Court Opinion

ID: 9868907
Source: CourtListenerOpinion
Date Created: 2023-09-26 19:04:37.138792+00
Date Added: 2024-06-11T12:31:36.530475
License: Public Domain

United States Tax Court

                               T.C. Memo. 2023-119

                 FARID RAFIEE AND MISUK P. RAFIEE,
                             Petitioners

                                           v.

               COMMISSIONER OF INTERNAL REVENUE,
                           Respondent

                                     —————

Docket No. 8800-21L.                                    Filed September 26, 2023.

                                     —————

Alissa S.L. Gipson and Renesha N. Fountain, for petitioners.

Courtney M. Hill and Gordon P. Sanz, for respondent.

                          MEMORANDUM OPINION

        LAUBER, Judge: In this collection due process (CDP) case peti-
tioners seek review pursuant to section 6330(d)(1) 1 of the determination
by the Internal Revenue Service (IRS or respondent) to uphold the filing
of a notice of intent to levy. The notice relates to petitioners’ income tax
liability for tax years 2009 and 2010. Respondent has filed a Motion for
Summary Judgment under Rule 121, contending that there are no dis-
putes of material fact and that the settlement officers did not abuse their
discretion in sustaining the proposed levy. We agree and accordingly
will grant the Motion.

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

Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the
Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and
Rule references are to the Tax Court Rules of Practice and Procedure. We round all
monetary amounts to the nearest dollar.

                                 Served 09/26/23
                                           2

[*2]                                Background

       The following facts are derived from the parties’ pleadings, Mo-
tion papers, Declarations, and attached Exhibits, which include the ad-
ministrative record of the CDP proceeding. See Rule 121(c). Petitioners
resided in Alabama when they timely filed their Petition.

       At relevant times petitioner husband was the chief operating of-
ficer of an international company. The IRS examined petitioners’ joint
Federal income tax returns for 2009 and 2010 and sent them a timely
notice of deficiency. After the case was docketed, the parties executed a
Stipulated Decision in which they agreed that there were deficiencies of
$3,050,797 and $1,228,352, and accuracy-related penalties of $457,620
and $184,253, due from petitioners for 2009 and 2010, respectively. The
Court entered a Decision to that effect in 2016. Rafiee v. Commissioner,
Docket No. 20261-15 (Oct. 31, 2016). 2

       The IRS assessed petitioners’ 2009 and 2010 liabilities as rede-
termined in our Decision. Petitioners did not pay those liabilities upon
notice and demand for payment. As of September 2019 their total un-
paid liability for these years exceeded $6.54 million.

        On August 23, 2019, in an attempt to collect these unpaid liabili-
ties, the IRS mailed petitioners a Letter 1058, Final Notice of Intent to
Levy and Notice of Your Right to a Hearing (levy notice). Through their
counsel petitioners timely requested a CDP hearing, checking the boxes
marked “Installment Agreement,” “Offer in Compromise,” and “I Cannot
Pay Balance.” Petitioners alleged that they “d[id] not have sufficient
liquid assets to satisfy this liability all at once” and requested a face-to-
face (FTF) hearing.

       Petitioners’ case was assigned to a settlement officer (SO1) in the
IRS Independent Office of Appeals (Appeals) in Boston, Massachusetts.
SO1 verified that the 2009–2010 liabilities had been properly assessed
and that all requirements of applicable law and administrative proce-
dure had been satisfied. After reviewing IRS records, SO1 ascertained
that petitioners were not in compliance with their tax filing obligations.
As of January 15, 2020, they had not filed a Federal income tax return
for 2018. And although they were “historically . . . required” to pay es-
timated tax, they had made no estimated tax payments for 2018 or 2019.

       2 The notice of deficiency referenced in the text also determined a deficiency for

2011. That liability is not the subject of any collection action in this case.
                                         3

[*3] On January 15, 2020, SO1 sent petitioners and their representa-
tive a letter scheduling a telephone conference for February 25, 2020.
SO1 informed petitioners that, in order for him to consider a collection
alternative, they needed to supply before the hearing (1) a completed
Form 433–A, Collection Information Statement for Wage Earners and
Self-Employed Individuals, with supporting financial information; (2) a
completed Form 656, Offer in Compromise; (3) a signed tax return for
2018; and (4) “[p]roof you paid your estimated tax payments in full for
the year to date.” SO1 explained that he was requesting a signed copy
of petitioners’ 2018 tax return because IRS “records show that [it] has
not been filed.” On January 28, 2020, petitioners’ representative reiter-
ated their request for an FTF hearing, but SO1 demurred because peti-
tioners did not meet the eligibility criteria the IRS has established for
such conferences.

       On February 24, 2020, the day before the scheduled conference,
petitioners’ representative sent SO1 a completed Form 433–D, Install-
ment Agreement, proposing monthly payments of $166,666 beginning
April 28, 2020. Petitioners’ representative expressed his understanding
that the delinquent 2018 return would soon be filed, but he did not ad-
dress petitioners’ continued failure to make estimated tax payments.
Petitioners did not supply before the conference a completed Form
433–A, nor did they propose an offer-in-compromise (OIC).

       The telephone conference took place as scheduled. Petitioners’
representative stated his belief that petitioners had filed their 2018 tax
return within the preceding 24 hours. 3 But SO1 noted that petitioners
still had not supplied a completed Form 433–A or proof that they were
current on their estimated tax obligations. Petitioners’ representative
requested additional time to submit that information, and SO1 set a
deadline of March 10, 2020, for doing so.

       On March 6, 2020, petitioners sent SO1 an unsigned copy of their
2018 return, which reported adjusted gross income of $3,845,168. Four
days later, petitioners’ counsel requested another two-week extension to
supply the information SO1 had requested. SO1 agreed and extended
the deadline to March 25, 2020. He later extended the deadline again
to April 10, 2020.

        3 Petitioners’ account transcript for 2018 shows that the IRS Service Center

received their 2018 return on February 25, 2020, and processed it on March 23, 2020.
                                         4

[*4] On April 24, 2020, SO1 received from petitioners’ representative
a completed Form 433–A and a chart of expenses, but no proof of esti-
mated tax payments. The assets listed on the Form 433–A included an
ownership share of a limited liability company (LLC) valued at $5.7 mil-
lion (with $2.4 million in equity), a primary residence valued at $2.2
million (with $400,000 in equity), a condominium valued at $790,000
(with $115,000 in equity), a rental property valued at $121,000 (with
$121,000 in equity), land in Hawaii valued at $400,000 (with $400,000
in equity), and six vehicles, including four Mercedes Benzes and a Fer-
rari. Petitioners’ representative subsequently submitted more than 700
pages of bank records and other financial information. SO1 was unable
to retrieve or review these documents because of office closures related
to the COVID-19 pandemic.

        On August 24, 2020, the case was reassigned to a new settlement
officer (SO2). After retrieving the documents referenced above, SO2 de-
cided to submit an Appeals Referral Investigation (ARI) request to the
IRS Collection Division. 4 On September 9, 2020, SO2 forwarded an ARI
request and petitioners’ Form 433–A with supporting documents to his
Appeals Team Manager (ATM) for transmission to the Collection Divi-
sion.

       As of January 25, 2021, SO2 had received no response from the
Collection Division. He noted in his case activity record that petitioners
had not filed a tax return for 2019 and had made no estimated tax pay-
ments for the current year. 5 On the basis of petitioners’ Form 433–A,
SO2 determined that they were ineligible for currently not collectible
(CNC) status.

      SO2 confirmed that notice and demand for payment had been
sent to petitioners’ last known address and verified that all require-
ments of applicable law and administrative procedure had been satis-
fied. He concluded that petitioners were ineligible for an OIC because
they had made no such offer and had not submitted a Form 656.
Although petitioners had proposed an IA, SO2 concluded that they were

       4 An ARI may be used to verify a taxpayer’s collection information statement

(CIS) in various circumstances, including when the taxpayer proposes an installment
agreement (IA) and “provides a new CIS to Appeals that requires verification.” Inter-
nal Revenue Manual (IRM) 8.22.7.4(1) (Aug. 26, 2020).
         5 Because of the COVID pandemic, the IRS extended the filing deadline for

2019 tax returns to July 15, 2020. It also granted taxpayers who needed more time to
file an opportunity to extend to October 15, 2020. See I.R.S. Notice 2020-18, 2020-15
I.R.B. 590 (2020); I.R.S. News Release IR-2020-134 (June 29, 2020).
                                    5

[*5] ineligible for one because they were “not in filing compliance,” not-
ing both their failure to file a 2019 return and their failure to make re-
quired payments of estimated tax for the current year. Finally, SO2
determined that petitioners did not qualify for CNC status because they
had “equity in assets and have not shown that liquidation of the assets
would cause a hardship.”

        Recommending that the levy notice be sustained, SO2 forwarded
a draft notice of determination and closing documents to his ATM for
approval. The ATM approved SO2’s recommendation to sustain the
levy. On February 8, 2021, Appeals sent petitioners two identical no-
tices of determination (one addressed to each spouse) sustaining the
levy. Each notice informed petitioners that “you are not in filing com-
pliance and a collection alternative could not be granted or approved at
this time.” With respect to their request for CNC status, each notice
advised that “[t]he Form 433A reflected ability to pay the [2009–2010]
liabilities in full.”

       On March 10, 2021, petitioners timely petitioned this Court, con-
tending that the SOs abused their discretion by (among other things)
declining the request for an FTF hearing and rejecting the proposed IA
and request for CNC status. On April 26, 2023, respondent filed a Mo-
tion for Summary Judgment, to which petitioners timely responded.

                               Discussion

I.    Summary Judgment

       The purpose of summary judgment is to expedite litigation and
avoid costly, unnecessary, and time-consuming trials. See FPL Grp.,
Inc. & Subs. v. Commissioner, 116 T.C. 73, 74 (2001). We may grant
summary judgment when there is no genuine dispute as to any material
fact and a decision may be rendered as a matter of law. Rule 121(a)(2);
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17
F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judg-
ment, we construe factual materials and inferences drawn from them in
the light most favorable to the nonmoving party. Sundstrand Corp., 98
T.C. at 520. Where the moving party makes and properly supports a
motion for summary judgment, “the nonmovant may not rest on the al-
legations or denials in that party’s pleadings” but must set forth specific
facts, by affidavit or otherwise, showing that there is a genuine dispute
for trial. Rule 121(d). We find that there exist no genuine disputes of
material fact and that summary adjudication is appropriate.
                                    6

[*6] II.    Standard of Review

        Section 6330(d)(1) does not prescribe the standard of review that
this Court should apply in reviewing an IRS administrative determina-
tion in a CDP case. The general parameters for such review are marked
out by our precedents. Where the taxpayer’s underlying tax liability is
properly at issue, we review the IRS’s determination de novo. Sego v.
Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C.
176, 181–82 (2000). Where the validity of a taxpayer’s underlying lia-
bility is not properly in dispute, we review the IRS decision for abuse of
discretion only. Jones v. Commissioner, 338 F.3d 463, 466 (5th Cir.
2003); Goza, 114 T.C. at 182. Abuse of discretion exists when a deter-
mination is arbitrary, capricious, or without sound basis in fact or law.
See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d
27 (1st Cir. 2006).

       Taxpayers may challenge their underlying tax liability at a CDP
hearing only if they did not receive a statutory notice of deficiency for
that liability or did not otherwise have an opportunity to dispute it.
§ 6330(c)(2)(B). Petitioners received a notice of deficiency for 2009–2010
and challenged the Commissioner’s determinations in the case at Docket
No. 20261-15. We entered the parties’ Stipulated Decision in that case,
and the decision is now final. See § 7481(a). Petitioners did not dispute
their underlying liability at the CDP hearing and do not challenge it
here. See Thompson v. Commissioner, 140 T.C. 173, 178 (2013). We
thus review the SOs’ determinations for abuse of discretion only. See
§ 6330(c)(2)(B); Goza, 114 T.C. at 182.

III.   Abuse of Discretion

       In deciding whether the SOs abused their discretion, we consider
whether they (1) properly verified that the requirements of applicable
law and administrative procedure were met, (2) considered relevant is-
sues that petitioners raised, and (3) considered “whether any proposed
collection action balances the need for the efficient collection of taxes
with the legitimate concern of [petitioners] that any collection action be
no more intrusive than necessary.” See § 6330(c)(3). Our review of the
record establishes that SO1 and SO2 properly discharged all of their re-
sponsibilities under these provisions.

       A.    Verification

     Section 6330(c)(1) provides that “[t]he appeals officer shall at the
[CDP] hearing obtain verification from the Secretary that the
                                           7

[*7] requirements of any applicable law or administrative procedure
have been met.” Petitioners contend that SO2, in two ways, fell short in
this respect.

       Petitioners first contend that SO2 failed to verify timely supervi-
sory approval of the penalties assessed for 2009–2010. See § 6751(b)(1).
But those penalties were assessed consistently with the Stipulated De-
cision that petitioners executed in Docket No. 20261-15. As noted above,
petitioners are precluded from challenging that liability—on section
6751(b)(1) grounds or otherwise—because they received a notice of defi-
ciency and had the opportunity to challenge the penalties in this Court.
See § 6330(c)(2)(B); cf. Laidlaws Harley Davidson Sales, Inc. v. Commis-
sioner, T.C. Memo. 2023-90, at *7 (holding in a CDP case that “verifica-
tion of compliance with section 6751(b) would serve no bona fide pur-
pose” because the SO was bound by a prior decision of this Court to im-
pose a penalty); Rockafellor v. Commissioner, T.C. Memo. 2019-160, 118
T.C.M. (CCH) 462, 465 (holding in a CDP case that taxpayer waived re-
quirements of section 6751(b) by executing a closing agreement that in-
cluded accuracy-related penalties). 6

       Second, petitioners contend that SO2 failed to follow a provision
of the IRM stating that, “[i]f Collection discovers a taxpayer has not re-
mained in filing compliance, Collection attempts to secure the delin-
quent return(s).” See IRM 8.22.7.10.5.3(1) (Aug. 26, 2020). Petitioners
do not dispute that SO1 repeatedly warned them that he could not con-
sider a collection alternative unless they submitted delinquent returns
and became current with their estimated tax obligations. But they com-
plain that SO2 did not reiterate that warning before issuing the notice
of determination. In petitioners’ view, this supposed lack of communi-
cation amounted to a “fail[ure] to follow [r]espondent’s internal guid-
ance” and thus violated the verification requirement.

       We are not persuaded. Petitioners were plainly on notice that
they needed to be in compliance with their return-filing and estimated
tax obligations in order to be eligible for a collection alternative. In his
January 15, 2020, letter scheduling the CDP hearing, SO1 requested a
signed 2018 tax return and made clear that he was doing so because IRS
“records show[ed] that [it] ha[d] not been filed.” He repeatedly told

         6 Petitioners contend that their 2009–2010 liabilities include additions to tax

for failure to pay tax appearing in a notice and demand for payment, see § 6651(a)(3),
and that the SOs failed to verify supervisory approval for those amounts. But super-
visory approval is not required for “any addition to tax under section 6651.” See
§ 6751(b)(2)(A).
                                    8

[*8] petitioners that they needed to pay their “estimated tax payments
in full for the year to date.” When petitioners neglected to submit proof
of payment of estimated tax, SO1 gave their representative no fewer
than three extensions of time to supply it.

       Petitioners do not contend that they actually filed a delinquent
return for 2019, or that they actually made the required estimated tax
payments for 2020 or 2021, before the notice of determination was is-
sued. Rather, they contend that SO2 erred by failing to remind them of
their obligation to do these things. But “a taxpayer need not be an ex-
pert in tax law to know that tax returns have fixed filing dates.” Nunn
v. Commissioner, T.C. Memo. 2002-250, 84 T.C.M. (CCH) 403, 409 (cit-
ing United States v. Boyle, 469 U.S. 241, 251 (1985)). “[T]axpayers are
charged with knowledge of the law,” Niedringhaus v. Commissioner, 99
T.C. 202, 222 (1992), and an SO need not remind a taxpayer that a tax
return is due each year on April 15, Cavazos v. Commissioner, T.C.
Memo. 2008-257, 96 T.C.M. (CCH) 341, 344. SO2 was under no duty to
remind petitioners of their most basic tax obligations, which SO1 had
repeatedly emphasized to them.

       In any event, the IRM lacks the force of law and does not create
rights for taxpayers. Anonymous v. Commissioner, 145 T.C. 246, 257
(2015). Petitioners cite no case in which an SO was found to have abused
his discretion by failing to verify that a particular IRM provision was
followed. Cf. Wadleigh v. Commissioner, 134 T.C. 280, 294 n.13 (2010)
(declining to decide whether IRM procedures fall within the verification
requirement of section 6330(c)(1)). “[C]ompliance with the IRM’s re-
quirements is not mandatory.” See Urban v. Commissioner, 964 F.2d
888, 890 (9th Cir. 1992), aff’g T.C. Memo. 1991-220. And we have often
upheld an SO’s determination to sustain collection action despite a fail-
ure to follow some IRM provision. See Weiss v. Commissioner, 147 T.C.
179, 196 (2016), aff’d, No. 16-1407, 2018 WL 2759389 (D.C. Cir. May 22,
2018); Walker v. Commissioner, T.C. Memo. 2018-22, 115 T.C.M. (CCH)
1082, 1087.

      B.     Collection Alternatives

       At their CDP hearing petitioners were entitled to make offers of
collection alternatives, such as an OIC or an IA. See § 6330(c)(2) and (3).
Petitioners did not propose an OIC and did not submit a completed Form
656. “There is no abuse of discretion when Appeals fails to consider an
[OIC] when a Form 656 was not submitted to Appeals.” Gentile v. Com-
missioner, T.C. Memo. 2013-175, 106 T.C.M. (CCH) 75, 77, aff’d, 592
                                    9

[*9] F. App’x 824 (11th Cir. 2014). We thus focus on petitioners’ conten-
tion that SO2 abused his discretion in rejecting their IA proposal.

       SO2 indicated in the notice of determination that his principal
reason for rejecting petitioners’ IA proposal was their failure to come
into compliance with their return filing and estimated tax obligations.
We have consistently held that an SO does not abuse his discretion when
he declines to consider collection alternatives for a taxpayer who is not
in tax compliance. See, e.g., First Rock Baptist Church Child Dev. Ctr.
v. Commissioner, 148 T.C. 380, 391 (2017); Giamelli v. Commissioner,
129 T.C. 107, 111–12 (2007); Boulware v. Commissioner, T.C. Memo.
2014-80, aff’d, 816 F.3d 133 (D.C. Cir. 2016). The requirement of cur-
rent compliance as a condition of executing an IA “ensures that current
taxes are paid and avoids ‘the risk of pyramiding tax liability.’” Hull v.
Commissioner, T.C. Memo. 2015-86, 109 T.C.M. (CCH) 1438, 1441 (quot-
ing Schwartz v. Commissioner, T.C. Memo. 2007-155, 93 T.C.M. (CCH)
1377, 1379); see Orum v. Commissioner, 412 F.3d 819, 821 (7th Cir.
2005), aff’g 123 T.C. 1 (2004).

        Upon review of petitioners’ IRS account transcripts, SO1 ascer-
tained that they had not filed a return for 2018 and had made no esti-
mated tax payments for 2018 or 2019. SO1 repeatedly advised them
that they needed to cure these failures. Although petitioners eventually
did file a return for 2018, they submitted no evidence that they had paid
their estimated tax “in full for the year to date.” SO1 gave their repre-
sentative no fewer than three extensions of time to submit such proof,
but none was ever forthcoming.

        On January 25, 2021, SO2 determined that petitioners were still
delinquent on their current tax obligations—as of then, their obligation
to file a return for 2019 and to make estimated tax payments for 2020.
Given petitioners’ track record of current and prior filing noncompli-
ance, SO2 did not abuse his discretion in declining to accept their pro-
posed IA.

        Petitioners urge that SO2 abused his discretion by failing to com-
municate his decision to reject their proposed IA before issuing the no-
tice of determination, thereby closing the case prematurely. But even if
SO2 had done as petitioners suggest, the fact remains that they were
not in compliance with their tax obligations on that date, and SO2 could
have rejected their proposed IA (or any counteroffer) on this ground
alone. Petitioners were aware of their return-filing and estimated tax
obligations and had ample opportunity to come into compliance before
                                          10

[*10] the notice of determination was issued. SO2 had no affirmative
duty to remind them of what the law required. See supra pp. 7–9.

        From the date they received the CDP scheduling letter (January
15, 2020) until the date the notice of determination was issued (Febru-
ary 8, 2021), petitioners had nearly 13 months to come into compliance
with their tax obligations. They were given numerous opportunities and
extensions of time to do so. SOs are not obligated to offer taxpayers an
indefinite amount of time to come into compliance. See Biggs-Owens v.
Commissioner, T.C. Memo. 2020-113, 120 T.C.M. (CCH) 79, 81; Wind
Surf & Sail Pools, Inc. v. Commissioner, T.C. Memo. 2019-130, 118
T.C.M. (CCH) 304, 306. SO2 did not abuse his discretion in closing the
case when he did, on the basis of the information available to him at that
time. 7

        Petitioners alternatively requested that their account be placed
in CNC status. To be entitled to such relief, taxpayers must demon-
strate, on the basis of their assets, equity, income, and expenses, that
they have no apparent ability to make payments on the outstanding tax
liability. See Foley v. Commissioner, T.C. Memo. 2007-242, 94 T.C.M.
(CCH) 210, 212. An account may not be placed in CNC status if the
taxpayer has income or equity in assets unless enforced collection would
cause hardship. See Siebert v. Commissioner, T.C. Memo. 2021-34, 121
T.C.M. (CCH) 1230, 1236 (citing IRM 5.16.1.2.9(1) (Aug. 25, 2014)). A
hardship exists if the taxpayer is unable to pay reasonable basic living
expenses. Margolis-Sellers v. Commissioner, T.C. Memo. 2019-165, 118
T.C.M. (CCH) 488, 498. (citing IRM 5.16.1.2.9(1)).

       Here, SO2 determined that petitioners, far from being unable to
pay anything at all, had reported on their Form 433–A numerous assets
that could be used to reduce their tax liabilities. These assets included
(among other things) an LLC investment with equity of $2.4 million and
real estate with total equity exceeding $1 million. Petitioners’ 2018 tax
return, moreover, reported adjusted gross income of $3,845,168.

          7 Petitioners complain that neither SO1 nor SO2 proposed a collection alterna-

tive to them but simply rejected the IA they offered. But an SO is not required to
negotiate over the specific terms of an IA where the taxpayer—being out of filing com-
pliance—is entitled to no collection alternative whatsoever. See Nimmo v. Commis-
sioner, T.C. Memo. 2020-72, 119 T.C.M. (CCH) 1504, 1506 (“[A]n SO does not abuse
her discretion when she declines to consider collection alternatives for a taxpayer who
has failed to file all required returns and to make required estimated tax payments.”
(first citing Giamelli, 129 T.C. at 111–12; and then citing Starkman v. Commissioner,
T.C. Memo. 2012-236)).
                                          11

[*11] Considering the information that petitioners themselves supplied,
SO2 reasonably concluded that they could pay at least some of their tax
liability and “ha[d] not shown that liquidation of the assets would cause
a hardship.” This Court will neither substitute its judgment for that of
an SO nor recalculate a taxpayer’s ability to pay. See O’Donnell v. Com-
missioner, T.C. Memo. 2013-247, 106 T.C.M. (CCH) 477, 481. 8

        Petitioners fault the notice of determination for not identifying
which specific assets SO2 considered in concluding that CNC status was
not available to them. But we have previously upheld notices of deter-
mination, even those of less-than-ideal clarity, when the basis for the
determination is reasonably discernable from the record. See Melasky
v. Commissioner, 151 T.C. 93, 106 (2018), aff’d, 803 F. App’x 732 (5th
Cir. 2020); cf. Kasper v. Commissioner, 150 T.C. 8, 24–25 (2018) (“Alt-
hough we may not accept any post hoc rationalizations for agency action
provided by the Commissioner’s counsel, we may consider any ‘contem-
poraneous explanation of the agency decision’ contained in the record.”
(quoting Tourus Records, Inc. v. Drug Enf’t Admin., 259 F.3d 731, 738
(D.C. Cir. 2001))). Here, petitioners’ Form 433–A and the SOs’ case ac-
tivity record list multiple assets that justified SO2’s conclusion: an own-
ership share of an LLC valued at $5.7 million (with $2.4 million in eq-
uity), a primary residence valued at $2.2 million (with $400,000 in eq-
uity), a condominium valued at $790,000 (with $115,000 in equity), a
rental property valued at $121,000 (with $121,000 in equity), land in
Hawaii valued at $400,000 (with $400,000 in equity), and six vehicles,
including four Mercedes Benzes and a Ferrari. 9

       Finally, petitioners contend that SO1 abused his discretion by
failing to offer them an FTF hearing. We have repeatedly held that sec-
tion 6330 does not require one. See Katz v. Commissioner, 115 T.C. 329,
337–38 (2000); see also Treas. Reg. § 301.6330-1(d)(2), Q&A-D6 (noting

       8 Petitioners argue that SO2 failed to follow IRM guidelines by not informing

them of his conclusion that “there was sufficient equity in [their] assets.” But their
Form 433–A showed on its face that there was several million dollars of equity in their
assets. Petitioners do not explain how SO2’s silence amounted to an abuse of discre-
tion, and they cite no case law supporting their argument. In any event we reiterate
that the IRM lacks the force of law and does not create rights for taxpayers. See supra
p. 8.
        9 Petitioners say there is no evidence that “[r]espondent’s Compliance Office

actually reviewed” the 700 pages of documents that they provided in support of their
Form 433–A. But SO2’s determination regarding CNC status was based solely on the
face values of the assets that petitioners listed on the Form 433–A. Supporting finan-
cial documents (or the lack thereof) were not critical to his determination.
                                    12

[*12] that a proper hearing may occur by telephone, correspondence, or
review of documents). In particular we have held that an SO’s denial of
an FTF hearing does not constitute an abuse of discretion where (as
here) a taxpayer fails to provide past due returns. See Moline v. Com-
missioner, T.C. Memo. 2009-110, 97 T.C.M. (CCH) 1571, 1572, aff’d, 363
F. App’x 675 (10th Cir. 2010); see also Treas. Reg. § 301.6330-1(d)(2),
Q&A-D8.

      C.     Balancing

       Petitioners urge that SO2 did not comply with section
6330(c)(3)(C), which requires the IRS to balance “the need for the effi-
cient collection of taxes with the legitimate concern of [petitioners] that
any collection action be no more intrusive than necessary.” The record
shows that SO2 performed a balancing test, finding that the proposed
levy action adequately balances the need for efficient tax collection with
petitioners’ concerns, citing petitioners’ ongoing noncompliance and
their equity in assets. Given petitioners’ history of noncompliance, the
magnitude of their outstanding liabilities, and their failure to comply
with their ongoing tax obligations, we conclude that SO2 did not abuse
his discretion in sustaining the proposed levy.

       We have considered all of petitioners’ arguments and, to the ex-
tent those arguments are not addressed herein, we find them to be irrel-
evant, without merit, or duplicative of the arguments addressed above.
Finding no abuse of discretion in any respect, we will grant respondent’s
Motion for Summary Judgment and sustain the proposed collection ac-
tion. We note that petitioners are free to come into filing compliance
and submit to the IRS at any time, for its consideration and possible
acceptance, a collection alternative in the form of an IA or an OIC, sup-
ported by the requisite financial information.

      To reflect the foregoing,

      An appropriate order and decision will be entered.