Court Opinion

ID: 4617924
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:37:34.51898+00
Date Added: 2024-06-11T07:55:22.878614
License: Public Domain

KEVIN R. GURULE AND DAWN M. GURULE, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Gurule v. Comm'rDocket No. 13323-13L United States Tax Court2015 Tax Ct. Memo LEXIS 81; March 31, 2015, FiledDecision text below is the first available text from the court; it has not been editorially reviewed by LexisNexis. Publisher's editorial review, including Headnotes, Case Summary, Shepard's analysis or any amendments will be added in accordance with LexisNexis editorial guidelines.*81 Docket No. 13323-13L. Filed March 31, 2015.Kevin R. Gurule and Dawn M. Gurule, pro sese.John Schmittdiel and Jeremy J. Eggerth, for respondent.MEMORANDUM FINDINGS OF FACT AND OPINIONMARVEL, Judge: In a Notice of Determination Concerning CollectionAction(s) Under Section 6320 and/or 63301 (notice of determination), respondent1Unless otherwise indicated, all section references are to the Internal Revenue Code (Code) as amended and in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.- 2 -[*2] sustained the proposed collection by levy of petitioners' unpaid Federalincome tax for taxable year 2009. The issue for decision is whether respondentabused his discretion in sustaining the proposed levy. Because we are unable todetermine on the record before us whether respondent abused his discretion, wewill remand to the Internal Revenue Service (IRS) Appeals Office for furtherproceedings.FINDINGS OF FACTSome of the facts have been stipulated and are so found. The stipulatedfacts and facts drawn from stipulated exhibits are incorporated herein by thisreference. Petitioners resided in Minnesota when they petitioned this Court.I. BackgroundPetitioners are*82  husband and wife. Mr. Gurule has an associate's degree inaviation electronics and a bachelor's degree in business management. He workedfor General Mills for 18 years, beginning as a technician and then moving up inthe company. His job required him to move several times, most recently fromMinnesota to Missouri in 2009. Each time his family moved with him. Mr.Gurule lost his job three months after petitioners moved to Missouri. The familymoved back to Minnesota, and after four to five months of unemployment Mr.- 3 -[*3] Gurule found a job at the manufacturing facility of a grocery chain. He wasworking there on the date of the trial in this case.Mrs. Gurule has a severe neurological condition that causes her to sufferseizures and has prevented her from working. She has had brain surgery, takesmedication, and has many doctor visits per year because of her medical condition.Petitioners' middle and youngest sons continued to reside with themthroughout the various moves. Their middle son was in an accident as a child andsuffered a brain injury. He had medical problems throughout his life as a result ofthe injury. Tragically, petitioners' middle son passed away in August 2013 fromthese medical*83  problems. Petitioners have not yet been able to place his ashes in amausoleum because doing so would cost between $7,000 and $10,000 and they areunable to pay the cost.Petitioners owned a home in Minnesota. When they moved to Missouri in2009, they put the Minnesota home up for sale and were in the process of buying ahouse in Missouri. Mr. Gurule took distributions from a section 401(k) planaccount he maintained with Great West Retirement for the downpayment, butpetitioners were not able to purchase the house after Mr. Gurule lost his job. Thesection 401(k) plan account distributions generated the underlying tax liability inthis case. After petitioners moved back to Minnesota, they lived in the Minnesota- 4 -[*4] house until December 2012. At that time the mortgage on petitioners'Minnesota home was the subject of a foreclosure proceeding, and they moved.Mr. Gurule had two loans from his section 401(k) plan account outstandingat the time of the foreclosure. In January 2013 Mr. Gurule took out another loanfrom his section 401(k) plan account (third section 401(k) plan account loan)because petitioners had unexpected expenses after the foreclosure, includingmoving expenses, a security deposit, and the first month's rent for a newresidence. Mr. Gurule's earnings*84  statements from 2012 show that amountsbetween $332.88 and $403.56 were deducted from his biweekly paycheck to payback the first two section 401(k) plan account loans. The third section 401(k) planaccount loan increased his biweekly payroll deduction to $536.24.2 In or aroundMarch 2013 Mr. Gurule obtained funds to pay petitioners' son's medical expensesby taking out another section 401(k) plan account loan (fourth section 401(k) planaccount loan). This increased Mr. Gurule's biweekly payroll deduction to $622.32In a letter to respondent Mr. Gurule stated that the third sec. 401(k) plan account loan increased his payroll deduction to "$536.24 per month coming out of each paycheck." This statement appears to have been incorrect because, as petitioners' Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Mr. Gurule's earnings statements in the administrative record show, he was paid biweekly.3In a letter to respondent Mr. Gurule stated that the fourth sec. 401(k) plan (continued...)- 5 -[*5] After petitioners' middle son passed away in August 2013, Mr. Gurule tookout a fifth section 401(k) plan account loan (fifth section 401(k) plan accountloan) to pay for his son's funeral services. Mr. Gurule's earnings statements forFebruary 2014 show that this*85  additional loan increased the biweekly payrolldeduction to $694.70.II. The Liability and the Collection ProcessPetitioners timely filed a joint Form 1040, U.S. Individual Income TaxReturn, for taxable year 2009. On May 2, 2011, respondent sent a Notice CP2000to petitioners proposing adjustments to their 2009 Federal income tax on the basisof third-party information returns showing that Mr. Gurule had section 401(k) planaccount distributions during the year. The record is unclear as to whetherrespondent sent petitioners a statutory notice of deficiency as required undersection 6213(a). In November 2011 respondent assessed additional tax of $36,516and an accuracy-related penalty of $6,756. Petitioners did not pay the assessedamounts, and respondent's Automated Collection System Section issued a Letter3(...continued)account loan increased the repayment to "$622.00 per month coming out of each paycheck". This statement is incorrect because Mr. Gurule was paid biweekly. See supra note 2.- 6 -[*6] 1058, Notice of Intent to Levy and Notice of Your Right to a Hearing, onMay 7, 2012.4Petitioners timely requested a section 6330 hearing. In their request, theyindicated that they could not pay the balance and stated: "Collection will*86  cause ahardship. I need an offer in compromise or installment agreement, penaltiesshould be cancelled for reasonable cause."Petitioners' case was assigned to Settlement Officer Lori Degiovanni in theIRS Appeals Office. On August 21, 2012, petitioners submitted to SettlementOfficer Degiovanni a Form 656, Offer in Compromise, a Form 433-A, andsupporting financial information. The offer-in-compromise (OIC) request, inwhich petitioners proposed to settle their tax liability for $950 paid over fivemonths, was based on doubt as to collectibility.The Appeals Office retained jurisdiction over the case while the IRS'Centralized Offer in Compromise (COIC) Unit researched petitioners' OIC requestand verified their financial information. By letter dated November 28, 2012, theCOIC Unit informed petitioners that it could not accept the proposed OIC butindicated a willingness to receive additional information. In response, petitioners4The Letter 1058 also stated that petitioners were liable for an addition to tax for late payment pursuant to sec. 6651(a)(3).- 7 -[*7] sent the COIC Unit a letter dated January 9, 2013, and financialdocumentation. The letter explained the family's medical problems, theforeclosure*87  proceedings, and the third section 401(k) plan account loan. Themortgage on the Minnesota house was foreclosed upon and Mr. Gurule had takenout the third section 401(k) plan account loan after petitioners submitted theirOIC. The financial information petitioners sent included documentation of themoving expenses and the medical expenses.On January 29, 2013, the COIC Unit preliminarily rejected petitioners'proposed OIC because it contended that petitioners could fully pay the liability onthe basis of their calculated net realizable equity and future income.5 The COICUnit determined petitioners' net realizable equity to be $19,342.80, which itcomputed by adding the total value of petitioners' bank account balance of $1,700,Mr. Gurule's section 401(k) plan account net realizable equity of $16,442.80, andvehicle net realizable equity of $1,200. The COIC Unit calculated the net5The term "net realizable equity" is defined as "quick sale value * * * less amounts owed to secured lien holders with priority over the [F]ederal tax lien". Internal Revenue Manual (IRM) pt. 5.8.5.4.1(1) (Oct. 22, 2010). The term "quick sale value" used in the definition of "net realizable equity" is defined to mean "an estimate of the price a seller could*88  get for the asset in a situation where financial pressures motivate the owner to sell in a short period of time", usually 80% of the fair market value of the asset. Id. pt. 5.8.5.4.1(2) and (3); see Lane v.Commissioner, T.C. Memo 2013-121">T.C. Memo. 2013-121.- 8 -[*8] realizable equity of Mr. Gurule's section 401(k) plan account by reducing thefair market value of $71,704 by 30% to account for Federal income tax and thensubtracting a loan balance of $33,750. The COIC Unit did not consider Mr.Gurule's then-existing third section 401(k) plan account loan in calculating thesection 401(k) plan account's net realizable equity.The COIC Unit determined petitioners' monthly gross income, monthlyexpenses, and monthly net income to be $8,663, $8,225, and $438, respectively.On the basis of petitioners' net realizable equity of $19,342.80 and monthly netincome of $438 over 110 months, the COIC Unit determined that petitioners couldfully satisfy their tax liability, which then totaled $46,657.77.The COIC Unit then transferred the OIC case file to the Appeals Office fora final determination. After receiving the case file, Settlement Officer Degiovanniprepared an asset equity table and an income and expense table, which showed thefollowing: - 9 - [*9]Asset Equity Table1  Fair  market Percent Quick*89  sale Appeals AssetvaluereducedvalueEncumbrancesequity Checking  acct. $1,700 -0- -0- -0- -0- Sec. 401(k) plan acct. 269,079 3-0- $48,355 $34,097 $14,258  Vehicle 1 1,500 20% 1,200 -0- -0-  Total 14,258 1Categories without a value in any column have been omitted.2The record does not explain why the COIC Unit and Settlement Officer Degiovanni assigned a different fair market value to Mr. Gurule's sec. 401(k) plan account. The notice of determination makes clear that the difference was not a result of Settlement Officer Degiovanni's taking the third sec. 401(k) plan account loan into consideration. See infra pp. 30-31.3Though Settlement Officer Degiovanni's chart shows 0% reduced, the quick sale value implies that she reduced the fair market value of the sec. 401(k) plan account by 30%.Income TableItemClaimed1 Appeals Gross wages $6,694 $8,202  Social Security -0- 459  Total 6,694 8,661 1This column reflects the income that petitioners claimed on their Form 433-A. - 10 - [*10]Expense TableExpenseClaimed1 Appeals National standard $1,021 $1,450  Housing and utilities 2,197 2,581  Vehicle ownership 420 409  Vehicle operating 632 432  Taxes (on income) 1,427 1,427  Health insurance 287 287  Out-of-pocket health care 550 550 *90  Life insurance 130 130  Other secured debt -0- -0-  Additional vehicle operating -0- 400  Total 26,664 7,666 1This column reflects the expenses that petitioners claimed on their Form 433-A.2Petitioners' Form 433-A incorrectly stated that the expenses totaled $6,644. The correct total is $6,664.Settlement Officer Degiovanni did not allow a monthly expense for Mr. Gurule'spayroll deduction related to the section 401(k) plan account loans at that time.On the basis of these calculations, Settlement Officer Degiovanni found thatpetitioners had monthly disposable income and a reasonable collection potential6(RCP) of $995 and $26,198, respectively, and she therefore preliminarilydetermined that petitioners would be able to pay the tax liability in full. On March6Reasonable collection potential is generally the sum of a taxpayer's net realizable equity and future income. IRM pt. 5.8.4.3.1 (June 1, 2010); see infra pp. 27-28.- 11 -[*11] 1, 2013, Settlement Officer Degiovanni sent petitioners a letter explainingher preliminary determination and scheduling a telephone call for April 9, 2013.The letter also stated that petitioners could provide additional information byMarch 22, 2013.In response to the letter, petitioners*91  sent Settlement Officer Degiovanniadditional financial information, including a pay stub, rent checks, utility bills, andmedical bills. Mr. Gurule also included a letter explaining certain housing andvehicle expenses and the fourth section 401(k) plan account loan. Although hestated in the letter that the fourth section 401(k) plan account loan had increasedhis payroll deduction to $622, petitioners did not provide an updated earningsstatement to this effect. The pay stub that petitioners sent was current as ofFebruary 2013 and reflected only the first three section 401(k) plan account loans.Mr. Gurule and Settlement Officer Degiovanni spoke on the telephone onApril 11, 2013. Following the telephone call, Settlement Officer Degiovannirecalculated petitioners' expenses as follows: - 12 - [*12] ExpenseClaimed1 Appeals National standard $1,021 $1,465  Housing and utilities 3,051 2,778  Vehicle ownership 420 409  Vehicle operating 632 432  Taxes (on income) 1,427 1,427  Health insurance 287 2287  Out-of-pocket health care 550 3626  Life insurance 130 130  Other secured debt -0- -0-  Additional vehicle operating -0- 400 Sec. 401(k) plan acct. loan 622 536  Total 46,664 8,490 1This column reflects the expenses that petitioners claimed*92  during the sec. 6330 hearing.2Although Mr. Gurule stated that his taxes and medical insurance costs had increased, Settlement Officer Degiovanni did not adjust these amounts because she determined that the difference was netted out by increased wages and smaller contributions to a healthcare flexible spending account.3Settlement Officer Degiovanni increased petitioners' allowable medical expenses to $626 per month, which she calculated by totaling all of the medical bills in the record and dividing by 15 months.4Settlement Officer Degiovanni's calculations and the notice of determination show an incorrect total of $6,664. The correct total is $8,140.As the table above reflects, Settlement Officer Degiovanni included a partof Mr. Gurule's payroll deduction for the section 401(k) plan account loans as anexpense when she recalculated petitioners' expenses. She allowed a $536 monthlyexpense for the section 401(k) plan account loans because Mr. Gurule's most- 13 -[*13] recent earnings statement "shows $536 being deducted". Mr. Gurule waspaid biweekly, but Settlement Officer Degiovanni allowed only $536 as Mr.Gurule's monthly expense for the section 401(k) plan account loans.Settlement Officer Degiovanni did not reduce the net realizable*93  equity inMr. Gurule's section 401(k) plan account by the amount of the third or fourthsection 401(k) plan account loan. As the case activity record explains, becausepetitioners "chose to borrow an additional amount against the equity in the IRA,knowing that they owed [F]ederal taxes, we will not now consider the additionalloan encumbrance when figuring RCP. This could also be considered a dissipatedasset." We construe this statement to mean that Settlement Officer Degiovanniconsidered the additional loan amounts to be dissipated assets.On the basis of these adjustments, Settlement Officer Degiovannidetermined that petitioners' RCP was $16,310 and their monthly net income was$171. She therefore rejected petitioners' proposed OIC of $950. She offeredpetitioners the choice of either increasing their OIC or accepting an installmentagreement with a payment of $171 per month and the filing of a notice of Federaltax lien. She also informed petitioners that they did not meet the requirements forcurrently not collectible status.- 14 -[*14] On April 18, 2013, Mr. Gurule called Settlement Officer Degiovanni topropose an installment agreement with a payment of $120 per month. Petitionersfelt this was the maximum they could*94  pay because this was the amount left in theirbank account at the end of each month. Settlement Officer Degiovanni did notaccept this amount because her financial analysis showed monthly net income of$171. Petitioners alternatively offered to increase their OIC to $6,100. SettlementOfficer Degiovanni did not accept this offer because she determined thatpetitioners' RCP exceeded this amount.Respondent sent petitioners a notice of determination on May 13, 2013,sustaining the proposed levy. The notice of determination explained the AppealsOffice's final calculations of petitioners' net realizable equity, monthly incomeand expenses, and RCP. The notice of determination further stated: "We will notconsider additional encumbrances against your 401(k), which you chose to takewhen you were aware that you had an outstanding tax liability."Because petitioners' two OIC proposals were below the calculated RCP, thenotice of determination sustained the proposed collection action by levy. Thenotice of determination also stated that the applicable law, regulations, andprocedures had been followed and that the Appeals Office balanced the need forefficient collection with petitioners' concern that the*95  collection action be no more- 15 -[*15] intrusive than necessary. However, the notice of determination did notaddress petitioners' claim of financial hardship, which they brought to theattention of the Appeals Office with their section 6330 hearing request.Settlement Officer Degiovanni's case activity report likewise does not mention thefinancial hardship claim.Petitioners timely filed a petition disputing the notice of determination onJune 12, 2013.7 After the filing of the petition, petitioners' middle son passedaway, and Mr. Gurule took out the fifth section 401(k) plan account loan to payfor the funeral services.On March 11, 2014, petitioners sent respondent an updated but unsignedForm 433-A showing increased expenses that exceeded their monthly income by$250. Petitioners also sent respondent a printout that shows, as of April 8, 2014,that Mr. Gurule was eligible to take out an additional $4,753.33 from his section401(k) plan account as a loan. If he took out an additional loan from the section7Petitioners initially elected to have this case treated under small tax case procedures. Seesec. 7463(f)(2). Before trial respondent requested by oral motion that the "S" designation be removed because, at the time the notice*96  of determination was issued, petitioners' total balance slightly exceeded the $50,000 cap on small tax cases. Seesec. 7463(a)(1), (d); Leahy v. Commissioner, 129 T.C. 71">129 T.C. 71, 76 (2007). The Court granted respondent's oral motion.- 16 -[*16] 401(k) plan account in this amount, his biweekly loan repayment wouldincrease to $816.67.OPINIONI. Section 6330 HearingUnder section 6331(a), the Secretary may levy upon property and propertyrights of a taxpayer liable for tax if the taxpayer fails to pay the tax within 10 daysafter notice and demand for payment. Section 6330(a) provides that no levy maybe made on any property or right to property of any person unless the Secretaryhas notified such person in writing of the right to a hearing before the levy ismade. Section 6330(a) and (b) and section 6331(d) provide that the Secretarymust give at least 30 days' written notice to the taxpayer of his intent to levy andmust send the taxpayer written notice of the taxpayer's right to a hearing beforethe IRS Appeals Office at least 30 days before any levy begins.If a taxpayer requests a hearing in response to a notice of intent to levypursuant to section 6330, a hearing shall be held before an impartial officer oremployee of the Appeals Office. Sec. 6330(b)(1), (3). At the hearing the taxpayermay raise any relevant issue, including appropriate spousal defenses, challenges*97  tothe appropriateness of the collection action, and collection alternatives. Sec.6330(c)(2)(A). A taxpayer is precluded from contesting the existence or amount- 17 -[*17] of the underlying tax liability unless the taxpayer did not receive a notice ofdeficiency for the liability in question or did not otherwise have an opportunity todispute the liability. Sec. 6330(c)(2)(B); see Sego v. Commissioner, 114 T.C. 604">114 T.C. 604,609 (2000). The phrase "underlying tax liability" includes the tax deficiency,additions to tax, and statutory interest. Katz v. Commissioner, 115 T.C. 329">115 T.C. 329, 339(2000).In determining whether to sustain the proposed collection action, thesettlement officer must take into account verification of the Secretary'scompliance with "the requirements of any applicable law or administrativeprocedure", the issues that the taxpayer raised at the hearing, and whether thecollection action "balances the need for the efficient collection of taxes with thelegitimate concern of the * * * [taxpayer] that any collection action be no moreintrusive than necessary." Sec. 6330(c)(1), (3); e.g., Goza v. Commissioner, 114T.C. 176, 180-181 (2000). The Court has jurisdiction to review thisdetermination. Sec. 6330(d)(1); e.g., Sego v. Commissioner, 114 T.C. at 609.Where the underlying tax liability is properly at issue, the Court reviews thedetermination de novo.*98 E.g., Goza v. Commissioner, 114 T.C. at 181-182. Wherethe validity of the underlying tax is not properly at issue, the Court reviews theCommissioner's determination for abuse of discretion. E.g., Sego v.- 18 -[*18]Commissioner, 114 T.C. at 610. The Appeals Office abuses its discretionwhen its exercise of discretion is arbitrary, capricious, or without sound basis infact or law. Murphy v. Commissioner, 125 T.C. 301">125 T.C. 301, 308, 320 (2005), aff'd, 469F.3d 27 (1st Cir. 2006); Woodral v. Commissioner, 112 T.C. 19">112 T.C. 19, 23 (1999).II. Section 6330(c)(1) RequirementsPursuant to section 6330(c)(1), the settlement officer shall "obtainverification from the Secretary that the requirements of any applicable law oradministrative procedure have been met." When the IRS has assessed additionaltax from its determination of a deficiency in the income tax that married taxpayersreported on a joint return, the settlement officer must verify each of the following:(1) either that the Commissioner mailed a valid notice of deficiency to thetaxpayers at their last known address (or addresses) or each spouse signed anappropriate waiver, secs. 6212(b), 6213; (2) that the Commissioner made a validassessment, sec. 6203; (3) that the Commissioner issued notice and demand, sec.6303; (4) that the taxpayers did not pay the liability, sec. 6331(a); and (5) that theCommissioner issued to the taxpayers notice of intent to collect the outstandingliability by levy and*99  of the taxpayers' right to a hearing, sec. 6330(a); see RonLykins, Inc. v. Commissioner, 133 T.C. 87">133 T.C. 87, 96-97 (2009); Manko v.- 19 -[*19]Commissioner, 126 T.C. 195">126 T.C. 195, 203 (2006); Freije v. Commissioner, 125 T.C.14, 35 (2005); Marlow v. Commissioner, T.C. Memo 2010-113">T.C. Memo. 2010-113.The settlement officer must verify that these requirements have beensatisfied. Sec. 6330(c)(1), (3)(A); Hoyle v. Commissioner, 131 T.C. 197">131 T.C. 197, 201-202(2008), supplemented by136 T.C. 463">136 T.C. 463 (2011). If they have not, collection cannotproceed and the settlement officer cannot sustain the proposed collection action.See Med. Practice Solutions, LLC v. Commissioner, T.C. Memo 2009-214">T.C. Memo. 2009-214. TheCourt reviews the Appeals Office's verification under section 6330(c)(1) withoutregard to whether the taxpayers raised these issues during the section 6330hearing. Hoyle v. Commissioner, 131 T.C. at 202-203.The IRS was required to send Mr. and Mrs. Gurule a notice of deficiencybefore assessing tax. Seesec. 6213(a); see also Commissioner v. Shapiro, 424U.S. 614, 616-617 (1976); Manko v. Commissioner, 126 T.C. at 200-201; Freije v.Commissioner, 125 T.C. at 34-37. However, a copy of a notice of deficiency isnot in the record. The notice of determination does not say that the Appeals Officeverified the mailing of a notice of deficiency. This is especially worrisomebecause the notice of determination specifically states that the settlement officerverified each of the other statutory requirements. Settlement Officer Degiovanni'scase activity record states that she verified that the Letter 1058 was sent to- 20 -[*20] petitioners and other procedural requirements were satisfied, but it does notindicate*100  that she verified that an appropriate notice of deficiency was mailed topetitioners at their last known address.The only possible reference to a notice of deficiency appears in the casehistory transcript, which has an entry for a "STAT NOTICE" on August 1, 2011.The case history transcript does not indicate when, if ever, the Commissionermailed this notice to petitioners. Because multiple notices required by applicableCode provisions and related regulations must be sent to taxpayers before andduring the collection process, the Court cannot tell whether the "STAT NOTICE"entry refers to the mailing of a notice of deficiency. On the basis of the limitedrecord before us, the Court cannot determine whether Settlement OfficerDegiovanni verified that the IRS properly mailed a notice of deficiency topetitioners. We may remand when the Appeals officer did not develop a recordsufficient for judicial review. See Hoyle v. Commissioner, 131 T.C. at 204-205;Churchill v. Commissioner, T.C. Memo. 2011-182. Accordingly, we will remandthis case to the Appeals Office for it to clarify the record as to whether it verifiedthat a notice of deficiency was properly sent to petitioners at their last knownaddress and, if so, on what it relied to do so.- 21 -[*21]III.Section 6330(c)(2) RequirementsOnce the settlement*101  officer verifies that the applicable law andadministrative procedures have been followed, the settlement officer mustconsider any relevant issue that the taxpayer has raised relating to the unpaid taxor the proposed levy. Sec. 6330(c)(2); see Sego v. Commissioner, 114 T.C. at608-609. Petitioners argue that Settlement Officer Degiovanni did not properlyaddress the issues they raised in the section 6330 hearing. We cannot determineon the basis of the record before us whether the settlement officer properlyconsidered the issues petitioners raised in the section 6330 hearing.A. Economic Hardship and Necessary Living ExpensesPetitioners assert that the proposed collection action should not proceedbecause they are experiencing economic hardship and the equity in their onlymeaningful asset, Mr. Gurule's section 401(k) plan account, is needed as a sourcefor loans to pay necessary living expenses. Section 6343(a)(1)(D) directs theCommissioner to release a levy upon all, or part of, a taxpayer's property if hedetermines that a levy would cause economic hardship to the taxpayer. A levycauses "economic hardship" when the taxpayer would be unable to pay reasonablebasic living expenses, according to the taxpayer's complete and current financialinformation, if a levy were*102  made. Washington v. Commissioner, 120 T.C. 137">120 T.C. 137,- 22 -[*22] 149-150 (2003); sec. 301.6343-1(b)(4)(i), Proced. & Admin. Regs.; seesec.301.6343-1(b)(4)(ii), Proced. & Admin. Regs. (outlining what constitutes basicliving expenses and including any "factor that the taxpayer claims bears oneconomic hardship and brings to the attention of the director"). By extension, thesettlement officer in a section 6330 hearing may not proceed with a proposed levywhen a taxpayer establishes that it would create an economic hardship becausesection 6343 would require the levy's immediate release. Vinatieri v.Commissioner, 133 T.C. 392">133 T.C. 392, 400, 402 (2009) ("Proceeding with the levy wouldbe unreasonable because section 6343 would require its immediate release, and thedetermination to do so was arbitrary."). Instead, the settlement officer "mustconsider an alternative." Id. at 401.Beyond this statutory requirement, the IRS has implemented its ownprocedures that restrict the levying upon retirement accounts because they arespecifically intended for a taxpayer's future welfare. The Internal RevenueManual (IRM) has a three-step procedure for levying upon retirement accountsand instructs IRS employees to levy upon these accounts only if (1) a taxpayer'sconduct has been flagrant8 and (2) the taxpayer does not depend on the funds in8Examples of flagrant conduct*103  include, among others, (1) reliance on frivolous arguments, (2) voluntary contributions to retirement accounts when tax(continued...)- 23 -[*23] the account to pay necessary living expenses, taking into account any specialcircumstances such as extraordinary expenses.9 IRM pt. 5.11.6.2 (Dec. 2, 2011);see Wadleigh v. Commissioner, 134 T.C. 280">134 T.C. 280, 294-296 (2010) (discussing theIRM provision that addresses the Commissioner's ability to levy upon retirementaccounts).Petitioners wrote "[c]ollection will cause a hardship" on their section 6330hearing request and provided documents supporting this claim. Settlement OfficerDegiovanni was aware that Mrs. Gurule and petitioners' middle son suffered fromsevere medical conditions that left them with high medical bills every month.Petitioners had borrowed against Mr. Gurule's section 401(k) plan account, their8(...continued)is due, (3) conviction for tax evasion for the liability, (4) assessment of a fraud penalty with respect to the liability, and (5) a demonstrated pattern of uncooperative or unresponsive behavior. IRM pt. 5.11.6.2(6) (Dec. 2, 2011).9The Commissioner's internal procedures, as reflected in the IRM, do not have the force of law, and deviation from them does not necessarily render the Commissioner's action invalid.*104 Vallone v. Commissioner, 88 T.C. 794">88 T.C. 794, 807-808 (1987). Nevertheless, the IRM can be persuasive authority, see Atchison v.Commissioner, T.C. Memo. 2009-8, and a review of relevant IRM provisions is instructive in ascertaining the procedures the IRS expects its employees to follow, see Wadleigh v. Commissioner, 134 T.C. 280">134 T.C. 280, 294 & n.13 (2010) (reviewing relevant IRM provisions to determine procedures that IRS employees are expected to follow when deciding whether to levy upon a taxpayer's retirement account); see also Fairlamb v. Commissioner, T.C. Memo. 2010-22 (stating that a settlement officer's "determination * * * [that is] based wholly on misapplication of internal procedures, cannot be said to have a sound basis in law or fact").- 24 -[*24] only asset with a positive net realizable equity according to the notice ofdetermination, to pay basic living expenses such as moving and medical expenses.Petitioners took out two of the five section 401(k) plan account loans during thecourse of the section 6330 hearing and promptly notified Settlement OfficerDegiovanni by letter after each loan. The chronic nature of the medical conditionssuggested that medical bills would continue to accumulate. Yet the notice ofdetermination and Settlement Officer Degiovanni's case notes do not show thatthe Appeals Office ever considered, much less made a determination about,petitioners' economic hardship claim. The administrative*105  record also does notshow that Settlement Officer Degiovanni considered or followed the three-stepprocess for levying upon retirement accounts pursuant to the IRM even though shewas aware that petitioners were using the section 401(k) plan account to paynecessary living expenses.10 On the basis of the record before us, we cannotdetermine whether Settlement Officer Degiovanni abused her discretion by10The notice of determination does not specifically state that petitioners' sec. 401(k) plan account will be levied upon, yet this was the only asset with positive net equity listed in the notice of determination's asset equity table. Of petitioners' total calculated RCP of $16,310, only $2,052 was attributable to future income while the remaining $14,258 was attributable to petitioners' sec. 401(k) plan account.- 25 -[*25] upholding the proposed levy notwithstanding petitioners' economic hardshipclaim.B. Petitioners' Proposed Collection AlternativesAssuming arguendo that petitioners' economic hardship claim does not barcollection action entirely, we address Settlement Officer Degiovanni'sdetermination to reject petitioners' proposed collection alternatives. Petitionersfirst proposed an OIC of $950 and later increased the amount*106  to $6,100 after theAppeals Office rejected the first offer. Petitioners also proposed an installmentagreement with a payment of $120 per month. Settlement Officer Degiovannirejected the offers because they fell below petitioners' calculated RCP (for theOIC) and monthly net income (for the installment agreement). Petitioners contendthat the settlement officer incorrectly calculated their RCP and/or monthly netincome by either (1) not reducing the section 401(k) plan account's net realizableequity by the amounts of the additional loans petitioners took out during thesection 6330 hearing or (2) failing to reduce petitioners' monthly income by theamounts of the loan payments to the section 401(k) plan account.11 Petitioners11In the petition, petitioners stated that Settlement Officer Degiovanni would not allow all of their current medical expenses in the calculation of their monthly net income. Settlement Officer Degiovanni allowed petitioners' medical expenses of $550 as stated on their Form 433-A plus an additional $76 per month on the(continued...)- 26 -[*26] also assert that their RCP has changed since the time of the settlementofficer's determination because of their middle son's death.1. Collection Alternatives Generally*107 During the course of a section 6330 hearing taxpayers may proposecollection alternatives such as an OIC or an installment agreement. Sec.6330(c)(2)(A)(iii); Giamelli v. Commissioner, 129 T.C. 107">129 T.C. 107, 112 n.3 (2007).Pursuant to section 7122(a) the Secretary may compromise any civil orcriminal case arising under the internal revenue laws before its referral to theDepartment of Justice. Section 7122(d) authorizes the Secretary to prescribeguidelines for officers and employees of the IRS to determine whether an OIC isadequate and should be accepted. Accordingly, we generally uphold the rejectionof an OIC when the Appeals Office has followed the IRM. See, e.g., Churchill v.Commissioner, T.C. Memo. 2011-182, 102 T.C.M. (CCH) 116">102 T.C.M. (CCH) 116, 117 (2011);11(...continued)basis of medical records they provided during the sec. 6330 hearing. Because the administrative record demonstrates that Settlement Officer Degiovanni allowed all of the medical expenses that petitioners claimed, it appears that the Appeals Office did not abuse its discretion in considering this medical expense issue. SeeJohnson v. Commissioner, T.C. Memo. 2007-29 (holding that the Appeals Office properly considered the taxpayer's current medical expenses in calculating RCP when it allowed the full amount of medical expenses that he had claimed), aff'd inrelevant part sub nom. Keller v. Commissioner, 568 F.3d 710">568 F.3d 710, 718 (9th Cir. 2009). Petitioners conceded this issue at trial.- 27 -[*27]Atchison v. Commissioner, T.C. Memo. 2009-8, 97 T.C.M. (CCH) 1034">97 T.C.M. (CCH) 1034,1036 (2009).Petitioners*108  do not challenge the existence or amount of the underlyingliability. Their challenge focuses on their claimed inability to pay and theirdifficult financial circumstances.The Commissioner may accept an OIC of a Federal tax debt on the groundsof "Doubt as to collectibility", among others. Sec. 301.7122-1(b)(1), (2), and (3),Proced. & Admin. Regs. In making a determination regarding collectibility, theSecretary must calculate a taxpayer's ability to pay. Id. para. (c)(2). Generally,this type of OIC will be accepted only if the amount offered equals or exceeds thetaxpayer's RCP; i.e., the amount that the IRS could collect through other meanssuch as administrative and judicial collection remedies. Rev. Proc. 2003-71, sec.4.02(2), 2 C.B. 517">2003-2 C.B. 517, 517; see IRM pt. 5.8.1.1.3 (Mar. 16, 2010). The IRMsets forth procedures for analyzing a taxpayer's financial condition to determinethe taxpayer's RCP. See IRM pt. 5.8.5.1 (Sept. 23, 2008). A taxpayer's RCP isgenerally defined as the sum of (1) the taxpayer's net realizable equity in assets(net realizable equity) and (2) the amount collectible from the taxpayer's expectedfuture income after allowing for payment of necessary living expenses. Id. pt.5.8.4.3.1 (June 1, 2010); seesec. 301.7122-1(c)(2)(i), Proced. & Admin. Regs.- 28 -*109 [*28] (stating that the Secretary is required to "permit taxpayers to retain sufficientfunds to pay basic living expenses").Sec. 6159(a) authorizes the Secretary to enter into an installment agreementupon determining that the proposed agreement would facilitate full or partialcollection of the taxpayer's liability. An installment agreement generally does notreduce the amount of taxes, interest, or penalties that the taxpayer owes but ratherallows the taxpayer to pay the liability over time. Seesec. 301.6159-1(c)(1)(ii),Proced. & Admin. Regs. The decision to accept or reject installment agreementslies within the discretion of the Commissioner. Thompson v. Commissioner, 140T.C. 173, 179 (2013) (citing section 301.6159-1(a), (c)(1)(i), Proced. & Admin.Regs.). If a settlement officer follows all statutory and administrative guidelinesand provides a reasoned and balanced decision, the Court will not reweigh theequities. Id.; Lipson v. Commissioner, T.C. Memo 2012-252">T.C. Memo. 2012-252, at *9 (citing FiftyBelow Sales & Mktg., Inc. v. United States, 497 F.3d 828">497 F.3d 828, 830 (8th Cir. 2007)).IRM pt. 5.14.1.4(4) (June 1, 2010) states: "Installment agreements mustreflect taxpayers' ability to pay on a monthly basis throughout the duration ofagreements." A taxpayer's ability to pay is determined by comparing his monthlyincome to allowable expenses. Thompson v. Commissioner, 140 T.C. at 179-180(discussing allowable monthly expenses); Friedman v. Commissioner*110 , T.C. Memo.- 29 -[*29] 2013-44, at *9. In reviewing for abuse of discretion the Court ordinarilydoes not recalculate a taxpayer's ability to pay nor substitute its judgment for thatof the settlement officer. See, e.g., Boulware v. Commissioner, T.C. Memo. 2014-80.2. Settlement Officer Degiovanni's Calculation of Petitioners' Ability To PayPetitioners contend that Settlement Officer Degiovanni did not properlyaccount for Mr. Gurule's section 401(k) plan account loans in calculating theirability to pay, whether by reducing the net realizable equity of the section 401(k)plan account or by reducing their monthly net income by the amounts of the loanpayments. Respondent contends that petitioners are not entitled to any adjustmentto their monthly net income because petitioners are essentially repaying a loan tothemselves and allowing an adjustment would result in double counting thesection 401(k) plan account encumbrances. Respondent further avers thatpetitioners may not receive a reduction in the net realizable equity of the section401(k) plan account because the additional loans Mr. Gurule took are "dissipatedassets".Initially, before Mr. Gurule took out the additional loans, Settlement OfficerDegiovanni calculated the net realizable equity of Mr. Gurule's section 401(k)- 30 -[*30]*111  plan account by reducing its cash value by encumbrances (the first twosection 401(k) plan account loans) and tax consequences. See IRM pt. 5.8.5.9(Oct. 22, 2010). However, Settlement Officer Degiovanni determined not toreduce the section 401(k) plan account's net realizable equity by the amounts ofthe two additional loans because "[w]e will not consider additional encumbrancesagainst your 401(k), which you chose to take when you were aware that you hadan outstanding tax liability."Although the settlement officer did not further reduce the net realizableequity of the section 401(k) plan account, she allowed a $536 monthly expense forMr. Gurule's section 401(k) plan account loan payments. This allowance reducedpetitioners' calculated monthly net income. Respondent contends that thisadjustment favored petitioners because ordinarily loan payments to a retirementaccount are not allowable as an expense in calculating RCP, as retirement accountloan payments are essentially moving a taxpayer's money from one account toanother. See id. pt. 5.8.5.20.4(9) (Oct. 22, 2010). However, Settlement OfficerDegiovanni determined it was appropriate to include the loan payments inpetitioners' RCP because the loans originated, at least in part, to pay necessary*112 medical expenses.- 31 -[*31] According to the case activity report, Settlement Officer Degiovanniallowed petitioners a monthly expense of $536 for the loan payments on the basisof Mr. Gurule's earnings statement that petitioners provided.12 However, therecord establishes that Mr. Gurule was paid biweekly for all relevant periods. Theearnings statements on which Settlement Officer Degiovanni relied reflectedbiweekly earnings and not monthly earnings.In sum, after Mr. Gurule took out the third section 401(k) plan account loan,Settlement Officer Degiovanni did not adjust the net realizable equity of thesection 401(k) plan account for the balance remaining on the section 401(k) planaccount loans or adjust petitioners' monthly net income by the full amount of theloan payment per month. Thus, it appears that Settlement Officer Degiovanni mayhave made a material error in calculating petitioners' RCP.In at least one instance, the IRM sanctions the use of an inflated RCP forpublic policy reasons. A dissipated asset is any asset, liquid or illiquid, that has12Although petitioners told Settlement Officer Degiovanni that Mr. Gurule's loan payment had increased from $536 to $622 "coming out of each paycheck", she did not abuse her discretion*113  by relying on the then-outdated earnings statement because petitioners did not provide any updated documents showing the new amount. See Etkin v. Commissioner, T.C. Memo. 2005-245 (holding that an Appeals officer did not abuse his discretion when taxpayers did not provide updated financial information showing a change in circumstances); see also Orumv. Commissioner, 123 T.C. 1">123 T.C. 1, 13 (2004), aff'd, 412 F.3d 819">412 F.3d 819 (7th Cir. 2005).- 32 -[*32] been sold, transferred, or spent on nonpriority items or debts so that it is nolonger available to pay a tax liability. Johnson v. Commissioner, 136 T.C. 475">136 T.C. 475,487 (2011), aff'd without published opinion, 502 Fed. Appx. 1">502 Fed. Appx. 1 (D.C. Cir. 2013).The IRM instructs that a dissipated asset may be included in the RCP calculationeven though it is no longer at the taxpayer's disposal as a way to discouragedelinquent taxpayers from squandering money instead of paying taxes. Id.; IRMpt. 5.8.5.16(3) (Oct. 22, 2010); see, e.g., Tucker v. Commissioner, 676 F.3d 1129">676 F.3d 1129,1135 (D.C. Cir. 2012), aff'g135 T.C. 114">135 T.C. 114 (2010), and aff'gT.C. Memo 2011-67">T.C. Memo. 2011-67.Settlement Officer Degiovanni's case notes indicate that she did not reducepetitioners' calculated RCP by the total amount of the additional section 401(k)plan account loans because she considered that amount to be a dissipated asset.The IRM states that dissipated assets should not automatically be includedin the RCP calculation. See IRM pt. 5.8.5.16(1); id. pt. 8.23.3.3.2.3(2) (Oct. 14,2011). The*114  IRM lists factors that the Appeals Office should analyze whendeciding whether to include dissipated assets in the RCP calculation.13 The IRM13The factors to be evaluated are (1) when the assets were dissipated in relation to the offer submission, (2) whether the assets were used to pay for existing ongoing business operating expenses, (3) when the assets were dissipated in relation to the liability, (4) how the assets were transferred, (5) whether the taxpayer realized any funds from the transfer of assets, (6) how any funds realized from the disposition of assets were used, and (7) the value of the assets and the(continued...)- 33 -[*33] also states: "When it can be shown through internal research orsubstantiation provided by the taxpayer that the funds were needed to provide fornecessary living expenses, these amounts should not be included in the RCPcalculation." Id. pt. 5.8.5.16(5); see also Layton v. Commissioner, T.C. Memo.2011-194; IRM pt. 8.23.3.3.2.3(5). Further, "[i]nclusion of the value of dissipatedassets must clearly be justified in the case file and documented on the ICS orAOIC history, as appropriate."14 IRM pt. 5.8.5.16(4), (10).The administrative record does not establish*115  that Mr. Gurule took out theadditional section 401(k) plan account loans intending to disregard the outstandingtax liability, see IRM pt. 5.8.5.16(7), or that the loans otherwise qualify asdissipated assets that should be included in the RCP calculation. In any event,Settlement Officer Degiovanni's decision to treat the additional loan encumbrance13(...continued)taxpayer's interest in those assets. IRM pt. 5.8.5.16(4) (Oct. 22, 2010).14The IRM instructs the Appeals Office to consider, but does not mandate, including dissipated assets in the RCP calculation when an investigation clearly reveals that assets have been dissipated with a disregard of the outstanding tax liability. IRM pt. 5.8.5.16(7); see also Tucker v. Commissioner, 676 F.3d 1129">676 F.3d 1129, 1135-1136 (D.C. Cir. 2012), aff'g135 T.C. 114">135 T.C. 114 (2010), and aff'gT.C. Memo 2011-67">T.C. Memo. 2011-67. Examples of when dissipated assets may result in an RCP increase include dissolving an IRA account to pay for a child's wedding or a vacation and selling real estate and gifting the proceeds to family members. IRM pt. 5.8.5.16(7), ex. 1.- 34 -[*34] as a dissipated asset was not clearly justified in the case file. SettlementOfficer Degiovanni included the purported dissipated asset in the RCP calculation,but it is unclear to what extent she considered petitioners' unique circumstances*116  orany of the factors that the IRM instructs the Appeals Office to consider. See id. pt.5.8.5.16(1) ("The value of dissipated assets should not automatically be includedin the calculation of the RCP. Each particular case must be evaluated on its ownmerit."); id. pt. 5.8.5.16(4); see also Titsworth v. Commissioner, T.C. Memo.2012-12, slip op. at 18-19 ("Whether to include dissipated assets in a taxpayer'sRCP is not an automatic determination but must be evaluated on the basis of thefacts and circumstances of each case in the light of certain enumerated factors [inthe IRM]."). The case activity report and the notice of determination summarilystate that this amount is included in the RCP calculation because Mr. Gurule tookout the loans when petitioners knew of their outstanding Federal tax liability.Especially considering that the subsequent loans appear to have been used to paynecessary living expenses, we cannot properly review Settlement OfficerDegiovanni's conclusion and evaluate its impact on the Appeals Office'sdetermination with the cursory explanation in the administrative record. See IRMpt. 5.8.5.16(4) and (5); see also Jones v. Commissioner, T.C. Memo 2012-274">T.C. Memo. 2012-274, at*32; Tucker v. Commissioner, T.C. Memo. 2011-67 (holding that the RCP- 35 -[*35] calculation should not include*117  the entire amount the taxpayer placed in hisday trading account as a dissipated asset if he later withdrew half the amount topay for basic living expenses).Because the administrative record does not fully and clearly explainSettlement Officer Degiovanni's treatment of the additional section 401(k) planaccount loans, we cannot determine whether she calculated petitioners' RCPcorrectly at the time of the section 6330 hearing. Moreover, Settlement OfficerDegiovanni's calculation of petitioners' ability to pay also affected herdetermination to reject petitioners' proposed installment agreement with apayment of $120 per month. See IRM pt. 5.14.1.4(4). Although we do notsubstitute our judgment for that of the Appeals Office in calculating a taxpayer'sability to pay when the Appeals Office rejects an installment agreement, see, e.g.,Boulware v. Commissioner, T.C. Memo. 2014-80, we can consider whether theAppeals Office's decision to reject an installment agreement was the result of afailure to properly consider the taxpayers' financial information in the record.Because the record does not permit us to do so, a remand is appropriate.A remand may also be appropriate when a taxpayer has experienced amaterial change in circumstances between the time of the section 6330 hearing*118  andthe trial that affects the RCP calculation. Leago v. Commissioner, T.C. Memo.- 36 -[*36] 2012-39;Churchill v. Commissioner, T.C. Memo. 2011-182 (remanding tothe Appeals Office when the taxpayer's RCP had changed as a result of hisdivorce); see INS v. Ventura, 537 U.S. 12">537 U.S. 12, 14-18 (2002); SKF USA, Inc. v. UnitedStates, 254 F.3d 1022">254 F.3d 1022, 1028 (Fed. Cir. 2001); Harrell v. Commissioner, T.C.Memo. 2003-271 (remanding when a Supreme Court case decided after the noticeof determination resolved a relevant question about equitable tolling). Petitioners'middle son passed away in August 2013 after the notice of determination wasissued. This tragic event constitutes a material change of circumstances forpetitioners, who had to take out a fifth section 401(k) plan account loan to pay hisfinal expenses and who are still unable to pay for the placement of his ashes in amausoleum. These additional costs could have affected petitioners' RCP and theirability to pay their tax liability. On remand the Appeals Office is directed toconsider updated financial information that petitioners should provide todocument any change in their ability to pay resulting from their middle son'sdeath.3. Special CircumstancesThe IRS may accept an OIC on the basis of doubt as to collectibility whenthe offer is less than the RCP if there are "special circumstances".*119  Rev. Proc.2003-71, sec. 4.02(2); see Fairlamb v. Commissioner, T.C. Memo. 2010-22. For- 37 -[*37] this purpose, special circumstances are: (1) circumstances demonstratingthat the taxpayer would suffer economic hardship if the IRS were to collect fromhim an amount equal to the RCP and (2) compelling public policy or equityconsiderations that provide sufficient basis for compromise. See Murphy v.Commissioner, 125 T.C. at 309; McClanahan v. Commissioner, T.C. Memo. 2008-161; IRM pt. 5.8.4.2(4) (June 1, 2010) (stating that the factors establishing specialcircumstances for doubt as to collectibility are the same as those considered undereffective tax administration); IRM pt. 5.8.11.2(2)(b) (Sept. 23, 2008). Factorsindicating economic hardship include, but are not limited to, (1) the taxpayer'slong-term illness, medical condition, or disability that renders him incapable ofearning a living, where it is "reasonably foreseeable that taxpayer's financialresources will be exhausted providing for care and support during the course ofthe condition"; (2) the taxpayer's monthly income is exhausted each month inproviding for care of dependents without other means of support; and (3) thetaxpayer is unable to borrow against the equity in assets and liquidation of thoseassets to pay a tax liability would render the taxpayer*120  unable to meet basic livingexpenses. Sec. 301.7122-1(c)(3)(i), Proced. & Admin. Regs.; IRM pt.5.8.11.2.1(6) (Sept. 23, 2008).- 38 -[*38] Our analysis here closely tracks our analysis of petitioners' economichardship claim supra. The record does not show whether Settlement OfficerDegiovanni considered accepting petitioners' OIC on the basis of doubt as tocollectibility with special circumstances. See IRM pt. 5.8.11.4(2) (Sept. 23, 2008)(instructing IRS employees to consider a taxpayer's OIC under doubt as tocollectibility with special circumstances when the taxpayer's RCP does not exceedthe tax liability and special circumstances exist). The notice of determinationstates: "The IRS cannot compromise tax liabilities for less than the amountdetermined to be reasonably collectible. Your Offer in Compromise was rejected."Settlement Officer Degiovanni knew that Mrs. Gurule could not work because ofher neurological condition, and she also knew that Mr. Gurule had to take severalsection 401(k) plan account loans to pay their son's medical expenses and otherbasic living expenses. Even though Mr. Gurule had positive net realizable equityin his section 401(k) plan account at that time, it was quickly being depleted topay basic expenses. Yet the notice of determination suggests*121  that the AppealsOffice rejected petitioners' OIC pro forma because the offer fell below thecalculated RCP. We cannot determine whether the Appeals Office gave dueregard to potential special circumstances before rejecting the offer. See Andersonv. Commssioner, T.C. Memo. 2013-261 (remanding when it was unclear whether- 39 -[*39] the settlement officer properly considered the taxpayer's health in rejectingthe taxpayer's OIC with special circumstances); Leago v. Commissioner, T.C.Memo. 2012-39 (same); see also Antioco v. Commissioner, T.C. Memo. 2013-35(remanding when the settlement officer did not meaningfully consider thetaxpayer's special circumstances before rejecting her proposed installmentagreement).IV. ConclusionIn the light of the inadequacy of the administrative record and the reasonsstated for rejecting petitioners' proposed collection alternatives, we are unable toconclude whether it was an abuse of discretion for respondent to determine toproceed with the proposed collection action for petitioners' 2009 tax liability.Because a remand would be "helpful", "necessary", or "productive", see Kelby v.Commissioner, 130 T.C. 79">130 T.C. 79, 86 n.4 (2008); Lunsford v. Commissioner, 117 T.C.183, 189 (2001); Churchill v. Commissioner, T.C. Memo 2011-182">T.C. Memo. 2011-182, we willremand the case to the Appeals Office for further consideration and clarification.Upon remand*122  the Appeals Office shall consider any additional information orevidence that petitioners may wish to submit, any new collection alternative thatpetitioners may wish to propose, and any asserted change in circumstances.- 40 -[*40] We have considered the parties' remaining arguments and, to the extent notdiscussed above, conclude that those arguments are irrelevant, moot, or withoutmerit. For the reasons identified above, we will remand this case to the AppealsOffice for further proceedings consistent with this opinion.To reflect the foregoing,An appropriate order will be issued.