TAX COURT OPINION

Case: Ronald David Stinchcomb
Docket Number: 29690-07L
Judge: Wells
Opinion Type: memo
Filed: 11/10/2009
Pages: 9

T .C . Memo . 2009-25 9 UNITED STATES TAX COUR T RONALD DAVID STINCHCOMB, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 29690-07L . Filed November 10, 2009 . Ronald David Stinchcomb, pro se .- Jennifer Martwick , for respondent . MEMORANDUM OPINION WELLS, Judge : Petitioner seeks review, pursuant to section 6330(d),' of respondent's determination regarding a lien filed with respect . to petitioner's . Federal income taxes for 2001 and 2002 and a trust fund recovery penalty for the period ende d 'Unless otherwise indicated, section references .are to the applicable versions of the Internal Revenue Code . SERVE[' NOV 10 2009 September 30, 2002 . W e settlement officer abused her discretion in determining to reject petitioner's offer-in-compromise and upholding the filing of th e lien regarding petitioner's' liabilities . The parties stipulated certain facts and exhibits . incorporate herein the parties' stipulations of fact, which are found accordingly . Whe . the petition was filed, petitione r resided in Georgia . On March 19, 2004,jpetitioner filed a Federal income tax g 1 ' return for his 2001 taxable year . The return reported a ta x liability of $7,738 and l a withholding credit of $3,638 . Petitioner did not pay the tax balance due of $4,100 . On July 26, 2004, respondent assessed the tax, plus a delinquency 11 addition to tax pursuant to section 6651(a)(1) of $922 .50, a p1 failure to pay addition to,tax pursuant to section $574, and interest of $614 .53 . As of November 12 , L IL petitioner's outstanding tax liability for taxable year 2001 , including accrued interest, was $7,781 .94 . On March 19, 2004 , return for his 2002 taxable year . The return reported a ta x liability of $9,164 and Petitioner did not pay'the tax balance due of $6,997 . On June'7, d 2004, respondent .assessed the tax, plus an estimated tax addition' , to tax pursuant to section 6654 of $218, a delinquency addition a -3- to tax pursuant to section 6651(a)(1) of $1,574 .32, a=failure to pay addition to tax pursuant to section 6651(a)(2) of $419 .86, and interest of $394 .71 . That same day, respondent abated the estimated addition to tax of $218, . along with the delinquency addition to tax of $224 .77 . As of November 12, 2008, petitioner's outstanding tax liability for taxable year 2002, including accrued interest, was $7,240 .43 . On June-21, 2004, respondent assessed against petitioner a trust fund recovery penalty (TFRP) .of $2,741 .77 for the period ended September 30, 2002 . The TFRP was assessed against petitioner as a responsible party for the employment ta x liabilities of Driver Recruiting Services, Inc . As of November 12, 2008, petitioner's outstanding tax liability for the TFRP had been paid in full . On or about September 9, 2004, petitioner entered into an installment agreement (installment agreement) with the Internal .Revenue Service (IRS) requiring petitioner to pay $125 per month . The installment agreement applied to the tax years and the tax period originally in issue in the instant case . : Petitioner made, monthly payments pursuant to the installment agreement of $125 through June 2006 . On,or about August 28, 2006, the installment agreement wa s defaulted .2 . On June 1, 2007, respondent sent petitioner a Notic e of Federal Tax Lien Filling and Your Right to a Hearing Under IR C 6320 (NFTL) with respects to petitioner's income taxliabilities for the .taxable periods in issue . On June 27, 2007,' petitione r and the IRS entered intd a new installment agreement (ne w installment agreement) for $286 per month . 3 On July, 9,"2007, petitioner submitted to the IRS a Form 12153, (cid:127) Request- for a Colrlection Due Process Hearing, wit h respect to the NFTL . . In his hearing request, petitioner checke d the boxes'for installmerit .agreement and offer-in-compromise . Additionally, petitioner checked the boxes requesting lien, subordination, discharge, and withdrawal and stated that h e disagreed with the lie n construction and this lien will be a hardship--IRS did not follo w procedures . By letter dated October 15, 2007,-the settlement office r assigned to petitioner' s case (settlement officer) informed . . petitioner that she had scheduled a telephone conference for 11 2Respondent's records show "status 61 defaulting IA" , which, according to respondent, indicates that petitioner was in defaultion the installment agreement after petitioner missed the payment deadlines for two payments . I~ 3Petitioner made monthly payments pursuant to the new installment agreement of $286 through May 2008, at which time, petitioner stopped making the payments because he could no longer afford to make them . -5- November 13, 2007 . The settlement officer also noted that petitioner checked the lien subordination, discharge and withdrawal boxes on his request for hearing and informed petitioner that he needed to follow the instructions in Publication 784, How to Prepare an Application for a Certificate of Subordination of Federal Tax Lien, and return the necessary information to her within 14 days .4 She also stated that petitioner had not provided any specific information or documents to show that withdrawal of the NFTL would facilitate the collection of the tax liabilities or be in the Government's best interest . Finally, the settlement officer advised petitioner that since he already was on the new installment agreement for $286 per month, there were no collection alternatives for her to consider . She also noted that since it already had been determined that petitioner had the ability to fully pay his liabilities through an installment agreement , an offer-in- compromise could not be considered . On November 13, 2007, the settlement officer called petitioner for the scheduled conference . The settlement officer informed petitioner that the Internal Revenue Service (IRS) had followed all applicable law and administrative procedures in his case . Petitioner stated that he could not finish building hi s 'Petitioner did not return these forms to the settlement officer . -6- home because he could n o get any loans ,on-account of the lien . Petitioner also told the settlement officer ,that his corporation . had already paid the TFRIP for the periods ended June 30 an d September 30, 2002, but the payments had not been applied . The settlement officer told petitioner that she would look into th e payment .issue for him . Subsequently, the settlement officer informed petitioner that she had .not found that any payments were incorrectly applied . She also informed .petitioner that she would sustain the .NFTL 1 1 On November 28, 2007, respondent issued a'Notice of Determination Concerning Collection Action(s) Under Section . 6320 Ine d and/or 6330which sustathe NFTL . On December 26, . 2007 , petitioner filed the petition . Where the . underlying tax liability is not in issue, we review the determination of the Appeals office for abuse o f discretion . See Sego v!I Commissioner , 114 T .C . 604, 610 (2000) . In reviewing for abuse of . discretion, we reject the determination of the Appeals Office olyif the determination . was arbitrary , capricious,, or without . sound-basis in fact or law . See Cox v . li : Commissioner , 126 T .C . 237, 255 (2006), revd .-514 F .3d 1119 (10th Cir : 2008) ; Murphy v . Commissioner , 125 T .C . 301,y308, 320 . .. Ip (2005), affd .1469 F .3d 2 .7 (1st Cir . 2006) .. -Petitioner stipulated that he does not disputIe the underlying liabilities . -7- Consequently , we review the determination of the Appeals Office for abuse of discretion . Where, as in the instant case, we-decide the propriety of the settlement officer's rejection -of an offer - in-compromise, we review the reasoning underlying that rejection to decide whether it was arbitrary , capricious , or without sound basis in fact or law . We do not substitute our judgment for that of the settlement officer, and we do not decide independently the amount that we believe . would be an . acceptable offer-in - compromise . See Murphy v . Commissioner , supra at 320 . We generally do not consider arguments , issues, or other matters raised for the first time at trial , but we limi t our consideration to matters brought to the attention of the Appeals Office . See Giamelli v . Commissioner , 129 T .C . 107 (2007 ) ; Murphy v . Commissioner , supra at 308 ; Magana v_ Commissioner, 118 T .C . 488 , 493 (2002 ) . "[ E],vidence tha t [a taxpayer ] might have presented at .the section 6330 hearing (but chose not to ) is not admissible in a trial conducted pursuant to section 6330 ( d)(1) because it is not relevant to the question of whether the Appeals officer abused her discretion . " Murphy v . Commissioner , supra at 315 . At the time of petitioner's Appeals hearing, petitioner and the IRS already had entered into the new installment agreement, and he was making payments of $286 a month . At the Appeals -8- hearing the settlement officer informed=petitioner that, since he already had an installment agreement, there was no collection, alternative for the settlement officer to consider . The .only argument petitioner advanced was that the lien should not be sustained .because it was preventing him from finishing construction on his newt home . It was not an abuse of discretio n for the settlement officer to-refuse to withdraw -the lien because it .interfered with the,Construction of his home . ' At trial petitioner did not . identif Y any payments that should have been, but were notProPerlY credited to his tax liabilities .6 It does not appear that petitioner disagrees, with the remaining liabilities . Petitioner's main contention-appears1. to be that (cid:127)the $125 monthly it installment agreement should b e 'Although petitioner had the new installment agreement in place at ;the time offhis Appeals hearing, that installment agreement did not preclude the filing of an NFTL, nor was respondent required to withdraw the NFTL after the new installment-agreement had become effective . Sec .,6323(j)(1) is permissive . Although the IRS may withdraw an NFTL pursuant'to sec . 6323(j)(1), failure to do so is not an abuse of discretion . See Crisan v . Commissioner , T .C . Memo . 2007-67 ; Ramirez v . Commissioner , T .C . Memol 2005-179 ; Stein v . Commissioner , T .C . Memo . 2004-124 ; Dorra vil' Commissioner , T .C . Memo . 20'04-16 . Accordingly, the settlement officer did not abuse her discretion by not withdrawing the NFTL . 6Petitoner's tax liability for 1999 has been paid 'i n full, and that year has been dismissed as moot . Additionally, as to the TFRP, the corporation paid the tax for the period ended June 30, 2002, and that ;period has been dismissed as moot . -9- reinstated ., 7 However, as the issue of reinstating petitioner's installment agreement was not raised with the settlement officer at petitioner',s hearing, we will not consider it . The settlement officer considered all of petitioner's contentions, verified compliance by the IRS with all applicable laws and regulations, and considered whether the proposed collection actions balanced the need for efficient tax collection with petitioner's concern that they not be more intrusive than necessary . Petitioner did not offer any evidence that the filing of the NFTL would impair his .ability to pay his outstanding liabilities . On the basis of the facts presented, we hold . that the settlement officer did not abuse her discretion in sustaining the filing of the NFTL . In reaching these holdings, we have considered all of the parties' arguments, and, to the extent not addressed herein, we conclude that they are moot, irrelevant, or without merit . To reflect the foregoing, Decision will be entere d for respondent . 7The only issues raised in the petition are : "My home is under construction and-lien is preventing me from completing my home . Taxes from 1999 and 2002 have been paid ." At'the time petitioner filed the petition, he was making monthly payments of $286 pursuant to the new installment agreement .