TAX COURT OPINION

Case: Barry Shrier
Docket Number: 8725-05L
Judge: Foley
Opinion Type: memo
Filed: 08/29/2006
Pages: 6

I .ADS . RECORDED SERVICE TCAL . T .C . Memo . 2006-18 1 UNITED STATES TAX COURT BARRY SHRIER , Petitioner v_ . COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No . . 8725-05L . Filed August 29, 2006 . . Cheryl R . Frank and Gerald W . Kelly ; Jr . , for petitioner . Vivian N . Rodriguez , for respondent : MEMORANDUM FINDINGS OF FACT AND OPINIO N FOLEY, Judge : The issue for decision is whether respondent abused his discretion in proceeding with collection of petitioner's income tax liabilities relating to 1989 through 2000 . SERVED AUG 2 9 2006 e FINDINGS OF FAC T On May 15 , 200 3 respondent issued petitioner a Final Notic e :'6f'Intentito Levy and Notic e } oflYour Right to a Hearing relating -'to 1=989" through 2000 (the ye'arsin issue ) .; In the notice , respondent determined that pietitioner was liable for taxes and additions to tax totaling $ 130,835 and $ 41,445, respectively, relating to the years in issue . - On May 27, 2003, petitioner timely filed a Form 12153 , Request for a Collection Due Process Hearing (request), and stated that he did "not have sufficient assets to cover the assessed liabilities ." On Nvember 11, 2003, petitioner sen t respondent a Form 433-A, Collection Information Statement for Wage Earners and Sell-Employed Individuals' . On November 25 , 2003, petitioner sup lemented his Form 433-A with copies of p statements relating to petitioner's checking, credit card, and telephone accounts . Petitionerialso attached a copy of a statement relating to a car ;lease in the name of Leo Shrier , petitioner's father . On November 25, 2003, respondent conducted a telephone conference with petitioner . During the conference, petitioner requested that his account be placed in "currently not collectible status" because he was unemployed . On February 13, 2004, petitioner's counsel informed respondent that petitioner - 3 - was employed and would submit an offer-in-compromise (OIC ) relating to his income tax liabilities . While petitioner was unemployed, petitioner's parents made several deposits into his checking account (deposits) . In a letter dated February 27, 2004, respondent requested that petitioner provide an "affidavit from * * * [petitioner' s] parents as to the amount of money the y gave him and * * * cancelled checks corresponding to the deposits ." Respondent also asked petitioner to explain the car lease expense . On March 23, 2004, petitioner submitted to respondent a Form 656, Offer in Compromise, in the amount of $2,000 based on doubt as to collectibility (March OIC) . Petitioner attached an updated Form 433-A to the March OIC but did not attach any additional financial documents . In a letter dated November 17, 2004, respondent requested additional financial information . In a second letter, also dated November 17, 2004, respondent requested that . petitioner "provide the documents specified on Form 433 A * * * [and] an affidavit from * * * [petitioner's] parents as t o the amount of money .they gave him ." Respondent warned petitione r that if the requested documents were-not-received by December 17, 2004, the March OIC would not be accepted . On December 17, 2004, petitioner sent respondent an amended OIC in the amount of $2,000 based on doubt as to collectibility -'4 - and effective tax administration (December OIC) . Petitioner attached to the Decei er OIC. aniupdated Form 433-A, statements relating to petitioner's checkig account,i statements relating to an employee profit-sharing plan ; and wage statements from his current employer . I In a letter dat d March 3,12005, respondent stated that th e e December OIC was insufficient because petitioner did not provide the requisite documentation relating to petitioner's ability t o pay . Respondent also informed petitioner that his claimed living expenses (e .g ., food ., housing, and transportation) were in excess of the allowable amount . Respondent also asserted tha t petitioner had not disclose d that he was living with another individual . On April 15, 2005, respondent issued petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 relating to 1989 and 1991 through 2000 . On May 12, 2005, petitioner, while residing in Aventura, Florida, filed his petition with the Court relating to the years in issue and 2001 . On July 15, 2005, respondent issued petitioner a Decision Letter Concerning Equivalent Hearing Under Section 6320 and/or 6330 o f the InternalRevenue Code relating to 19901 . On March 2,'200b , the Court filed respondent's motion to dismiss for lack of jurisdiction and to stlrike as to the taxable year 2001 . On March 29, 2006, the Court granted respondent's - 7 - motion . OPINION Petitioner does not dispute the .underlying tax liabilities . Where the validity of the liability is not at issue, the Court reviews the Commissioner's administrative determination for abuse of discretion . Goza v . Commissioner , 114 T .C . 176, 182 (2000) . Respondent's determination will be sustained unless the determination is arbitrary, capricious, clearly unlawful, or without sound basis in factor law . Woodral v . Commissioner , 11 2 T .C . 19, 23 ( 1999) . Petitioner contends that respondent abused his discretion by not accepting the December OIC . Section 7122' authorizes respondent to grant an OIC as an alternative to pursuing a collection action, but petitioner must provide detailed financial statements and supporting documentation . Sec . 301 .7122-1(d)(2), Proced . & Admin . Regs . Respondent, on numerous occasions, requested supporting documentation from petitioner . Petitioner, however, failed to provide the requested information . Indeed, . respondent was unable to properly evaluate the December OIC because petitioner did not provide the supporting documentatio n 1 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue . 6 - relating to petitioner ' s expenses ( i .e ., ..liousing, food, transportation , and health care) and certain deposits . Accordingly, respondent didinottabuse his discretion by no t accepting an OIC and proceeding ; with the proposed collection action . id . Contentions we have not addressed are irrelevant , moot, or meritless . To reflect the foregoing, Decision will be entere d for respondent .