsh e co ul d c om pl et el y rev ie w pe ti ti on er’s o ffer -in -co m

pr om is e. Ms . Crearin fo rm edpe ti ti on er tha t i f he di d n ot pa rti ci pa te inth e co nf

eren ce o r res po ndto th e le tt er, s he wou ldm ak e h er de te rm in at io n re ga rd in g h is off er-i n- co m pr om is e u si ng th e in fo rm at io n a va il ab le . On Ap ril 25 , 20 12 , pet it io ne r res po nd edto Ms . Crearwith alet te r st at in g tha t so m e o f th e reque st eddo cu m en ts ha d b eensubm it te d wi th th e o rig in al off er-i nco m pr om is e an d wer e in th e p os se ss io n o f res po nd en t’s co un se l an d c on firm in g th e te le ph on e co nf

eren ce fo r Apr il 27 , 20 12 . Peti ti on er al le ge s tha t h e atta ch ed so m e o f th e o th er re qu es te d d oc um en ts to th atlet te r. On Ap ril 27 , 20 12 , pet it io ne r an d the App eal s Off ic e, rep res en te d b y

Ms . Crea r an d R og erl yn P . Jac ks on , hel d the sch edul edtel ep ho ne co nf eren ce. Ms . Ja ck so n i nf

orm edpe ti ti on er tha t s he co ul d n otco ns id er p et it io ne r’s of fer- in co m pr om is e o r ot he r co ll ect io n a lt ern at iv es be cau se pe ti ti on er h adno t p ro vi de d a ll of th e d oc um en ts reque st ed ; i n fa ct , pet it io ne r ha d s ub m it te d o nl y hi s Fo rm s 1 04 0 fo r hi s 2 00 9, 2 01 0, an d 2 01 1 t ax y ears . Duri ng th e co nf eren ce, p et it io ne r was advi se d tha t co ll ect io n a lt ern at iv es co ul d n otbe co ns id eredag ai n i f he di d n ot pr ov id e th e reque st edfin an ci al in fo rm at io n. Th e App eal s Off ic e th engra nt ed-9 -

pe ti ti on er an ex te ns io n o f ti m e to Ju ne 18 , 20 12 , to pro vi de th e reque st edfin an ci al in fo rm at io n. Ms . Crearfax eda le tt er t o p et it io ne r co nf irming th e ex te ns io n o f ti m e to Ju ne 18 , 20 12 , andin fo rm in g p et it io ne r th atsh e co ul d e va lu at e th e o ffer in -co m pr om is e o nl y

if p et it io ne r subm it te d a ll of t he in fo rm at io n re qu es te d a nd th e in fo rm at io n was curren t. On M ay 31 , 20 12 , Ms . Jac ks on in adve rte nt ly faxedpe ti ti on er a l et te r st at in g th athi s ca se ha d b eenrece iv edby the App eal s Off ic e fo r co ns id erat io n. OnJu ne 7, 2 01 2, M s. J ack so n i nf

orm edpe ti ti on er tha t thi s l et te r was sen t i n e rro r, bu t tha t he ne ed edto pro vi de Ms . Crearwith the ad di ti on al reque st edin fo rm at io n b y Ju ne 18 , 20 12 . Peti ti on er d idno t s ub m itan y ad di ti on al in fo rm at io n b y June 18 , 20 12 . On J ul y 13 , 20 12 , res po nd en t n ot ifi edth e Co urt tha t the App eal s Off ic e wou ldreco ns id er p et it io ne r’s of fer- in -co m

pr om is e und er m or e fl ex ib le term s. Mo reo ve r, res po nd en t as si gn eda ne w set tl em en t o ffi cer, M ic ha el Bla is , to in de pe nd en tl y

an al yze the off

er-i n- co m pr om is e. Afte r a p rel im in ary rev ie w of pe ti ti on er’s p rev io us ly sub m it te d d oc um en ts , Mr. Bl ai s co nc lu de d tha t the re were in co ns is te nc ie s i n p et it io ne r’s fin an ci al in fo rm at io n. OnJu ly 17, 2 01 2, M r. Bl ai s reque st edpe ti ti on er t o s ub m itby Aug us t 3 , 20 12 , add it io na l b us in es s b an k re co rd s th atwou ldall ow h im

to co m pl et e h is rev ie w of p et it io ne r’s of fer- in -co m

pr om is e. Pet it io ne r di d n otsubm itth e reque st edreco rd s. OnAug us t 1 4, 2 01 2, M r. Bl ai s-1 0-

co nt act edpe ti ti on er, atwhi chti m e p et it io ne r to ldMr. Bl ai s tha t h e wou ldno t pr ov id e an y

ad di ti on al in fo rm at io n t o the App eal s Off ic e. On Oct ob er 2 6, 2 01 2, re sp on de ntsen t t o p et it io ne r th e supp le m en ta l n ot ic e of de te rm in at io n re

jecti ng pe ti ti on er’s o ffer -in -co m pr om is e o f $6 25 an d s us ta in in g th e NFTL. Dis cu ss io n Purs uantto sec ti on 63 21 , th e Fed eral Gov ern m en t o bt ai ns a li enag ai ns t “ al l pr op erty an d ri gh ts to pro pe rty, whethe r rea l o r pe rs on al ” o f any pe rs on li ab le for Fed eral tax es up on de m an d fo r paym en t an d fa il ur e to pa y . See Ian no ne v. Co m m is si on er, 1 22 T.C. 28 7, 2 93 (20 04 ). Howev er, s ect io n 6 32 0( a)(1 ) requi res th e Co m m is si on er t o g iv e a t axpa y er wri tt enno ti ce o f th e fi li ng of ano ti ce o f Fed eral tax li enup on th attax pa y er’s p ro pe rty. T he no ti ce o f fi li ng m us t i nf orm th e ta xp ay er o f th e ri gh t t o re qu es t a h eari ng inth e Co m mis si on er’s Ap pe al s Offi ce. Sec . 63 20 (a)( 3) (B), (b )(1 ). Sect io n 6 33 0( c), (d ), an d (e ) go ve rn s the co nduc t o f a h eari ng reque st ed un de r se ct io n 6 32 0. Se c. 63 20 (c). At t he he ari ng , th e ta xp ay er m ay rai se an y rel ev an t i ss ue s i nc lu di ng ap pr op ria te sp ou sa l d efen se s, ch al le ng es to th e ap pr op ria te ne ss of c ol le ct io n a ct io ns , andco ll ect io n a lt ern at iv es . Sec. 63 30 (c)( 2) (A). The t ax pay er m ay ch al le ng e th e und erl y in g t ax li ab il ity at t he-1 1-

he ari ng on ly if th e ta xp ay er d idno t re cei ve a st atut ory no ti ce o f de fic ie nc y

or ot he rwis e h av e anop po rtu ni ty to d is pu te th e ta x l iabi li ty. Sec. 6 33 0( c)(2 )(B) . In ad di ti on to co ns id eri ng is su es rai se d b y th e ta xp ay er u nd er s ect io n 6 33 0( c)(2 ), th e App eal s Off

ic e m us t v eri fy th atth e requi rem en ts of a ny app li cab le law o r adm in is tra ti ve pro cedur e h av e b eenm et . Sec. 6 33 0( c)(1 ), (3 ). Whe re the va li di ty of th e und erl y in g t ax li ab il ity is pro pe rly in i ss ue , th e Co urt wi ll rev ie w th e m atte r de no vo . Seg o v . Comm is si on er, 1 14 T.C. 60 4, 6 10 (2 00 0) ; Go za v . Comm is si on er, 1 14 T.C. 17 6, 1 81 -1 82 (20 00 ). Howev er, wh ere th e v al id ity

of t he un de rlyin g t ax is no t p ro pe rly in i ss ue , th e Co urt wi ll 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, 11 4 T.C. at61 0; Gozav. Co m mis si on er, 1 14 T.C. at 1 81 -1 82 . In o urpri or op in io n, we co nc lu de d tha t p et it io ne r ga ve up hi s ri gh t t o c ha ll en ge th e de fic ie nc ie s an d i s n oten ti tl edto rai se hi s u nd erl y in g l iabi li ti es be fo re the App eal s Offi ce o r th is Co urt. See Fat eh i v . Comm is si on er, 2 01 2 WL 96 76 65 , at * 5. Acco rd in gl y , we rev ie w th e App eal s Off ic e’s de te rm in at io n fo r ab us e o f di sc ret io n. Inrev ie win g the App eal s Off ic e’s de te rm in at io n fo r ab us e o f di sc ret io n, we rev ie w th e und erl y in g re as on in g t o d eci de whet he r itwas arb itrary, capri ci ou s, o r witho utso un d b as is infactor l aw. See M ur ph y v. Co m m is si on er, 1 25 T.C. 30 1,-1 2-

32 0 (2 00 5) , aff’d, 4 69 F.3d27 (1s t Ci r. 20 06 ). W e d o n otsubs ti tu te our jud gm en t fo r th atof t he App eal s Off ic e, an d we d o n otde ci de in de pe nd en tl y whet he r we be li ev e th atth e li enno ti ce s ho ul d b e wit hdrawn . See i d. In st ead , we con si de r whe th er, i n the co ur se of m ak in g i ts de te rm in at io n, the App eal s Off ic e (1 ) ve rif

ie d th atth e requi rem en ts of app li cab le law an d a dm in is tra ti ve pro cedur e h av e b een m et , (2) co ns id eredany

rel ev an t i ss ue rai se d b y

th e ta xp ay er tha t re la te s t o the unpa idtax or t he pro po se d l ie n, an d (3 ) de te rm in edwhet he r an y pro po se d co ll ect io n a ct 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 thth e le gi ti m at e co nc ernof t he 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 anne ces sa ry . Sec. 6 33 0( c)(1 )-(3 ). Inou r pr io r op in io n, we re m an de d the cas e to th e App eal s Off ic e to cla rif

y th e rec or d andart ic ul at e fac ts onwhi chitba se d i ts de te rm in at io n t o re ject pe ti ti on er’s o ffer -in -co m

pr om is e an d t o o fferpe ti ti on er an adm in is tra ti ve he ari ng on or b efo re Ma y

29 , 20 12 . On Apr il 27 , 20 12 , pet it io ne r an d the App eal s Off ic e he ldanadm in is tra ti ve he ari ng . On Oct ob er 2 6, 2 01 2, re sp on de ntsen t t o 2 Ina st atus rep ort fi le d wi th th e Co urt o n No ve m be r 14 , 20 12 , pet it io ne r 2 in ex pl ic ab ly alle ge d tha t the Co urt-o rd eredadm in is tra ti ve he ari ng ha d n otbe en sc he du le d. Ho wev er, i n apre vi ou s re po rt f il edwith the Co urt o n J un e 1 5, 2 01 2, pe ti ti on er ac kn owl ed ge d tha t o n o r ab ou t Ap ril 16 , 20 12 , he s ch edul edan adm in is tra ti ve he ari ng with the App eal s Off ic e fo r Apr il 27 , 20 12 inacco rd an ce with the Co urt o rd er an d tha t, o n Ap ril 27 , 20 12 , pet it io ne r en ga ge d i n atel ep ho ne (co nt in ue d...)-1 3-

pe ti ti on er a s up pl em en ta l n ot ic e o f de te rm in at io n i nd ic at in g h is de ci si on s t o re ject pe ti ti on er’s o ffer -in -co m

pr om is e an d s us ta in th e NFTL andart ic ul at in g re as on s fo r hi s d eci si on s. The reas on gi ve n b y

res po nd en t fo r reject in g p et it io ne r’s of fer- in co m pr om is e was th atres po nd en t was “un ab le to de te rm in e th e ad equa cy of [p et it io ne r’s of

fer- in -co m

pr om is e] bas edonth e la ckof f in an ci al di sc lo su re.” Th e App eal s Off

ic e d et erm in edth atpe ti ti on er’s “ in co ns is te ntan d i nc om pl et e rec or ds [m ad e] it i m

po ss ib le to ren de r anin fo rm edde ci si on ab ou t a s ui tabl e co ll ect io n al te rn at iv e.” To b e el ig ib le fora co ll ect io n a lt ern at iv e, su chas a n o ffer -in co m pr om is e, th e ta xp ay er m

us t p ro vi de requi redreturns an d p ro vi de reque st ed fin an ci al in fo rm at io n, i nc lu di ng Fo rm 43 3- A, to th e App eal s Off ic e. Sec. 30 1.6 33 0- 1( d) (2 ), Q&A-D8 , Pro ced . & Adm in . Reg s.; see als o Lan ce v . Co m m is si on er, T.C. Mem o. 2 00 9- 12 9, 2 00 9 WL 15 63 42 2, at*3 -* 4; Sch wers en sky

v. Co m m is si on er, T.C. Mem o. 2 00 6- 17 8, 2 00 6 WL 24 56 48 4, at*4 . (...co nt inue d) 2 co nf eren ce wi th Ms . Jac ks on inth e App eal s Off ic e in refe ren ce t o the sch edul ed adm in is tra ti ve he ari ng . Alth ou gh a se c. 63 30 he ari ng m ay co ns is t o f a face -to -fac e co nf

eren ce, a p ro pe r he ari ng m ay als o o ccu r by tel ep ho ne . Barry v. Co m m is si on er, T.C. Mem o. 2 01 1- 12 7, 2 01 1 WL 22 60 41 8, at*5 (ci ti ng Katz v. Co m m is si on er, 1 15 T.C. 32 9, 3 37 -3 38 , (20 00 )); sec . 30 1.6 33 0- 1( d) (2 ), Q&A-D6 , Pro ced . & Adm in . Reg s. Acco rd in gl y , we con cl ud e th atpe ti ti on er’s al le ga ti on is m eri tl es s an d tha t the ord eredadm in is tra ti ve he ari ng was s ch edul edforan d oc cu rredon Apri l 2 7, 2 01 2.-1 4-

On Ap ril 16 , 20 12 , Ms . Crearreque st edpe ti ti on er t o s ub m it , by Apr il 25 , 20 12 , supp le m en ta l d oc um en ts an d o th er fi na nc ia l i nf orm at io n s o tha t s he co ul d co m pl et el y rev ie w pet it io ne r’s of

fer- in -co m

pr om is e in adva nc e o f th e h eari ng sc he du le d fo r Apr il 27 , 20 12 . Peti ti on er s ub m it te d o nl y hi s Fo rm s 1 04 0 fo r hi s 20 09 , 20 10 , and20 11 tax y ears . The Ap pe al s Off ic e th engra nt edpe ti ti on er an ex te ns io n o f ti m e to Ju ne 18 , 20 12 , to pro vi de th e rem ai ni ng reque st eddo cu m en ts an d fi na nc ia l i nf

orm at io n. Ontwo sep arat e o ccas io ns , th e App eal s Off ic e rem in de d p et it io ne r inwrit in g o f th e ex te nd edde ad li ne ; n on ethe le ss , pet it io ne r di d no t s ub m itan y

ad di ti on al in fo rm at io n b y Ju ne 18 , 20 12 . On Ju ly 17, 2 01 2, af te r pe ti ti on er’s o ffer -in -co m

pr om is e was forward edto Mr. Bl ai s fo r anin de pe nd en t rev ie w, Mr. Bl ai s re qu es te d tha t p et it io ne r pr ov id e b y Aug us t 3 , 20 12 , hi s Ap ril , May, andJu ne 20 12 bu si ne ss ba nkreco rd s s o tha t h e co ul d d et erm in e whe th er pe ti ti on er was rep orti ng anin co m e sh ortfa ll , payin g p ers on al ex pe ns es ou t o f a bu si ne ss acco un t, o r rep orti ng ex pe ns es on hi s Fo rm 43 3- A th atwere i nc on si st en t with tho se on ba nkst at em en ts . Peti ti on er d idno t s ub mitth e rec or ds by Aug us t 3 , 20 12 , and , when Mr. Bl ai s ca ll edpe ti ti on er o n Au gu st14 , 20 12 , pet it io ne r refu se d to pro vi de an y

ad di ti on al in fo rm at io n t o the App eal s Off ic e. The Ap pe al s Off

ic e of fere d p et it io ne r m

ul ti pl e o pp ortu ni ti es to subm itth e reque st eddo cu m en ts an d fin an ci al in fo rm at io n; pe ti ti on er fa il edto co op erat e wit h a ny of th os e reque st s.-1 5-

Acco rd in gl y , pet it io ne r was no t el ig ib le fora co ll ect io n a lt ern at iv e, an d we s us ta in res po nd en t’s d et erm in at io n t o re ject p et it io ne r’s of

fer- in -co m

pr om is e. Pet it io ne r co nt en ds th athe pre vi ou sl y subm it te d the do cum en ts reque st ed by the App eal s Off

ic e. Pet it io ne r’s co nt en ti on is witho utm eri t. Alt ho ug h pe ti ti on er m ay

ha ve pre vi ou sl y

subm it te d p as t v ers io ns of t he do cu m en ts th atha d be enreque st ed , th e App eal s Off ic e cl earl y

in fo rm edpe ti ti on er tha t cu rren t in fo rm at io n was requi redto pro pe rly eval ua te hi s o ffer -in -co m pr om is e. Mo reo ve r, pe ti ti on er adm it s tha t h e d idno t s ub m itth e b an k re co rd s re qu es te d b y Mr. Bl ai s b ecau se pe ti ti on er d idno t fi nditne ces sary to subm itdo cu m en ts pe rta in in g t o h is bu si ne ss , des pi te Mr. Bl ai s’s co nc ern s tha t p et it io ne r was m is st at in g e xp en se s thr ou ghth e u se of h is bu si ne ss acco un t. Inhi s s up pl em en ta l n ot ic e o f de te rm in at io n, re sp on de ntals o s us ta in edth e NFTL, whic h p et it io ne r co nt en ds sh ou ldbe withdrawn . The Co m mis si on er “ m ay fil e NFTLs fo r ta x p eri od s an d t ax es , whet he r or no t co ve redby the CDP Not ic e is su edun de r se ct io n 6 33 0” . Sec. 3 01 .63 30 -1 (g )(2 ), Q&A-G3 , Pro ced . & Adm in . Reg s. Ho wev er, p ur su an t t o s ect io n 6 32 3( j), an NFTL m ay

be withd rawnwitho ut fu ll pa y m en t an d wi th ou t p reju di ce u nd er the fol lo win g c on di ti on s: (1) th e fi li ng of th e NFTL was p rem atur e o r ot he rwis e n otinacco rd an ce wi th adm in is tra ti ve pr oc edur es of t he IRS; (2) th e ta xp ay er h aden te redin to anin st al lm en t ag reem en t-1 6-

un de r se ct io n 6 15 9 t o s at is fy th e ta x l iabi li ty for wh ic h the NFTL was impos edby m ean s o f in st al lm en t p aym en ts , un le ss th e ag reem en t p ro vi de s o th erwi se ; (3 ) withd rawal of t he NFTL will faci li ta te co ll ect io n o f th e ta x l iabi li ty; (4) with the co ns en t o f th e ta xp ay er o r th e Nat io na l Tax pa y er Advo cat e (NTA), th e wit hd rawal of th e n ot ic e wou ldbe inth e b es t i nt eres t o f th e ta xp ay er (d et erm in edby the NTA orth e ta xp ay er) andth e Uni te d S ta te s. See Sk id m or e v . Comm is si on er, T.C. Mem o. 2 01 2- 32 8, at*1 4- *1 5; sec . 30 1.6 32 3( j)-1, Pr oc ed . & Adm in . Reg s. If the Co m m is si on er d et erm in es co nd it io ns forwithd rawal are p res en t, the Co m m is si on er m ay

(bu t i s n otrequi redto ) au th or iz e th e wit hd rawal . Sec. 30 1.6 32 3(

j)-1( c), Pro ced . & Adm in . Reg s. Pet it io ne r co nt en ds th atth e NFTL sh ou ldbe withd rawnbe cau se he is un ab le to pa y

th e o ut st an di ng Fed eral in co m e ta x l iabi li ti es for th e y ears inis su e an d tha t re sp on de ntha s ad m it te d p et it io ne r’s in ab il ity to pay . W e d is ag ree. Th e App eal s Off

ic e h as st at edth atpe ti ti on er’s “ in co ns is te ntan d i nc om pl et e rec or ds [m ad e] it i m

po ss ib le to ren de r anin fo rm edde ci si on ab ou t a s ui tabl e co ll ect io n al te rn at iv e.” Res po nd en t h as no t ad m it te d p et it io ne r’s in ab il ity to pay ; t o the co nt rary, resp on de ntha s as se rte d tha t re sp on de ntis un ab le to de te rm in e whe th er pe ti ti on er was ab le to pa y . Peti ti on er p ro vi de d n o a dd it io na l i nf orm at io n o r supp ort fo r hi s co nt en ti on th atth e NFTL sh ou ldbe withd rawn , no r ha s h e sh own-1 7-

th atan y of t he co nd it io ns un de r se ct io n 6 32 3( j) were s at is fie d. Acco rd in gl y , res po nd en t was act in g wi th inres po nd en t’s s ou nddi sc ret io n i n uph ol di ng th e NFTL. Pet it io ne r ha s n otadvanc edan y arg um en t o r in tro du cedan y ev id en ce tha t wou ldcau se us to co nc lu de th atth e d et erm in at io ns to su st ai n the NFTL andreject pe ti ti on er’s o ffer -in -co m

pr om is e were a rb itrary, capri ci ou s, o r witho utso un d b as is in fact . The Ap pe al s Off ic e co rrec tl y

pre cl ud edpe ti ti on er fro m ch al le ng in g the un de rlyin g l iabi li ti es . Peti ti on er d idno t co m pl y with the App eal s Off

ic e’s rep eat edreque st s t o s ub m itcurren t d oc um en ts an d o th er fi na nc ia l i nf orm at io n. The App eal s Off

ic e d et erm in edth atth e requi rem en ts of app li cab le law an d adm in is tra ti ve pro cedur e were m etan d c on cl ud edth atth e p ro po se d c ol le ct io n act io n app ro pr iate ly bal an cedth e n eedforeffi ci en t co ll ect io n o f ta xe s wi th pe ti ti on er’s co nc ern s re ga rd in g the in tru si ve ne ss of t he act io n. Co ns eque nt ly, we ho ldth atth e App eal s Off ic e d idno t ab us e it s d is cret io n wh enitis su edit s supp le m en ta l n ot ic e o f de te rm in at io n re jecti ng pe ti ti on er’s o ffer -in -co m pr om is e an d uph ol di ng th e p ro po se d c ol le ct io n a ct io n. Inreac hi ng th es e h ol di ng s, we h av e co ns id eredall th e p art ie s’ arg um en ts , an d, t o the ex te ntno t ad dr es se d h erei n, we co nc lu de th atth ey are m oo t, i rrel ev an t, orwitho utm eri t.-1 8-

To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redfor res po nd en t.