T.C. Memo. 2014-41

UNITED STATES TAX COURT

TOM REED, Petitioner v. COMMISSIONER

OF INTERNAL REVENUE, Respondent*

Docket No. 27604-11L. Filed March 10, 2014.

George W. Connelly, Jr., Heather M. Pesikoff, and Renesha N. Fountain, for

petitioner.

David Baudillo Mora and Gordon P. Sanz, for respondent.

SUPPLEMENTAL MEMORANDUM OPINION

KROUPA, Judge: This matter is before the Court on petitioner’s motion for

reconsideration of our findings and opinion in Reed v. Commissioner, 141 T.C. __

This opinion supplements our prior Opinion, Reed v. Commissioner, 141 *

T.C. __ (Sept. 23, 2013).
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[*2] (Sept. 23, 2013) (Reed I). See Rule 161. We held in Reed I that we had

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jurisdiction to determine whether respondent abused his discretion in sustaining a

final notice of intent to levy (proposed collection action). We further held that

respondent could not be required to reopen an offer-in-compromise (OIC) based

on doubt as to collectibility that respondent had returned to petitioner years before

a collection due process hearing (collection hearing) commenced. Additionally,

we held that it was not an abuse of discretion for respondent to sustain the

proposed collection action. Petitioner now asks us to reconsider the latter two

holdings of Reed I. We will deny his motion.

Background

We adopt the findings of fact we made in Reed I. We summarize the factual

and procedural background briefly here and make additional findings as required

for our ruling on the motion for reconsideration.

Petitioner failed to file Federal income tax returns timely for years 1987

through 2001 (years at issue). Petitioner eventually filed returns for the years at

issue (delinquent returns) but did not fully satisfy his liabilities for the taxes,

penalties and interest arising from the delinquent returns (outstanding tax

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

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unless otherwise indicated.
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[*3] liabilities). Petitioner submitted two separate OICs to settle his outstanding

tax liabilities. Only one of these OICs is now relevant.

A. The 2008 Offer

Petitioner submitted an OIC to respondent’s Houston Offer in Compromise

Unit (offer unit) in 2008 (2008 offer). Petitioner proposed settling the outstanding

tax liabilities of almost one-half million dollars for $35,196 based on doubt as to

collectibility. The offer unit determined that petitioner had failed to demonstrate

he was in compliance with his Federal income tax obligations at the time he

submitted the 2008 offer. The offer unit returned the 2008 offer because it had

determined that petitioner was not current with his estimated tax payments for

2007. Petitioner then exchanged several letters with the offer unit. Petitioner

attempted through the letter exchange to have the offer unit reconsider its

returning the 2008 offer. To this end, petitioner argued that he was in fact in

compliance with his Federal income tax obligations at the time he submitted the

2008 offer. Petitioner also argued in the letter exchange that he should be given

the opportunity to comply if, in fact, he was not in compliance at the time he

submitted the 2008 offer. Petitioner continued to make payments during the letter

exchange consistent with the 2008 offer. The letter exchange ultimately failed to

convince the offer unit to alter its decision to return the 2008 offer to petitioner.
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[*4] B. The Collection Due Process Hearing

Respondent subsequently issued a final notice of intent to levy for the years

at issue. Petitioner timely requested a collection hearing. Settlement Officer

Liana A. White (SO White) at Houston Appeals was assigned to conduct the

collection hearing. Petitioner challenged the manner in which respondent had

handled the 2008 offer. SO White issued the determination notice in late 2011

sustaining the proposed collection action.

Discussion

Petitioner again urges us to find that respondent abused his discretion so

that petitioner can effectively extinguish his outstanding tax liabilities. We begin

with this Court’s standard for deciding whether to grant a motion for

reconsideration. We then address petitioner’s contentions.

I. Standard Under Rules 161

We now discuss our standard for deciding whether to grant a motion for

reconsideration of our findings or opinion. See Rule 161. The decision rests

within the discretion of the Court. CWT Farms, Inc. v. Commissioner, 79 T.C.

1054, 1057 (1982), aff’d, 755 F.2d 790 (11th Cir. 1985). It is the Court’s policy to

try all issues raised in a case in one proceeding to avoid piecemeal and protracted

litigation. Id. Accordingly, we generally do not exercise our discretion to grant
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[*5] such a motion without a showing of substantial error or unusual

circumstances. Haft Trust v. Commissioner, 62 T.C. 145 (1974), aff’d on this

ground, 510 F.2d 43, 45 n.1 (1st Cir. 1975). A motion for reconsideration is not

the appropriate forum for rehashing previously rejected legal arguments or

tendering new legal theories to reach the end result the moving party desires. 

Estate of Quick v. Commissioner, 110 T.C. 440, 441-442 (1998).

II. The Motion for Reconsideration 

We now focus on the motion for reconsideration. Petitioner asks us to find

that respondent abused his discretion by sustaining the proposed collection action. 

Petitioner wants us to direct the Internal Revenue Service (IRS) Appeals Office to

either consider the 2008 offer or to return it to the offer unit for consideration. 

Petitioner asks us to do this, however, by simply rehashing the arguments he made

during the initial proceeding. We heard and considered these arguments once and

find it inappropriate to reconsider Reed I simply because petitioner has raised

these arguments for a second time. See Estate of Quick v. Commissioner, 110

T.C. at 441-442; Dynadeck Rotary Sys., Ltd. v. Commissioner, T.C. Memo. 2001-

113. We briefly address petitioner’s tax compliance arguments, however, because

doing so will allow us to provide additional details of our reasoning in Reed I.
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[*6] Petitioner first reiterates his argument that he was in compliance with his

Federal income tax obligations for 2007 when he submitted the 2008 offer. The

offer unit determined otherwise. At trial SO White explained that she reviewed

the relevant files and concluded that petitioner was not in compliance for 2007

because he had failed to timely submit an estimated tax payment for 2007. She

further explained that the addition to tax assessed against petitioner for failing to

timely pay his estimated tax payments supported her conclusion. SO White’s

determination was not arbitrary, capricious or without a sound basis in fact or law. 

Accordingly, petitioner’s argument lacks merit.2

Petitioner next repeats his contention that he should have been given more

of an opportunity to get in compliance with his Federal income tax obligations if

he was not in compliance at the time he submitted the 2008 offer. Petitioner again

draws our attention to some frequently asked questions (FAQs) posted to the IRS’

Web site and certain Internal Revenue Manual (IRM) provisions. He claims that

the offer unit failed to give him the opportunity described in the FAQs and the

Our role is not to substitute our own judgment for that of SO White. See 2

Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir.

2006). We do not decide independently whether we believe the levy should be

withdrawn. See id.
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[*7] IRM provisions. Petitioner contends that SO White abused her discretion

when she sustained the proposed collection action anyway.

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It is not an abuse of discretion for the Commissioner to return an OIC

because of a taxpayer’s failure to meet current tax obligations. Christopher Cross,

Inc. v. United States, 461 F.3d 610, 613 (5th Cir. 2006). Further, informal

guidance, such as the FAQs posted to the IRS’ Web site, is not an authoritative

source of Federal tax law. See Nelson v. Commissioner, T.C. Memo. 2013-259

(citing Zimmerman v. Commissioner, 71 T.C. 367, 371 (1978), aff’d without

published opinion, 614 F.2d 1294 (2d Cir. 1979)). Moreover, the IRM does not

have the force of law and does not confer enforceable rights on taxpayers. Fargo

v. Commissioner, 447 F.3d 706, 713 (9th Cir. 2006) (holding that the IRM does

not require the Commissioner to negotiate with a taxpayer), aff’g T.C. Memo.

2004-13.

In any event, the record reflects that the offer unit sent petitioner a letter

notifying him that he had to be in compliance with his estimated tax payment

obligations before the offer unit would consider the 2008 offer. The record further

Petitioner argued in the initial proceeding and again argues in the motion

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for reconsideration that the 2008 offer was improperly returned on the basis of tax

noncompliance. We note that petitioner has not argued that respondent’s returning

the 2008 offer was a de facto rejection of the 2008 offer rather than a return of the

2008 offer.
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[*8] reflects that petitioner did not request additional time to comply. Petitioner

was on notice that he had to be in compliance with his Federal income tax

obligations before the offer unit would consider his 2008 offer. Petitioner was not

in compliance, and the offer unit returned the 2008 offer to him. Thus, petitioner’s

argument lacks merit.

III. Conclusion

Petitioner has provided no valid basis for us to reconsider our findings or

opinion in Reed I. Accordingly, we will deny his motions.

We have considered all remaining arguments the parties made and, to the

extent not addressed, we find them to be irrelevant, moot or meritless.

To reflect the foregoing,

An appropriate order will be issued.