T.C. Memo. 2020-125



                         UNITED STATES TAX COURT



                  JILL BETH SAVEDOFF, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 4346-18L.                          Filed August 31, 2020.



      Jill Beth Savedoff, pro se.

      Jonathan Bartolomei and Lydia A. Branche, for respondent.



                           MEMORANDUM OPINION


      URDA, Judge: In this collection due process (CDP) case petitioner, Jill

Beth Savedoff, seeks review pursuant to sections 6320(c) and 6330(d)(1)1 of the


      1
      Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect at all relevant times, and all Rule references are to the Tax
Court Rules of Practice and Procedure. We round all monetary amounts to the
                                                                       (continued...)
                                         -2-

[*2] determination by the Internal Revenue Service (IRS) Office of Appeals2 to

uphold the filing of a notice of Federal tax lien (NFTL) with respect to unpaid

Federal income tax liabilities for 2013 and 2014, as well as associated interest and

additions to tax. Ms. Savedoff contends that she did not receive proper service of

the notice of NFTL filing and that the Office of Appeals abused its discretion in its

ultimate determination.

      Respondent has moved for summary judgment under Rule 121, asserting

that no disputed issues of material fact remain, that the IRS properly mailed the

notice, and that the settlement officer acted within her discretion in sustaining the

NFTL filing. We agree and accordingly will grant the motion.

                                    Background

      The following facts are based on the parties’ pleadings and motion papers,

including the attached declaration and exhibits. See Rule 121(b). Ms. Savedoff

lived in New York when she timely filed her petition.




      1
       (...continued)
nearest dollar.
      2
        On July 1, 2019, the Office of Appeals was renamed the Independent
Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, sec. 1001, 133
Stat. at 983 (2019). As the events in this case predated that change, we will use
the name in effect at the times relevant to this case, i.e., the Office of Appeals.
                                        -3-

[*3] A.      Ms. Savedoff’s Tax Liabilities

      Ms. Savedoff is a self-employed attorney. As relevant here, she reported

taxable income of $63,840 and Federal income tax of $23,841 on her 2013 Form

1040, U.S. Individual Income Tax Return, and taxable income of $53,277 and tax

of $20,578 on her 2014 return. She, however, did not pay these reported tax

obligations. The IRS accordingly assessed for each year the reported tax, an

addition to tax under section 6651(a)(2) for failure to timely pay, an addition to tax

under section 6654 for failure to pay estimated tax, and statutory interest.

      Ms. Savedoff subsequently entered into an installment agreement with the

IRS (first installment agreement) under which she paid $600 per month towards

her outstanding tax liabilities. The IRS applied 17 of these monthly payments

(from July 2014 until October 2015) against Ms. Savedoff’s 2013 liability and 13

payments (from December 2015 until December 2016) against her 2014 liability.

The IRS terminated the first installment agreement on February 27, 2017.3

B.    CDP Proceeding

      On September 5, 2017, the IRS issued a notice to Ms. Savedoff informing

her of the filing of an NFTL with respect to her unpaid 2013 and 2014 liabilities


      3
     Neither party introduced the first installment agreement or any
documentation providing the reasons for its termination.
                                        -4-

[*4] and apprising her of her right to request a CDP hearing pursuant to section

6320. Ms. Savedoff had not filed her 2016 Form 1040 when the IRS issued this

notice, and the notice accordingly was mailed to the address listed on Ms.

Savedoff’s 2015 Form 1040.4

      Ten days later, on September 15, 2017, Ms. Savedoff entered into an

installment agreement with the IRS (second installment agreement) agreeing to the

same monthly payment of $600 as before. Ms. Savedoff declined the opportunity

to enter into a direct deposit installment agreement, instead electing to send in her

payments. She also filed a timely Form 12153, Request for a Collection Due

Process or Equivalent Hearing, on which she checked the box for “Installment

Agreement” and requested a lien withdrawal on the ground that “[t]he lien notice

was not properly served and is based on the wrongful termination of an installment

agreement.”

      Ms. Savedoff’s CDP case thereafter was assigned to a settlement officer in

the Office of Appeals. The settlement officer reviewed Ms. Savedoff’s case file,

which showed a tax liability for 2016 that brought her total liability (including her

2013 and 2014 liabilities) to $58,802. The settlement officer noted the first

      4
       The Form 4340, Certificate of Assessments and Payments, for Ms.
Savedoff’s 2016 tax year indicates that she filed her 2016 Form 1040 (on
extension) on October 15, 2017.
                                        -5-

[*5] installment agreement but stated that Ms. Savedoff had defaulted and was not

current with estimated tax payments.5

      On December 13, 2017, the settlement officer sent Ms. Savedoff a

Letter 4837 scheduling a telephone CDP hearing. Among other things, the

settlement officer requested that within 14 days Ms. Savedoff submit proof that

she was in compliance with her 2017 estimated tax obligations. Ms. Savedoff did

not provide the requested estimated tax information or otherwise communicate

with the settlement officer before the scheduled hearing date.

      The telephone CDP hearing was held on January 23, 2018. During the

hearing Ms. Savedoff told the settlement officer that the notice of NFTL filing had

been incorrectly sent to her previous address and then delivered to her by the then-

current residents. Ms. Savedoff further stated that she had incurred approximately

$59,000 in medical bills in 2015. The settlement officer discussed with Ms.

Savedoff her obligation to make estimated tax payments, how she might avoid the

IRS’ levying on her property, and how she could modify the second installment

agreement to apply to her 2016 liability as well.


      5
       By letter dated November 11, 2017, the IRS informed Ms. Savedoff that
her new installment agreement would be suspended during the pendency of her
CDP proceeding although it advised her to continue her monthly installment
payments to minimize penalty and interest accruals.
                                        -6-

[*6] The conversation also encompassed Ms. Savedoff’s request for lien

withdrawal and the propriety of the NFTL filing. The settlement officer explained

that the second installment agreement did not meet the IRS’ “fresh start” criteria

and that a lien was necessary to protect the Government’s interest.6 The settlement

officer further observed that the NFTL filing was appropriate in that there was a

liability when the lien was filed. Having reached an impasse, Ms. Savedoff

requested the issuance of a notice of determination.

      On February 2, 2018, the Office of Appeals issued a notice of determination

sustaining the NFTL filing for 2013 and 2014. The notice stated that “the Internal

Revenue Manual provisions require Service personnel to file a Notice of Federal

Tax Lien when the total liabilities pass a certain threshold, which * * * [Ms.

Savedoff’s] did.” It further described the filing of an NFTL as the least intrusive

method of protecting the Government’s interest because it did not involve the

actual taking of property through levy or seizure. The notice concluded that,

“[a]lthough * * * [Ms. Savedoff] was granted an installment agreement by the

Collection Department, retaining the Notice of Federal Tax Lien balances the need




      6
      Neither the notice of determination nor respondent’s motion for summary
judgment explains the “fresh start” criteria.
                                          -7-

[*7] for efficient collection with * * * [her] concern that the collection action be

no more intrusive than necessary.”

                                      Discussion

I.    Governing Principles

      A.     Summary Judgment

      The purpose of summary judgment is to expedite litigation and avoid costly,

time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 

, 681 (1988). Under Rule 121(b) the Court may grant summary judgment

when there is no genuine dispute as to any material fact and a decision may be

rendered as a matter of law. Sundstrand Corp. v. Commissioner, 

, 520

(1992), aff’d, 

(7th Cir. 1994). In deciding whether to grant summary

judgment, we construe factual materials and inferences drawn from them in the

light most favorable to the nonmoving party.

however,

may not rest upon the mere allegations or denials in its pleadings but instead must

set forth specific facts showing that there is a genuine dispute for trial.

Rule 121(d); see Celotex Corp. v. Catrett, 

, 324 (1986).

      B.     Standard of Review

      We have jurisdiction to review the Office of Appeals’ determination

pursuant to sections 6320(c) and 6330(d)(1). Where, as here, the underlying tax
                                         -8-

[*8] liabilities are not at issue, we review the determination of the Office of

Appeals for abuse of discretion. Sego v. Commissioner, 

, 610

(2000); Goza v. Commissioner, 

, 182 (2000). In reviewing for abuse

of discretion, we must uphold the Office of Appeals’ determination unless it is

arbitrary, capricious, or without sound basis in fact or law. See, e.g., Murphy v.

Commissioner, 

, 320 (2005), aff’d, 

(1st Cir. 2006);

Taylor v. Commissioner, T.C. Memo. 2009-27, 

, 1116

(2009).

II.   Abuse of Discretion

      Ms. Savedoff contends that the Office of Appeals abused its discretion in

sustaining the NFTL filing. We consider whether the settlement officer:

(1) properly verified that the requirements of any applicable law or administrative

procedure have been met; (2) considered any relevant issues Ms. Savedoff raised;

and (3) considered whether “any proposed collection action balances the need for

the efficient collection of taxes with the legitimate concern of * * * [Ms. Savedoff]

that any collection action be no more intrusive than necessary.” Sec. 6330(c)(3).

Our review of the administrative record establishes that the settlement officer

satisfied all of these requirements.
                                         -9-

[*9] A.      Verification

      Ms. Savedoff argues that the IRS did not properly “serve” the notice of

NFTL filing upon her. In essence she is asserting that the settlement officer failed

to verify that the IRS satisfied the notice requirements of section 6320(a)(2). The

settlement officer did not abuse her discretion in this regard.

      Section 6320(a)(2)(C) provides that an NFTL shall be sent to the taxpayer’s

last known address. See also sec. 301.6320-1(a)(1), Proced. & Admin. Regs. A

taxpayer’s last known address is “the address that appears on the taxpayer’s most

recently filed and properly processed Federal tax return, unless the Internal

Revenue Service (IRS) is given clear and concise notification of a different

address.” Sec. 301.6212-2(a), Proced. & Admin. Regs. This definition applies to

lien notices. See

taxpayer may submit a change of address by indicating a new address on

her most recently filed tax return, by properly filing a written or electronic notice

of change of address with the IRS, or by providing an updated address to the U.S.

Postal Service for inclusion in its National Change of Address database. See

Chapman v. Commissioner, T.C. Memo. 2019-110, at *15; see also sec. 301.6212-

2(a) and (b), Proced. & Admin. Regs.; Rev. Proc. 2010-16, sec. 5.04, 2010-19

I.R.B. 664, 667.
                                       - 10 -

[*10] The IRS mailed the notice of NFTL filing to the address on Ms. Savedoff’s

2015 Form 1040. Ms. Savedoff does not assert that she filed her 2016 return

before September 5, 2017 (when the notice of NFTL filing was issued), and the

Form 4340 for her 2016 tax year reflects that her return for that year was filed on

October 15, 2017.

      The IRS thus properly mailed the notice unless Ms. Savedoff gave the IRS

clear and concise notification of a different address. Although Ms. Savedoff

asserts that she had moved to a new address as of the time of mailing, she has not

alleged, much less shown, that she provided sufficient notification to the IRS of

any change in her address. Ms. Savedoff has failed to raise a genuine issue of

material fact on this point, see Rule 121(d), and we accordingly conclude that the

settlement officer did not abuse her discretion in determining that service was

proper.7

      Ms. Savedoff has not otherwise challenged verification, and we conclude

from our review of the record that the settlement officer conducted a thorough

      7
        Even assuming arguendo that the notice was mailed incorrectly, any error
was harmless as Ms. Savedoff received the notice of NFTL filing in time to
request a CDP hearing, and she did in fact request and receive a hearing. See, e.g.,
Med. Practice Sols., LLC v. Commissioner, T.C. Memo. 2010-98, 

, at *7; cf. Estate of Brandon v. Commissioner, 

, 87
(2009) (“[T]he intent of section 6320 was fulfilled because the estate received
notice, made a timely request for, and received, a hearing relating to the NFTL.”).
                                        - 11 -

[*11] review of the account transcripts and verified that all applicable

requirements were met.8

      B.     Issues Raised

      During her CDP hearing and before us Ms. Savedoff has requested that the

NFTL be withdrawn. Section 6323(j) permits the Secretary to withdraw an NFTL

in certain enumerated circumstances, including where a taxpayer enters into an

installment agreement. Although her brief is not entirely clear on this point, Ms.

Savedoff apparently contends that the lien should have been withdrawn in the light

of the second installment agreement.

      Section 6323(j) “is permissive, and nothing in it requires respondent to

withdraw the NFTL because of * * * [an] installment agreement.” Berkery v.

Commissioner, T.C. Memo. 2011-57, 

, 1260 (2011); see

sec. 301.6323(j)-1(c), Proced. & Admin. Regs. (“If the Commissioner determines

conditions for withdrawal [of an NFTL] are present, the Commissioner may (but is

not required to) authorize the withdrawal.” (Emphasis added.)). The existence of




      8
       “Where the supervisory approval requirement of section 6751(b)(1)
applies, the Appeals officer should obtain verification that such approval was
obtained”. ATL & Sons Holdings, Inc. v. Commissioner, 

, 144
(2019). The approval requirement of sec. 6751(b)(1), however, does not apply to
additions to tax under secs. 6651(a)(2) and 6654. See sec. 6751(b)(2)(A).
                                         - 12 -

[*12] the installment agreement by itself thus did not render the NFTL

unnecessary or require its withdrawal.

      In sustaining the NFTL the notice of determination further stated that

“Internal Revenue Manual provisions require Service personnel to file a Notice of

Federal Tax Lien when the total liabilities pass a certain threshold” and that

retaining the lien was in the best interest of the Government even in the light of

the valid second installment agreement. This conclusion was not an abuse of

discretion.

      As a general matter, the Internal Revenue Manual (IRM) provides that an

NFTL should be withdrawn where, inter alia, a taxpayer has entered into a direct

debit installment agreement and her aggregate unpaid balance of assessments on

the installment agreement is $25,000 or less at the time of the request. See IRM

pt. 5.12.9.3.2.1(3) and (4) (Oct. 14, 2013). Ms. Savedoff plainly did not qualify.

She declined the opportunity to enter into a direct deposit installment agreement.

See

(“Taxpayers making payments under any other type of

installment agreement are not eligible for consideration for withdrawal * * *

unless they convert to a * * * [direct debit installment agreement.]”); see also

Brown v. Commissioner, T.C. Memo. 2019-157, at *10. And her balance for 2013

and 2014 exceeded $25,000 at the time. See IRM pt. 5.12.9.3.2.1(4).
                                       - 13 -

[*13] In summary, the determination to sustain the filing of the NFTL despite the

existence of the second installment agreement was consistent with the relevant

provisions of the IRM. We have previously held that a settlement officer does not

abuse her discretion when she adheres to collection guidelines published in the

IRM. Brown v. Commissioner, at *10. We see nothing to suggest a different

conclusion here.9

      C.     Balancing

      In her opposition to the motion for summary judgment Ms. Savedoff argues

that the filing of the lien was “overbearing and unjust” on the grounds that “there

is no risk that IRS will not be paid monies owed and there are insufficient assets

for the IRS to seize.” From our review we are satisfied that the settlement officer

duly considered the totality of Ms. Savedoff’s circumstances before she concluded

that the NFTL filing was not overly intrusive and was necessary to protect the

Government’s interest in efficiently collecting taxes. Ms. Savedoff had already

been granted a second installment agreement by the time of her CDP hearing, and

she fails to persuade us that maintaining the lien under the circumstances of this

      9
       Ms. Savedoff also argues that the first installment agreement was wrongly
terminated. She fails to explain, however, why this purportedly improper
termination mattered, considering that the IRS granted her an identical installment
agreement before she requested a CDP hearing. See Karakaedos v. Commissioner,
T.C. Memo. 2012-53, 

, 1258 (2012).
                                        - 14 -

[*14] case was improper. We fail to see an abuse in this regard. See Shaw v.

Commissioner, T.C. Memo. 2010-210, 

, 297 (2010); see

also Stinchcomb v. Commissioner, T.C. Memo. 2009-259, 

,

at *3.10

III.   Conclusion

       Finding no abuse of discretion in any respect, we will grant summary

judgment to respondent and sustain the notice of determination upholding the

filing of the NFTL for the years at issue.

       To reflect the foregoing,


                                                 An appropriate order and decision

                                       will be entered.


       10
        Ms. Savedoff seems concerned that the IRS will seize her bank accounts.
No such collection action is before us. As the settlement officer explained in the
notice of determination, an NFTL filing does not involve the taking of property
through levy or seizure. To put it more plainly: “Pursuant to section 6321, the
Federal Government obtains a lien against ‘all property and rights to property,
whether real or personal’ of any person liable for Federal taxes upon demand for
payment and failure to pay.” Berkery v. Commissioner, T.C. Memo. 2011-57, 

, 1259 (2011). “The purpose of filing, pursuant to section
6323, notice of the lien that arises under section 6321 is to protect the
Government’s interest in a taxpayer’s property against the claims of other
creditors.”

attempt to collect by levy in the future, Ms.
Savedoff would have the chance to request a CDP hearing with respect to the levy.
See sec. 6330(a), (b), and (c).