T.C. Memo. 2008-281
UNITED STATES TAX COURT
ROBERT AND VIENNA LESHIN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17709-06L. Filed December 15, 2008.
Jeffrey D. Moffatt, for petitioners.
Michael W. Tan, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: Pursuant to section 6330(d),1 petitioners
seek review of respondent’s determination to proceed with
collection of their unpaid 2001 income tax liability. The issue
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code.
- 2 -
for decision is whether respondent may proceed with collection of
the above-mentioned unpaid income tax liability.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts, the supplemental stipulation of facts,
and the attached exhibits are incorporated herein by this
reference. At the time they filed the petition, petitioners
resided in California.
On December 14, 2005, respondent filed a Notice of Federal
Tax Lien (NFTL) regarding petitioners’ 2001 tax year. On
December 16, 2005, respondent mailed to petitioners a Notice of
Federal Tax Lien Filing and Your Right to a Hearing Under IRC
6320 regarding 2001.
Petitioners timely submitted a Form 12153, Request for a
Collection Due Process Hearing, regarding 2001 to respondent.
On or about April 6, 2006, respondent received Form 656,
Offer in Compromise (OIC), from petitioners. Petitioners offered
to pay $70,000 to satisfy their total outstanding tax liabilities
of approximately $225,115 for 1999 through 2004.2 As of the date
of the notice of determination, petitioners’ income tax liability
for 2001 was approximately $36,480.
2
On the Form 656, petitioners listed the tax years as 1991
to 2005. However, petitioners had a zero balance for 1991
through 1998 and for 2005.
- 3 -
Attached to the OIC was Form 433-A, Collection Information
Statement for Wage Earners and Self-Employed Individuals. The
information provided on the Form 433-A was incomplete. For
example, petitioners did not list the current value of a 2004
Chevrolet, petitioners listed no monthly income even though they
indicated they were self-employed, and petitioners indicated that
they received income from stocks but did not submit any
documentation related to such income (i.e., listing the amount of
dividends received).3
Respondent’s settlement officer wrote petitioners’ counsel
requesting additional information. Additionally, on April 18,
2006, respondent’s settlement officer requested a Form 433-B,
Collection Information Statement for Businesses, regarding
petitioners’ hay sales business. Petitioners failed to provide
any information on their business during the section 6330
hearing.
During 1999 through 2005 petitioners sold stocks and bonds
with a value of over $500,000. However, they did not use these
proceeds to pay their outstanding tax liabilities for those
years.
Based on the incomplete information provided by petitioners,
respondent determined their monthly future income potential was
3
Form 433-A states on the face of the form that
attachments are required as proof of self-employment income and
other income.
- 4 -
$4,386 ($11,086 in monthly income less $6,700 for reasonable
expenses). Petitioners’ present value of future income was
$210,528 ($4,386 per month x 48 months). This amount alone
resulted in a reasonable collection potential (RCP) well in
excess of the amount owed for 2001--$36,480.4
Until July 14, 2006, respondent’s settlement officer
provided petitioners with several opportunities to dispute any
and all aspects of her RCP calculations. Petitioners’ counsel
did not contest respondent’s RCP calculation until two weeks
after the July 14, 2006, deadline.
On August 16, 2006, respondent issued the notice of
determination to petitioners and sustained the filing of the
NFTL. Respondent concluded that petitioners’ RCP exceeded the
$70,000 offered in the OIC. Accordingly, the settlement officer
rejected petitioners’ OIC.
OPINION
Section 6320 provides that the Secretary shall furnish the
person described in section 6321 with written notice (i.e., the
hearing notice) of the filing of a notice of lien under section
6323. Section 6320 further provides that the taxpayer may
request administrative review of the matter (in the form of a
hearing) within a 30-day period. The hearing generally shall be
4
Furthermore, this amount alone is close to petitioners’
total outstanding tax liabilities of approximately $225,115 for
1999 through 2004.
- 5 -
conducted consistent with the procedures set forth in section
6330(c), (d), and (e). Sec. 6320(c).
Pursuant to section 6330(c)(2)(A), a taxpayer may raise at
the section 6330 hearing any relevant issue with regard to the
Commissioner’s collection activities, including spousal defenses,
challenges to the appropriateness of the Commissioner’s intended
collection action, and alternative means of collection. Sego v.
Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114
T.C. 176, 180 (2000).
The only issue raised by petitioners at the section 6330
hearing was an OIC as a collection alternative. Accordingly,
because the validity of the underlying tax liability is not at
issue, we review the Commissioner’s determination for abuse of
discretion. Sego v. Commissioner, supra at 610.
The information petitioners provided on the Form 433-A was
incomplete. Petitioners failed to submit a Form 433-B as
requested by the settlement officer. Petitioners’ RCP
substantially exceeded the amount of their tax liability for
2001. Additionally, during 1999 through 2005 petitioners sold
stocks and bonds with a value of $586,797 but did not use the
proceeds to pay their outstanding tax liabilities for these
years.
We conclude that respondent did not abuse his discretion
when he sustained the filing of the NFTL. In reaching all of our
- 6 -
holdings herein, we have considered all arguments made by the
parties, and to the extent not mentioned above, we find them to
be irrelevant or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.