Court Opinion

ID: 9891911
Source: CourtListenerOpinion
Date Created: 2023-10-19 19:02:46.894726+00
Date Added: 2024-06-11T14:01:16.199153
License: Public Domain

United States Tax Court

                             T.C. Memo. 2023-125

                            MARTIN G. PLOTKIN,
                                Petitioner,

                                        v.

              COMMISSIONER OF INTERNAL REVENUE,
                          Respondent

                                   __________

Docket No. 16224-14L.                                   Filed October 19, 2023.

                                   __________

Martin G. Plotkin, pro se.

Miriam C. Dillard and A. Gary Begun, for respondent.

        MEMORANDUM FINDINGS OF FACT AND OPINION

       MORRISON, Judge: This is a collection due process (CDP) case
brought by petitioner, Martin G. Plotkin, pursuant to section 6330(d) 1
for review of a determination by the Internal Revenue Service (IRS)
Office of Appeals (Appeals) sustaining a notice of intent to levy to collect
unpaid federal income tax liabilities for the tax years 1991–95.

       On April 4, 2019, we issued a Memorandum Opinion (the April
2019 Memorandum Opinion), Plotkin v. Commissioner, T.C. Memo.
2019-27, which resolved all issues in the case. The April 2019
Memorandum Opinion agreed in part with petitioner’s Motion for
Summary Judgment dated February 27, 2018, as supplemented on April
2, 2018, as to his reported tax liabilities (and related interest and
additions to tax) for 1991, 1992, and 1993. Id. at *33. We opined that
the determination of Appeals should not be sustained as to the collection

        1 Unless otherwise indicated, section references are to the Internal Revenue

Code of 1986, Title 26 U.S.C., in effect at all relevant times.

                                Served 10/19/23
                                     2

[*2] of these amounts. Id. at *57. In the same April 2019 Memorandum
Opinion, we opined that the determination should not be sustained as
to the collection of a $6,000 amount related to 1995. Id. at *8, *57.
Neither party has specifically moved for summary judgment as to the
collection of this $6,000 amount, but neither party denied that the
determination of Appeals was erroneous as to this amount. Besides
these two matters, we opined that the determination should be
sustained, including the portion finding that the proposed levy balanced
the need for efficient collection with the legitimate interest of petitioner
that the collection action be no more intrusive than necessary. Id.
at *57. We correspondingly explained that partial summary judgment
should be granted to respondent. Id. However, on May 20, 2020, we
issued an Order withdrawing these portions of the April 2019
Memorandum Opinion sustaining the determination to the extent that
it concluded that the proposed levy balanced the need for efficient
collection with the legitimate interest of petitioner that the collection
action be no more intrusive than necessary. On February 3, 2021, we
remanded the case to Appeals to further consider this balancing test.
On July 29, 2021, and February 2, 2022, Appeals issued supplemental
notices of determination determining that the proposed levy balanced
the need for efficient collection with the legitimate interest of petitioner
that the collection action be no more intrusive than necessary. In this
Opinion, we hold that this balancing determination was not an abuse of
discretion.

                          FINDINGS OF FACT

      Petitioner was a resident of Florida when he filed his Petition.
Plotkin, T.C. Memo. 2019-27, at *5.

        In 2004 three years of income tax of petitioner, and related
additions to tax and interest, were rendered uncollectible by the
expiration of the ten-year period for respondent to collect assessed tax
liabilities. § 6502(a)(1); Plotkin, T.C. Memo. 2019-27, at *6. The
assessed amounts rendered uncollectible were $4,823.18 for 1991,
$7,590.38 for 1992, and $2,660.12 for 1993. Plotkin, T.C. Memo. 2019-
27, at *6.

       On July 29, 2013, respondent issued a notice of intent to levy to
petitioner. Id. at *10. The notice stated that respondent intended to
levy to collect $1,876,431.28 of liabilities for the tax years 1991–95. Id.
at *11. This amount included the amounts that had been rendered
                                       3

[*3] uncollectible in 2004 by the expiration of the ten-year period for
collecting assessed tax liabilities. Id.

       The notice of intent to levy gave petitioner the right to request a
CDP hearing with Appeals. Id. at *10. Petitioner requested and
received such a hearing. Id. at *11–12.

        On June 9, 2014, Appeals issued a notice of determination
sustaining the levy. Id. at *20. The notice of determination did not
acknowledge that the levy was intended in part to collect the amounts
rendered uncollectible in 2004 by the expiration of the ten-year period
for collecting assessed tax liabilities. The notice of determination stated
that because petitioner had failed to give Appeals the financial
information it had requested during the hearing, the proposed levy
balanced the need for efficient collection with petitioner’s concern that
any collection action be no more intrusive than necessary. Id. at *21.
This last statement (that petitioner had to give Appeals the financial
information it requested for it to make the balancing determination in
favor of petitioner) might be viewed as inconsistent with four case-
activity entries that had earlier been made by the Appeals officer who
handled the CDP hearing:

       •      First, a case-activity entry on November 15, 2013, stated
              that the officer had reviewed respondent’s records of prior
              returns and that these returns showed that petitioner’s
              only income was Social Security benefits. Id. at *13, *26.

       •      Second, a case-activity entry on April 14, 2014, suggested
              that the officer had reviewed records of prior returns,
              determined that petitioner’s only income was Social
              Security benefits, and determined that petitioner qualified
              for alternatives to collection. 2

       •      Third, a case-activity entry on the same day, April 14,
              2014, suggested that the officer had reviewed records of
              prior returns, determined that petitioner’s only income was
              Social Security benefits, and determined that petitioner
              could not pay the tax sought to be collected. 3

        2 Although this entry was discussed in the April 2019 Memorandum Opinion,

these aspects of the entry were not discussed.
       3 This entry was not discussed in the April 2019 Memorandum Opinion.
                                    4

[*4]   •     Fourth, a case-activity entry on June 4, 2014, stated that
             the officer reviewed records of prior returns to see whether
             petitioner would be in a hardship situation, that one of the
             returns reported that petitioner had earned $28,510 of
             dividend income, that petitioner might be able to pay the
             tax sought to be collected, and that a notice of
             determination would be issued. Id. at *20.

      Petitioner timely filed his Tax Court Petition for review of the
June 9, 2014, notice of determination. Id. at *22.

       On October 12, 2017, respondent moved for summary judgment.
Id. at *23. In that Motion, respondent contended that Appeals did not
abuse its discretion in sustaining the levy.

       On October 16, 2017, petitioner moved for partial summary
judgment. Id. at *25. One of his theories was that it was impossible for
respondent to collect any significant portion of the liabilities because
Appeals had determined on November 15, 2013, that he had no income
other than Social Security income. Id. at *26. He explained in his
Motion that his “financial situation was such that collection of any
significant portion of the amount set out in the Notice of Intent to Levy
was a practical impossibility.” Because the Motion requested that the
Court set aside the notice of determination, it is unclear why the Motion
was titled a Motion for “Partial” Summary Judgment.

        On November 8, 2017, petitioner moved for partial summary
judgment. Id. In this Motion he argued that the notice of determination
erred because the proposed levy involved an attempt to collect the
amounts rendered uncollectible in 2004 by the expiration of the ten-year
period for collecting assessed tax liabilities. Id. at *26, *27 & n.6. The
Motion requested that the Court “reverse” the notice of determination.
It is therefore unclear why this Motion was titled a Motion for “Partial”
Summary Judgment.

       On November 15, 2017, petitioner filed a Response to
respondent’s October 12, 2017 Motion for Summary Judgment. Id. at
*27. Reprising his Motion for Partial Summary Judgment of November
8, 2017, petitioner argued that the proposed levy was an attempt to
collect the amounts rendered uncollectible in 2004 by the expiration of
the ten-year period for collecting assessed tax liabilities. Id. at *28.
Reiterating the theory he had asserted in his Motion for Partial
Summary Judgment of October 16, 2017, petitioner contended that
                                    5

[*5] Appeals erred in concluding that the balancing test of section
6330(c)(3)(C) was met because Appeals had determined that petitioner’s
income consisted solely of Social Security benefits. Plotkin, T.C. Memo.
2019-27, at *28. He explained that the balancing test required Appeals
to determine whether “a taxpayer is financially able to pay an amount
due.” Petitioner made other arguments, including that Appeals failed
to perform the verification required by section 6330(c)(1). Plotkin, T.C.
Memo. 2019-27, at *28–29, *46.

        On February 5, 2018, respondent filed a Reply to petitioner’s
November 15, 2017, Response. Id. at *29. Among other things,
respondent addressed petitioner’s theory that Appeals erred in
concluding the balancing test of section 6330(c)(3)(C) was met because
Appeals had determined that petitioner’s income consisted solely of
Social Security benefits.      Plotkin, T.C. Memo. 2019-27, at *31.
Respondent gave two reasons why Appeals did not abuse its discretion
in determining that the balancing test had been met: first, the Appeals
officer’s case-activity entry of June 4, 2014, stated that prior returns
showed that petitioner might be able to pay; second, petitioner had
failed to submit the requested financial information to Appeals. Id.

       On February 27, 2018, petitioner filed a Motion for Summary
Judgment. Id. at *33. In the Motion petitioner stated that, because
respondent had admitted that reversals of writeoffs on March 5, 2012,
were improper, thus reinstating the amounts that had been rendered
uncollectible in 2004 by the expiration of the ten-year period for
collecting assessed tax liabilities, Appeals had failed to “verify that all
legal and administrative requirements have been met.” Id. It is unclear
why petitioner divided his Motion for Summary Judgment into multiple
separate Motions.

      On April 4, 2019, the Court issued the April 2019 Memorandum
Opinion resolving the parties’ various Motions for Summary Judgment.
Plotkin v. Commissioner, T.C. Memo. 2019-27.

       The April 2019 Memorandum Opinion rejected petitioner’s
argument regarding the balancing test. Id. at *53. We recognized that
the Appeals officer’s case-activity entry of June 4, 2014, which stated
that prior returns showed that petitioner might be able to pay, relied
upon a false return filed by a third party. Id. However, we held that
the analysis of the balancing test by Appeals hinged on petitioner’s
failure to submit the requested financial information, not on the
information in the prior returns. Id.
                                    6

[*6] As to petitioner’s argument that the proposed levy was an
attempt to collect the amounts rendered uncollectible in 2004 by the
expiration of the ten-year period for collecting assessed tax liabilities,
the April 2019 Memorandum Opinion held that the uncollectibility of
these amounts did not mean that the proposed levy was defective as to
the entire liability. Id. at *55–57. We also observed that of a deficiency
amount that had been determined for tax year 1995 respondent had
failed to assess $6,000 on account of a typographical error. Id. at *8.
Neither party has specifically moved for summary judgment as to the
collection of this $6,000 amount, but neither party denies that Appeals’
notice of determination was erroneous as to collection of this amount.

       The April 2019 Memorandum Opinion held that Appeals did not
abuse its discretion in performing the verification mandated by
section 6330(c)(1), except as to its failure to verify whether the ten-year
period for collecting the assessed liabilities for 1991–93 was still open.
Plotkin, T.C. Memo. 2019-17, at *44–46.

       The April 2019 Memorandum Opinion held that the notice of
determination should be sustained except as to (1) the amounts
rendered uncollectible in 2004 by the expiration of the ten-year period
for collecting assessed tax liabilities and (2) the $6,000 amount. Id.
at *8, *57.

       On July 1, 2019, the IRS Office of Appeals was renamed the IRS
Independent Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-
25, § 1001, 133 Stat. 981, 983 (2019).

       On May 20, 2020, we reconsidered our April 2019 Memorandum
Opinion. We did so on Motion of petitioner, who argued that Appeals
had obtained information that his financial situation was such that it
was impossible to collect any significant portion of the liabilities, and
that as a result, the notice of determination erred in concluding that the
balancing test of section 6330(c)(3)(C) had been satisfied. In particular,
petitioner argued that the determination by Appeals regarding the
balancing test was inconsistent with the proposition that “[p]etitioner’s
only income came from his Social Security Benefits, which were
insufficient to provide for any payment of the liability.” We agreed with
petitioner’s argument inasmuch as we withdrew the portions of the
April 2019 Memorandum Opinion holding that Appeals did not err in
applying the balancing test of section 6330(c)(3)(C) because of
petitioner’s failure to submit the requested financial information. Our
rationale for withdrawing those portions of the April 2019 Memorandum
                                     7

[*7] Opinion was that in evaluating respondent’s Motion for Summary
Judgment, we should draw inferences in favor of petitioner, and that
consequently we should not infer that the reasoning of Appeals hinged
independently on petitioner’s failure to provide the requested financial
information. See Naftel v. Commissioner, 85 T.C. 527, 529 (1985)
(stating that resolving a motion for summary judgment, the Court must
draw inferences in favor of the nonmoving party). We left unchanged
the other portions of the April 2019 Memorandum Opinion. We stated
that the only unresolved issue in the case was whether Appeals
determined that petitioner’s income consisted solely of Social Security
benefits and if so, whether this meant that Appeals abused its discretion
in concluding that the proposed levy balanced the need for the efficient
collection of tax with petitioner’s legitimate concern that any collection
action be no more intrusive than necessary.

       On January 28, 2021, respondent moved to have the Court
remand the case to Appeals “with respect to the one unresolved issue in
the instant case—the reasoning behind Appeals’ conclusion on the
balancing test of I.R.C. § 6330(c)(3)(C).” The Motion stated that
petitioner had told respondent that he was willing to consider remand if
he had the opportunity to participate in the remand proceeding.

        On February 3, 2021, the Court remanded the case to Appeals “for
clarification and for further consideration . . . with respect to the
balancing test.” The Court ordered Appeals to hold a further hearing no
later than April 30, 2021. The Court did not initially set a deadline for
Appeals to issue a supplemental notice of determination.

      On July 7, 2021, the Court ordered Appeals to issue a
supplemental notice of determination on or before July 29, 2021.

      On July 29, 2021, Appeals issued a supplemental notice of
determination.

      By Motion filed by the Court on August 16, 2021, petitioner stated
that he had been prevented from participating in the remand hearing
by mailing and other delays. Consequently, we imposed a new deadline
for Appeals to issue a new supplemental notice of determination
regarding the remand. The new deadline was February 2, 2022.

       On February 2, 2022, Appeals issued a second supplemental
notice of determination. In that notice, Appeals sustained the proposed
levy and stated that petitioner is not entitled to currently-not-collectible
                                   8

[*8] (CNC) status because petitioner failed to submit requested
financial information:

             You were afforded a second supplemental hearing by
      the Order of Tax Court. The purpose of the second
      supplemental hearing remains the same, for further
      consideration in order to enable the Court to understand
      respondent’s determinations in the notice of determination
      with respect to the balancing test. I have reviewed the
      additional correspondence received from you. I have
      provided you Internal Revenue Manual (IRM) references,
      which requires you to provide a completed Form 433-A,
      Collection Information Statement, for review of your
      ability/inability to pay. You do not meet the currently not
      collectable exception criteria as indicated in IRM
      5.19.17.2.4.1, due to your total balances due the IRS.
      During the original hearing, you were provided multiple
      opportunities to provide a completed Form 433-A and
      declined the opportunity to assist you in a determination
      as to the proposed levy by the IRS. Therefore the proposed
      levy action is sustained.

       Another portion of the notice of determination explained the
significance of the amount of the balance due:

             During the Supplemental Hearing, I provided you
      multiple Internal Revenue Manual (IRM) references,
      reflecting a completed Form 433-A, Collection Information
      Statement (CIS) is required to proceed with a resolution as
      to the proposed levy action by the IRS. There is an
      exception as indicated in IRM 5.19.17.2.4.1, if the reported
      income is social security only, however, the IRM reference
      is only in regard to balances due of $10,000.00 or less the
      IRS. Therefore you do not qualify. Your balance due the
      IRS requires you to disclose your assets, income and
      expense to determine the appropriate resolution to the
      balances due. During the original hearing you were
      provided multiple times, the opportunity, to provide a
      completed 433-A, CIS and you declined Ms. Chavez’s and
      my request to assist you.

            Based on this, I have determined due to your refusal
      to provide a completed Form 433-A, CIS, I am unable to
                                    9

[*9]   assist you with a resolution as to the levy action proposed
       by the IRS.

             The proposed levy action is sustained.

      Another portion of the second supplemental notice of
determination explained the importance of the requested financial
information:

       Per IRM 5.16.1.2.9 – Hardship, in summary states a
       hardship exists if you are unable to pay reasonable basic
       living expenses. The basis for a hardship determination is
       from information about your financial condition provided
       on Form 433–A, Collection Information Statement for
       Wage Earners and Self-Employed Individuals. Generally,
       these cases involve no income or assets, no equity in assets
       or insufficient income to make any payment without
       causing hardship. An account should not be reported as
       CNC if the taxpayer has income or equity in assets and
       enforced collection of the income or assets would not cause
       hardship. It states verification of a CIS is not required if
       the aggregate unpaid balance of assessments is less than
       $10,000.00 and the information on the CIS appears
       reasonable. There are certain conditions, a CIS is not
       required before reporting an account CNC. The aggregate
       unpaid balance of assessments, including any prior CNCs,
       must be less than $10,000.00 and states that certain
       conditions must exist. It further states verification that is
       required for balances due between $10,000.00 and
       $100,000.00 and balances above $100,000.00. IRM 5.15.1
       – Financial Analysis Handbook as notated in the IRM
       5.16.1.2.9 is utilized when you provide a completed CIS.

       The second supplemental notice of determination concluded that
petitioner refused “to provide the information required” and that
therefore it was Appeals’ judgment that “the Notice of Intent to Levy
balances the efficient collection of taxes with your legitimate concern
that the collection action be no more intrusive than necessary.”

       On December 16, 2022, this case was tried by videoconference. At
trial we admitted Exhibit 1000-R, which consisted of (1) the second
supplemental declaration of Appeals Officer Lora Davis and (2) sub-
exhibits A through QQ.
                                   10

[*10]                          OPINION

       Before respondent can levy to collect a tax liability, respondent
must first notify the taxpayer of the right to a CDP hearing with
Appeals. § 6330(a)(1), (b)(1). The hearing, and Appeals’ determination
following the hearing, are governed by section 6330. Section 6330(c)(1)
provides that at the hearing the Appeals officer must obtain verification
from the Secretary that the requirements of any applicable law or
administrative procedure have been met. Section 6330(c)(2) provides
that the taxpayer may raise at the hearing (1) any relevant issue related
to the unpaid tax or the proposed levy, including challenges to the
appropriateness of collection actions and including offers of collection
alternatives, and (2) challenges to the existence or amount of the
underlying tax liability if the person did not have a prior opportunity to
dispute such tax liability.       Section 6330(c)(3) provides that the
determination by Appeals must take into consideration the verification
presented under section 6330(c)(1), the issues raised under section
6330(c)(2), and, finally (as provided by section 6330(c)(3)(C)), whether
the proposed collection action (in this case a levy) balances the need for
the efficient collection of taxes with the taxpayer’s legitimate concern
that any collection action be no more intrusive than necessary. Unless
the existence or amount of the underlying tax liability is properly at
issue, we review the determination for abuse of discretion. Goza v.
Commissioner, 114 T.C. 176, 181–82 (2000).

      The only remaining issue to resolve is whether Appeals
determined that petitioner’s income consisted solely of Social Security
benefits and if so, whether Appeals abused its discretion in concluding
that the proposed levy balanced the need for the efficient collection of
tax with petitioner’s legitimate concern that any collection action be no
more intrusive than necessary.

I.      Appeals did not err in not placing petitioner’s account in CNC
        status.

       On remand, Appeals determined that petitioner did not meet the
criteria for CNC status. “CNC status, which suspends IRS collection
efforts, ‘is a “collection alternative” that the taxpayer may propose and
that the Office of Appeals must take into consideration.’” Riggs v.
Commissioner, T.C. Memo. 2015-98, at *11 (quoting Wright v.
Commissioner, T.C. Memo. 2012-24, slip op. at 7); see also Norberg v.
Commissioner, T.C. Memo. 2022-30, at *5. It is available if a taxpayer
                                     11

[*11] has “no apparent ability to make payments on the outstanding tax
liability.” Norberg, T.C. Memo. 2022-30, at *5.

       Because petitioner refused to submit financial information,
Appeals determined that petitioner’s account did not qualify for CNC
status. As Appeals recognized, the amount respondent is attempting to
collect from petitioner is more than $10,000. Appeals followed guidance
in the Internal Revenue Manual that the account of a taxpayer with a
balance due of more than $10,000 cannot be placed in CNC status unless
the taxpayer’s income, expenses, and equity in assets, are verified by
financial information from the taxpayer. Reproduced below are relevant
portions of the Internal Revenue Manual 5.16.1.2.9(1)–(5) (May 22,
2012), which are found in the administrative record at Ex. 1001-R, Ex.
S, at 161–62:

      (1)       Follow the procedures in IRM 5.15.1, Financial
                Analysis Handbook, to determine the correct
                resolution of the case based on the taxpayer’s assets
                and equity, income and expenses:

            •      A hardship exists if a taxpayer is unable to pay
                   reasonable basic living expenses.

            •      The basis for a hardship determination is from
                   information about the taxpayer’s financial
                   condition provided on Form 433-A, Collection
                   Information Statement for Wage Earners and
                   Self-Employed Individuals or Form 433-B,
                   Collection Information Statement for Businesses.

            •      Generally, these cases involve no income or
                   assets, no equity in assets or insufficient income
                   to make any payment without causing hardship.

            •      An account should not be reported as CNC if the
                   taxpayer has income or equity in assets, and
                   enforced collection of the income or assets would
                   not cause hardship.

            •      Hardship accounts are closed using cc 24 through
                   32. See Exhibit 5.16.1-2.

            Reminder:      Hardship closing codes can only be
            used for individual or joint IMF assessments, sole
                                        12

[*12]         proprietorships, general partnerships, and LLCs, where
              an individual owner is identified as the liable taxpayer.
              See IRM 5.16.1.2.4 for decedent cases.

        (2)       Verification of a CIS is not required if the aggregate
                  unpaid balance of assessments is less than $10,000
                  and the information on the CIS appears reasonable.

        (3)       Under certain conditions, a CIS is not required
                  before reporting an account CNC. The aggregate
                  unpaid balance of assessments, including any prior
                  CNCs, must be less than $10,000.00 and at least
                  one of the following conditions must exist:

              •      The taxpayer has a terminal illness or excessive
                     medical bills.

              •      The taxpayer is incarcerated.

              •      The taxpayer’s only source of income is social
                     security, welfare, or unemployment.

              •      The taxpayer is unemployed with no source of
                     income. Consider a mandatory follow-up or
                     Manually Monitored Installment Agreement
                     (MMIA) for seasonal workers.

              Note:    Employees      are   required    to    secure
              documentation from the taxpayer prior to declaring the
              account uncollectible if internal documents such as
              IRPTR and RTVUE do not confirm the taxpayer’s
              circumstance.

        (4)       The following verification is required for accounts
                  when the aggregate unpaid balance of assessments
                  is between $10,000.00 and $100,000.00:

              •      IRPTR or SUPOL

              •      RTVUE/TRDBV

              •      Conduct Currency and Banking Retrieval
                     System (CBRS) research when IRPTR reflects
                     that a taxpayer has filed a Foreign Bank Account
                                        13

[*13]                Reporting (FBAR) form to obtain the name of the
                     bank where the account is located, the amount in
                     the account, co-owners, and other useful
                     information. See IRM 5.1.18.15, Foreign Bank
                     Account Report.

              Note:      RTVUE/TRDBV is required only if the last
              filed return was for one of the immediate two preceding
              years.    If RTVUE reveals new income or asset
              information secure a copy of the return(s) for the
              purpose of identifying income or assets.

        (5)       For accounts where the aggregate unpaid balance of
                  assessments is above $100,000.00 the following
                  additional verification is required:

              •      Full credit report on IMF and sole proprietor
                     taxpayers and LLCs (where an individual owner
                     is identified as the liable taxpayer)

              •      Motor vehicle records

              •      Real and personal property courthouse records,
                     see IRM 5.1.18.4, Real Property Records

              •      On-line locator services, such as Accurint, follow
                     security guidelines when using public internet
                     search engines.

              •      CC AMDIS. If there is an open Examination
                     activity, contact the revenue agent to determine
                     any additional sources of collection or the need to
                     limit the scope of the examination based on
                     collectability.

              •      Audit File or Special Agents Report if the
                     assessment originated in Examination or
                     Criminal Investigation (CI). The file can be
                     secured by requesting the DLN of the TC
                     29X/30X.

              Note:    If unable to obtain any information from the
              special agent, consider consulting with Advisory. If
                                        14

[*14]      there is a TC 910 on the module, the taxpayer may have
           filed a financial statement with the probation office.

           Note:    Credit reports are optional for accounts with
           an aggregate balance below $100,000.00.

      We hold that Appeals did not abuse its discretion in refusing to
place petitioner’s account in CNC status.           See Chadwick v.
Commissioner, 154 T.C. 84, 95 (2020) (stating that Appeals does not
abuse discretion in denying CNC status to taxpayer who does not submit
the necessary financial information).

       In our Order of May 20, 2020, we inferred from the then-existing
administrative record that Appeals could rely entirely on past-filed
returns, without requiring financial information from petitioner, in
determining whether petitioner could pay his tax. 4 Our Order of May
20, 2020, drew all inferences about the administrative record in favor of
petitioner, the party opposing respondent’s Motion for Summary
Judgment. See Naftel, 85 T.C. at 529. But we are not now evaluating
the merits of a Summary Judgment Motion filed by respondent. We are
weighing the evidence adduced at trial. Furthermore, the
administrative record is now different from the one we considered in our
Order of May 20, 2020. The administrative record related to the remand
proceedings shows that Appeals denied CNC status for petitioner’s
account because he refused to provide financial information. Our
conclusion that Appeals on remand did not abuse its discretion in
denying CNC status for petitioner’s account is not inconsistent with our
Order of May 20, 2020. In that Order we determined that an issue
remained for trial. We have now had that trial. We resolve the issue in
favor of respondent.

II.     Appeals did not err in evaluating petitioner’s sole unresolved
        challenge to the levy by determining whether his account was
        eligible for CNC status.

      Petitioner contends that Appeals erred on remand in considering
whether his account was eligible for CNC status. Petitioner explains
that he did not request such status during the remand hearing and

        4 We had observed that the two case-activity entries of April 14, 2014,

“suggested” that the Appeals officer had “reviewed information from petitioner’s
income tax returns and, on the basis of that information, concluded that petitioner
could not pay the amounts the levy was intended to collect.”
                                   15

[*15] therefore he should not have been subjected to the requirement
that he submit financial information.

      Although petitioner did not request CNC status on remand,
Appeals agreed to waive the requirement that petitioner request CNC
status. As the second supplemental notice of determination states: “It
has been agreed that you are not required to request a collection
alternative or CNC during the CDP Appeals process.” The question
therefore becomes whether Appeals erred in waiving this requirement
and in considering whether petitioner’s account qualified for CNC status
despite this requirement.

       CNC status is appropriate when the taxpayer cannot pay.
Norberg, T.C. Memo. 2022-30, at *5. Petitioner’s argument related to
Social Security benefits was in essence that he cannot pay the amounts
respondent intends to collect. As petitioner argued in his Motion for
Partial Summary Judgment on October 16, 2017, his “financial situation
was such that collection of any significant portion of the amount set out
in the Notice of Intent to Levy was a practical impossibility.” In his
November 15, 2017 Response to respondent’s October 12, 2017, Motion
for Summary Judgment, petitioner contended that Appeals had failed to
determine whether he was “financially able to pay.” Thus, by
considering petitioner’s qualification for CNC status, Appeals was
considering the argument that petitioner made against the proposed
levy (his alleged inability to pay), which was the same argument the
Court considered in reconsidering its grant of respondent’s Motion for
Summary Judgment. Plotkin, T.C. Memo. 2019-27, at *52–53. It was
appropriate for Appeals on remand to evaluate petitioner’s argument
against the intended levy by determining whether petitioner’s account
qualified for CNC status.

III.   Appeals did not err in considering petitioner’s refusal to provide
       financial information in applying the balancing test.

      The corollary to petitioner’s argument that financial information
should be required only for taxpayers who request CNC status is that
no such information should be required for Appeals to apply the
balancing test under section 6330(c)(3)(C). This argument is unavailing.
Looking at the second supplemental notice of determination through the
lens of section 6330(c)(3)(C), we discern no abuse of discretion by
Appeals. The second supplemental notice of determination concluded
that petitioner refused “to provide the information required” and that
therefore it was Appeals’ judgment that “the Notice of Intent to Levy
                                   16

[*16] balances the efficient collection of taxes with your legitimate
concern that the collection action be no more intrusive than necessary.”
The Internal Revenue Manual’s guidance for determining whether a levy
meets the section 6330(c)(3)(C) balancing test requires Appeals to
consider a taxpayer’s “financial circumstances.”              Gonzalez v.
Commissioner, T.C. Memo. 2010-8, slip op. at 8 (“As required under
section 6330(c)(3)(C), an Appeals officer should consider, among other
things, a taxpayer’s actions, compliance history, and financial
circumstances when balancing the Government’s needs with those of the
taxpayer. Internal Revenue Manual pt. 8.7.2.3.13(6) (Jan. 1, 2006).”) In
the remand proceeding, Appeals asked petitioner for financial
information in order to understand his financial circumstances.
Petitioner refused to provide any. Consequently, Appeals did not err in
concluding the levy met the balancing test under section 6330(c)(3)(C).
See Cosio v. Commissioner, T.C. Memo. 2022-18, at *8 (stating that
where taxpayer did not respond to requests for financial information or
a completed offer-in-compromise form, Appeals did not abuse its
discretion in determining that the levy balanced the needs of collection
with the concerns of the taxpayer); Bunton v. Commissioner, T.C. Memo.
2021-141, at *22 (stating that Appeals did not abuse its discretion in
concluding that the levy balanced the needs of collection with the
concerns of the taxpayers given that taxpayers never submitted
financial information or outstanding tax returns), aff’d, No. 22-70139,
2023 WL 4449183 (9th Cir. July 11, 2023); Ramdas v. Commissioner,
T.C. Memo. 2013-104, at *41 (stating that a taxpayer who alleges that a
levy would be a hardship must follow up with further information to
prove the harmfulness of the levy before Appeals, otherwise the
taxpayer does not prove hardship that would render the levy “more
intrusive than necessary”); Vuckovich v. Commissioner, T.C. Memo.
2009-7, slip op. at 8–9 (same); see also Assured Source, Inc. v.
Commissioner, T.C. Memo. 2010-243, slip op. at 7–9 (stating that
Appeals did not abuse its discretion by failing to engage in the balancing
analysis under section 6330(c)(3)(C) where taxpayer submitted no
financial information and did not submit outstanding tax returns).

IV.   Appeals did not err regarding matters outside the scope of the
      remand.

       On brief, petitioner also makes two arguments regarding the
amounts rendered uncollectible in 2004 by the expiration of the ten-year
period for collecting assessed tax liabilities. First, petitioner contends
that Appeals erred in its original notice of determination in verifying
that all requirements of any applicable law or administrative procedure
                                     17

[*17] have been met. Second, petitioner contends that respondent has
abated interest in the wrong amount. The CDP hearing conducted on
remand was not a new hearing, but rather a hearing to provide “the
parties with the opportunity to complete the initial section 6330 hearing
while preserving the taxpayer’s right to receive judicial review of the
ultimate administrative determination.” Kelby v. Commissioner, 130
T.C. 79, 86 (2008) (quoting Drake v. Commissioner, T.C. Memo. 2006-
151, aff’d, 511 F.3d 65 (1st Cir. 2007)). We remanded the case to Appeals
to consider only one issue, the balancing test. These other issues are
outside the scope of the remand.

V.    Conclusion

        In its second supplemental notice of determination, dated
February 2, 2022, Appeals did not abuse its discretion in determining
that the proposed levy balances the efficient collection of taxes with
petitioner’s concern that the collection action be no more intrusive than
necessary. All other issues in this case were resolved by our April 2019
Memorandum Opinion, as modified by our May 20, 2020, Order.
Consequently, the June 9, 2014, notice of determination by Appeals, as
supplemented by the July 29, 2021, supplemental notice of
determination, and as supplemented by the February 2, 2022, second
supplemental notice of determination, should be sustained except as to
the collection of the following liabilities by the proposed levy: (1) the tax
liabilities (and related interest and additions to tax) for 1991, 1992, and
1993 and (2) the liability for the deficiency for 1995 of $6,000 (the
difference between $66,031 and $60,031).

      To reflect the foregoing,

      An appropriate order and decision will be entered.