Court Opinion

ID: 4335754
Source: CourtListenerOpinion
Date Created: 2018-11-14 02:26:26.845879+00
Date Added: 2024-06-11T14:20:32.365961
License: Public Domain

125 T.C. No. 15

                  UNITED STATES TAX COURT

            EDWARD F. MURPHY, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 10239-03L.             Filed December 29, 2005.

     P asks us to review a determination by R’s
settlement officer (SO) that R may proceed with
collection by levy of P’s unpaid tax liability for
1999. P claims that the SO abused her discretion by
(1) rejecting P’s offer in compromise, based
alternatively on doubt as to collectibility and the
promotion of effective tax administration, and (2)
improperly and prematurely concluding P’s hearing. R
objects to P’s testimony as to reasons he did not pay
his 1992-2001 tax liabilities as they came due and the
SO’s testimony as to entries in her case activity notes
and certain aspects of her handling of the case.

     1.   Held:   P’s testimony is excluded.

     2. Held, further, SO’s testimony is admitted as
to meaning of notations and abbreviations in her case
activity report; the remainder of her testimony is
excluded.
                               - 2 -

          3. Held, further, SO did not err in rejecting
     offer in compromise based, alternatively, on doubt as
     to collectibility and effective tax administration.

          4. Held, further, SO did not err in concluding
     hearing following P’s failures to meet various due
     dates, including due date for revised offer in
     compromise.

          5. Held, further, there were no improprieties in
     SO’s actions or hearing procedures.

          6. Held, further, SO did not abuse her discretion
     in determining that R may proceed by levy to collect
     P’s unpaid tax liability for 1999.

     Timothy J. Burke, for petitioner.

     Nina P. Ching and Maureen T. O’Brien, for respondent.

     HALPERN, Judge:   This case is before the Court to review a

determination made by one of respondent’s Appeals officers that

respondent may proceed to collect by levy unpaid taxes with

respect to petitioner’s 1999 tax year.   We review the

determination pursuant to section 6330(d)(1).

     Unless otherwise indicated, all section references are to

the Internal Revenue Code of 1986, as amended, and all Rule

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

Dollar amounts have been rounded to the nearest dollar.

                         FINDINGS OF FACT

     Some facts have been stipulated and are so found.    The

stipulation of facts, with accompanying exhibits, is incorporated

herein by this reference.
                               - 3 -

     Petitioner resided in Quincy, Massachusetts, at the time the

petition was filed.

     On April 15, 2002, respondent issued to petitioner a Final

Notice - Notice of Intent to Levy and Notice of Your Right to a

Hearing.   The notice pertains to petitioner’s unpaid Federal

income tax for 1999, in the amount of $16,560 (the unpaid tax).

     By letter dated April 23, 2002, petitioner’s representative,

Timothy J. Burke, Esq., submitted an Internal Revenue Service

(IRS) Form 12153, Request for a Collection Due Process Hearing,

to the IRS on petitioner’s behalf.     On an attachment to the Form

12153, petitioner asserts:   “It is in the best interest of the

government and the taxpayer that an Offer in Compromise be

entered into.”   Petitioner raised no other issue on the Form

12153 or during the subsequent hearing accorded him (the section

6330 hearing or, sometimes, the hearing).

     On or about September 13, 2002, an Appeals official,

Settlement Officer Lisa Boudreau, was assigned to petitioner’s

case.   On September 16, 2002, Ms. Boudreau sent Mr. Burke a

letter scheduling a meeting for September 20, 2002.    At Mr.

Burke’s request, that meeting was rescheduled for October 3, 2002

(the October 3 meeting).   Ms. Boudreau and Mr. Burke, but not

petitioner, attended the October 3 meeting.    At the meeting, Mr.

Burke submitted to Ms. Boudreau certain collection information

statements that had been requested by her and an IRS Form 656,
                               - 4 -

Offer in Compromise.   By the Form 656, petitioner proposed to

compromise his unpaid income tax liabilities from 1990 through

2001 (later limited to 1992 through 2001 since the period of

limitations on collection for 1990 and 1991 had run).

Petitioner’s unpaid income tax liabilities for 1992 through 2001

(the 1992-2001 liability) total $275,777.   Petitioner offered to

pay $10,000 in compromise of the 1992-2001 liability (sometimes,

the offer or the offer in compromise), such amount to be paid

within 24 months of acceptance of the offer.   Petitioner checked

boxes on the Form 656 justifying the offer by reason of both

“Doubt as to Collectibility” (i.e., he had insufficient assets

and income to pay the full liability) and “Effective Tax

Administration” (i.e., he had sufficient assets to pay the full

liability but, due to his exceptional circumstances, requiring

full payment would cause an economic hardship or would be unfair

and inequitable).   In the portion of the form requesting an

explanation of circumstances affecting the taxpayer’s ability to

fully pay the amount due, petitioner stated:   “Please see

attached.”   No attachment accompanies the copy of the form

stipulated by the parties.

     During the October 3 meeting, Ms. Boudreau asked Mr. Burke

about the exceptional circumstances claimed by petitioner.     Mr.

Burke responded that petitioner was ill, but he would not

disclose the nature of the illness, citing petitioner’s wish on
                               - 5 -

that point.   Ms. Boudreau advised Mr. Burke that, unless

petitioner disclosed the circumstances of his illness, she would

be unable to consider the illness.     Mr. Burke said that he

understood and had told his client that already.     Among other

things, Mr. Burke did tell Ms. Boudreau that petitioner was an

insurance salesman, owed money on credit cards, owed about

$90,000 to the Commonwealth of Massachusetts, and was divorced,

with his ex-wife receiving residual payments from insurance

contracts that petitioner had sold.

     Ms. Boudreau concluded the October 3 meeting by requesting

that petitioner submit by October 31, 2002, additional

information and documents necessary for her to review the offer

in compromise.   Petitioner missed that due date.    Indeed,

following the October 3 meeting, and through February 10, 2003,

petitioner repeatedly missed due dates that either Ms. Boudreau

or Mr. Burke himself had set for submitting information necessary

for Ms. Boudreau to review the offer in compromise.     On one

occasion during that period, due to petitioner’s failure to meet

submission due dates, Ms. Boudreau closed petitioner’s case and

concluded that she should sustain the proposed levy action.      She

decided to reopen the case only after petitioner belatedly

complied with a request for certain information.
                               - 6 -

     By letter dated February 10, 2003, petitioner provided to

Ms. Boudreau the last of the information necessary for her to

review the offer in compromise.

     By March 19, 2003, Ms. Boudreau had reviewed the offer in

compromise and supporting information submitted by petitioner and

had concluded that the offer was too low.   By letter dated March

19, 2003 (the March 19 letter), Ms. Boudreau informed Mr. Burke

that an acceptable offer in compromise would have to be of at

least $97,884.   She enclosed copies of the income/expense and

asset/equity tables that she used to compute that amount.   Based

principally on information provided by petitioner, Ms. Boudreau

calculated petitioner’s total monthly income to be $4,235 ($2,618

of net business income and $1,617 of pension income) and his

necessary monthly living expenses to be $3,107, with a difference

of $1,128.   Ms. Boudreau multiplied the difference times 60 to

determine the amount petitioner could pay over 60 months; viz,

$67,680.   Also based principally on information provided by

petitioner, Ms. Boudreau calculated petitioner’s net realizable

equity to be $30,204.   The sum that petitioner could pay over 60

months, $67,680, and his net realizable equity, $30,204, is

$97,884 (the amount Ms. Boudreau had identified as an acceptable

offer in compromise).   Ms. Boudreau invited petitioner to submit

an amended offer in compromise in the amount of $97,884 by April

9, 2003.
                                 - 7 -

     In response to the March 19 letter, Mr. Burke telephoned Ms.

Boudreau on April 1, 2003, and agreed to amend the offer in

compromise by April 18, 2003.    No amended offer was received by

that date.   On April 25, 2003, Mr. Burke telephoned Ms. Boudreau

and reported that petitioner was in the hospital.    He also told

Ms. Boudreau that, no later than April 29, 2003, he would submit

a copy of petitioner’s 2002 Federal income tax return (the 2002

return), which had become due and was necessary to process any

offer in compromise.

     April 29, 2003, passed without Ms. Boudreau’s receiving

either the 2002 return or an amended offer in compromise.     On

Thursday, May 1, 2003, she called Mr. Burke and left a voice

message directing him to return her call on Monday, May 5, 2003.

Mr. Burke called as requested.    He reported that petitioner was

out of the hospital, although he remained ill and continued to

prohibit Mr. Burke from disclosing the nature of his illness.

Mr. Burke also reported that he would meet with petitioner later

that week and contact Ms. Boudreau by May 9, 2003.

     Neither Mr. Burke nor petitioner contacted Ms. Boudreau by

May 9, 2003.

     On May 12, 2003, Ms. Boudreau noted in her case activity

record that the deadline set for May 9, 2003, as well as previous

deadlines, had been missed.   She also noted that no viable
                               - 8 -

collection alternative had been proposed and she had decided that

respondent’s proposed collection action should stand.

     On May 14, 2003, Ms. Boudreau submitted an IRS Form 5402-c,

Appeals Transmittal and Case Memo, to her supervisor recommending

that the proposed collection action stand.   In an attachment to

the Form 5402-c (the attachment), Ms. Boudreau states that she

has verified that all legal and administrative requirements that

needed to be satisfied with respect to collection by levy had

been satisfied.   She describes petitioner’s offer to compromise

the 1992-2001 liability (“approximately $260,000”) for $10,000.

She states that the offer was submitted on the alternative

grounds of effective tax administration and doubt as to

collectibility.   She concludes that, because she is prohibited

from accepting an offer in compromise based on effective tax

administration unless the Commissioner could collect the

outstanding liability in full, and petitioner has insufficient

resources from which the Commissioner could collect the 1992-2001

liability in full, effective tax administration is unavailable as

a ground for an offer in compromise.   She concludes that,

although petitioner cannot pay the entire 1992-2001 liability and

may qualify for an offer in compromise based on doubt as to

collectibility:   “[H]e can pay considerably more than the $10,000

being offered.”
                               - 9 -

     On the attachment, she calculates the amount she believes

that petitioner can pay in much the same way that, in the March

19 letter, she calculated what she described as an acceptable

offer in compromise (at least $97,884).   The only apparent

difference is that she reduced her estimate of petitioner’s

monthly net business income from $2,618 to $2,356.   She

concludes:   “The reasonable collection potential based on the

income and expense figures provided by Mr. Murphy and calculated

utilizing allowable expenses and accepted practices is

$82,164.00.”   She recommends that petitioner’s offer in

compromise be rejected.

     With respect to balancing the need for the efficient

collection of the taxes due with the concern that the collection

action be no more intrusive than necessary, she concludes:    “This

analysis indicates that this action is now necessary to provide

for the efficient collection of the taxes despite the potential

intrusiveness of enforced collection.”

     Ms. Boudreau’s proposed disposition of petitioner’s case was

approved by her supervisor on May 19, 2003.

     On May 23, 2003, Ms. Boudreau returned a telephone call from

Mr. Burke.   She informed him that she had rejected the offer in

compromise because it was too low and had closed the case because

of missed deadlines.   Mr. Burke said petitioner was ill and had

finally permitted him to disclose the nature of his illness
                              - 10 -

(which Mr. Burke disclosed to Ms. Boudreau).   After the phone

conversation, Mr. Burke faxed a letter to Ms. Boudreau asking

that she reconsider her decision to close petitioner’s case.     The

letter contains no new financial information and makes no new

offer.   Ms. Boudreau reviewed the letter and the case file and

concluded that her decision to reject the offer should stand.

     By Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330, dated May 29, 2003 (the notice of

determination), Ms. Boudreau’s supervisor notified petitioner

that Appeals had sustained respondent’s decision to proceed with

collection of the unpaid tax by levy.   An attachment to the

notice of determination explains in some detail the matters

considered at the hearing and the conclusions reached.   It

contains, among other things, statements that a review of

petitioner’s administrative file indicated that the statutory and

administrative requirements that needed to be met with respect to

the proposed levy had been satisfied, the offer in compromise was

not a viable collection alternative, and collection by levy was

necessary to provide for the efficient collection of the taxes

despite the potential intrusiveness of enforced collection.

     Petitioner timely petitioned this Court for review of the

notice of determination.
                                - 11 -

                                OPINION

I.    Introduction

       Petitioner has assigned error to Appeals’ (Ms. Boudreau’s)

determination that respondent may proceed to collect the unpaid

tax by levy (the determination).    Before addressing the

assignment, we provide a general overview of the authority of the

Secretary of the Treasury (Secretary) to collect unpaid taxes by

levy, the procedures he must follow to do so, and our authority

to review the determination.    We also describe the Secretary’s

authority to compromise a tax case.       We then state the parties’

arguments and dispose of respondent’s objections to certain

testimony of petitioner’s and Ms. Boudreau’s.      Finally, we decide

whether Ms. Boudreau erred in making the determination.      We

decide that she did not.

II.    Sections 6330 and 6331

       Section 6331(a) authorizes the Secretary to levy against

property and property rights where a taxpayer liable for taxes

fails to pay those taxes within 10 days after notice and demand

for payment is made.    Section 6331(d) requires the Secretary to

send the taxpayer written notice of the Secretary’s intent to

levy, and section 6330(a) requires the Secretary to send the
                                - 12 -

taxpayer written notice of his right to a section 6330 hearing at

least 30 days before any levy is begun.1

     If a section 6330 hearing is requested, the hearing is to be

conducted by respondent’s Appeals Office (Appeals), and, at the

hearing, the Appeals officer or employee (without distinction,

Appeals officer) conducting it must verify that the requirements

of any applicable law or administrative procedure have been met.

Sec. 6330(b)(1), (c)(1).    The taxpayer may raise at the hearing

any relevant issue relating to the unpaid tax or the proposed

levy.    Sec. 6330(c)(2)(A).   The taxpayer is entitled to propose

an offer in compromise or other alternative to immediate

collection.    See sec. 6330(c)(2)(A)(iii).   The taxpayer may

contest the existence or amount of the underlying tax liability

     1
        A taxpayer receiving a notice of Federal tax lien has
hearing rights similar to the hearing rights accorded a taxpayer
receiving a notice of intent to levy. See sec. 6320(c). Indeed,
the record in this case contains a Notice of Federal Tax Lien
Filing and Your Right to a Hearing under Section 6320, dated May
3, 2002, addressed to petitioner, and concerning his unpaid
Federal income tax for 1999 (the notice of Federal tax lien).
Respondent has proposed that we find that (1) the Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330, dated May 29, 2003 (notice of determination), which
we described supra in our Findings of Fact, relates only to the
Final Notice - Notice of Intent to Levy and Notice of Your Right
to a Hearing, issued Apr. 15, 2002, which we also described supra
in our Findings of Fact, and (2) the notice of determination was
issued under sec. 6330 only. Petitioner states that he does not
dispute those proposed findings of fact, and we find accordingly.
Therefore, we do not in this case concern ourselves with the
notice of Federal tax lien or any determination under secs. 6320
and 6330 in connection therewith.
                              - 13 -

at the hearing if the taxpayer did not receive a statutory notice

of deficiency with respect to the underlying tax liability or did

not otherwise have an opportunity to dispute that liability.

Sec. 6330(c)(2)(B).

     At the conclusion of the hearing, the Appeals officer must

determine whether and how to proceed with collection, taking into

account, among other things, collection alternatives (e.g., an

offer in compromise) proposed by the taxpayer and whether any

proposed collection action balances the need for the efficient

collection of taxes with the legitimate concern of the taxpayer

that the collection action be no more intrusive than necessary.

See sec. 6330(c)(3).

     We have jurisdiction to review the Appeals officer’s

determination where we have jurisdiction over the type of tax

involved in the case.   Sec. 6330(d)(1)(A); see Iannone v.

Commissioner, 122 T.C. 287, 290 (2004).   Where the underlying tax

liability is properly at issue, we review the determination de

novo.   E.g., Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

Where the underlying tax liability is not at issue, we review the

determination for abuse of discretion.    Id. at 182.   In reviewing

for an abuse of discretion under section 6330(d)(1), generally we

consider only arguments, issues, and other matters that were

raised at the section 6330 hearing or otherwise brought to the

attention of Appeals.   Magana v. Commissioner, 118 T.C. 488, 493
                                - 14 -

(2002); see also sec. 301.6330-1(f)(2), Q&A-F5, Proced. & Admin.

Regs.     Whether an abuse of discretion has occurred depends upon

whether the exercise of discretion is without sound basis in fact

or law.     Freije v. Commissioner, 125 T.C. 14, 23 (2005).

III.     Offers in Compromise

        Section 7122(a) authorizes the Secretary to compromise any

civil or criminal case arising under the internal revenue laws.

Section 7122(c) authorizes the Secretary to prescribe guidelines

for the officers and employees of the IRS to determine whether an

offer in compromise is adequate.     Regulations implementing

section 7122 set forth three grounds for the compromise of a

liability:     (1) Doubt as to liability, (2) doubt as to

collectibility, and (3) to promote effective tax administration

(effective tax administration).     Sec. 301.7122-1(b), Proced. &

Admin. Regs.     Doubt as to liability is not at issue in this case.

        Doubt as to collectibility exists in any case where the

taxpayer’s assets and income are less than the full amount of the

liability.     Sec. 301.7122-1(b)(2), Proced. & Admin. Regs.

Generally, under respondent’s administrative pronouncements, an

offer to compromise based on doubt as to collectibility will be

acceptable only if the offer reflects the reasonable collection

potential of the case (i.e., that amount, less than the full

liability, that the IRS could collect through means such as

administrative and judicial collection remedies).     Rev. Proc.
                              - 15 -

2003-71, sec. 4.02(2), 2003-2 C.B. 517.   The offer must include

all unpaid tax liabilities and periods for which the taxpayer is

liable.   Internal Revenue Manual (IRM) pt. 5.8.1.7 (Sept. 1,

2005) (Liabilities to be Compromised).2   In some cases, the

Secretary will accept an offer of less than the reasonable

collection potential of the case if there are special

circumstances.   Rev. Proc. 2003-71, supra.   Special circumstances

are (1) circumstances demonstrating that the taxpayer would

suffer economic hardship if the IRS were to collect from him an

amount equal to the reasonable collection potential of the case

or (2) if no demonstration of such suffering can be made,

circumstances justifying acceptance of an amount less than the

reasonable collection potential of the case based on public

policy or equity considerations.   IRM pt. 5.8.4.3.4 (Sept. 1,

2005) (Effective Tax Administration and Doubt as to

Collectibility with Special Circumstances).   To demonstrate that

compelling public policy or equity considerations justify a

compromise, the taxpayer must be able to demonstrate that, due to

exceptional circumstances, collection of the full liability would

undermine public confidence that the tax laws are being

     2
        All citations to the Internal Revenue Manual are to the
manual as found at http://www.irs.gov/irm/index.html (last
visited Dec. 27, 2005).
                                 - 16 -

administered in a fair and equitable manner.   Sec. 301.7122-

1(b)(3)(ii), Proced. & Admin. Regs.

      Where, because the reasonable collection potential of the

case exceeds the taxpayer’s liability, doubt as to collectibility

is not a ground for compromise, the Secretary may enter into a

compromise on the ground of effective tax administration.   Sec.

301.7122-1(b)(3), Proced. & Admin. Regs.   Before the Secretary

will enter into a compromise on the ground of effective tax

administration, the taxpayer must show, among other things, that

collection in full would cause him economic hardship or, if he

cannot, that compelling public policy or equity considerations

justify such compromise.   Id.

IV.   The Parties’ Arguments

      In support of his assignment of error, petitioner avers that

(1) acceptance of an offer in compromise was in the best

interests of respondent and petitioner, and (2) Ms. Boudreau

improperly and prematurely concluded the section 6330 hearing.

With respect to the averments, petitioner asks us to consider not

only the administrative record of the hearing, which consists of

documents stipulated by the parties (the hearing record), but

also petitioner’s and Ms. Boudreau’s trial testimony.

      Respondent answers that Ms. Boudreau did not abuse her

discretion in rejecting the offer in compromise and determining

that respondent may proceed to collect the unpaid tax by levy,
                                - 17 -

nor did she prematurely and improperly conclude the hearing.

Respondent objects to the admission of both petitioner’s and

Ms. Boudreau’s trial testimony on the ground that the testimony

is not relevant to our deciding whether Ms. Boudreau abused her

discretion.

V.   Admissibility of Trial Testimony

      A.   Trial Testimony

      At the trial of this case, over the objection of respondent,

petitioner testified as to his marriage and divorce, his military

service, his health, and his credit card debt, all as it affected

his ability to pay his tax liabilities as they came due.     Also

over the objection of respondent, petitioner testified as to the

onset in April 2003 of cardiovascular problems that limit his

ability to work.    Over the objection of respondent, Ms. Boudreau

testified as to various entries in her case activity record and

certain aspects of the process by which she reached her decisions

to reject the offer in compromise and close petitioner’s case.

The Court noted respondent’s objections but reserved its ruling.

      B.   Positions of the Parties

            1.   Respondent’s Position

      Respondent’s relevancy objection is based on the fact that

petitioner’s underlying tax liability was not raised at the

hearing and is not before the Court.     Accordingly, respondent

argues, the appropriate standard for our review of the
                             - 18 -

determination is abuse of discretion and the appropriate scope of

review, pursuant to the record rule, is the hearing record.     The

record rule is the general rule of administrative law that a

court can engage in judicial review of an agency action only on

the basis of the record amassed by the agency.   2 Pierce,

Administrative Law, sec. 11.6, at 822 (4th ed. 2002); see United

States v. Carlo Bianchi & Co., 373 U.S. 709, 714 (1963).

Respondent recognizes that there are exceptions to the general

rule; e.g., “where the administrative record fails to disclose

the factors considered by the agency”,3 “where necessary for

background information”,4 and “where the agency failed to

consider all relevant factors”.5   Nevertheless, respondent

argues that none of those exceptions exist here.

     Respondent also recognizes that, recently, in Robinette v.

Commissioner, 123 T.C. 85, 101 (2004), we held that, in reviewing

for an abuse of discretion under section 6330(d), we are not

limited to the administrative record.   In Robinette, we were

asked to review an Appeals officer’s determination that the

     3
        Respondent cites Citizens to Preserve Overton Park, Inc.
v. Volpe, 401 U.S. 402, 420 (1971), overruled on unrelated
grounds by Califano v. Sanders, 430 U.S. 99, 105 (1977).
     4
        Respondent cites Thompson v. U.S. Dept. of Labor, 885
F.2d 551, 555 (9th Cir. 1989).
     5
        Respondent cites Fla. Power & Light Co. v. Lorion, 470
U.S. 729, 744 (1985); accord Franklin Sav. Association v.
Director, 934 F.2d 1127, 1137-1138 (10th Cir. 1991).
                              - 19 -

Commissioner could proceed to collect unpaid taxes that had been

compromised pursuant to an agreement that required the taxpayer

to file his income tax returns on time for a period of 5 years

(or face collection of the compromised amount).   The taxpayer had

breached the agreement by failing to file timely a return

governed by the agreement.   We received into evidence in addition

to the administrative record both testimony and documents that

showed (1) the taxpayer’s good faith efforts to file his return

in a timely manner, (2) the Appeals officer’s refusal to consider

certain evidence that the return was filed timely, and (3) his

unwillingness at the hearing to consider in depth his authority

to reinstate the offer in compromise.    Id. at 103-104.   We found

the testimony and documents relevant to the question of whether

the Appeals officer had abused his discretion in approving

collection of the compromised taxes.    Id. at 104.   We found that

he had abused his discretion, in part because he (1) “had a

closed mind to the arguments presented on petitioner’s behalf”

and (2) “failed to consider the facts and circumstances of this

case.”   Id. at 107.

     If we do not adopt his implicit suggestion that we overrule

Robinette v. Commissioner, supra, and apply the record rule in

reviewing for abuse of discretion under section 6330(d),

respondent asks that we distinguish the facts of this case from

those of Robinette and exclude petitioner’s and Ms. Boudreau’s
                              - 20 -

trial testimony.   Respondent points out that, in Robinette, some

of the Judges of the Court expressed reservation to, in all

circumstances, allowing testimony or admitting other evidence not

presented to Appeals.   E.g., Robinette v. Commissioner, 123 T.C.

at 115 (Wells, J., concurring) (distinguishing situation where

taxpayer refuses to furnish relevant evidence requested at

section 6330 hearing), id. at 116 (Thornton, J., concurring)

(suggesting it might be appropriate not to admit testimony or

other evidence when the taxpayer has failed to cooperate in

presenting relevant evidence at the section 6330 hearing), id. at

120 (Wherry, J., concurring) (“[The holding of the case] should

not be construed as sanctioning the dilatory introduction at

trial of new facts or documents previously withheld and not

produced at the Appeals hearing in order to justify reversal or

remand of the Appeals or settlement officer’s determination.”).

Respondent argues that petitioner should not be allowed to

introduce his testimony and the testimony of Ms. Boudreau because

his conduct during the hearing was marked by missed due dates and

constant requests for extensions of time to provide requested

information.   Respondent points out that the only issue raised by

petitioner was an offer in compromise, and he was given ample

opportunity to present an acceptable offer before he missed yet

another self-established due date (without warning Ms. Boudreau)

and she closed the case.   As a result, respondent concludes, our
                                 - 21 -

review of Ms. Boudreau’s exercise of discretion should be based

solely on the information presented to, and considered by, her.

           2.    Petitioner’s Position

     On brief, petitioner argues:     “[T]he infirmities in the

Respondent’s Determination, record and procedures require the

introduction of extrinsic evidence for an in depth review of the

Respondent’s Hearing.”

     C.   Discussion

           1.    Introduction

     Petitioner’s underlying tax liability is not at issue.       The

appropriate standard of review is, as respondent claims, abuse of

discretion.     See supra section II. of this report.

     We decline to overrule Robinette v. Commissioner, 123 T.C.

85 (2004).6     We shall, however, sustain respondent’s objection to

     6
        Recently, the Court of Appeals for the First Circuit
reviewed a District Court judgment that, pursuant to sec.
6330(d)(1), had affirmed an Appeals Office determination made
pursuant to sec. 6330(c)(3) that a levy to collect certain unpaid
employment taxes and penalties could proceed. Olsen v. United
States, 414 F.3d 144 (1st Cir. 2005), affg. 326 F. Supp. 2d 184
(D. Mass. 2004). The Court of Appeals upheld the record rule as
defining the scope of judicial review of such a determination
where, as in the case it was reviewing, the underlying tax
liability is not in issue. See id. at 155. The Court of Appeals
distinguished Robinette v. Commissioner, 123 T.C. 85 (2004), on
the ground that it is premised on considerations that are unique
to the Tax Court. Olsen v. United States, supra at 154 n.9.
Therefore, we are not required by the doctrine of Golsen v.
Commissioner, 54 T.C. 742, 757 (1970), affd. 445 F.2d 985 (10th
Cir. 1971), to follow Olsen with respect to the appropriate scope
of our review, notwithstanding that, barring stipulation of the
                                                    (continued...)
                               - 22 -

the admission of petitioner’s trial testimony and, with one

exception, also sustain it with respect to the admission of Ms.

Boudreau’s trial testimony.    Our reasons are as follows.

          2.    Petitioner’s Trial Testimony

     In Robinette v. Commissioner, supra, we admitted testimony

and documents not provided to Appeals on a showing that the

evidence presented at trial related to issues raised at the

taxpayer’s section 6330 hearing and was relevant and admissible

under the Federal Rules of Evidence.

     The sole issue raised by petitioner at the section 6330

hearing was a collection alternative; i.e., the offer in

compromise.    Petitioner submitted to Ms. Boudreau an IRS Form

656, Offer in Compromise, on which he checked boxes indicating

that the basis of the offer was either doubt as to collectibility

or effective tax administration.    He indicated on the form that

there were special circumstances (which he may have neglected to

describe).    During the October 3 meeting, Ms. Boudreau asked Mr.

Burke to describe petitioner’s special circumstances.    Mr. Burke

responded, but not fully, since petitioner had prohibited him

from discussing the nature of petitioner’s illness.    At trial,

Mr. Burke stated that petitioner wished to testify so that he

     6
      (...continued)
parties to the contrary, appeal of this case would lie to the
Court of Appeals for the First Circuit. See sec. 7482(b).
                              - 23 -

could explain why he had failed to pay the 1992-2001 liability as

it came due.   That explanation, claimed Mr. Burke, would convince

the Court that it would not have been contrary to public policy

for Ms. Boudreau to have accepted the offer in compromise.        On

brief, petitioner argues that he qualifies for an offer in

compromise based on “equity”; i.e., “requiring the Respondent to

act fairly in compromising outstanding taxes in those instances

where a rigid interpretation of the Respondent’s rules * * *

precludes the resolution of an issue.”   Considerations of

hardship, public policy, and equity figure in compromises

grounded on both doubt as to collectibility and effective tax

administration.   See supra section III. of this report.     We

accept that, at the section 6330 hearing, petitioner attempted to

convince Ms. Boudreau that special circumstances justified her

agreeing to an offer in compromise based on hardship, public

policy, or equity considerations.   Therefore, as was the case in

Robinette v. Commissioner, supra, petitioner’s trial testimony

relates to an issue he raised at the section 6330 hearing.

     Nevertheless, petitioner’s testimony regarding special

circumstances is not relevant to the question of whether Ms.

Boudreau abused her discretion in rejecting the offer in

compromise to the extent the offer was grounded on effective tax

administration.   If for no other reason, that is because Ms.

Boudreau’s rejection of petitioner’s offer to the extent that the
                                - 24 -

offer was grounded on effective tax administration was based on

her conclusion that respondent could not collect the full 1992-

2001 liability from petitioner (the potential of collection in

full being a prerequisite to any consideration of special

circumstances, such as hardship or equity, justifying an offer in

compromise grounded on effective tax administration).   We also

think that petitioner’s testimony is not relevant to the question

of whether Ms. Boudreau abused her discretion in rejecting the

offer to the extent the offer was grounded on doubt as to

collectibility.   The 1992-2001 liability ($275,777) exceeds both

the amount Ms. Boudreau determined to be the reasonable

collection potential of the case ($82,164) and the amount

petitioner offered ($10,000).    Because the offer was in an amount

less than what she determined to be the reasonable collection

potential, Ms. Boudreau could not consider the offer unless there

were special circumstances.   Nevertheless, petitioner did not

timely provide her with all of the evidence that he now believes

should be taken into account in determining whether there are

special circumstances.   An appeals officer does not abuse her

discretion when she fails to take into account information that

she requested and that was not provided in a reasonable time.     As

explained in the next paragraph, that is the case here with

respect to petitioner’s trial testimony.   Here, evidence that

petitioner might have presented at the section 6330 hearing (but
                              - 25 -

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.    See Fed. R.

Evid. 401; Morlino v. Commissioner, T.C. Memo. 2005-203.

     Petitioner was represented by counsel, Mr. Burke, at all

stages of the section 6330 hearing.    Petitioner had been informed

by Mr. Burke that, unless petitioner disclosed the nature of his

illness, Ms. Boudreau would not take illness into account.

Nevertheless, petitioner refused to disclose the nature of his

illness until after Ms. Boudreau had twice decided to close his

case for missed due dates and, in the second instance, lack of a

viable collection alternative.    Petitioner had more than an

adequate opportunity to provide Ms. Beaudreau with all of the

evidence he thought necessary to convince her of special

circumstances during the course of the hearing and before May 12,

2003, when Ms. Boudreau decided that respondent’s proposed

collection action should stand.    Moreover, petitioner does not

claim any change in his circumstances arising after the

conclusion of the hearing.   See Magana v. Commissioner, 118 T.C.

at 494 (an allegation of recent, unusual illness or hardship

might warrant the consideration of that new argument).    We did

not in Robinette v. Commissioner, supra, sanction the dilatory

introduction at trial of new facts or documents previously

withheld and not produced at the section 6330 hearing in order to
                                - 26 -

justify reversal or remand of the Appeals office determination.

See id. at 115, 116, 120 (Wells, Thornton, and Wherry, JJ.,

concurring, respectively).    Accordingly, as stated, petitioner’s

testimony with respect to special circumstances is not admissible

because it is irrelevant.

            3.   Ms. Boudreau’s Trial Testimony

     Petitioner wishes to introduce Ms. Boudreau’s trial

testimony to show infirmities in the determination, the hearing

record, and the Appeals procedures applicable to section 6330

hearings.    Much of that testimony was in response to Mr. Burke’s

questions to Ms. Boudreau concerning the content of her case

activity record and how she arrived at her decision to reject the

offer in compromise.    Among other things, Mr. Burke questioned

her as to abbreviations and notations in the case activity

record, her use of national standards for determining necessary

living expenses in evaluating offers in compromise, what factors

she took into account in rejecting the offer, and whether she

notified petitioner that he could appeal her decision to reject

the offer in compromise.    On brief, petitioner catalogues the

infirmities that he claims justify Ms. Boudreau’s trial

testimony:    The notice of determination fails to state what

“current IRS policy and procedures” were being relied on by Ms.

Boudreau and whether she rejected the offer in compromise based

on doubt as to collectibility or effective tax administration.
                               - 27 -

Ms. Boudreau’s case activity report contains unexplained

notations and abbreviations.     Respondent made no transcript or

recording of the hearing.   The records provided by respondent

fail to include any information on “National Standards”, “Local

Standards”, or “other basis for ascertaining ‘allowable

expenses’”, or grounds for deviating from those national or local

standards.

     Those are not claims that petitioner made at the hearing.

While in Robinette v. Commissioner, supra, we admitted at trial

evidence not provided to Appeals on a showing that (besides being

relevant and otherwise admissible under the Federal Rules of

Evidence) the evidence related to issues raised at the taxpayer’s

section 6330 hearing, we did not say that such a showing is

prerequisite to admissibility.    An irregularity in the conduct of

the hearing or some defect in the record may not be apparent

until after the hearing is concluded and the taxpayer receives

notice of the resulting determination.    The circumstances may

justify allowing the taxpayer to raise the issue at trial and

introduce evidence notwithstanding the taxpayer’s failure to

raise the issue at the section 6330 hearing.7    We address each of

     7
        Even given application of the record rule, circumstances
with respect to conduct of the hearing may justify
supplementation of the record. See, e.g., Olsen v. United
States, 414 F.3d at 155 (in the context of a section 6330
hearing); Lands Council v. Powell, 395 F.3d 1019, 1030 (9th Cir.
                                                    (continued...)
                                - 28 -

the infirmities that petitioner claims justify the admission of

Ms. Boudreau’s testimony.

     First, petitioner claims that the notice of determination

fails to state the current policies and procedures relied on by

Ms. Boudreau.    We have summarized the contents of the notice of

determination (and attachment) in our findings of fact, and there

is no question but that it addresses all of the issues required

by law.    See sec. 6330(c); sec. 301.6330-1(e)(3), A-E10 & A-E1,

Proced. & Admin. Regs.    Moreover, as respondent points out on

brief, the policies and procedures of the IRS, as set forth in

the law, accompanying regulations, and Internal Revenue Manual,

are all available to the general public.8    Respondent concedes

that petitioner could have questioned Ms. Boudreau about any

policy or procedure that he believed she did not follow.

Instead, petitioner questioned her about her use of national

standards for determining necessary living expenses in evaluating

offers in compromise.    Such a discussion is not relevant in this

particular case, argues respondent, because, with one exception,

Ms. Boudreau accepted the living expenses claimed by petitioner

in the collection information statements he submitted to her when

     7
      (...continued)
2005); Orion Intl. Techs. v. United States, 60 Fed. Cl. 338, 343-
344 (2004).
     8
          See supra note 2 for direction to the Internal Revenue
Manual.
                              - 29 -

she decided that the offer in compromise was unacceptable.   The

one exception was her disallowance of an expense characterized by

petitioner as being attributable to secured debt, when, in truth,

as petitioner later admitted, the expense was attributable to

unsecured credit card debt (which, according to the collection

information statement petitioner filled out, generally cannot be

claimed as a necessary living expense).    We agree with respondent

that, since national standards for determining necessary living

standards did not enter into her decision to reject the offer in

compromise, Ms. Boudreau’s testimony on that score is irrelevant,

and we exclude it on that basis.   See Fed. R. Evid. 401.

     It is true that the notice of determination does not state

Ms. Boudreau’s reason (or reasons) for rejecting the offer in

compromise.   An attachment to the notice states only that the

offer in compromise cannot be accepted under current IRS policy

and procedures.   The parties, however, have stipulated a copy of

the Form 5402-c, Appeals Transmittal and Case Memo, submitted by

Ms. Boudreau on May 14, 2003, to her supervisor.   As we have

found, the Form 5402-c does set forth in detail Ms. Boudreau’s

analysis leading to her rejection of the offer in compromise on

both of the grounds (doubt as to collectibility and effective tax

administration) put forth by petitioner.   The hearing record is

clear that Ms. Boudreau rejected the offer in compromise on both

grounds advanced by petitioner, and no testimony by her on that
                              - 30 -

score is necessary for us to review the determination.    See Fed.

R. Evid. 403 (waste of time or needless presentation of

cumulative evidence grounds for excluding relevant evidence).

     Ms. Boudreau’s case activity report does contain unexplained

notations and abbreviations, and her testimony is necessary to

explain those notations and abbreviations.   Therefore, that

testimony is admissible.

     It is also true, as petitioner claims, that there is no

transcript or recording of the hearing.   No provision of section

6330 requires the recording of a section 6330 hearing, and, in

fact, section 301.6330-1(d)(2), A-D6, Proced. & Admin. Regs.,

states:   “A transcript or recording of any face-to-face meeting

or conversation between an Appeals officer or employee and the

taxpayer or the taxpayer's representative is not required.”

Moreover, petitioner never asked to record Mr. Burke’s meeting

with Ms. Boudreau.   Cf. Keene v. Commissioner, 121 T.C. 8, 19

(2003).   Here, we need ascertain only whether Ms. Boudreau abused

her discretion when she did not accept a compromise based on

petitioner’s insistence that he could pay no more than

approximately 4 percent of his uncontested tax liability and

concluded that, under the circumstances, the use of the levy

process was “no more intrusive than necessary.”   Sec. 6330(c).

Petitioner’s offer, his responses and lack thereof to Ms.

Boudreau’s requests, and her conclusions, are adequate for such
                                  - 31 -

review.    See Fed. R. Evid. 403; cf. Olsen v. United States, 414

F.3d 144, 155 (1st Cir. 2005).

     Petitioner complains that the records provided by respondent

contain no information on national or local living expense

standards.    While that is true, the Internal Revenue Manual,

which is available to petitioner on the IRS Web site,9 discusses

the national standards, local standards, and other bases for

determining allowable expenses when evaluating offers in

compromise.    See, e.g., IRM secs. 5.8.5.5.1 through 5.8.5.5.3

(Sept. 1, 2005).    Moreover, as described supra, Ms. Boudreau

allowed in full petitioner’s validly claimed expenses.      An

Appeals officer does not abuse her discretion when she allows a

taxpayer’s claimed expenses.      See Schulman v. Commissioner, T.C.

Memo. 2002-129.    Ms. Boudreau’s testimony describing national or

local expense standards is, therefore, irrelevant.      See Fed. R.

Evid. 401.

     In summary, we shall allow into evidence Ms. Boudreau’s

testimony explaining notations and abbreviations in her case

activity report and exclude the remainder of her testimony.

     D.    Conclusion

     Respondent’s objection to the admission of petitioner’s

testimony is sustained.       Respondent’s objection to the admission

     9
          See supra note 2.
                                - 32 -

of Ms. Boudreau’s testimony is sustained in part and overruled in

part.

VI.   Abuse of Discretion

      A.   Introduction

      We must now decide whether Ms. Boudreau abused her

discretion in determining that respondent may proceed by levy to

collect the unpaid tax.     Petitioner claims that Ms. Boudreau did,

because (1) acceptance of an offer in compromise was in the best

interests of respondent and petitioner and (2) Ms. Boudreau

improperly and prematurely concluded the hearing.

      B.   The Appeals Officer Did Not Err in Rejecting the Offer
           in Compromise

      We do not conduct an independent review of what would be an

acceptable offer in compromise.     Fowler v. Commissioner, T.C.

Memo. 2004-163.    The extent of our review is to determine whether

the Appeals officer’s decision to reject the offer in compromise

actually submitted by the taxpayer was arbitrary, capricious, or

without sound basis in fact or law.      Skrizowski v. Commissioner,

T.C. Memo. 2004-229; Fowler v. Commissioner, supra; see Woodral

v. Commissioner, 112 T.C. 19, 23 (1999).

      Ms. Boudreau concluded that petitioner could not pay his

liability (the 1992-2001 liability) in full and, therefore, did

not qualify for an offer in compromise based on effective tax

administration.    Certainly, her conclusion about petitioner’s
                              - 33 -

inability to pay in full agrees with the information petitioner

provided her, and we see no error in that conclusion or in her

decision, based on that conclusion, to reject effective tax

administration as a ground for compromising the 1992-2001

liability.   Section 301.7122-1(b)(3)(ii), Proced. & Admin. Regs.,

makes the ability to make full payment a precondition to any

offer in compromise based on effective tax administration.10

     Nor do we see any error in Ms. Boudreau’s decision to reject

petitioner’s offer of $10,000 in settlement of the 1992-2001

liability of $275,777 on the ground of doubt as to

collectibility.   She reviewed the information submitted by

petitioner during the hearing.   She found that petitioner was

operating a business and earning more than $30,000 a year.

Combined with his monthly pension income, and after subtracting

     10
        In his reply brief, petitioner, for the first time,
raises a challenge to sec. 301.7122-1, Proced. & Admin. Regs., in
so far as it sets forth the requirements that a taxpayer must
meet to qualify for a compromise on the basis of effective tax
administration. Petitioner bases his challenge on changes made
to sec. 7122 by the Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206, sec. 3462(a) and (c)(1), 112
Stat. 764, 766. See H. Rept. 105-599, at 287-289 (1998), 1998-3
C.B. 747, 1041-1043 (addressing effective tax administration).
That argument is raised too late for consideration. See Rule
334(b)(4); Aero Rental v. Commissioner, 64 T.C. 331, 338 (1975);
Kelly v. Commissioner, T.C. Memo. 1996-529. Petitioner does not
lose much by our so ruling, since, as described supra sec. III.
of this report, the same factors are taken into account in
considering offers in compromise grounded on effective tax
administration and those grounded on doubt as to collectibility
based on special circumstances.
                               - 34 -

his claimed expenses, she found that, from his net monthly income

alone, he could, over time, afford to pay more than $10,000

towards the 1992-2001 liability.11   She also calculated that he

had net realizable equity of $30,204, which was more than the

$10,000 he had offered.    She calculated a reasonable collection

potential of $82,164.   Because the offer was less than the

reasonable collection potential she had calculated, the offer

was, in the absence of special circumstances, unacceptable under

the Commissioner’s procedures for the submission and processing

of offers in compromise.    See Rev. Proc. 2003-71, sec. 4.02(2),

2003-2 C.B. 517.   Petitioner has not challenged Rev. Proc. 2003-

71, supra.   Moreover, petitioner provided Ms. Boudreau with

insufficient information to justify her accepting an offer based

on special circumstances in any amount less than what she had

calculated as the reasonable collection potential of the case.

Therefore, we must determine only whether the Appeals officer’s

calculations are reasonable.    See, e.g., Galvin v. Commissioner,

T.C. Memo. 2003-263; McCorkle v. Commissioner, T.C. Memo. 2003-

34; Schulman v. Commissioner, T.C. Memo. 2002-129.    We conclude

that her computations were reasonable, and she did not err in

     11
        Ms. Boudreau did not calculate the present value of his
net monthly income, and we are unsure whether her assumption in
calculating what petitioner could pay is that petitioner would
make installment payments. Taking into account any reasonable
interest rate, however, the present value of petitioner’s net
monthly income is still a substantial amount.
                               - 35 -

rejecting the offer in compromise based on doubt as to

collectibility.

     C.   The Appeals Officer Did Not Improperly and Prematurely
          Conclude the Hearing

           1.   Introduction

     On brief, petitioner argues not only that Ms. Boudreau

prematurely concluded the hearing but also that she (1) did not

conduct the hearing in good faith, (2) failed to negotiate during

consideration of the offer, (3) was inflexible in considering

petitioner’s case, (4) was biased in concluding that the hearing

had to be promptly concluded, and (5) was not impartial since she

both conducted the hearing and negotiated the offer.    Petitioner

further argues bias in the section 6330 hearing procedures

because (1) there was no administrative review of Ms. Boudreau’s

rejection of the offer, and (2) petitioner had no right to appeal

Ms. Boudreau’s rejection of the offer.

           2.   Hearing Was Not Prematurely Concluded

     In Clawson v. Commissioner, T.C. Memo. 2004-106, fewer than

3 months passed between the taxpayer's filing a request for a

section 6330 hearing concerning a proposed levy and an adverse

determination by the Appeals officer.    Approximately 1 month

passed after the Appeals officer's offer of a telephonic

conference until the adverse determination, and only 9 days

passed after the telephone conference until the adverse
                               - 36 -

determination.    The taxpayer argued that the Appeals officer

abused his discretion because he reached his decision to sustain

the proposed levy in “barely one month” after he contacted

petitioners.   We held:   “[T]here is neither requirement nor

reason that the Appeals officer wait a certain amount of time

before rendering his determination as to a proposed levy.”      As

authority, we cited section 301.6330-1(e)(3), Q&A-E9, Proced. &

Admin. Regs., which provides that there is no period of time in

which Appeals must conduct a section 6330 hearing or issue a

notice of determination:    “Appeals will, however, attempt to

conduct a * * * [section 6330 hearing] and issue a Notice of

Determination as expeditiously as possible under the

circumstances.”

     In this case, Ms. Boudreau reached her decision that

respondent’s collection action should stand more than 8 months

after she was assigned to petitioner’s case.    On being assigned

to the case, she contacted petitioner’s representative, Mr.

Burke, and promptly met with him.    She received from him an offer

in compromise and certain supporting information.    She requested

from him additional information and documents necessary for her

to review the offer.    Mr. Burke missed numerous due dates for

submitting additional information, and, on one occasion, she

closed the case because of Mr. Burke’s failure to meet submission

due dates.   It took Mr. Burke more than 4 months to provide to
                              - 37 -

Ms. Boudreau the last of the information necessary for her to

review the offer in compromise.   When her review showed that the

offer was not acceptable, she gave petitioner the opportunity to

submit an acceptable offer.   Again, due dates were missed, and no

new offer was submitted.   Ms. Boudreau waited almost 2 months for

an acceptable offer before deciding that respondent’s proposed

collection action should stand.   Eleven days after she made her

decision (and 6 days before the notice of determination was

issued), Mr. Burke finally disclosed to Ms. Boudreau the nature

of petitioner’s illness.   Ms. Boudreau considered that

information and decided that her decision should stand.   We do

not think that Ms. Boudreau prematurely concluded the hearing.

See Roman v. Commissioner, T.C. Memo. 2004-20 (reasonable to

issue adverse section 6330 determination when, after 6 weeks,

taxpayer had failed to submit information requested with respect

to offer in compromise); see also Olsen v. United States, 414

F.3d at 154 (“Given * * * [the taxpayer’s] failure to cooperate

fully despite the appeals officer's repeated attempts to obtain

the information deemed necessary to evaluate the offer (and, in

particular, * * * [the taxpayer’s] claimed inability to pay), we

cannot say the appeals officer abused her discretion in

determining the collection action to be ‘no more intrusive than

necessary.’”).
                                 - 38 -

          3.   Other Arguments

     Respondent argues that we should disregard petitioner’s

other arguments since he did not raise them in the petition.     See

Rule 331(b)(4).   We construe the petition broadly, however, see

Rule 31(d), and give petitioner the benefit of the doubt that his

averment that Ms. Boudreau improperly concluded the hearing

encompasses his other arguments.     In any event we have made

extensive findings from the record, which we think belie

petitioner’s claims.    We address each claim briefly.

     Petitioner claims:   Ms. Boudreau “did not conduct the

hearing in good faith.”    As an example, petitioner recites that

Ms. Boudreau made her initial contact with petitioner by a letter

sent on September 16, 2002, which scheduled a meeting for

September 30, 2002.    Petitioner recites:   “This action is

assuredly indicative of the Settlement Officer’s predisposition

toward an expedient conclusion of Petitioner’s matter.”     We do

not reach that conclusion since, when Mr. Burke telephoned Ms.

Boudreau on September 17, 2002, apparently in response to her

letter, she agreed to move the meeting to October 3, 2002.

Petitioner complains that Ms. Boudreau’s “lack of economic

perspicacity” reflected in her calculations (using national and

local expense standards) “shows that the Hearing was not

conducted in good faith.”    We cannot agree with that complaint

since Ms. Boudreau adopted petitioner’s claimed expenses as a
                              - 39 -

basis for her calculations.   Considering all of petitioner’s

claims of bad faith, we fail to find that Ms. Boudreau conducted

the hearing in bad faith.

     Petitioner claims:   Ms. Boudreau “did not act with

flexibility but with a clear predisposition toward an inflexible

and expeditious determination of the Petitioner's matter.”    The

facts in evidence hardly lead to that conclusion.    Ms. Boudreau

tolerated numerous missed due dates.   She reopened the case after

she had closed it on account of a missed due date.   After

rejecting the offer in compromise, she invited another offer.

When that offer was not timely received, she closed the case but

considered reopening it when Mr. Burke belatedly telephoned her.

We do not find that Ms. Boudreau was inflexible.    While she may

have been predisposed to an expeditious conclusion of

petitioner’s case, we see nothing wrong with that, given the

facts before us.

     Petitioner claims:   Ms. Boudreau “was biased by her belief

that the hearing had to be promptly concluded.”    Besides the fact

that Ms. Boudreau rejected the offer and, after almost 2 months,

gave up on petitioner’s promise to submit a new offer, petitioner

has shown no facts that would support his claim of bias.     As we

made plain supra p. 35 of this report, there is no requirement

that an Appeals officer wait a certain amount of time
                              - 40 -

before concluding a section 6330 hearing.   Petitioner has failed

to show bias.

     Petitioner claims:   Ms. Boudreau “was not impartial as

[since] she both conducted the hearing and negotiated the offer.”

That, however, is precisely the scheme contemplated by section

6330.   Section 6330(c)(2)(A)(iii) permits a taxpayer to offer

collection alternatives, including offers in compromise, at a

section 6330 hearing, and section 6330(c)(3) provides that the

determination of the Appeals officer conducting the section 6330

hearing shall take into consideration any collection alternative

offered by the taxpayer at the hearing.   Petitioner argues:   “It

is constitutionally impermissible for the Respondent to assign

the same person to negotiate an OIC [offer in compromise] and

thereafter rule on the fairness of her negotiations.”   Section

6330(b)(3) ensures a measure of impartiality by requiring that,

unless the taxpayer waives the requirement, the section 6330

hearing be conducted by an Appeals officer who has had no prior

involvement with the unpaid tax at issue in the hearing.

Petitioner’s claim is without merit.

     Petitioner claims:   Ms. Boudreau “failed to negotiate during

the consideration of the OIC.”   Petitioner argues:   “In failing

to negotiate a reasonable offer the Settlement Officer failed to

meet her responsibility to hold a fair hearing at which she was

to negotiate, be flexible and to make it easier for taxpayers to
                              - 41 -

enter into OICs.”   We need not in this case decide whether the

Secretary “must” negotiate an offer in compromise.   See Olsen v.

United States, 414 F.3d at 157 (“section 7122 commits the

acceptance and negotiation of offers in compromise to the

Secretary’s discretion”).   In this case, although Ms. Boudreau

rejected the offer in compromise, she told petitioner what would

be an acceptable offer in compromise and provided petitioner

almost 2 months to submit a new offer before she closed the case.

In that regard, there was no error in her actions.   Cf. id. (with

respect to taxpayer’s argument that Appeals officer failed to

negotiate and make a counter-offer during course of section 6330

hearing:   “Given * * * [the taxpayer’s] sluggish and inadequate

response, the appeals officer was certainly not required, nor was

she able, to make a meaningful counter-offer.”).

     Finally, petitioner complains that the absence of

administrative review of the rejected offer in compromise as well

as the Secretary's failure to grant him administrative appeal

rights evidences bias in the section 6330 hearing procedures.12

Here, the record shows that Ms. Boudreau’s decision to reject the

offer was reviewed and approved by her supervisor.   Moreover,

petitioner does have the right to appeal; viz, to this Court.

     12
        Sec. 301.7122-1(f), Proced. & Admin. Regs., requires
administrative review of a rejected offer in compromise and
accords the taxpayer a right of appeal.
                                - 42 -

See sec. 6330(d).     In response to these same arguments, the Court

of Appeals for the First Circuit has said:

       Represented by counsel, * * * [the taxpayer] decided to
       submit his offer in compromise to the IRS Office of
       Appeals pursuant to § 6330 in the first instance.
       Under § 6330, he had no right to more than one hearing
       nor to a hearing before anyone other than the Office of
       Appeals. See 26 U.S.C. § 6330(b) (2000). Moreover, if
       a taxpayer desires to challenge an appeals officer's
       determination, § 6330 provides for judicial review,
       which * * * [the taxpayer] elected to pursue, not
       another administrative appeal. Id. § 6330(d).

Olsen v. United States, supra at 157.     Petitioner’s complaint is

without merit.

             4.   Conclusion

       We find no merit in petitioner’s arguments that Ms. Boudreau

improperly and prematurely concluded the hearing.

       D.   Conclusion

       Ms. Boudreau did not abuse her discretion in determining

that respondent may proceed by levy to collect the unpaid tax.

VII.    Conclusion

       To reflect the foregoing,

                                           Decision will be entered

                                      for respondent.