T.C. Mem o. 2 01 4- 41

UNITED STAT ES TAX COURT
TOM REED, Peti ti on er v . COMMI SSIONER OF INTERNAL REVENU E, Resp on de nt *

Doc ke t No . 27 60 4- 11 L. Fil edMarc h 1 0, 2 01 4.

Geo rg e W. Co nn el ly, Jr ., Heath er M. Pe si ko ff, an d R en es haN. Fou nt ai n, fo r pe ti ti on er. Dav idBau di ll o M or a an d Go rd on P. San z, fo r res po nd en t.

SUPPLEMENTAL MEMORANDUM OPINI ON KROUPA, Ju dg e: Thi s m at te r is be fo re the Co urt o n p et it io ne r’s m ot io n fo r reco ns id erat io n o f ou r fi nd in gs an d o pi ni on inReedv. Co m m is si on er, 1 41 T.C. __

Thi s o pi ni onsupp le m en ts ou r pr io r Opi ni on , Reedv. Co m m is si on er, 1 41 * T.C. __(Sep t. 2 3, 2 01 3)
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[* 2] (Sep t. 2 3, 2 01 3) (Ree d I) . See Ru le 16 1. W e h el d i n R eedI th atwe ha d 1 juri sd ic ti on to de te rm in e whe th er re sp on de ntab us edhi s d is cret io n i n s us ta in in g a fin al no ti ce o f in te ntto lev y (pr op os edco ll ect io n a ct io n) . W e furth er h el d t ha t res po nd en t co ul d n otbe requi redto reo pe n a n o ffer -in -co m pr om is e (OIC) ba se d
on do ub t as to co ll ect ib il ity th atres po nd en t h adreturne d t o p et it io ne r y ears be fo re a co ll ect io n due pro ces s h eari ng (co ll ect io n h eari ng ) co m m en ced . Add it io na ll y , we he ldth atitwas n otanab us e o f di sc ret io n fo r res po nd en t t o s us ta in th e pr op os edco ll ect io n a ct io n. Pe ti ti on er n ow as ks us to reco ns id er the lat te r two ho ld in gs of R eedI. W e wil l d en y hi s m ot io n. Bac kg ro un d W e ad op t the fin di ng s o f fac t we m ad e in ReedI. W e su m m ari ze the factua l
an d p ro cedur al ba ck gr oundbri efl y he re an d m ak e ad di ti on al fin di ng s as requi red fo r ou r ru li ng on th e m ot io n fo r rec on si de rat io n. Pet it io ne r fai le d t o fi le Fed eral in co m e ta x re tu rn s t im el y fory ears 19 87 th ro ug h 2 00 1 (years at i ss ue ). Pet it io ne r ev en tu al ly file d re tu rn s fo r th e y ears at is su e (d el in qu en t re tu rn s) bu t d idno t fu ll y sat is fy hi s l iabi li ti es forth e ta xe s, pe na lt ie s an d i nt eres t ar is in g fr om th e d el in qu en t re tu rn s (o ut st an di ng tax
Ru le refe ren ces are t o t he Tax C ou rt Rul es of P ract ic e an d P ro cedur e 1 un le ss ot he rwis e in di cat ed
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[* 3] li ab il it ie s) . Peti ti on er s ub m it te d t wo s ep arat e OICs to set tl e h is ou ts tand in g ta x l iabi li ti es . Onl y

on e o f th es e OICs is no w rel ev an t. A. The 2 00 8 Off

er Pet it io ne r subm it te d a n OIC to res po nd en t’s Ho us to n Off er i n C om pr om is e Uni t (o fferun it ) in 20 08 (20 08 off er). Pet it io ne r pr op os edset tl in g the ou ts tand in g ta x l iabi li ti es of a lm os t o ne -h al f m il li on do ll ars for$3 5,1 96 ba se d o n d oubtas t o co ll ect ib il ity . The o ffer

un itde te rm in edth atpe ti ti on er h adfai le d t o d em on st rat e he was i n c om

pl ianc e wit h h is Fed eral in co m e ta x o bl ig at io ns at t he ti m e h e subm it te d t he 20 08 off

er. The off

er u ni t re turn edth e 2 00 8 o fferbe cau se itha d de te rm in edth atpe ti ti on er was no t cu rren t wi th hi s es ti m at edtax pa ym en ts for 20 07 . Peti ti on er the n e xc ha ng edsev eral let te rs with t he off er u ni t. Pet it io ne r at te m pt edth ro ug h t he let te r ex ch an ge to ha ve th e o fferun itreco ns id er i ts returni ng th e 2 00 8 o ffer . To th is en d, p et it io ne r arg ue d t ha t h e was infactin
co m pl ianc e wit h h is Fed eral in co m e ta x o bl ig at io ns at t he ti m e h e subm it te d t he 20 08 off er. Pet it io ne r al so arg ue d i n t he let te r ex ch an ge th athe sh ou ldbe gi ve n th e o pp ortu ni ty to co m

pl y if, i n fa ct , he was no t i n c om pl ianc e atth e ti m e h e subm it te d t he 20 08 off

er. Pet it io ne r co nt in ue d t o m ak e p aym en ts du rin g the let te r ex ch an ge co ns is te ntwith t he 20 08 off er. The let te r ex ch an ge ul ti m at el y fai le d t o co nv in ce the off

er u ni t t o a lt er i ts de ci si on to return t he 20 08 off er t o p et it io ne r.-4
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[* 4] B. The C ol le ct io n Du e Pro ces s Hea rin g Res po nd en t s ub se qu en tl y is su eda fi na l n ot ic e o f in te ntto lev y forth e y ears atis su e. Pet it io ne r ti m el y reque st eda co ll ect io n h eari ng . Sett le m en t Offi cer Lian a A. Whi te (SO Whi te ) atHou st on App eal s was ass ig ne d t o c on du ctth e co ll ect io n h eari ng . Peti ti on er ch al le ng edth e m an ne r in whi chres po nd en t h ad ha nd le d t he 20 08 off

er. SO Whi te is su edth e d et erm in at io n n ot ic e in lat e 2 01 1
su st ai ni ng th e p ro po se d c ol le ct io n a ct io n. Dis cu ss io n Pet it io ne r ag ai n urg es us to fin d t ha t re sp on de ntab us edhi s d is cret io n s o th atpe ti ti on er ca n e ffec ti ve ly ext in gu is h h is ou ts tand in g t ax li ab il it ie s. We beg in with t hi s C ou rt’s s tand ardforde ci di ng whet he r to gra nta m ot io n fo r reco ns id erat io n. We th enad dr es s p et it io ne r’s co nt en ti on s. I. Sta nd ardUnd er Ru le s 1 61 W e n ow d is cu ss ou r st an da rdforde ci di ng whet he r to granta m ot io n fo r reco ns id erat io n o f ou r fi nd in gs or o pi ni on . See Ru le 16 1. Th e d eci si on res ts withi n t he di sc ret io n o f th e Co urt. CWT Farm s, In c. v. Co m m is si on er, 7 9 T.C. 10 54 , 10 57 (19 82 ), aff’d, 7 55 F.2d79 0 (1 1t h C ir. 1 98 5) . It i s the Co urt’s p ol ic y to try all is su es rai se d i n acas e inon e p ro ceed in g t o a vo idpi ecemeal an d p ro tra ct ed li ti ga ti on . Id. Acco rd in gl y , we gen eral ly do n otex erci se ou r di sc ret io n t o g ran t-5
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[* 5] su cha m ot io n wi th ou t a s ho win g o f subs tant ia l erro r orun us ua l ci rcu m st an ces . Haft Tru stv. Co m m is si on er, 6 2 T.C. 1 45 (19 74 ), aff’d o n t hi s gr ou nd , 51 0 F .2d43 , 45 n.1 (1s t Ci r. 19 75 ). A m ot io n fo r rec on si de rat io n i s n ot th e ap pr op ria te forum

forreh as hi ng pre vi ou sl y reject edleg al arg um en ts or te nd eri ng ne w leg al th eo rie s t o re ach th e en d re su ltth e m ov in g p arty de si res . Est at e o f Qui ckv. Co m

mis si on er, 1 10 T.C. 44 0, 4 41 -4 42 (19 98 ). II. The Mo ti on forReco ns id erat io n W e n ow fo cu s o n t he m ot io n fo r reco ns id erat io n. Pe ti ti on er as ks us to fin d th atres po nd en t ab us edhi s d is cret io n b y su st ai ni ng th e p ro po se d c ol le ct io n a ct io n. Pet it io ne r wan ts us to di rectth e In te rn al Rev enue Serv ic e (IR S) Ap pe al s Off ic e to ei th er co ns id er the 20 08 off er o r to return i t t o the off er uni t fo r co ns id erat io n. Pet it io ne r as ks us to do th is , ho wev er, b y si m pl y reh as hi ng th e arg um en ts he m ad e du rin g t he in it ia l p ro ceed in g. We heardan d c on si de redth es e arg um en ts on ce an d fin d i t i napp ro pr ia te to reco ns id er Re edI si m pl y be cau se pe ti ti on er h as rai se d th es e arg um en ts fora se co ndti m e. See Es ta te of Qu ic k v . Comm is si on er, 1 10 T.C. at 4 41 -4 42 ; Dyna de ckRo tary Sy s., Ltd . v. Co m

m is si on er, T.C. Mem o. 2 00 1- 11 3. We bri efl y

ad dr es s p et it io ne r’s ta x c om pl ianc e arg um en ts , ho wev er, b ecau se do in g s o wi ll all ow u s t o p ro vi de ad di ti on al de ta il s o f ou r rea so ni ng inReedI.-6
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[* 6] Pet it io ne r fi rs t re it erat es hi s ar gu m en t tha t h e was inco m pl ianc e wit h h is Fed eral in co m e ta x o bl ig at io ns for20 07 when he subm it te d the 20 08 off er. The of fer u ni t d et erm in edot he rwis e. At tria l SO Whi te ex pl ai ne d t ha t s he rev ie wed th e rel ev an t fi le s an d c on cl ud edth atpe ti ti on er was no t i n c om pl ianc e fo r 20 07 be cau se he ha d fa il edto ti m el y subm itanest im at edtax pa ym en t fo r 20 07 . She furth er ex pl ai ne d t ha t the ad di ti on to tax ass es se d a ga in stpe ti ti on er fo r fai li ng to ti m el y pay hi s es ti m at edtax pa ym en ts supp orte d h er co nc lu si on . SO Whi te ’s de te rm in at io n was no t arbi tra ry , cap ric io us or wi th ou t a s ou ndba si s i n fa ctor l aw. Acco rd in gl y , pet it io ne r’s arg um en t l ack s m eri t. 2 Pet it io ne r ne xtrep eat s h is co nt en ti onth athe sh ou ldha ve be engi ve n m or e of anop po rtu ni ty to g etinco m pl ianc e wit h h is Fed eral in co m e ta x o bl ig at io ns if he was n otinco m

pl ianc e atth e ti m e h e subm it te d t he 20 08 off er. Pet it io ne r ag ai n dr aws ou r at te nt io n t o s om e fre qu en tl y ask edqu es ti on s (F AQs) p os te d t o t he IRS’ W eb si te an d c ert ai n In te rn al Rev enue Man ua l (I RM) pro vi si on s. He cl ai m s tha t th e o fferun itfai le d t o g iv e h im th e o pp ortu ni ty des cri be d i n the FAQs an d t he

Ourrol e is no t t o s ub st itut e o urownjud gm en t fo r th atof S O Whi te . See 2 Mu rp hy v. Co m

m is si on er, 1 25 T.C. 30 1, 3 20 (20 05 ), aff’d, 4 69 F.3d27 (1s t Ci r. 20 06 ). W e d o n otde ci de in de pe nd en tl y whethe r we b el ie ve th e le vy sho ul d b e withd rawn . See i d.-7
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[* 7] IRM p ro vi si on s. Pet it io ne r co nt en ds th atSO Whi te ab us edhe r di sc ret io n whe n s he su st ai ne d t he pro po se d c ol le ct io n a ct io n a nyway . 3 It i s n otanab us e o f di sc ret io n fo r th e Co m m is si on er t o re tu rnanOIC be cau se of atax pay er’s fai lu re t o m eetcurren t t ax ob li ga ti on s. Ch ris to ph er Cr os s, In c. v. Un it edSta te s, 4 61 F.3d61 0, 6 13 (5t h C ir. 2 00 6) . Furthe r, in fo rm al gu id an ce, s uc h a s the FAQs p os te d t o t he IRS’ W eb si te , is no t anau th or it at iv e so ur ce o f Fed eral tax law. See Nels on v. Co m m is si on er, T.C. Mem o. 2 01 3- 25 9 (ci ti ng Zimm erm anv. Co m m is si on er, 7 1 T.C. 3 67 , 37 1 (1 97 8) , aff’d wit ho ut publ is he d o pi ni on , 61 4 F .2d12 94 (2dCir . 19 79 )). Mo reo ve r, th e IRM do es no t ha ve th e fo rce o f law anddo es no t co nf er en fo rceabl e ri gh ts ontax pay ers . Farg o v. Co m m is si on er, 4 47 F.3d70 6, 7 13 (9t h C ir. 2 00 6) (ho ld in g t ha t the IRM d oe s no t re qu ire th e Co m

m is si on er t o n eg ot ia te with atax pa y er), af f’g T.C. Mem o. 20 04 -1 3. Inan y ev en t, the reco rdrefl ect s tha t the off er uni t s en t p et it io ne r a l et te r no ti fy in g h im

th athe ha d t o b e in co m

pl ianc e wit h h is est im at edtax paym en t ob li ga ti on s b efo re the off er u ni t wo ul d c on si de r th e 2 00 8 o ffer . The rec or d fu rth er Pet it io ne r arg ue d i n t he in it ia l p ro ceed in g a ndag ai n a rg ue s i n t he m ot io n 3 fo r rec on si de rat io n tha t the 20 08 off er was im pr op erl y returne d o n t he ba si s o f ta x no nc om pl ianc e. W e n ot e th atpe ti ti on er h as no t ar gu edth atres po nd en t’s re tu rn in g th e 2 00 8 o fferwas ade fact o re jecti on of the 20 08 off

er ra th er tha n areturn o f th e 20 08 off er.-8
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[* 8] refl ect s tha t p et it io ne r di d n otreque stad di ti on al ti m e to co m pl y . Peti ti on er was onno ti ce tha t h e h adto be inco m pl ianc e wit h h is Fed eral in co m e ta x ob li ga ti on s b efo re the off er u ni t wo ul d c on si de r hi s 2 00 8 o ffer . Peti ti on er was no t in co m pl ianc e, an d t he off

er u ni t re tu rn edth e 2 00 8 o fferto hi m . Thu s, p et it io ne r’s arg um en t l ack s m eri t. III. Co nc lu si on Pet it io ne r ha s p ro vi de d n o v al idba si s fo r us to reco ns id er o urfin di ng s o r op in io n i n R eedI. Acco rd in gl y , we wil l d en y hi s m ot io ns . W e h av e co ns id eredall rem ai ni ng arg um en ts th e p art ie s m ad e an d, t o t he
ex te ntno t ad dr es se d, we fi ndth em to be irr el ev an t, m oo t o r m eri tl es s. To re fle ctth e fo reg oi ng , An ap pr op ria te ord er wi ll be is su ed
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