T.C. Summary Opinion 2010-69
UNITED STATES TAX COURT
NORMAN C. JOHNSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19860-06S. Filed June 7, 2010.
Norman C. Johnson, pro se.
Jack T. Anagnostis, for respondent.
CHABOT, Judge: This case was heard pursuant to section
7463.1 The decision to be entered is not reviewable by any other
1
Unless indicated otherwise, all section references are to
sections of the Internal Revenue Code of 1986 as in effect for
proceedings commenced on the date the petition in the instant
case was filed, except that the section references in the
footnotes to tables 2 and 4 are to sections of the Internal
Revenue Code of 1986 as in effect for the years in issue.
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court, and this opinion shall not be treated as a precedent for
any other case. Sec. 7463(b).
This case was commenced in response to a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330. The issues for decision are as follows:
(1) Whether petitioner’s tax liabilities for 1996,
1997, 1999, 2000, and 2001 (hereinafter sometimes
collectively referred to as the years in issue)2 were
discharged in bankruptcy;
(2) whether petitioner had a prior opportunity to
dispute the underlying tax liabilities for any of the
years in issue; and
(3) whether petitioner’s rights in this collection
matter are affected by any of certain miscellaneous
matters.
Background
The stipulations and the stipulated exhibits are
incorporated herein by this reference.
When the petition was filed in the instant case, petitioner
resided in Pennsylvania.
The First Bankruptcy Case
On November 4, 1996, petitioner filed a bankruptcy petition
under chapter 13 of the U.S. Bankruptcy Code in the U.S.
2
The parties do not explain what is different about 1998.
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Bankruptcy Court for the Eastern District of Pennsylvania; the
resulting proceeding is hereinafter sometimes referred to as
petitioner’s first bankruptcy case. In 1997 the Internal Revenue
Service (IRS) filed proofs of claim for petitioner’s income taxes
for 1988-90 and 1992-95 in petitioner’s first bankruptcy case.3
The bankruptcy court ordered petitioner’s employer to deduct $122
from petitioner’s wages every 2 weeks and pay these amounts to
the bankruptcy trustee, who in turn was to pay these amounts to
the IRS. The amounts were paid and, on January 4, 2002, the
Bankruptcy Court discharged petitioner from all debts under the
plan in petitioner’s first bankruptcy case.
The Years in Issue
On September 9, 1998, petitioner filed income tax returns
for 1996 and 1997, showing the amounts set forth in table 1.
Table 1
Amount
Item 1996 1997
Adjusted gross income $34,781 $29,059
Taxable income 28,231 22,259
Tax 4,783 3,341
Withholding 3,177 576
3
The record does not indicate what happened to 1991. There
is no indication in the record that the facts as to 1991 play any
role in the substance of the instant case or the perceptions of
any party in the instant case.
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These tax returns were prepared for petitioner by a
“representative” of respondent at an office of respondent in
Philadelphia, Pennsylvania.
On November 30, 1998, respondent assessed the amounts shown
in table 2.
Table 2
Amount
Item1 1996 1997
Tax $4,783.00 $3,341.00
Estimated tax “penalty” 67.00 146.00
Late filing “penalty” 361.35 124.42
Failure to pay tax “penalty” 160.60 110.60
Interest 282.79 145.25
The estimated tax “penalty” is presumably a sec.
1
6654 addition to tax, the late filing “penalty” is
presumably a sec. 6651(a)(1) addition to tax, and the
failure to pay tax “penalty” is presumably a sec.
6651(a)(2) addition to tax. See, e.g., discussion in
Burke v. Commissioner, T.C. Memo. 2009-282.
On October 7, 2002, petitioner filed tax returns for 1999,
2000, and 2001, showing the amounts set forth in table 3.
Table 3
Amount
Item 1999 2000 2001
Adjusted gross income $30,483 $31,842 $32,806
Taxable income 23,433 24,642 25,356
Tax 3,514 3,694 3,506
Withholding 700 869 906
On November 11, 2002, respondent assessed the amounts shown
in table 4.
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Table 4
Amount
Item 1
1999 2000 2001
Tax $3,514.00 $3,694.00 $3,506.00
Late filing “penalty” 703.50 706.25 260.00
Interest 724.10 385.91 95.10
The late filing “penalty” is presumably a sec.
1
6651(a)(1) addition to tax.
For each of the years in issue, petitioner failed to pay all
of the liabilities reported on his income tax returns.4
The Second Bankruptcy Case
On September 18, 2002, petitioner filed a bankruptcy
petition under chapter 13 in the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania; the resulting proceeding is
hereinafter sometimes referred to as petitioner’s second
bankruptcy case. On December 9, 2002, the IRS filed a proof of
claim for petitioner’s income taxes for the years in issue in
petitioner’s second bankruptcy case. Petitioner’s only debt in
his second bankruptcy case was to the IRS. On March 28, 2003,
petitioner moved to voluntarily dismiss his second bankruptcy
case, stating that he was in the process of filing an offer-in-
compromise with the IRS to “pay all past due taxes.” The
4
So stipulated. We assume that the parties mean in their
stipulation that petitioner failed to pay the balances due; i.e.,
the liabilities less the withholdings, shown in tables 1 and 3.
For the years in issue, the balances due on the tax returns
aggregate about two-thirds of the liabilities reported on the tax
returns.
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Bankruptcy Court granted petitioner’s motion on April 2, 2003,
“in order for Debtor to file an Offer in Compromise with the
Internal Revenue Service.”
Later Proceedings
On June 1, 2003, petitioner submitted to the IRS an offer-
in-compromise for the years in issue;5 the IRS rejected it on
July 22, 2003. On September 16, 2003, petitioner entered into an
installment agreement with the IRS for the years in issue. The
record in the instant case does not include a copy of the
agreement.
On or about September 6, 2004, respondent notified
petitioner as follows as to his 2002 income tax account:
WE APPLIED YOUR PAYMENT TO YOUR ACCOUNT
THANK YOU FOR YOUR INQUIRY. WE LOCATED AND APPLIED YOUR PAYMENT(S)
TOTALING $100.00 TO THE ACCOUNT SHOWN ABOVE. THE PAYMENT(S) WE APPLIED ARE SHOWN
AT THE END OF THIS NOTICE.
WE MADE A CHANGE TO YOUR ACCOUNT THAT RESULTED IN A VERY SMALL BALANCE DUE.
WE WANT YOU TO KNOW ABOUT THE CHANGE, BUT NO PAYMENT IS DUE. OUR POLICY IS TO
KEEP YOU INFORMED, BUT WE DON’T WANT TO BURDEN YOU BY ASKING YOU TO PAY THIS
AMOUNT. AGAIN, PLEASE DON’T SEND A PAYMENT.
YOUR ACCOUNT NOW:
AMOUNT YOU PREVIOUSLY OWED...........................$61.46
LESS YOUR PAYMENT(S).................................100.00
REMAINING BALANCE OWED................................38.54
FAILURE TO PAY PENALTY................................27.25
INTEREST FIGURED TO SEP. 6, 2004......................13.62
*UNDERPAYMENT CREDIT..................................$2.33-
5
The parties stipulated that the IRS received petitioner’s
offer in compromise for the years in issue on June 1, 2003. The
stipulated Form 4340, Certificate of Assessments, Payments, and
Other Specified Matters, for each of the years in issue shows
June 17, 2003, as “Offer in Compromise Pending” and does not show
any entry for June 1, 2003. We have not found anything in the
record explaining the significance of the June 17, 2003, date on
each Form 4340. Where the Forms 4340 are not contradicted by the
parties’ stipulations or other evidence in the record we have
accepted the statements on the Forms 4340 as being accurate.
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AMOUNT YOU NOW OWE.....................................NONE
*THE SMALL BALANCE THAT YOU OWED HAS BEEN CREDITED TO YOUR ACCOUNT.
YOUR ACCOUNT BALANCE IS NOW ZERO.
On December 13, 2004, respondent sent to petitioner a notice
of intent to levy with the caption “You Defaulted On Your
Installment Agreement”. That notice of intent to levy explained
that petitioner defaulted because he failed to make his payments
as agreed.
Collection Proceedings
On September 24, 2005, respondent sent to petitioner a Final
Notice--Notice of Intent to Levy and Notice of Your Right to a
Hearing. In response, on October 20, 2005, petitioner submitted
a Form 12153, Request for a Collection Due Process Hearing
(hereinafter sometimes referred to as the hearing request). In
the hearing request, petitioner stated: “I was under the
protection of the bankruptcy court until bill was paid.”
Petitioner believed that his payments under the plan in his first
bankruptcy case satisfied his tax liabilities for the years in
issue.6
6
Respondent’s proposed finding of fact (to which petitioner
does not object) refers to payments “distributed to respondent
during the period from 11/04/1996 to 01/10/2005”. The relevant
exhibit shows that payments under the plan in petitioner’s first
bankruptcy case were made as late as October 2001, and that on
Jan. 4, 2002, the Bankruptcy Court discharged petitioner from all
debts under the plan in petitioner’s first bankruptcy case. We
do not understand what were the payments received after the
discharge from petitioner’s first bankruptcy case “to
01/10/2005”.
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Petitioner and respondent’s settlement officer, Ronald Kroll
(hereinafter sometimes referred to as Kroll), met for a face-to-
face administrative collection hearing on June 21, 2006. At the
administrative collection hearing petitioner (1) argued that his
tax liabilities for the years in issue were satisfied by his
payments under his chapter 13 plan in his first bankruptcy case,
(2) stated that his employer did not withhold sufficient amounts
to pay his taxes for the years in issue, and (3) declined to
complete a Form 433-A, Collection Information Statement for Wage
Earners and Self-Employed Individuals, relevant to a collection
alternative. Petitioner contends that he offered a collection
alternative--“that respondent discontinue collection action,
consistent with its prior statement that no tax was due on his
account.” Respondent’s evaluation is that petitioner “declined
to provide” a collection alternative.
On July 12, 2006, respondent issued to petitioner a Notice
of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330, which (1) determined that “the periods covered
by this hearing [the administrative collection hearing] represent
post-petition tax years and were not included in your bankruptcy
action”; (2) determined that “the issuance of the Notice of
Intent to Levy is appropriate”; and (3) informed petitioner of
his right to petition the Tax Court within 30 days. Petitioner
timely petitioned this Court, contending that during the years in
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issue, his “finances were under the supervision of the bankruptcy
court in the Eastern District of Pennsylvania. The bankruptcy
was discharged effective 1/4/02. At that time all outstanding
debts were satisfied after completion of the repayment plan,
including the tax liabilities for the * * * [years in issue].”
Discussion
1. In General--The Collection Framework
In general, section 6321 imposes a lien in favor of the
United States on all property and rights to property of a person
liable for tax when a demand for the payment of the person’s tax
has been made and the person fails to pay the tax. Such a lien
arises when an assessment is made. Sec. 6322.
Sections 6320 (relating to liens) and 6330 (relating to
levies) generally provide protections for taxpayers in tax
collection matters. In general, sections 6320 and 6330 provide
for notice and the right to an administrative collection hearing
and judicial review when the Commissioner files a Federal tax
lien or proposes to collect unpaid taxes by levy. Inv. Research
Associates, Inc. v. Commissioner, 126 T.C. 183, 185-186 (2006).
Section 6320(b) affords taxpayers the right to a hearing
before an impartial officer or employee of the Appeals Office.
Pursuant to section 6320(b)(2), a taxpayer is entitled to only
one hearing regarding the tax period relating to the amount of
unpaid tax.
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Section 6320(c) provides that the hearing generally shall be
conducted consistent with the procedures set forth in section
6330(c), (d) (other than paragraph (2)(B) thereof), (e), and (g).
Section 6330(c)(1) requires the Appeals officer to obtain
verification that the requirements of any applicable law or
administrative procedure have been met. Section 6330(c)(2)(A)
provides that the taxpayer may raise at the hearing “any relevant
issue relating to the unpaid tax or the proposed levy” including
spousal defenses, challenges to the appropriateness of collection
actions, and collection alternatives.
Section 6330(c)(3) provides that a determination of the
Appeals officer shall take into consideration the verification
under section 6330(c)(1), the issues raised by the taxpayer, and
whether the proposed collection action balances the need for the
efficient collection of taxes with the legitimate concern of the
taxpayer that any collection action not be any more intrusive
than necessary.
Section 6330(c)(2)(B) provides, in general, that a taxpayer
may dispute the underlying tax liability at the administrative
collection hearing if both of two requirements have been
satisfied: (1) The taxpayer did not receive a notice of
deficiency for that tax liability and (2) the taxpayer did not
otherwise have an opportunity to dispute that tax liability. See
Hoyle v. Commissioner, 131 T.C. 197, 199 (2008). If either one
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of these requirements is not satisfied (i.e., if the taxpayer
received a notice of deficiency or the taxpayer had another
opportunity to dispute the tax liability), then section
6330(c)(2)(B) does not provide authority for the taxpayer to
dispute that tax liability at the administrative collection
hearing. See Kuykendall v. Commissioner, 129 T.C. 77, 80 (2007)
(as to notice of deficiency); Lewis v. Commissioner, 128 T.C. 48
(2007) (as to other opportunity to dispute). However, the
taxpayer may dispute certain matters under section 6330(c)(2)(A),
including (as here relevant) whether a liability was discharged
in bankruptcy, without regard to the restrictions described in
section 6330(c)(2)(B). See Swanson v. Commissioner, 121 T.C.
111, 118-119 (2003).
When the Appeals Office issues a notice of determination to
a taxpayer following an administrative collection hearing
regarding a lien or levy action, sections 6320(c) (by way of
cross-reference) and 6330(d)(1) provide that the taxpayer will
have 30 days following the issuance of a notice of determination
to seek judicial review. If the underlying tax liability is
properly in issue, then the Court will review the determination
by the Appeals Office de novo. Sego v. Commissioner, 114 T.C.
604, 610 (2000). If, instead, the underlying tax liability is
not in issue, then the Court will review the determination of the
Appeals Office for abuse of discretion. Id.
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We proceed to consider the contentions presented in the
instant case.
2. Discharge in First Bankruptcy Case
In his petition, petitioner contends as follows:
During the time period in question [i.e., the years in
issue], my finances were under the supervision of the
bankruptcy court in the Eastern District of
Pennsylvania. The bankruptcy was discharged effective
1/4/02. At that time, all outstanding debts were
satisfied after completion of the repayment plan,
including the tax liabilities for the above periods.
We have jurisdiction to review respondent’s determination
that petitioner’s tax liabilities for the years in issue were not
discharged in the first bankruptcy case; petitioner’s contention
that they were so discharged amounts to a challenge of the
appropriateness of the collection action under section
6330(c)(2)(A). See Bussell v. Commissioner, 130 T.C. 222, 236
(2008). We consider such a contention without the restrictions
of the “challenges to * * * the underlying tax liability” rules
of section 6330(c)(2)(B). See Swanson v. Commissioner, 121 T.C.
at 118-119.
Debtors filing for chapter 13 bankruptcy are required to
submit a plan for repayment of creditors. 11 U.S.C. secs. 1321
and 1322 (2006). Generally, debts provided for by the plan in a
chapter 13 bankruptcy are discharged upon completion of that
plan. 11 U.S.C. sec. 1328 (2006); In re Lilley, 91 F.3d 491,
494-495 (3d Cir. 1996). But debts incurred after commencement of
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the bankruptcy case and not provided for by the plan generally
are not discharged. 8 Collier on Bankruptcy, par. 1328.02[l], at
1328-20 (16th ed. 2010). Post-bankruptcy-petition tax
liabilities generally are included among those debts that are not
discharged. See In re Woods, 316 Bankr. 522, 524-525 (Bankr.
N.D. Ill. 2004).
Petitioner’s plan in his first bankruptcy case included tax
liabilities for 1988-90 and 1992-95, and the IRS filed proofs of
claim for those years. But petitioner’s tax liability for 1996,
the earliest of the years in issue, did not become payable until
after he filed his bankruptcy petition in his first bankruptcy
case. Moreover, the IRS did not file a proof of claim for
petitioner’s tax liabilities for the years in issue in
petitioner’s first bankruptcy case. Although the plan in
petitioner’s first bankruptcy case was carried out during the
years in issue, none of the tax liabilities for the years in
issue were included in that plan.
Thus, because all of his tax liabilities for the years in
issue became payable after the first bankruptcy petition was
filed, and because the IRS did not file a proof of claim with
respect to those liabilities, petitioner’s tax liabilities for
the years in issue were not discharged in his first bankruptcy
case.
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We hold, for respondent, that none of petitioner’s tax
liabilities for the years in issue were discharged in the first
bankruptcy case.
3. Petitioner’s Prior Opportunity To Dispute His Underlying Tax
Liabilities for the Years in Issue
Petitioner maintains that he has not had a prior opportunity
to dispute his underlying liabilities for the years in issue.7
He also maintains that his attorney prevented him from attending
the hearing in his second bankruptcy case, so he asked her to
withdraw from that bankruptcy case and to move to dismiss his
bankruptcy petition. Respondent maintains that petitioner had an
opportunity to dispute his underlying tax liabilities for the
years in issue during his second bankruptcy case.
As we explained in Kendricks v. Commissioner, 124 T.C. 69,
77-79 (2005), if the IRS submits a proof of claim for unpaid
Federal tax liabilities for the years in issue in a taxpayer’s
bankruptcy action, then, for purposes of section 6330(c)(2)(B),
the taxpayer has had the opportunity to dispute the underlying
7
Respondent does not contend that petitioner received a
notice of deficiency for any of the years in issue. Petitioner
does not contend that a notice of deficiency should have been
issued. See sec. 6201(a)(1). The record before us does not
clearly fill in the gaps in the story. We leave the parties
where we find them as to the notice of deficiency implications,
and we focus on the other opportunity-to-dispute prong of sec.
6330(c)(2)(B).
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tax liabilities. This is so even where the taxpayer voluntarily
moves to dismiss his bankruptcy case before a hearing on the
underlying liabilities. Id.
Petitioner filed his second bankruptcy case on September 18,
2002, and the IRS filed a proof of claim for the years in issue
in petitioner’s second bankruptcy case on December 9, 2002.
Thus, petitioner could have contested his underlying tax
liabilities during his second bankruptcy case. See Kendricks v.
Commissioner, 124 T.C. at 77.
The parties have stipulated, and we have found, that on
March 28, 2003, petitioner moved to voluntarily dismiss his
second bankruptcy case, stating that he was in the process of
filing an offer-in-compromise with the IRS. On April 2, 2003,
the Bankruptcy Court granted this motion “in order for Debtor
[petitioner] to file an Offer in Compromise with the Internal
Revenue Service.” Two months later petitioner submitted an
offer-in-compromise.
As we held in Kendricks, this voluntary dismissal does not
change the conclusion that petitioner had an opportunity to
dispute his underlying tax liabilities.
Petitioner contends as follows:
2. Petitioner had filed the Chapter 13 bankruptcy action
on the advice of the attorney, Stephanie Rosof,
appointed to him by his employee union. However, on
the date of his bankruptcy hearing, Ms. Rosof prevented
him from attending the bankruptcy proceeding.
Petitioner did not believe Ms. Rosof was effectively
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representing his interests so asked her to withdraw her
representation and directed her to dismiss his
bankruptcy petition. Therefore, petitioner did not
have a meaningful opportunity to dispute the tax
liabilities for 1996 through 2001 in the bankruptcy
action he filed on September 18, 2002.
The parties filed stipulations, and petitioner testified at
the evidentiary hearing. On the basis of that evidence, we have
found that (1) petitioner filed his second bankruptcy case, (2)
almost 3 months later the IRS filed a proof of claim for
petitioner’s taxes for the years in issue, (3) almost 4 months
after that petitioner moved to dismiss his second bankruptcy
case, stating that he was in the process of filing an offer-in-
compromise, (4) a few days later the bankruptcy court granted the
dismissal motion in order for petitioner to file an offer-in-
compromise, and (5) about 2 months after that petitioner
submitted an offer-in-compromise. It is evident that he took the
actions even though he now tells us he fired his bankruptcy
counsel because he “did not believe Ms. Rosof was effectively
representing his interests”. This concern was not mentioned in
petitioner’s testimony. Also absent from petitioner’s testimony
is any indication that in any way “Ms. Rosof prevented him from
attending the bankruptcy proceeding.” Petitioner may now regret
having followed Ms. Rosof’s advice, but the evidence of record
(testimony, stipulations) makes it clear that the actions
petitioner took brought him into the ambit of having had another
opportunity to dispute his tax liabilities.
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We hold, for respondent, that petitioner had an opportunity
to dispute his underlying liability for each of the years in
issue, within the meaning of section 6330(c)(2)(B); thus,
petitioner is not permitted to dispute his underlying tax
liability for any of the years in issue in this collection
proceeding.8
4. The “Stop Sending Payments” Letter
Petitioner contends that respondent’s settlement officer
abused his discretion because respondent had previously accepted
an installment agreement covering the years in issue and also
2002, and in connection with that installment agreement,
respondent told petitioner “to stop sending payments because no
further payments were due.” Respondent maintains that petitioner
was mistaken because the evidence petitioner relied on applied
only to 2002 and not to any of the years in issue.
Petitioner has the burden of proof in the instant case. See
Rule 142(a).9 The letter that petitioner produced, telling him
to stop making payments and that his “account balance is now
zero”, clearly refers only to 2002. As respondent notes, the
8
Although he did not have to, Kroll apparently considered
petitioner’s underlying tax liabilities at the collection
hearing. But that did not waive the restrictions of sec.
6330(c)(2)(B). See Behling v. Commissioner, 118 T.C. 572, 579
(2002).
9
Unless indicated otherwise, all Rule references are to the
Tax Court Rule of Practice and Procedure.
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account transcripts for the years in issue include references to
“installment agreement” but the account transcript for 2002 does
not refer to any installment agreement.
The parties have not furnished us with a copy of the
installment agreement or a relevant summary that would show that
the installment agreement covered the years in issue and also
2002. On brief, petitioner states that “he wrote on the checks
that he sent to apply the installment payments to tax year 2002.”
Petitioner may have become confused. However, we are satisfied
that there is no evidence in the record that respondent told
petitioner to stop making payments with respect to the years in
issue.
We hold, for respondent, that the “stop payment” letter does
not show that respondent’s settlement officer abused his
discretion.
5. Income Tax Withholding
Petitioner also contends that his employer failed to
properly withhold amounts sufficient to satisfy his income tax
liabilities for the years in issue. On brief, he argued as
follows:
Petitioner reasonably believed, pursuant to the January
29, 1997, order of the United States Bankruptcy Judge
Diane Sigmund, that his employer was making the proper
withholdings from his wages for the remittances to his
sole creditor, the Internal Revenue Service. (Exhibit
17-J). As his wages were under the “supervision and
control of the Court,” petitioner reasonably expected
his employer to report accurate wages and proper
federal tax withholdings from his earnings during the
years, 1997 through 2001. Petitioner’s bankruptcy
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attorney, David Offen, never advised that the payments
would not cover any new tax liabilities that might be
incurred during those years. For each tax year at
issue, petitioner filed for an extension for filing as
he believed was required of him.
In September 1998, after his returns for tax years 1996
and 1997 were prepared by one representative of
respondent at its 7th and Arch Street office in
Philadelphia, petitioner was sent to speak with William
Johnson, another representative of respondent at that
office. Johnson advised petitioner that petitioner did
not have to pay any taxes because he was “under
legalities.”
Petitioner again references the letter discussed supra. The
“Stop Sending Payments” letter states that he had “believed that
respondent had come around to agree with petitioner’s position
that no taxes were owed for the years in dispute” and concludes
that respondent abused respondent’s discretion by determining to
proceed in the instant collection dispute.
As here relevant, section 31(a)(1) provides to petitioner a
credit for the amounts of income taxes his employer withheld from
his wages. Amounts so withheld are credited even if the employer
failed to pay them over to the IRS; amounts not so withheld are
not credited even if they should have been withheld. Edwards v.
Commissioner, 39 T.C. 78, 83-84 (1962), affd. on this issue 323
F.2d 751, 752 (9th Cir. 1963); sec. 1.31-1(a), Income Tax Regs.
There is no contention that petitioner’s section 31 credit
for each of the years in issue was different from what his
employer actually withheld. We do not have information that
would enable us to decide whether, as petitioner contends, his
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employer should have withheld more, but that would not affect
petitioner’s section 31 credit even if petitioner were correct.
We do note that, if petitioner was correct, and if his employer
had withheld a greater amount, then petitioner would have
received less take-home pay.
As to the effect of the stop-sending-payments letter, we
reaffirm our conclusion that this letter does not persuade us
that respondent has abused respondent’s discretion.
Neither side has raised the question of whether a challenge
to the amount of a section 31 credit is a challenge as to the
underlying tax liability (section 6330(c)(2)(B)) or a challenge
to the appropriateness of the collection action (section
6330(c)(2)(A)(ii)); petitioner loses on this issue in any event.
We hold, for respondent, that petitioner is not entitled to
any section 31 credit in excess of what has been allowed.
6. Collection Alternative
Petitioner states that at the administration hearing he
offered a proposed collection alternative--“respondent told him
he does not owe and it should not recant that statement.”
We hold that respondent did not abuse respondent’s
discretion by rejecting that “collection alternative”.
7. Conclusion
At the hearing, respondent’s counsel indicated on the record
that respondent may be willing to reduce some items that have
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been assessed. Accordingly, even though we have ruled for
respondent on every disputed matter, we will provide a short
period of time for exploration of modifications in the interest
of justice.
An appropriate order
will be issued.