T.C. Memo. 2002-227
UNITED STATES TAX COURT
ROY ELIASON AND MARGARET ELIASON, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12748-00L. Filed September 10, 2002.
Roy Eliason and Margaret Eliason, pro sese.
James A. Kutten, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
SWIFT, Judge: This matter is before us on petitioners’
petition for review under section 6330(d)(1) of respondent’s
Appeals Office determination to proceed with collection by way of
levy.
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Unless otherwise indicated, all section references are to
the Internal Revenue Code as applicable to the years in issue.
Hereinafter, references to petitioner in the singular are to
petitioner Roy Eliason.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
At the time the petition was filed, petitioners resided in
O’Fallon, Missouri.
Petitioners’ undisputed and unpaid Federal income tax
liabilities including penalties and interest, as of October 1,
2001, total $1,902 for 1994 and $5,254 for 1995.
On May 22, 1999, respondent mailed to petitioners a notice
of intent to levy and a notice of petitioners’ right to a
collection hearing with respondent’s Appeals Office relating to
petitioners’ income tax liabilities for 1994 and 1995.
On June 14, 1999, respondent received from petitioners a
request for a collection hearing with respondent’s Appeals
Office.
On May 20, 2000, in connection with the above request by
petitioners for a collection hearing, petitioners submitted to
respondent’s Appeals Office a financial statement showing with
respect to petitioners’ monthly income and expenses a net income
of $1,914. After adjustments were made by respondent’s Appeals
Office increasing the amount of petitioners’ monthly expenses,
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respondent’s Appeals Office reduced petitioners’ net income to
$912, or $1,002 less than that reflected on petitioners’
financial statement that was submitted to respondent.
Petitioners’ financial statement and respondent’s Appeals Office
adjustments reflected petitioners’ total monthly income and
expenses as follows:
Monthly Amounts
As Reflected As Adjusted
by Petitioners by Respondent
Income:
Salaries - Roy Eliason $ 780 $ 780
Salaries - Margaret Eliason 2,950 2,950
Pension - Roy Eliason 1,048 1,048
Pension - Margaret Eliason 180 180
Total Income $4,958 $4,958
Expenses:
National Standard Expenses $ 830 $ 957
Housing and Utilities 1,365 1,365
Transportation 204 291
Health Care 110 110
Taxes (Income and FICA) 520 1,308
Life Insurance 15 15
Total Expenses $3,044 $4,046
Net Income $1,914 $ 912
On May 31, 2000, in connection with petitioners’ collection
hearing, petitioner participated in a telephone conference with
respondent’s Appeals Office. During the telephone conference,
based on the $912 difference between petitioners’ monthly income
and expenses as reflected in the above calculations, as adjusted
by respondent, respondent’s Appeals Office proposed that
petitioners make monthly payments to respondent of $912.
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In a letter of May 31, 2000, respondent’s Appeals Office
confirmed to petitioners the proposed payment plan of $912 per
month and requested that petitioners respond before June 23,
2000, with any additional financial information that may differ
from the information already provided.
Petitioners did not provide to respondent’s Appeals Office
any additional financial information, petitioners did not offer
to respondent’s Appeals Office any alternatives to collection
other than an indefinite postponement for the due dates of the
proposed installment payments, and petitioners did not accept the
above proposed payment plan of $912 per month.
On November 28, 2000, respondent’s Appeals Office issued to
petitioners separate notices of determination sustaining
respondent’s proposed levy collection action.
During 2000, and before respondent’s Appeals Office issued
to petitioners the above notices of determination, petitioners
received $10,000 in insurance proceeds relating to an automobile
accident, and petitioners used the $10,000 as a downpayment on a
new home. Petitioners did not use any portion of the $10,000 to
make a payment on their 1994 and 1995 Federal income tax
liabilities.
Herein, petitioners assert that it was an abuse of
discretion for respondent’s representative: (1) To propose that
petitioners agree to a payment plan of $912 per month; (2) to
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fail to take into consideration additional medical expenses (that
were not disclosed to respondent’s Appeals Office in connection
with petitioners’ collection hearing) and the possibility of a
future reduction in petitioners’ income; and (3) to proceed with
collection by way of levy.
Based on the above stated reasons, in an amended petition,
petitioners ask this Court for “a reduction in past due taxes.”
OPINION
Under section 6330(d)(1), where a taxpayer’s underlying tax
liability is not at issue, we generally review a determination of
respondent’s Appeals Office concerning collection for an abuse of
discretion. Sego v. Commissioner, 114 T.C. 604, 609-610 (2000).
Under that standard of review, we generally consider only matters
that were raised by the taxpayer or otherwise brought to the
attention of respondent’s Appeals Office at or in connection with
the Appeals Office hearing. Magana v. Commissioner, 118 T.C.
488, 493 (2002).
Based on the limited information available to respondent’s
Appeals Office, the payment plan of $912 per month proposed by
respondent’s Appeals Office to petitioners in connection with
petitioners’ collection hearing did not constitute an abuse of
discretion. The proposed payment plan of $912 per month was
based on a financial analysis performed by respondent’s Appeals
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Office of petitioners’ monthly income and expenses using, among
other things, the financial information provided by petitioners.
Moreover, based on the $10,000 in insurance proceeds that
petitioners received in 2000 (before respondent’s Appeals Office
made its determination), petitioners had the ability to pay a
significant portion of their outstanding income tax liabilities
for 1994 and 1995 (a total of $7,156, including interest to
October 1, 2001).
With regard to alleged financial hardship raised by
petitioners for the first time in an amended petition (namely,
additional medical expenses and the possibility of a future
reduction in income), because petitioners did not raise such
matter until the filing of their amended petition in January of
2001, it did not constitute an abuse of discretion for
respondent’s Appeals Office to fail to consider such matter in
making the determination to proceed with collection.1 See Magana
v. Commissioner, supra.
1
Generally, consideration by respondent of matters not
presented to respondent’s Appeals Office until after a collection
hearing and after the issuance by respondent’s Appeals Office of
its notice of determination would be within respondent’s
discretion under sec. 6330(d)(2) and would not be reviewable by
this Court. Sec. 6330(b)(2), (d)(2); H. Conf. Rept. 105-599, at
266 (1998), 1998-3 C.B. 1020; sec. 301.6330-1(h)(1)(2), Q&A-H1
and H2, Proced. & Admin. Regs.
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We hold that respondent’s Appeals Office did not abuse its
discretion, and respondent may proceed with the proposed
collection by way of levy.
Decision will be entered for
respondent.