T.C. Memo. 2008-99
UNITED STATES TAX COURT
MICHAEL POINDEXTER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14979-05L. Filed April 15, 2008.
Larry D. Harvey, for petitioner.
Sara J. Barkley, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FOLEY, Judge: The issue for decision is whether respondent
abused his discretion in sustaining the default of petitioner’s
offer-in-compromise and determining to proceed with collection.
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FINDINGS OF FACT
On November 21, 1997, respondent accepted petitioner and his
wife Nancy Poindexter’s joint offer-in-compromise (OIC) relating
to tax years 1990, 1991, 1992, 1993, 1994, and 1995 (original tax
liability). The OIC required petitioner to file timely all
Federal income tax returns and pay timely all Federal income
taxes due for the 5 years following acceptance of the OIC or
until the OIC was paid in full, whichever was longer. Petitioner
failed to timely pay his 2000 and 2001 Federal income taxes. On
October 22, 2003, respondent sent petitioner a letter advising
him of the outstanding balances relating to 2000 and 2001 and
notifying him that failure to pay the balances within 30 days
would result in a default on the OIC and reinstatement of the
original tax liability. Petitioner, in a letter dated November
22, 2003, requested an additional 6 months to pay the outstanding
balances relating to 2000 and 2001.
On December 19, 2003, respondent entered petitioner’s
default on the OIC in the system. On September 9, 2004,
respondent mailed petitioner a Notice of Intent to Levy and Your
Right to a Hearing relating to 1993, 1994, and 1995. On
September 23, 2004, petitioner timely filed a Form 12153, Request
for a Collection Due Process Hearing. On December 21, 2004, more
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than a year after the OIC default, petitioner paid the
outstanding balances relating to 2000 and 2001.
On or about April 26, 2005, a collection due process hearing
(CDP hearing) was held, during which petitioner contended that
collection was improper because the OIC should not have been
defaulted. On July 14, 2005, respondent issued petitioner a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 finding that default of the OIC was
procedurally and legally correct, and that it was proper to
proceed with the levy.
Petitioner filed his petition with the Court on August 12,
2005, while residing in Colorado.
OPINION
Pursuant to Robinette v. Commissioner, 123 T.C. 85, 93-94
(2004), revd. on other grounds 439 F.3d 455 (8th Cir. 2006), the
underlying tax liabilities are not at issue and we review
respondent’s determination for an abuse of discretion. To
prevail on an abuse of discretion claim, the taxpayer must show
that the Commissioner’s actions were arbitrary, capricious, or
without sound basis in law or fact. See Giamelli v.
Commissioner, 129 T.C. 107, 111 (2007); Woodral v. Commissioner,
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112 T.C. 19, 23 (1999). Section 6330(c)(3)1 provides that in
making a determination, the Appeals officer must verify that the
requirements of applicable law and administrative procedure have
been met, consider the issues raised by the taxpayer, and
consider whether the proposed collection action balances the need
for the efficient collection of taxes with the taxpayer’s
legitimate concern that any collection be no more intrusive than
necessary. Petitioner contends that the Appeals officer abused
her discretion by sustaining the default of the OIC. We
disagree.
The OIC, which was accepted on November 21, 1997, required
petitioner to pay timely all Federal income taxes due for the 5
years following acceptance. Petitioner failed to pay his 2000
and 2001 taxes in a timely manner and did not respond in a timely
manner to respondent’s letter advising him of the impending OIC
default. In addition, petitioner did not propose collection
alternatives. Under these circumstances, the Appeals officer’s
actions were appropriate. We also note that petitioner asserts
that the Appeals officer abused her discretion by failing to
adhere to certain instructions that petitioner contends were
contained in the Internal Revenue Manual. The instructions upon
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended.
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which petitioner relies, however, were promulgated several years
after the OIC default. Thus, we reject petitioner’s contentions
and sustain respondent’s determination.
Contentions we have not addressed are irrelevant, moot, or
meritless.
Decision will be entered for
respondent.