T.C. Memo. 2011-67
UNITED STATES TAX COURT
LARRY E. TUCKER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3165-06L. Filed March 22, 2011.
P filed income tax returns for 2000, 2001, and
2002 that reported tax due; but he did not pay the tax.
In early 2003, when P’s tax liabilities totaled at
least $14,945, P used $44,700 for day trading and lost
$22,645. The Internal Revenue Service assessed the tax
and issued to P a notice of the filing of a “Notice of
Federal Tax Lien” (NFTL). After an initial hearing and
an adverse determination, P filed a timely appeal of
that determination with the Tax Court pursuant to
I.R.C. sec. 6330(d)(1), contending that the Office of
Appeals improperly rejected an offer-in-compromise
(OIC) that P proposed. This Court ordered a remand to
the Office of Appeals for further consideration of P’s
OIC. At a supplemental collection due process hearing,
the Office of Appeals preferred a partial payment
installment agreement but P proposed only his OIC. In
calculating P’s reasonable collection potential for
purposes of evaluating his OIC, the Office of Appeals
considered P’s day trading to constitute asset
dissipation. The Office of Appeals issued a
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supplemental notice of determination denying P’s
proposed OIC and upholding the filing of the NFTL. The
parties have filed cross-motions for summary judgment.
Held: Where P engaged in day trading in disregard
of his outstanding Federal income taxes, the resulting
losses constitute dissipation of assets. R’s Office of
Appeals did not abuse its discretion in denying P’s
proposed OIC and upholding the filing of the NFTL.
Carlton M. Smith and Zachary Grendi (student), for
petitioner.
Lydia A. Branche, for respondent.
MEMORANDUM OPINION
GUSTAFSON, Judge: This case is an appeal, pursuant to
section 6330(d)(1),1 by which petitioner Larry E. Tucker seeks
this Court’s review of a determination by the Office of Appeals
of the Internal Revenue Service (IRS) to reject Mr. Tucker’s
proposed offer-in-compromise (OIC) and to sustain the filing of a
notice of Federal tax lien (NFTL) in order to collect
Mr. Tucker’s unpaid income taxes for tax years 2000, 2001, and
2002. That determination was made after the Office of Appeals
conducted a collection due process (CDP) hearing pursuant to
section 6330(c) and a supplemental CDP hearing pursuant to a
remand of this Court. The IRS’s determination at issue in this
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code (“Code”, 26 U.S.C.) and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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case is reflected in an initial “Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330”
and in a “Supplemental Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330”. This
matter is currently before this Court on the parties’ cross-
motions for summary judgment filed under Rule 121.
The specific issue to be decided is whether the Office of
Appeals abused its discretion in September 2006--at a time when
Mr. Tucker owed more than $39,000--by rejecting an OIC pursuant
to which Mr. Tucker would have paid $317 over 116 months,
totaling $36,772. We will grant respondent’s motion and deny
Mr. Tucker’s motion. We hold that the Office of Appeals did not
abuse its discretion in rejecting Mr. Tucker’s OIC and sustaining
the filing of the NFTL.
Background
The parties’ motion papers and the supporting exhibits
attached thereto show that there is no dispute as to the
following facts. At the time he filed his petition, Mr. Tucker
resided in New Mexico.
Mr. Tucker’s tax returns
Mr. Tucker earned income in the five years 1999 through
2003. For the first three of those years Mr. Tucker failed to
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timely file tax returns. For the years at issue2–-2000, 2001,
and 2002--he simultaneously filed Forms 1040, “U.S. Individual
Income Tax Return”, on April 15, 2003.3 In March 2004 he filed
an untimely Form 1040 for tax year 1999. And in April 2004 he
timely filed a Form 1040 for tax year 2003. For 2000 through
2003, some but not all of his tax liabilities were either prepaid
or withheld from his wages. The IRS assessed the income tax
liabilities that Mr. Tucker had self-reported. After the
application of prepayment and withholding credits, Mr. Tucker had
2
The IRS’s notice of determination at issue referred to
liabilities for only three years--2000, 2001, and 2002--and this
Court lacks jurisdiction to review collection of the liabilities
for the years not included in the notices of determination. See
Sullivan v. Commissioner, T.C. Memo. 2009-4. However, as is
explained below, the OIC that Mr. Tucker submitted in his CDP
hearing addressed five years--1999 through 2003. In determining
whether the rejection of the OIC and the collection of
liabilities for the years included in the notices of
determination is appropriate, this Court is authorized (as the
settlement officer was required) to consider “any relevant issue
* * * including * * * offers of collection alternatives”. Sec.
6330(c)(2)(A), (d). Therefore, we evaluate the settlement
officer’s exercise of discretion in rejecting the OIC, taking
into account all the liabilities that were proposed to be
compromised, even though we do not have jurisdiction to review
the collection of all those liabilities. See, e.g., Orum v.
Commissioner, 123 T.C. 1 (2004) (reviewing an OIC that covers
income tax liabilities for tax years that are both within and
outside of this Court’s jurisdiction), affd. 412 F.3d 819 (7th
Cir. 2005).
3
In our previous Opinion in this case, Tucker v.
Commissioner, 135 T.C. 114, 117 (2010), we mistakenly stated that
Mr. Tucker untimely filed all of these returns in June 2003. The
transcripts of Mr. Tucker’s accounts show that, while these
returns were not processed by the IRS until June 2003, they were
received by the IRS on April 15, 2003. These filings were
therefore timely as to 2002 but untimely as to 2000 and 2001.
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an outstanding reported tax due (not including any interest or
penalties) for each year as follows:
Income Tax Withholding Reported Tax
Tax Year Reported Credits Liability Due
1999 $3,356 -0- $3,356
1
2000 14,808 ($6,702) 8,106
2001 3,629 (146) 3,483
2002 13,404 (10,353) 3,051
2003 6,947 (633) 6,314
Total 24,310
1
After filing his return for tax year 2000, Mr. Tucker made
three voluntary payments of $349 towards the amount due. As a
result, by July 2004, when the collection action at issue
started, the tax due for 2000 (without any accruals) was
reduced to $7,059, and the tax due for all five years (without
any accruals) was reduced to $23,263.
On May 8, 2004, nearly a year after Mr. Tucker filed his
returns for 2000, 2001, and 2002, the IRS sent to him a “Final
Notice--Notice of Intent to Levy and Notice of Your Right to a
Hearing” (hereinafter, “levy notice”) for those three years,
pursuant to sections 6330(a)(1) and 6331(d)(1), advising him of
the IRS’s intent to levy upon his property. Mr. Tucker did not
timely request a hearing under section 6330 with respect to that
notice. For the same three years, the IRS sent to Mr. Tucker on
July 22, 2004, a “Notice of Federal Tax Lien Filing and Your
Right to a Hearing Under IRC 6320” (“lien notice”), pursuant to
section 6320(a)(1), advising him that the IRS had filed an NFTL
against him.
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Mr. Tucker’s July 2004 OIC
On July 29, 2004, after the IRS had issued the lien notice,
but before Mr. Tucker received it, he submitted a Form 656,
“Offer in Compromise”, proposing to settle his income tax
liabilities for the five years 1999 through 2003. At that time,
his unpaid tax liabilities for those five years totaled $24,310,
and with interest and additions to tax (“accruals”), his total
five-year liability was approximately $35,000.4 Mr. Tucker
proposed to compromise that five-year liability for a total of
$6,000 payable in monthly payments of $100 over 60 months.
Mr. Tucker also submitted a Form 433-A, “Collection Information
Statement for Wage Earners and Self-Employed Individuals”,
detailing his assets, monthly income, and monthly expenses.
The IRS received Mr. Tucker’s July 2004 OIC on August 4,
2004. By letter dated August 25, 2004, the IRS examiner who
evaluated the July 2004 OIC informed Mr. Tucker that the IRS had
“determined that you have the ability to pay your liability in
4
The record reflects that Mr. Tucker’s outstanding
liabilities with accruals through August 16, 2004, were
$35,591.26, so we estimate his total outstanding liabilities
(i.e., unpaid taxes plus accruals) as of July 29, 2004 (i.e.,
less than one month earlier), to be approximately $35,000.
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full within the time provided by law.”5 Mr. Tucker was given 14
days to dispute this determination.
At the same time the IRS was evaluating Mr. Tucker’s
July 2004 OIC, Mr. Tucker timely submitted to the IRS on
August 11, 2004, a Form 12153, “Request for a Collection Due
Process Hearing”, in response to the lien notice. In the
attachment to Form 12153, Mr. Tucker expressed his desire for an
OIC in the CDP context by stating that “on July 29, 2004, the
taxpayer mailed to the IRS an offer in compromise covering these
taxes and taxes for the years 1999 and 2003. An offer in
compromise would be the sensible collection alternative to this
lien.” Because of the close timing of Mr. Tucker’s submission of
5
This August 2004 determination that Mr. Tucker could fully
pay his income tax liabilities--a determination not important to
the outcome of this case--was made by comparing Mr. Tucker’s
then-current liabilities (i.e., $35,591.26 with accruals through
August 16, 2004) to his total ability to pay (which was reckoned
to be $609,680.73). Included in the IRS’s calculation of
Mr. Tucker’s total ability to pay was $558,176.80 in dissipated
assets from stock transactions, representing $697,721 discounted
by 20 percent for quick sale purposes. The $697,721 represents
the largest amount of stock sales Mr. Tucker had, in the
aggregate, on any one day (i.e., February 3, 2003). We assume
that the examiner concluded that if he had sales in that amount
on that day, then he must have had cash in hand in that amount on
that day; but if the examiner so concluded, she evidently failed
to offset the proceeds by corresponding liabilities arising from
margin purchases. It seems unlikely that Mr. Tucker had $697,721
of proceeds from his day trading in hand at any one time. In any
event, before any determination was issued in this case, the OIC
examiner abandoned the position that Mr. Tucker had dissipated
$558,176.80 in stocks. As is set out below, the Appeals Office
subsequently determined that Mr. Tucker had dissipated assets in
a much smaller amount--$22,645.
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the July 2004 OIC and his August 2004 request for a CDP hearing,
there was some confusion as to who (i.e., the original OIC
examiner or the CDP settlement officer) should continue to
consider Mr. Tucker’s July 2004 OIC. As a result, there is some
dispute as to whether Mr. Tucker ever disputed the financial
determination outlined in the letter dated August 25, 2004, and
whether his July 2004 OIC was rejected by the IRS before his case
was assigned to a settlement officer. In any event, by letter
dated May 19, 2005, from Mr. Tucker’s counsel to the settlement
officer assigned to Mr. Tucker’s case, Mr. Tucker’s counsel
effectively withdrew Mr. Tucker’s July 2004 OIC and indicated his
desire for an installment agreement instead:
Per your request, enclosed is the offer in compromise filed
by Larry Tucker on July 29, 2004--i.e., prior to the IRS’
issuance of collection due process notices.[6] I am also
enclosing the Form 433-A filed at that time, together with
its enclosures. Please note that we have since realized
that the offer to pay $6,000 in the form of 60 monthly
payments of $100 was a mistake in that the IRS requires that
offers being paid in over two-year periods be payable over
the entire collection period--which in this case is closer
to ten years, since the offer was filed only a few months
6
For clarification, Mr. Tucker’s submission of the July 2004
OIC on July 29, 2004, was after the July 22, 2004, issuance of
the lien notice by the IRS, but before Mr. Tucker received it. A
“Final Notice--Notice of Intent to Levy and Notice of Your Right
to a Hearing” relating to tax years 1999 and 2003 was, in fact,
issued after Mr. Tucker’s submission of the July 2004 OIC.
Section 6331(k)(1) provides for a restraint on levy while an OIC
is pending, and the issuance of the notice of levy violated that
restriction. As a result, the IRS withdrew this levy notice
against Mr. Tucker. The issuance of that first levy notice (and
its subsequent withdrawal) was not part of the CDP hearing or
determination and is not part of the CDP appeal at issue here.
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after the 2003 return was filed. Mr. Tucker is willing to
make payments over the entire collection period remaining.
* * * * * * *
* * * [Mr. Tucker’s] income can be more variable than the
usual taxpayer. This may make an offer in compromise
unfeasible, since a brief period of unemployment could
result in the offer going into default and having to be
completely redone. Perhaps a more sensible situation would
be for us together to determine a full or partial payment
installment payment arrangement for Mr. Tucker, which might
be modified in the future as his circumstances change.
Using the collection financial standards, we together could
come to an amount. * * *
In this same letter, Mr. Tucker’s counsel also addressed the
issue that the original OIC examiner raised regarding dissipation
of assets. In doing so, Mr. Tucker’s counsel referred the
settlement officer to his letter dated April 26, 2005, which had
been submitted to the Office of Appeals before the settlement
officer was assigned to Mr. Tucker’s case. In that April 26,
2005, letter, Mr. Tucker’s counsel had summarized Mr. Tucker’s
stock transactions as follows:
In January 2003, Mr. Tucker received payment in advance
for some independent contractor web design project to be
performed by him later in the year. He knew he would need
this money to live on during the year, but he also knew he
owed taxes and other creditors. In retrospect unwisely, he
decided to try to leverage currently-unneeded funds[7] into
profits by which he could pay off his back tax debts and
7
Mr. Tucker’s counsel characterized as “currently-unneeded”
the funds that Mr. Tucker could have used to pay his overdue
liabilities for the years 1999 through 2001. Presumably he made
that characterization because Mr. Tucker had not yet filed
returns for those years. If that was his reasoning, then it was
not correct. See the text accompanying note 12 below, discussing
liabilities that were actually then due.
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other creditors. So, he wire transferred some of the funds
from his checking account to a newly-opened E-Trade account
between January 10, 2003 and April 3, 2003. During January,
he put $23,700 into the E-Trade account. Then, he began day
trading. By the end of January, he showed a small profit,
since the account was valued at $25,873.16 on January 31,
2003. From there, however, everything went south.
The E-Trade account lost $7,123.12 in value in February
2003. It continued losing money in March. So, starting on
March 13, 2003, Mr. Tucker received “margin calls”.
Mr. Tucker was trading on margin - i.e, borrowing part of
the money to trade from the brokerage firm. As the account
declined in value, the brokerage firm insisted that
Mr. Tucker put additional funds into the [E-Trade] account
so that the margin borrowing did not exceed a certain
percentage of the value of the account. If Mr. Tucker did
not comply with these “margin calls”, the brokerage firm
would sell all the stocks in the account. So, from March
13, 2003 to April 3, 2003, Mr. Tucker put, in aggregate,
$21,000 into the E-Trade account.
By mid-April, 2003, Mr. Tucker gave up on trading. He
had lost $22,645 through his trading between January 10 and
April 21. His last account position was liquidated on April
21, 2003. At that point, the E-Trade account had about
$22,000 in cash in it and no securities. Between May 2,
2003 and October 27, 2003, Mr. Tucker gradually transferred
money from the E-Trade account back to his checking account
to pay his rent and other bills. In all, he transferred
$18,503 between accounts in that period. At the same time,
since the E-Trade account came with a debit card, he charged
various personal expenses to thee-Trade [sic] account,
approximating $3,500 in all. By October 27, 2003, the
account was left with only 79 cents in it.
So, Mr. Tucker did not dissipate anywhere near the
$697,721 determined by * * * [the original OIC examiner] -
merely $22,645. And he did this in a good faith attempt to
repay his taxes. [Emphasis added.]
In her case activity records for May 27, 2005, the settlement
officer observed: “POA [i.e., Mr. Tucker’s “power of attorney”]
admits that at least $22,645.00 in assets was dissipated. This
amount must be added to RCP [reasonable collection potential].
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I/A [installment agreement] might be more appropriate unless FP
[full payment] is possible.”
CDP hearing
The CDP hearing was held as a telephone conference on
May 31, 2005, between the IRS settlement officer and Mr. Tucker
and his counsel. During the conference Mr. Tucker’s counsel
reiterated that Mr. Tucker was no longer pursuing the July 2004
OIC proposing payments totaling $6,000 since circumstances had
changed. Furthermore, Mr. Tucker’s counsel advised that
Mr. Tucker was not asserting that the lien filed against him had
to be removed, but rather Mr. Tucker was hoping to find an
installment payment arrangement that he could live with.
Following the May 31 telephone CDP hearing, numerous letters were
exchanged between the settlement officer and Mr. Tucker’s
counsel:
On June 8, 2005, Mr. Tucker submitted a revised page 6 of
the Form 433-A to reflect new financial figures for his monthly
income and expenses. This revised form demonstrated that
Mr. Tucker had excess income over allowable living expenses of
$326 per month. In the June 8, 2005, cover letter accompanying
the updated financial information, Mr. Tucker’s counsel advised
the settlement officer that “Mr. Tucker would be prepared to
enter into an installment payment arrangement to pay the IRS $326
a month.” In response, by letter dated June 20, 2005, the
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settlement officer concluded that her “calculations indicate that
the most * * * [Mr. Tucker] would be able to pay is $316.00” per
month. Enclosed with the settlement officer’s letter was a Form
433-D, “Installment Agreement”, filled out by the settlement
officer reflecting a proposed partial payment installment
agreement (PPIA) to pay $316 per month. The settlement officer
invited Mr. Tucker to review the terms of the PPIA and, if
acceptable, sign and return the agreement by July 6, 2005.
On June 23, 2005, Mr. Tucker’s counsel faxed the settlement
officer a letter indicating that Mr. Tucker would prefer an OIC
in lieu of the proposed PPIA, because an OIC would (assuming he
adhered to all of the conditions) fix his liability to the IRS,
whereas the PPIA could be reexamined every two years for possible
increases.8
8
See sec. 6159(d) (“In the case of an agreement entered into
by the Secretary * * * for partial collection of a tax liability
[i.e., a PPIA], the Secretary shall review the agreement at least
once every 2 years.”); sec. 7122 (authorizing agreement between a
taxpayer and the Government that fully settles a tax liability
for payment of less than the full amount owed.) But see Internal
Revenue Manual (IRM) pt. 5.8.6 (Sept. 1, 2005) (when accepting an
OIC, the Government may obtain a collateral agreement that
enables the Government to collect funds in addition to the amount
actually secured by the offer). Certain provisions of the IRM
have been revised since the time of Mr. Tucker’s CDP hearing. We
quote the IRM provisions as in effect when the Office of Appeals
made the determination that is under review in this case.
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Mr. Tucker’s July 2005 OIC
Consistent with the suggestion he had made in his June 23
fax, Mr. Tucker’s counsel sent to the settlement officer a
revised OIC dated July 20, 2005. At that time Mr. Tucker’s
liabilities for the five years 1999 through 2003 totaled
approximately $37,000 (with accruals).9 Mr. Tucker proposed to
settle his income tax liabilities for those five years by making
a total of $36,772 in monthly payments of $317 over 116 months
(July 2005 OIC). The offer of $317 per month was intended by
Mr. Tucker to be $1 more than the settlement officer had
previously determined he could pay per month (and was thus
intended to exceed his RCP and thereby warrant acceptance). In a
letter dated November 18, 2005, the settlement officer rejected
Mr. Tucker’s proposed July 2005 OIC. In doing so, the settlement
officer stated, “It is usually not in the Government’s best
interest to accept an offer when there is more than five years
remaining on the collection statute.”
The notice of determination and the commencement of this case
On January 9, 2006, the Office of Appeals issued to
Mr. Tucker a “Notice of Determination Concerning Collection
9
The record reflects that Mr. Tucker’s total outstanding tax
liability with accruals through August 16, 2004, was $35,591.26,
and his total liability with accruals through October 16, 2006,
was $39,790.19. We therefore estimate his total outstanding
liability as of July 20, 2005 (between those two dates), to be
approximately $37,000.
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Action(s) under Section 6320 and/or 6330”, in which Appeals
determined to uphold the filing of the NFTL as to Mr. Tucker’s
income tax liabilities for 2000, 2001, and 2002. In response,
Mr. Tucker timely filed a petition with this Court on February
13, 2006.
Previous Tax Court proceedings, remand to the Office of Appeals,
and supplemental notice of determination
After filing his petition, Mr. Tucker filed a motion for
summary judgment on June 9, 2006. Respondent opposed that motion
and filed a motion for remand on July 17, 2006, stating that
“[t]he settlement officer erred as a matter of law in
rejecting petitioner’s offer for the stated reason that amendment
of I.R.C. § 6159 to permit partial payment installment agreements
renders obsolete deferred payment offers in compromise.” By our
order of July 27, 2006, we denied Mr. Tucker’s motion for summary
judgment and granted respondent’s motion to remand the case to
the IRS’s Office of Appeals “for an officer to exercise
discretion in consideration of * * * [Mr. Tucker’s] offer” and
for issuance of a supplemental notice of determination no later
than October 16, 2006.
The Office of Appeals then assigned a settlement officer
(i.e., a different settlement officer from the one who had
conducted Mr. Tucker’s initial CDP hearing) to conduct a
supplemental CDP hearing and to reconsider Mr. Tucker’s July 2005
OIC. The supplemental CDP hearing was held as a telephone
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conference on September 11, 2006, between the settlement officer
and Mr. Tucker’s counsel. On September 12, 2006, the Office of
Appeals issued a “Supplemental Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330”, which
determined to reject Mr. Tucker’s July 2005 OIC and to uphold the
filing of the NFTL as to Mr. Tucker’s income tax liabilities for
2000, 2001, and 2002. The attachment to the supplemental notice
of determination stated, inter alia:
Issues Raised by the Taxpayer
In an attachment to Form 12153, * * * [counsel] stated that
you were unable to full pay the balances due based on
sporadic employment and medical concerns and believe that an
offer in compromise would be a sensible alternative to the
lien. You submitted a long term deferred offer in the
amount of $6,000.00 to compromise 1999, 2000, 2001, 2002,
and 2003 1040 return balances. You subsequently amended
your offer to $36,772.00. You owe $39,790.19 with accruals
to 10/16/2006.
In response:
1. An offer is not an alternative to the filing of a NFTL.
It is an alternative to the issuance of a levy or
garnishment. Internal Revenue Manual (IRM) Section 5.8.4.9
requires that a NFTL be considered when reviewing an offer
in compromise. This section does not require the filing of
a NFTL but they are routinely filed on offers that have been
accepted but will not be paid within 24 months in order to
protect the government’s interest in any assets an
individual may own. Your proposal includes payments over
the course of 116 months.
2. NFTL may not be released until full payment is
received. A taxpayer may qualify for a withdrawal under
circumstances laid out in IRC Section 6323(j) if the filing
of the lien was premature or otherwise not in accordance
with legal and administrative procedures, at the time a
taxpayer entered into an installment agreement, he or she
was not notified that a lien would be filed, withdrawal of
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the lien would facilitate collection, and hardship
situations (this determination is normally made by the
Taxpayer Advocate rather than Appeals). As stated above,
all legal or procedural requirements have been met. You
have no installment agreement precluding the filing of the
NFTL. The documents in the administrative file indicate
that you want to pay the debts over 116 months based on your
income. You site [sic] no other sources for funding the
offer. Therefore, withdrawal of the lien would not
facilitate collection by, for example, enabling you to get a
loan to full pay the balance or gain business to speed up
collection. Furthermore, in the response to the motion for
summary judgment, you indicated that you did not request the
NFTL be “removed”.
3. Internal Revenue Manual (IRM) Section 5.8.1.4(1) lists
four objectives of the offer in compromise program including
to effect collection of what can reasonably be collected at
the earliest possible time and at the least cost to the
government, achieve a resolution that is in the best
interest of both the individual taxpayer and the government,
provide a taxpayer a fresh start toward future voluntary
compliance with all filing and paying requirements, and
secure collection of revenue that may not be collected
through any other means. * * * [The previous settlement
officer] offered to negotiate a shorter term offer that
would accomplish all these objectives. A long term deferred
offer may also accomplish these objectives but it also
raises the possibility of a part payment installment
agreement (PPIA). Appeals is required to consider all
collection alternatives raised but is not required to accept
an alternative that it believes will not be in the best
interest of the taxpayer AND the government (emphasis
added).
4. Appeals still does not believe a long term deferred
offer is a better alternative to a PPIA because the Service
still has to collect and monitor payments for the next 116
months and unlike a long term deferred offer, the payments
on a PPIA are negotiable. IRS Section 6159 requires that
PPIAs be reviewed every two years. If there are increases
to a taxpayer’s income or equity in assets, then the
taxpayer is required to increase the amount of the payments,
liquidate the equity, and if the income and equity is
sufficient enough, full pay the debts. If the taxpayer does
not comply, the Service can terminate the PPIA. The bottom
line, in the amount of time it takes to monitor your long
term deferred offer, the Service can review a PPIA no less
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than four times, which may in fact result in an amount
greater than what is offered and even full payment.
5. There is reason to believe the Service would collect
more from a PPIA over the next 116 months based on the
documentation in the administrative file and information
available from internal sources. You are 45-years old, your
diabetes is being controlled by medication and you are not
receiving disability for this or any other ailments, and you
are gainfully employed. Your employment history also
indicates you have the ability to earn great sums of money.
For instance, in 2003, you purchased and sold almost $7
million in stocks (you purchased more than $3.4 million in
stocks and sold just about the same amount for which you
ultimately claimed a loss on your 2003 1040 return).
6. Upon review, * * * [this settlement officer] believes
that the stock sales are dissipated assets and believes the
amounts dissipated should be included in a minimum offer
calculation. As such, the minimum offer is actually full
payment. These stock transactions in 2003 occurred * * *
[after] the due dates of the 1999, 2000, and 2001 1040
returns. If you simply sold a little less than you bought,
which was your option, you could have already paid the taxes
in full.
Mr. Tucker’s motion to remand and the parties’ cross-motions for
summary judgment
On November 21, 2006, in response to the supplemental notice
of determination, Mr. Tucker filed an amendment to petition with
this Court in order to challenge the determination in the
supplemental notice of determination. In his amendment to
petition, Mr. Tucker asserted that the Office of Appeals erred
by: (1) determining that Mr. Tucker’s offer was not in
respondent’s best interest; (2) determining that a PPIA was a
better alternative to the OIC that Mr. Tucker proposed;
(3) determining that there was reason to believe that
Mr. Tucker’s income or assets would increase in the future, such
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that the IRS would collect more from a PPIA than from the OIC;
(4) determining that Mr. Tucker’s stock sales in 2003 constituted
“dissipated assets”; (5) raising the dissipated assets issue in
the supplemental notice of determination because it went beyond
the scope of the remand order, as the issue was not raised in the
original notice of determination; (6) determining that “there is
no law or policy that requires the Service to accept an offer”;
and (7) determining that “the cost it takes to monitor your long
term deferred offer for 116 months would be similar to the cost
it would take to monitor a part payment installment agreement”.10
On November 29, 2007, respondent filed a motion for summary
judgment asking the Court to sustain the supplemental notice of
determination. Mr. Tucker filed a cross-motion for summary
judgment on February 27, 2008, and filed a motion for remand on
September 2, 2008. Mr. Tucker’s motion to remand was previously
denied in Tucker v. Commissioner, 135 T.C. 114 (2010), and we now
address the parties’ cross-motions for summary judgment.
10
Mr. Tucker also contended that the Office of Appeals
failed to afford him his statutory right to a hearing, in that he
was denied a hearing before an appeals officer appointed pursuant
to the Appointments Clause in Article II of the Constitution. We
rejected this contention in Tucker v. Commissioner, 135 T.C. 114
(2010).
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Discussion
I. Applicable legal principles
A. Summary judgment standards
Where the pertinent facts are not in dispute, a party may
move for summary judgment to expedite the litigation and avoid an
unnecessary trial. Summary judgment may be granted where there
is no genuine issue as to any material fact and a decision may be
rendered as a matter of law. Rule 121(a) and (b). Since we will
grant respondent’s motion for summary judgment, we will focus on
respondent as the movant. The party moving for summary judgment
(i.e., respondent) bears the burden of showing that there is no
genuine issue as to any material fact, and factual inferences
will be drawn in the manner most favorable to the party opposing
summary judgment (i.e., Mr. Tucker). Dahlstrom v. Commissioner,
85 T.C. 812, 821 (1985).
B. Collection review procedure
When a taxpayer fails to pay any Federal income tax
liability after demand section 6321 imposes a lien in favor of
the United States on all the property of the deliquent taxpayer,
and section 6323 authorizes the IRS to file notice of that lien.
However, the IRS must provide written notice of a tax lien filing
to the taxpayer within five business days. After receiving such
a notice, the taxpayer may request an administrative hearing
before the Office of Appeals. Sec. 6320(a)(3)(B), (b)(1).
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Administrative review is carried out by way of a hearing before
the Office of Appeals pursuant to section 6330(b) and (c); and,
if the taxpayer is dissatisfied with the outcome there, he can
appeal that determination to the Tax Court under section 6330(d),
as Mr. Tucker has done.
For the agency-level CDP hearing before the Office of
Appeals, the pertinent procedures are set forth in section
6330(c):
First, the IRS appeals officer must obtain verification from
the Secretary that the requirements of any applicable law or
administrative procedure have been met. Sec. 6330(c)(1).11 The
supplemental notice of determination and respondent’s motion set
forth the IRS’s compliance with these requirements; however, in
his petition at paragraph 4(m) and (n), Mr. Tucker called into
question the accuracy of the filing date of the NFTL reflected on
the lien notice:
m. On July 13, 2004, respondent prepared a notice of
federal tax lien against petitioner for his 2000, 2001,
and 2002 taxes. Respondent filed the notice of federal
tax lien in Manhattan on August 4, 2004.
n. On July 22, 2004, respondent issued to petitioner a
“Notice of Federal Tax Lien Filing and Your Right to a
11
In the case of the lien filed against Mr. Tucker, the
basic requirements, see sec. 6320, for which the appeals officer
was to obtain verification are: a timely assessment of the
liability, secs. 6201(a)(1), 6501(a); notice and demand for
payment of the liability, sec. 6303; and notice of the filing of
the lien and of the taxpayer’s right to a CDP hearing, sec.
6320(a) and (b).
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Hearing Under IRC 6320” for the years 2000, 2001, and
2002, erroneously stating that the Notice of Federal
Tax Lien had been filed on July 15, 2004.
While Mr. Tucker concedes that the IRS issued to him a lien
notice for tax years 2000, 2001, and 2002 on July 22, 2004, he
disputes whether the NFTL was filed on July 15, 2004 (as
reflected in the lien notice), or August 4, 2004 (as reflected on
the website of the New York City Department of Finance). We find
it unnecessary to resolve this issue, for the following reasons.
Under section 6320(a), the Secretary is required to send
written notice to the taxpayer liable for the tax “not more than
5 business days after the day of the filing of the notice of
lien.” Whether the NFTL was filed on July 15, 2004, or August 4,
2004, the IRS sent notice of the filing to Mr. Tucker on July 22,
2004, which was “not more than 5 business days after” July 15,
2004, or August 4, 2004. There is no rule that the requisite
notice cannot be sent before the filing of the NFTL. Therefore,
even if the NFTL was filed on August 4, 2004, the lien notice
that Mr. Tucker received on July 22, 2004, was still timely under
section 6320(a). Mr. Tucker has raised no other verification
issues under section 6330(c)(1), and we find no failure of
verification.
Second, the taxpayer may “raise at the hearing any relevant
issue relating to the unpaid tax or the proposed levy,” including
challenges to the appropriateness of the collection action and
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offers of collection alternatives. Sec. 6330(c)(2)(A).
Mr. Tucker’s principal contention--that the IRS Office of Appeals
abused its discretion in not accepting his OIC--pertains to that
second set of issues, which we will discuss below.
Additionally, the taxpayer may contest the existence and
amount of the underlying tax liability if he did not receive a
notice of deficiency or otherwise have a prior opportunity to
dispute the tax liability. Sec. 6330(c)(2)(B). While Mr. Tucker
did not have any prior opportunity to challenge his underlying
self-reported liabilities, he did not make such a challenge
during his CDP hearing or before this Court. Therefore, we find
Mr. Tucker’s underlying tax liabilities for 2000, 2001, and 2002
are not at issue.
When the Office of Appeals issues its determination, the
taxpayer may “appeal such determination to the Tax Court”,
pursuant to section 6330(d)(1), as Mr. Tucker has done. In such
an appeal (where the underlying liability is not at issue), we
review the determination of the Office of Appeals for abuse of
discretion. That is, we decide whether the determination was
arbitrary, capricious, or without sound basis in fact or law.
See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), affd. 469
F.3d 27 (1st Cir. 2006); Sego v. Commissioner, 114 T.C. 604, 610
(2000); Goza v. Commissioner, 114 T.C. 176 (2000). Because
Mr. Tucker does not dispute the filing of the NFTL as improper,
-23-
our review of the supplemental notice of determination focuses on
whether the Office of Appeals abused its discretion in rejecting
Mr. Tucker’s OIC.
II. Respondent’s entitlement to summary judgment
A. Scope of remand
Mr. Tucker argues that the settlement officer assigned to
his supplemental CDP hearing erred in raising the dissipated
assets issue in the supplemental notice of determination because
it went beyond the scope of the remand order, as the issue was
not raised in the original notice of determination. As a result,
we must decide whether it was proper for the settlement officer
to include dissipated assets in her calculation of Mr. Tucker’s
reasonable collection potential. We hold that it was proper for
her to do so.
Section 6330(c)(2)(A)(iii) permits a taxpayer to propose
collection alternatives to the filing of a Federal tax lien.
Section 4.02(2) of Rev. Proc. 2003-71, 2003-2 C.B. 517, 517,
provides that an OIC based on doubt as to collectibility will be
treated as an acceptable collection alternative only where the
OIC reflects the taxpayer’s reasonable collection potential.
Where a taxpayer has dissipated assets in disregard of the
taxpayer’s outstanding Federal income taxes, the dissipated
assets may be included in the calculation of the minimum amount
-24-
that is to be paid under an acceptable OIC. Internal Revenue
Manual (IRM) pt. 5.8.5.4(5) (Sept. 1, 2005).
Mr. Tucker is not correct in asserting that the dissipation
issue was not considered by the original settlement officer and
not raised in the original notice of determination. While the
original settlement officer did not articulate her reasons for
denying Mr. Tucker’s OIC (thereby necessitating the remand), her
case activity notes clearly reflect that she considered the issue
of dissipation: “POA admits that at least $22,645.00 in assets
was dissipated. This amount must be added to RCP. I/A might be
more appropriate unless FP is possible.”
In any event, we do not believe the second settlement
officer’s review was limited to issues raised in the original
notice of determination. By its order of July 27, 2006, this
Court granted respondent’s motion to remand this case to the
IRS’s Office of Appeals “for an officer to exercise discretion in
consideration of * * * [Mr. Tucker’s] offer”. We thus ordered
the Office of Appeals to consider Mr. Tucker’s OIC de novo. To
do so, the settlement officer was required pursuant to IRM pt.
5.8.5.4 to consider any dissipated assets in calculating
Mr. Tucker’s reasonable collection potential. Since the
viability of an OIC is contingent on a taxpayer’s reasonable
collection potential, we find that inherent in the consideration
of Mr. Tucker’s OIC was the consideration of dissipated assets.
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As a result, we hold that the issue of dissipated assets was
properly considered by the settlement officer during the
supplemental CDP hearing, and that consideration of that issue
did not go beyond the scope of our remand order.
B. Dissipation of assets
Mr. Tucker also argues that the Office of Appeals erred in
determining that his day trading in 2003 constituted a
dissipation of assets. We disagree in part.
A dissipated asset is defined as any asset (liquid or not
liquid) that has been sold, transferred, or spent on nonpriority
items or debts and that is no longer available to pay the tax
liability. Samuel v. Commissioner, T.C. Memo. 2007-312; IRM pt.
5.8.5.4(1). If the OIC examiner determines that assets have been
dissipated with a disregard of an outstanding tax liability, then
the examiner may include the value of the dissipated asset in the
taxpayer’s reasonable collection potential calculation. IRM pt.
5.8.5.4 states:
(1) During an offer investigation it may be discovered
that assets (liquid or non-liquid) have been sold, gifted,
transferred, or spent on non-priority items and/or debts and
are no longer available to pay the tax liability. This
section discusses treatment of the value of these assets
when considering an offer in compromise.
* * * * * * *
(2) Once it is determined that a specific asset has
been dissipated, the investigation should address whether
the value of the asset, or a portion of the value, should be
included in an acceptable offer amount.
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* * * * * * *
(5) If the investigation clearly reveals that assets
have been dissipated with a disregard of the outstanding tax
liability, consider including the value in the reasonable
collection potential (RCP) calculation.
Where a taxpayer’s once-held assets have simply vanished, it
makes obvious sense for the tax collector to include the assets
in computing the taxpayer’s reasonable collection potential,
unless the taxpayer can account for them. See Schropp v.
Commissioner, T.C. Memo. 2010-71, slip op. at 24-26, affd.
without published opinion 106 AFTR 2d 2010-7424, 2011-1 USTC par.
50,122 (4th Cir. 2010). However, where a taxpayer can prove that
he really did dissipate the assets (say, by lavish living or
gambling that he substantiates), the long-gone assets cannot be
said to increase his literal collection potential. However, in
that circumstance the IRM nonetheless instructs the Office of
Appeals to “consider” including the assets in RCP. The evident
reason for this rule is to deter delinquent taxpayers from
wasting money that they owe and should pay as taxes.
Conscientious taxpayers would object--and the system would
suffer--if a noncompliant taxpayer with overdue taxes and with
money in hand could spend his money on “non-priority items” and
nonetheless effectively obtain forgiveness of his liability
simply by proving in the collection context that he really did
reduce his collection potential by wasting the assets. Removing
dissipated assets from “reasonable collection potential” could
-27-
create perverse incentives, and the tax collector must have
discretion to avoid that problem.
Mr. Tucker admittedly deposited $23,700 into an E-Trade
account in January 2003 and made additional deposits totaling
$21,000 between March 13 and April 3, 2003. At the time
Mr. Tucker admittedly deposited funds into his E-Trade account
(i.e., from January to April 3, 2003), he had not yet filed his
income tax returns for tax years 1999 through 2001, which were
then due. Nonetheless, because the due date for those returns
had passed, his tax liabilities had accrued and he had
outstanding tax liabilities (not including any interest or
additions to tax) for tax years 1999, 2000, and 2001 totaling
$14,945 at the time of his deposits.12 Personal income taxes are
due on the date the return is required to be filed. Sec.
6151(a); Holywell Corp. v. Smith, 503 U.S. 47, 58 (1992); Pan Am.
Van Lines v. United States, 607 F.2d 1299, 1301 (9th Cir. 1979).
Mr. Tucker’s tax liabilities for tax years 2002 and 2003 had not
yet accrued. Mr. Tucker was aware of his unpaid tax obligations
for 1999 through 2001 when he transferred the $44,700 into his E-
Trade account. Despite having known tax obligations, Mr. Tucker
still transferred the money and for nearly four months engaged in
the highly speculative and volatile activity of day trading.
12
The liabilities eventually reported on his returns but not
prepaid by withholding or otherwise were $3,356 for 1999, $8,106
for 2000, and $3,483 for 2001, totaling $14,945. See supra p. 5.
-28-
Mr. Tucker maintains that he did so in an effort to make enough
money to pay off his delinquent taxes and other creditors, as
well as pay his tax liability for 2002 that would be coming due.
Even if this is true, Mr. Tucker’s motives do not change the
character of his day trading activity.
Black’s Law Dictionary (8th ed. 2004) defines “day trading”
as “The act or practice of buying and selling stock shares or
other securities on the same day, esp. over the Internet, usu.
for the purpose of making a quick profit on the difference
between the buying price and the selling price.” Mr. Tucker had
never owned stocks before and had no experience in day trading.
To further complicate matters, Mr. Tucker was trading on margin--
i.e., was borrowing part of the money to trade from a brokerage
firm--and was making high-volume trades (e.g., trading as much as
$697,721 in one day).
On April 21, 2003, Mr. Tucker stopped trading. By that time
he had lost $22,645 of his initial deposits, leaving
approximately $22,000 in the E-Trade account. Mr. Tucker
maintains that he used this remaining $22,000 to provide for
basic living expenses from May 2 through October 27, 2003. Under
Rule 121 we view the facts in the light most favorable to
Mr. Tucker, and we assume that the $22,000 was, in fact, used for
-29-
necessary living expenses.13 Pursuant to IRS administrative
guidelines, if this $22,000 was used for necessary living
expenses, it will not be considered a dissipation. IRM pt.
5.8.5.4(4) (“When the taxpayer can show that assets have been
dissipated to provide for necessary living expenses, these
amounts should not be included in the reasonable collection
potential (RCP) calculation”). We therefore consider as
potential dissipation only the other $22,645, which Mr. Tucker
lost.
The losses that Mr. Tucker sustained were not due to an
unforeseeable event but rather were commonplace (especially for a
neophyte) in such a highly volatile activity. Mr. Tucker knew he
owed outstanding taxes; and he had the cash in hand that would
have paid in full the taxes and accruals he owed as of early 2003
(i.e., for tax years 1999, 2000 and 2001); and yet he chose
instead to devote that money to a risky investment. Mr. Tucker’s
foray into day trading was purely speculative, and his already
slim chances of success were undermined by his inexperience. In
short, Mr. Tucker’s circumstances were of his own making.
13
This assumption may be unduly generous, since Mr. Tucker
admits that some portion of this $22,000 may not have been used
for necessary living expenses--e.g., $824.64 on May 19, 2003, for
an airline ticket for a personal trip to Phoenix, Arizona;
$274.84 on June 2, 2003, for the hotel stay associated with this
personal trip; $535 on October 24, 2003, for a bartending course;
and $236 on August 12, 2003, for a personal cruise on the Hudson
River.
-30-
Therefore, we cannot criticize the Office of Appeals’ conclusion
that Mr. Tucker’s losses associated with his day trading were a
dissipation of assets that should be considered for inclusion in
RCP as contemplated by IRM pt. 5.8.5.4.
In the supplemental notice of determination, the settlement
officer concluded that Mr. Tucker had dissipated $44,700 in
assets, measured by his deposits into the E-Trade account. For
purposes of summary judgment, we find that that conclusion was
excessive. The mere act of depositing the money into the E-Trade
account did not rise to the level of dissipation, but the day
trading and the losing of the money in the account did. Because
at the time in April 2003 that Mr. Tucker lost a total of $22,645
from his day trading activities, he had outstanding Federal tax
liabilities of at least $14,975,14 we hold for purposes of
summary judgment that Mr. Tucker dissipated assets of $14,975.
The settlement officer determined that not just $14,975 but
rather all $44,700 of the deposits had been dissipated. For
14
The record does not provide a basis for the Court to
reasonably estimate Mr. Tucker’s unpaid tax liabilities with
accruals as of April 2003. As a result, for summary judgment
purposes, we assume Mr. Tucker’s unpaid tax liabilities to be the
amounts reported as due when he filed his delinquent returns for
tax years 1999, 2000, and 2001. Furthermore, although
Mr. Tucker’s tax liability for tax year 2002 accrued on April 15,
2003--the due date of the return--we cannot tell on the record
before us whether the losses associated with the E-Trade account
occurred before or after April 15, 2003. As a result, for
summary judgment purposes we ignore the tax liability for 2002 in
determining Mr. Tucker’s outstanding tax liabilities at the time
he dissipated assets.
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purposes of summary judgment, we assume that conclusion was
erroneous as to amount, but we find that error to be harmless for
reasons explained below. See infra note 16. As a result, we
conclude that the settlement officer did not abuse her discretion
in determining that Mr. Tucker had dissipated assets as the
result of his day trading in 2003.
C. Rejection of Mr. Tucker’s OIC
The Office of Appeals rejected Mr. Tucker’s OIC because,
inter alia, it determined that he could fully pay his tax
liabilities. At the time of the supplemental notice of
determination, Mr. Tucker owed $39,790.19 (with accruals through
October 16, 2006) in unpaid Federal income taxes for the years
1999 through 2003. The settlement officer assigned to
Mr. Tucker’s supplemental CDP hearing was tasked with considering
Mr. Tucker’s proposed OIC of $36,772 (to be paid at a rate of
$317 per month over 116 months) based on doubt as to
collectibility.
1. Mr. Tucker’s dissipation of assets justified the
rejection of his OIC.
Rev. Proc. 2003-71, sec. 4.02(2), 2003-2 C.B. 517, 517,
provides that an OIC based on doubt as to collectibility will be
treated as an acceptable collection alternative only where the
OIC reflects the taxpayer’s reasonable collection potential. A
taxpayer’s reasonable collection potential is determined, in
part, using published guidelines that establish national and
-32-
local allowances for necessary living expenses. Income and assets
(possibly including dissipated assets in accordance with IRM pt.
5.8.5.4) in excess of those needed for necessary living expenses
are treated as available to satisfy Federal income tax
liabilities. See IRM pt. 5.15.1.2(1) and (2) (May 1, 2004); IRM
exs. 5.15.1-3, 5.15.1-8, 5.15.1-9 (Jan. 1, 2005).
The parties agree that Mr. Tucker’s disposable income (i.e.,
monthly income over allowable monthly expenses) was $316 per
month, and that there were 116 months remaining before his
collection period expiration date. See sec. 6502. “Generally,
the amount to be collected from future income is calculated by
taking the projected gross monthly income less allowable expenses
and multiplying the difference times the number of months
remaining on the statutory period for collection.” IRM pt.
5.8.5.5.5(1) (Sept. 1, 2005). As a result, Mr. Tucker’s future
income subject to collection would be $316 x 116 months, or
$36,65615--an amount slightly less than the total of the payments
he proposed in his OIC.
However, as we determined above, the value of assets that
Mr. Tucker dissipated through his day trading activities was
$14,945. Under IRS guidelines, Mr. Tucker’s reasonable
15
In calculating a taxpayer’s future income stream for
purposes of evaluating a offer, the IRM apparently does not
direct settlement officers to discount the monthly income stream
to a present value.
-33-
collection potential would therefore be $51,601--i.e., the sum of
his future income stream ($36,656) plus the value of any
dissipated assets (at least $14,945). Given that Mr. Tucker’s
reasonable collection potential thus exceeded his outstanding tax
liabilities, the settlement officer did not err in determining
Mr. Tucker could fully pay his Federal income tax liabilities.16
When an Appeals officer has followed IRS administrative
guidelines to ascertain a taxpayer’s reasonable collection
potential and has rejected the taxpayer’s OIC on that ground, we
generally have found no abuse of discretion. See McClanahan v.
Commissioner, T.C. Memo. 2008-161.
2. Even apart from Mr. Tucker’s dissipation of
assets, the Office of Appeals did not abuse its
discretion in rejecting his OIC.
Assuming arguendo that we should ignore dissipated assets
altogether and should conclude that Mr. Tucker’s reasonable
collection potential was less than full payment, we still hold
that the Office of Appeals did not abuse its discretion in
rejecting Mr. Tucker’s OIC and insisting instead on a PPIA, for
the following reasons.
Section 7122(a) authorizes compromise of a taxpayer’s
Federal income tax liability. “‘The decision to entertain,
16
We find the settlement officer’s inclusion of $44,700 of
dissipated assets in Mr. Tucker’s reasonable collection potential
(as opposed to the $14,945 determined above) to be a harmless
error because--as is shown above--even with inclusion of only the
lower amount, Mr. Tucker could still fully pay his liabilities.
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accept or reject an offer in compromise is squarely within the
discretion of the appeals officer and the IRS in general.’”
Gregg v. Commissioner, T.C. Memo. 2009-19 (quoting Kindred v.
Commissioner, 454 F.3d 688, 696 (7th Cir. 2006)). In reviewing
this determination, we do not decide whether in our opinion
Mr. Tucker’s OIC should have been accepted. See Woodral v.
Commissioner, 112 T.C. 19, 23 (1999); Keller v. Commissioner,
T.C. Memo. 2006-166, affd. in part 568 F.3d 710 (9th Cir. 2009).
Instead, we review the determination for abuse of discretion.
As Mr. Tucker’s representative acknowledged, an OIC
permanently limits the Government to collecting only according to
its terms, whereas a PPIA permits the Government to review the
taxpayer’s situation every two years and increase its collections
if circumstances warrant. See supra note 8. In the supplemental
notice of determination, the settlement officer articulated
several reasons for her determination, largely on the basis of
this distinction: (1) Mr. Tucker’s offer was not in the best
interest of the Government; (2) a PPIA was a better alternative
to the OIC that Mr. Tucker proposed; (3) there is reason to
believe that Mr. Tucker’s income or assets would increase in the
future, such that the IRS would collect more from a PPIA than
from the OIC; (4) “there is no law or policy that requires the
Service to accept an offer”; and (5) “the cost it takes to
monitor * * * [Mr. Tucker’s] long term deferred offer for 116
-35-
months would be similar to the cost it would take to monitor a
part payment installment agreement”. The decision whether to
accept Mr. Tucker’s OIC rested squarely within the discretion of
the settlement officer, and we find there was a reasonable basis
for the settlement officer’s decision; it was not arbitrary,
capricious, or without sound basis in fact or law. As a result,
we cannot conclude that the Office of Appeals abused its
discretion in rejecting Mr. Tucker’s OIC and sustaining the
filing of the NFTL, whether or not dissipated assets were
considered by the settlement officer or included in his RCP.
Conclusion
On the basis of the foregoing, we conclude that the Office
of Appeals did not abuse its discretion, and we hold that
respondent is entitled to the entry of a decision sustaining the
determination as a matter of law.
To reflect the foregoing,
An appropriate order and
decision will be entered.