T.C. Summary Opinion 2013-48



                        UNITED STATES TAX COURT



        LAW OFFICES OF ROBERT A. CUSHMAN, LLC, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 17309-12S L.                     Filed June 13, 2013.



      Robert A. Cushman (a member), for petitioner.

      William C. Bogardus, for respondent.



                             SUMMARY OPINION


      PANUTHOS, Chief Special Trial Judge: This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in effect when the
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petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not

reviewable by any other court, and this opinion shall not be treated as precedent

for any other case.

      This case is before the Court on petitioner’s2 request for review of

respondent’s determination sustaining the filing of a notice of Federal tax lien

(NFTL) with respect to unpaid employment tax liability for the period ending

December 31, 2005. The sole issue for decision is whether respondent abused his

discretion in sustaining the NFTL for the period ending December 31, 2005, and

not granting petitioner’s request for additional time for a face-to-face meeting with

respondent’s settlement officer (SO).

                                    Background

      Some of the facts have been stipulated, and we incorporate the stipulation

and the accompanying exhibits by this reference. At the time the petition was

filed, petitioner’s principal place of business was in Connecticut.




      1
       Unless otherwise indicated, all section references are to the Internal
Revenue Code of 1986, as amended. All Rule references are to the Tax Court
Rules of Practice and Procedure.
      2
        Petitioner was represented by Robert A. Cushman. Mr. Cushman signed
the petition as a member of the L.L.C.
                                         -3-

      On January 3, 2012, respondent mailed to petitioner an NFTL for unpaid

employment taxes for the tax period ending December 31, 2005. The NFTL

showed a tax liability of $6,698.54 for that tax period, which is the same liability

the Court sustained in Law Offices of Robert A. Cushman, LLC v. Commissioner,

T.C. Summary Opinion 2011-37, filed March 29, 2011.3 There, the Court

concluded that respondent (1) properly assessed petitioner’s employment tax

liability for the period ending December 31, 2005, (2) did not abuse his discretion

in conducting petitioner’s CDP hearing through correspondence and telephone

calls, and (3) did not abuse his discretion in denying petitioner’s request for an

installment agreement. Petitioner timely submitted a Form 12153, Request for a

Collection Due Process or Equivalent Hearing. On the Form 12153 petitioner

checked the box stating “I Cannot Pay Balance” and requested that respondent

withdraw the NFTL. Petitioner also asserted that the deposit penalty law had

changed and that there would have been no penalty under the current law, that

some balances had been paid off but not properly allocated, and that a Form 433-




      3
       In Law Offices of Robert A. Cushman, LLC v. Commissioner, T.C.
Summary Opinion 2011-37, petitioner requested judicial review of respondent’s
determination sustaining a levy with respect to the tax period ending December
31, 2005, the same period at issue in this case.
                                         -4-

B, Collection Information Statement for Businesses, dated January 21, 2010, was

never considered.

      Settlement Officer Michael J. Matuszczak (SO Matuszczak) sent a letter to

petitioner on March 2, 2012, acknowledging receipt of petitioner’s Form 12153.

SO Matuszczak sent another letter to petitioner on March 29, 2012, scheduling a

telephone collection due process (CDP) hearing for May 16, 2012, and informing

petitioner that any request to reschedule the CDP hearing had to be made by April

12, 2012. The March 29, 2012, letter advised that petitioner had had a prior

opportunity to dispute the underlying liability and that petitioner therefore would

not be able to dispute the underlying liability at this CDP hearing. The letter also

stated that petitioner had to submit a completed Form 433-B and must have timely

paid in full any required Federal tax deposits for SO Matuszczak to consider

collection alternatives. The letter further stated that petitioner had to submit a

completed and signed Form 12277, Application for Withdrawal of Filed Form

668(Y), Notice of Federal Tax Lien, if petitioner wanted respondent to consider

withdrawal of the NFTL.

      On April 12, 2012, Mr. Cushman, as an individual, mailed to respondent a

completed Form 12277. On the form Mr. Cushman stated that a CDP hearing was
                                          -5-

pending and that he was unable to obtain credit with the lien affecting his credit

score.

         At some point after receiving the March 29, 2012, letter scheduling the

telephone CDP hearing, petitioner contacted SO Matuszczak to request a face-to-

face hearing. The face-to-face hearing was scheduled for May 23, 2012. On May

22, 2012, petitioner’s office sent a fax to SO Matuszczak requesting to reschedule

the May 23, 2012, CDP hearing to June 1, June 6, or June 8 because of Mr.

Cushman’s schedule. Mr. Cushman did not appear at or call SO Matuszczak for

the CDP hearing scheduled for May 23, 2012, and aside from the Form 12277 Mr.

Cushman submitted as an individual, petitioner did not submit any of the

information requested in the March 29, 2012, letter.

         On June 8, 2012, respondent mailed petitioner a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330 sustaining the

NFTL. The notice of determination stated that petitioner only requested

withdrawal of the NFTL and did not request any collection alternative or submit

financial information requested for consideration of collection alternatives.

         Petitioner filed the petition, asserting among other things that a CDP

hearing was not held even though petitioner had provided several potential dates

for a hearing and that the Form 433-B dated January 21, 2010, was never
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considered. Petitioner’s only argument at trial was that it did not have a CDP

hearing because the SO failed to grant the requested extension for a hearing date.

Petitioner asserted that it is seeking “just a * * * face-to-face hearing” and that if

the Court were to remand the case to respondent’s Appeals Office, petitioner

would propose that respondent withdraw the NFTL as requested and discuss

collection alternatives.

                                      Discussion

1.    General CDP Requirements

      If a taxpayer fails to pay any Federal income tax liability after notice and

demand, a lien in favor of the United States is imposed on all the property of the

delinquent taxpayer. Sec. 6321. Section 6320(a) provides that within five

business days after filing a notice of tax lien, the IRS must provide written notice

of that filing to the taxpayer. After receiving such notice, the taxpayer may

request an administrative hearing before the Appeals Office. Sec. 6320(a)(3)(B).

A CDP hearing concerning a lien under section 6320 is to be conducted in

accordance with the relevant provisions of section 6330. Sec. 6320(c). We have

jurisdiction under section 6330(d)(1) to review the Commissioner’s determination
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that the NFTL was proper and that the Commissioner may proceed to collect by

it.4

       In reviewing the Commissioner’s decision to sustain collection actions,

where the validity of the underlying tax liability is properly at issue, the Court

reviews the Commissioner’s determination of the underlying tax liability de novo.

Sego v. Commissioner, 

, 610 (2000); Goza v. Commissioner, 

, 181-182 (2000). The Court reviews any other administrative

determination regarding proposed collection actions for abuse of discretion. Sego

v. Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114 T.C. at 182.5 An

abuse of discretion occurs when the exercise of discretion is without sound basis

in fact or law. Murphy v. Commissioner, 

, 308 (2005), aff’d, 

 (1st Cir. 2006).




       4
        The Pension Protection Act of 2006, Pub. L. No. 109-280, sec. 855, 120
Stat. at 1019, amended sec. 6330(d) and granted this Court jurisdiction over all
sec. 6330 determinations made after October 16, 2006. Perkins v. Commissioner,

, 63 n.7 (2007).
       5
        Petitioner does not dispute the validity of the underlying tax liability in this
proceeding. In any event petitioner previously had an opportunity to dispute this
liability in a CDP hearing with respect to a levy for the same tax period. See Law
Offices of Robert A. Cushman, LLC, v. Commissioner, T.C. Summary Opinion
2011-37; see also sec. 6330(c)(4).
                                         -8-

      At the collection hearing, a taxpayer may raise any relevant issues relating

to the unpaid tax or proposed levy, including spousal defenses, challenges to the

appropriateness of the collection actions, and offers of collection alternatives.

Sec. 6330(c)(2)(A). In addition, he may challenge the existence or amount of the

underlying tax liability, but only if he did not receive a notice of deficiency or

otherwise have an opportunity to dispute such liability. Sec. 6330(c)(2)(B).

      The Appeals officer must verify that the requirements of applicable law and

administrative procedure have been met, consider the issues properly 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 action be no more intrusive than necessary. Sec. 6330(b), (c)(3).

Petitioner asserts that respondent abused his discretion in sustaining the NFTL

because respondent refused to reschedule petitioner’s face-to-face CDP hearing.

2.    Denial of Face-to-Face Hearing

      Petitioner argues that it did not receive a CDP hearing and that its Form

433-B was not considered. Although a CDP hearing may consist of a face-to-face

conference, a proper hearing may also occur by telephone or by correspondence

under certain circumstances. Barry v. Commissioner, T.C. Memo. 2011-127, 

, at *5 (citing Katz v. Commissioner, 

, 337-338 (2000)).
                                        -9-

Requests for a face-to-face CDP hearing in order to discuss a collection alternative

“will not be granted unless other taxpayers would be eligible for the alternative in

similar circumstances.” Sec. 301.6320-1(d)(2), Q&A-D8, Proced. & Admin.

Regs. To be eligible for a collection alternative, the taxpayer must provide

required returns, make required deposits of tax, and provide requested financial

information, including Form 433-B, to the Appeals Office. Id.; see also Rivas v.

Commissioner, T.C. Memo. 2012-20, 

, at *6; Williams v.

Commissioner, T.C. Memo. 2008-173, 

, at *9. On its Form

12153 petitioner requested withdrawal of the NFTL and did not request collection

alternatives. SO Matuszczak requested petitioner to submit a Form 433-B and

supporting documentation within 14 days of his March 29, 2012, letter if

petitioner wished to discuss collection alternatives. Petitioner never submitted a

current Form 433-B or supporting financial information, and therefore petitioner

was not eligible for a collection alternative. Consequently, respondent’s Appeals

Office did not abuse its discretion by denying petitioner’s request to reschedule

the face-to-face hearing, and petitioner was afforded a reasonable opportunity to

be heard for the tax period at issue. See Roman v. Commissioner, T.C. Memo.

2004-20.
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3.    Refusal To Grant Continuance and Denial of Collection Alternatives

      Petitioner further contends that respondent’s Appeals Office abused its

discretion when it denied petitioner’s request for a continuance of the CDP

hearing and did not consider collection alternatives. While an Appeals officer’s

unreasonable denial of a request for more time to submit financial information or

other evidence may be an abuse of discretion, see Shanley v. Commissioner, T.C.

Memo. 2009-17, 

, at *5; see also Sullivan v. Commissioner, T.C.

Memo. 2012-337, at *20, we conclude that the denial by the Appeals Office was

not an abuse of discretion.

      Petitioner learned of the CDP hearing scheduled for May 16, 2012, when it

received the March 29, 2012, letter from SO Matuszczak. The March 29, 2012,

letter clearly informed petitioner that it should make any requests to reschedule the

CDP hearing by April 12, 2012. The letter also requested a current Form 433-B so

that SO Matuszczak could determine whether petitioner qualified for any

collection alternatives.

      SO Matuszczak agreed to reschedule the CDP hearing to May 23, 2012.

When petitioner requested to reschedule the hearing for the second time, petitioner

made the request on May 22, 2012, just one day before the scheduled hearing date.

Petitioner had not provided the financial information requested in the March 29,
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2012, letter and requested the extension because of Mr. Cushman’s scheduling

problem, not because petitioner needed more time to complete the requested

financial information.

      A taxpayer may raise collection alternatives that may include an installment

agreement or an offer-in-compromise. Secs. 6320(c), 6330(c)(2)(A)(iii).

Petitioner did not request any collection alternatives. In the March 29, 2012,

letter, the SO requested a current Form 433-B so that he could determine whether

petitioner qualified for any collection alternatives. Petitioner did not provide a

current Form 433-B but, in its petition, asserted that a Form 433-B dated January

21, 2010, was not considered. We have consistently held that it is not an abuse of

discretion for the Appeals Office to reject collection alternatives and sustain the

proposed collection action on the basis of the taxpayer’s failure to submit

requested financial information. See Huntress v. Commissioner, T.C. Memo.

2009-161; Prater v. Commissioner, T.C. Memo. 2007-241; Roman v.

Commissioner, T.C. Memo. 2004-20. Petitioner was aware that SO Matuszczak

had requested current financial information, and petitioner failed to provide it.

      On these facts, we cannot find that the denial of the extension because of

petitioner’s failure to submit requested financial information was arbitrary,

capricious, or without sound basis in fact and law. Furthermore, it was not an
                                       - 12 -

abuse of discretion for the Appeals Office to reject collection alternatives because

of a lack of necessary financial information. Petitioner has not shown that

respondent’s determination to sustain the NFTL because of its unpaid tax

liabilities for the tax period ending December 31, 2005, and failure to submit a

current Form 433-B was arbitrary, capricious, or without sound basis in fact or

law.

4.     Conclusion

       On the basis of our findings stated above, we sustain respondent’s

determination for the tax period ending December 31, 2005. We also conclude

that there was no abuse of discretion in conducting petitioner’s CDP hearing

through correspondence and telephone calls and no abuse of discretion in denying

petitioner collection alternatives.

       We have considered the parties’ arguments and, to the extent not discussed

herein, we conclude the arguments to be irrelevant, moot, or without merit.

       To reflect the foregoing,


                                                Decision will be entered for

                                       respondent.