Ramdas v. Comm'r
Opinion
In response to R's notice of a proposed levy, P's request for a collection due process ("CDP") hearing under
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In response to R's notice of a proposed levy, P's request for a collection due process ("CDP") hearing under
GUSTAFSON,
The Commissioner's motion establishes the following facts, which Mr. Ramdas does not dispute.
Mr. Ramdas filed a Federal income tax return for tax year 2005, reporting an income tax liability of $2,271 and tax withheld of $22,665, and requesting a refund of $20,394. The IRS assessed the amount of tax shown on the return and issued a refund in the requested amount of $20,394.
*107 The IRS subsequently audited Mr. Ramdas's 2005 return and determined a deficiency in his 2005 income tax plus an accuracy-related penalty under
On August 31, 2009, the IRS issued to Mr. Ramdas a "Final Notice of Intent to Levy and Notice of Your Right to a Hearing". Mr. Ramdas's unpaid balance for tax year 2005 (with accruals for interest and additions for the late payment of tax) was $17,293.81 at that time.
Mr. Ramdas thereafter submitted a timely Form 12153, "Request for a Collection Due Process or Equivalent Hearing", which was also signed by his attorney. On that Form 12153, Mr. Ramdas checked the boxes to indicate a desire for both an installment agreement ("IA") and an OIC. In addition, he checked the box marked "Other", and in the corresponding space for the "Reason" for which he requested a hearing, he stated: *108 Taxpayer requests a CDP hearing as a levy would be a hardship & a burden. *114Taxpayer requests a collection alternative (i.e. OIC, I/A, etc.). Further, taxpayer requests penalty abatement as he believes he has reasonable cause for abatement of penalties.
On December 16, 2009, Appeals sent to Mr. Ramdas a letter scheduling his CDP hearing to be conducted as a telephone hearing on January 13, 2010, and stating that, in order for Appeals to consider alternative collection methods, Mr. Ramdas must provide within 14 days (i.e., by December 30, 2009): (1) a completed Form 433-A, "Collection Information Statement for Wage Earners and Self-Employed Individuals" (i.e., a financial statement), with the required attachments, and (2) a completed Form 656, "Offer In Compromise," with all applicable fees and schedules. In addition, Appeals informed Mr. Ramdas that he could not challenge the underlying liability at issue because he had a prior opportunity to do so when he was issued the notice of deficiency.
Mr. Ramdas failed to provide the requested documentation to Appeals by the December 30, 2009, deadline. Instead, on January 12, 2010 (i.e., one day before the scheduled telephone CDP hearing), Mr. Ramdas's attorney requested that Mr. Ramdas's CDP hearing be held *115as a face-to-face hearing instead. The IRS agreed, and the case was transferred to the New York Appeals Office.
*109 On January 27, 2010, an Appeals Officer in the New York Appeals Office issued a letter to Mr. Ramdas and his attorney, scheduling his face-to-face CDP hearing for February 25, 2010. The January 27, 2010, letter stated that Mr. Ramdas should provide all pertinent information within 14 days—i.e., by February 10, 2010. Specifically, Appeals' letter stated that in order for the IRS to consider a collection alternative, Mr. Ramdas must provide the following: • A completed Collection Information Statement (Form 433-A for individuals and/or Form 433-B for businesses.) • Proof of income earned for the last 3 months • Proof of expenses for the last 3 months • Bank statements for the last 3 months • Life insurance policy - type, conditions for borrowing or cancellation, current loan and cash value • Retirement Accounts/IRA/ • Documentation regarding all Real Property own[ed] or interest in for the last 3 years - description of the property, number of rooms, baths, basement etc, value of the asset, purchase *116date, loan balance, monthly payment, latest real estate tax statement and deed • Motor vehicle, boats etc. for the last 3 years - description of the asset, number of miles, value of the asset, purchase date, loan balance, monthly payment *110 • Documentation of accounts and or other assets held in your name or in [sic] which you have control over. • Medical documentation pertaining to taxpayer's or dependents [sic] health that affects the taxpayer's ability to satisfy the liability. • A statement regarding taxpayer's educational background, employment • Form 433 B - Collection Information Statement for Business—for any business taxpayer has an interest in or owns. Documentation to include but not limited to Account Receivables/Payables, Cash Flow, bank statements for the last 3 months, documentation of assets held in company or the taxpayer/officers name and the last 3 years of the business Income Tax Return including all K-1, schedules, attachments etc.
On February 23, 2010, the Appeals Officer spoke with Mr. Ramdas's attorney and rescheduled his CDP hearing for March 10, 2010. The Appeals Officer stated that all documents Mr. Ramdas wished to be considered were due by *111 February 26, 2010. It is unclear from the record whether Mr. Ramdas submitted any of the requested information by the February 26 deadline.
On March 10, 2010, the Appeals Officer held a face-to-face CDP hearing with Mr. Ramdas's attorney. During the CDP hearing Mr. Ramdas's attorney submitted an OIC that covered Mr. Ramdas's income tax liabilities not only for the 2005 tax year at issue here but also for tax years 2006, 2007, and 2008. By that OIC Mr. Ramdas proposed to compromise his unpaid tax liabilities for tax years 2005 through 2008 (which at that time totaled approximately $64,410)2 by paying a total of about 2% of his liability—i.e., $1,500—by paying $300 immediately as a 20% downpayment and paying the remaining $1,200 within five months.3*119 Along with the OIC, Mr. Ramdas submitted the required $150 *112 application fee and a $300 downpayment, as well as a Form 433-A with some *118backup documentation. After reviewing the Form 433-A, the Appeals Officer questioned Mr. Ramdas's attorney about several properties Mr. Ramdas owned, including some that were not disclosed on the Form 433-A. His attorney indicated that the mortgage loans securing most of Mr. Ramdas's properties had been or were being foreclosed upon. The Appeals Officer also inquired whether Mr. Ramdas was current in paying his estimated tax liabilities. His attorney advised that Mr. Ramdas would not be making such payments. At the face-to-face hearing, Mr. Ramdas's attorney did not raise either the issue of abating the penalty or the possibility of an IA.
*113 At the close of the March 2010 face-to-face meeting, the Appeals Officer asked Mr. Ramdas's attorney to provide additional documentation showing
Immediately following the March 2010 face-to-face meeting, Appeals sent Mr. Ramdas's OIC to the IRS's Brookhaven Centralized Offer in Compromise Unit (OIC Unit) for consideration. The OIC Unit processed Mr. Ramdas's OIC and calculated his reasonable collection potential ("RCP") by constructing an income and expense table and an assets and equity table, both based primarily on the information reported in Mr. Ramdas's Form 433-A. In so doing, the IRS determined that Mr. Ramdas had $106,839 available from the equity in his assets: *114 $100 from cash on hand $1,055 from a checking account4 $1 from a savings account $6,142 from the cash value of a life insurance policy $95,941 from equity in real estate (107-34 116th Street)5*122 $0 from equity in real estate (107-12 *121113th Street) $3,600 from equity in a 2000 Nissan Maxima6
After receiving the June 2010 recommendation that Mr. Ramdas's OIC be rejected, Mr. Ramdas's attorney met with the Appeals Officer again in July 2010 to discuss the OIC. At the conclusion of the meeting, the Appeals Officer again requested that Mr. Ramdas provide the additional information that the Appeals Officer had requested at the conclusion of the first meeting. Appeals gave a deadline of September 8, 2010. There is no evidence that at this second face-to-face meeting Mr. Ramdas's attorney raised or discussed the penalty abatement issue or the possibility of an *123IA.
Attached as Exhibit A to Mr. Ramdas's January 13, 2012, filing in this case is a letter dated September 3, 2010, by which Mr. Ramdas's attorney alleges she provided some of the requested information to the Appeals Officer. The IRS's records do not reflect that it received this letter, but for purposes of this motion we will assume, in Mr. Ramdas's favor, that the information in this letter was provided to the Appeals Officer before the September 8, 2010, deadline.
In the September 2010 letter, Mr. Ramdas's attorney asserted that the mortgage loans for four properties had already been foreclosed upon, that the loans for four properties were currently in foreclosure (or were about to be), and that the loans for four properties were in good standing.8 For each property, Mr. Ramdas's attorney provided some basic information—e.g., address, date of purchase, purchase price, foreclosure date (if applicable), estimated fair market value, loan balance, and payment status (i.e., default or current) and amount of monthly payment—but not all information was provided for each. In addition, attached to the letter were seven pages of various court documents allegedly *124relating to some of the properties with foreclosed loans; but on those papers the *117 identity of the property is given only by handwritten additions, and for the most part, it is therefore unclear which property is the subject of each paper. Moreover, the September 2010 letter included no other corroborating evidence of anything asserted in the letter—e.g., copies of deeds showing ownership; appraisal reports or property tax statements showing estimated fair market value; or deeds of trust, loan payoff statements, or monthly bills to show outstanding encumbrances. Furthermore, the September 2010 letter does not address the Appeals Officer's request for additional documentation regarding Mr. Ramdas's pensions, retirement accounts, and vehicles.
On March 14, 2011—i.e., nine months after the OIC Unit recommended rejecting the OIC and six months after the latest deadline (September 8, 2010) for Mr. Ramdas to provide additional information to Appeals—Appeals issued to Mr. Ramdas a "Notice of Determination *125Concerning Collection Action(s) Under You challenge the existence or the amount of the tax liability on your CDP hearing request form (Form 12153). The liability is based on an audit conducted on your 2005 income tax return. The additional tax liability per the audit was $28,992.00 with interest of $7,654.62 and penalty for [sic] $5,798.40. On your Form 12153, you request penalty abatement. You wrote that abatement was warranted under reasonable cause. During the appeal process, you were given sufficient opportunity to present your position. However, no information was supplied. You submitted an Offer in Compromise (OIC) as an alternative to the proposed collection action. Your offer *126was submitted under Doubt as to Collectability [sic] (DATC) and Effective Tax Administration (ETA). The offer was to pay $1,500.00. You submitted the 20% ($300.00) with the balance, $1,200 payable in five months. On the Form 656, Offer in Compromise, you indicated there was doubt to collectibility as there are insufficient income and assets to full pay the IRS. You further state that if the Service disagreed with DATC then the offer should be reviewed under ETA as requiring full payment would be a hardship. Citing economic hardship, losing real property to foreclosure was you[r] reason for requesting ETA. I reviewed the documents you supplied. It was incomplete regarding all of the properties in your name. You were asked to supply the additional information. Sufficient time was given to supply such documents but was never received. Therefore, I was unable to evaluate the offer. You raised no other issues. I balanced the competing interests in finding the proposed levy is appropriate. On your request for a CDP hearing, you offered *127a collection alternative in the form of an offer-in-compromise (OIC). However, your proposed collection alternative was not accepted for the following reasons: - Additional documentation regarding real estate property - Based on the limited information received you have the ability to full pay your liability - No evidence of hardship Because I am unable to process your collection alternative, the proposed levy balances the need for efficient collection with your concern that any collection action be no more intrusive than necessary[.] Permitting the proposed levy balance[s] the need for efficient collection with your concern that any collection action be no more intrusive than necessary.
Mr. Ramdas timely filed a petition in this Court on April 14, 2011, challenging the determination by Appeals. The petition alleges that Appeals erred in: (1) stating that Mr. Ramdas had not supplied adequate information during the CDP hearing; (2) denying Mr. Ramdas a collection alternative, whether an OIC or an IA; (3) denying Mr. Ramdas an abatement of penalties; and (4) stating that *120 Mr. Ramdas raised no other issues. In addition, the petition complains that Appeals improperly *128closed his case and issued the notice of determination and states that Mr. Ramdas "reserves the right to contest any other statements in the Notice of Determination at issue".
On November 3, 2011, the Commissioner moved for summary judgment. In that motion the Commissioner asserts that Appeals did not abuse its discretion by rejecting Mr. Ramdas's OIC after determining he could fully pay his tax liabilities. In addition, the Commissioner maintains that Mr. Ramdas's attorney failed to raise or discuss the issue of penalty abatement or the possibility of an IA at the face-to-face CDP hearing. As a result, the Commissioner contends that Appeals did not abuse its discretion in sustaining the proposed levy against Mr. Ramdas. On December 2, 2011, and January 13, 2012, Mr. Ramdas made filings opposing the Commissioner's motion.
Under When a motion for summary judgment is made and supported as provided in this Rule, * * *
On the facts shown by the Commissioner and not disputed by Mr. Ramdas, the Commissioner is entitled to summary judgment.
If a taxpayer fails to pay any Federal income tax liability after notice and demand,
At the CDP hearing, the Appeals Officer must make a determination whether the proposed collection action may proceed. In the case of a notice of levy, the procedures for the agency-level CDP hearing before Appeals are set forth in
First, the Appeals Officer must verify that the requirements of any applicable law and administrative procedure have been met by IRS personnel.
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 offers of collection alternatives. *132
*124 Additionally, the taxpayer may contest the existence and amount of the underlying tax liability, but only if he did not receive a notice of deficiency or otherwise have a prior opportunity to dispute the tax liability.
Finally, the Appeals Officer must determine "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary."
When Appeals issues its determination, the taxpayer may "appeal such determination to the Tax Court", pursuant to
Mr. Ramdas submitted to the IRS an OIC by which he proposed to compromise his Federal income tax liabilities for tax years 2005 through 2008 for $1,500. As of June 11, 2010, when the IRS evaluated Mr. Ramdas's offer, his outstanding balance for those years was $64,410. After consideration by the OIC Unit, Appeals rejected Mr. Ramdas's OIC for several reasons: *134(1) Mr. Ramdas did not furnish all of the requested information necessary for the IRS to properly evaluate his offer; (2) on the basis of the information provided, the IRS determined that Mr. Ramdas could fully pay his outstanding tax liabilities; and (3) Mr. Ramdas made no showing of hardship to warrant an OIC based on effective *126 tax administration. Mr. Ramdas disputes these determinations, so we will address each in turn.
In doing so, we note that
Mr. Ramdas's attorney submitted his Form 433-A with some supporting documentation at the CDP hearing. After reviewing the financial statement with Mr. Ramdas's attorney, the Appeals Officer requested that Mr. Ramdas provide additional information related to his income and assets. In particular, the Appeals Officer requested more detailed information about each property Mr. Ramdas owned, his pensions and retirement accounts, and his vehicles. Mr. Ramdas *127 contends that he submitted the additional information by letter dated September 3, 2010. Although the IRS's record does not show receipt of that information, we assume in Mr. Ramdas's favor, for purposes of the Commissioner's motion for summary judgment, that the information was provided as alleged in Mr. Ramdas's response to that motion. However, that September 2010 information was haphazard and incomplete as to his real estate; and as to his pensions, retirement account, and vehicles, the September 2010 letter is silent; and Mr. Ramdas does not allege, and our record does not show, that he ever provided any additional information. As a result, we must conclude that Mr. Ramdas failed to provide adequate financial *136information to enable the Appeals Officer to determine his financial situation.
For purposes of evaluating an OIC, doubt as to collectibility exists "where the taxpayer's assets and income are less than the full amount of the liability."
The IRS determined, on the basis of the incomplete financial information that Mr. Ramdas did supply, that he could fully pay his outstanding tax liabilities. For that independent reason, Mr. Ramdas's OIC was rejected.
Under the Commissioner's administrative procedures, an OIC based on doubt as to collectibility will be acceptable only if it reflects the taxpayer's *137RCP.
*129When the IRS determines whether an OIC is acceptable, a taxpayer's RCP is determined, in part, using published guidelines that establish national and local allowances for necessary living expenses; and income and assets in excess of those needed for necessary living expenses are treated as available to satisfy Federal income tax liabilities.
On the basis of the foregoing, the IRS calculated Mr. Ramdas's RCP to be $785,324. As a result, the IRS determined that Mr. Ramdas could fully pay his outstanding tax liabilities, and it therefore rejected his OIC. Although some of the IRS's calculations are doubtful (as we will explain below), we find that the IRS's overall conclusion cannot be criticized—i.e., that Mr. Ramdas could fully pay his outstanding liabilities.
Of the assets used by the OIC Unit to determine Mr. Ramdas's ability to pay, all but one—the supposed $95,941 in equity available to Mr. Ramdas from the 116th Street property—were self-reported by Mr. Ramdas on his Form 433-A. As *130 a result, we will address only the IRS's determination regarding the available equity in that property.
To determine Mr. Ramdas's net realizable equity available from the 116th Street property, the OIC Unit started with a fair market value of $382,200, which it obtained from a comparable sales analysis.9 Since Mr. Ramdas owned this property jointly with his wife, the OIC Unit discounted *139the value to 40% (i.e., one-half of the usual 80% quick sale value). Then, the OIC Unit further reduced this value by one-half of a $113,888 encumbrance on the property. In doing so, the OIC Unit determined that Mr. Ramdas's share of the net realizable equity in the 116th Street property was $95,941.
However, the encumbrance of $113,888 that the OIC Unit used in its analysis was apparently incorrect. The administrative record shows that a $113,887 mortgage loan existed as of November 20, 2003. However, the record also reflects that the mortgage loan was refinanced twice in 2004, resulting in higher loan amounts each time—$266,000 on January 5, 2004, and $382,500 on December 21, 2004. Assuming the facts most favorable to Mr. Ramdas, we *131 assume that in June 2010 the encumbrance on the house was still $382,500 (i.e., more than its fair market value). *140As a result, we conclude that he had no equity in the 116th Street property available to satisfy his income tax liabilities. We therefore assume, for purposes of the IRS's motion, that the RCP from Mr. Ramdas's assets was $10,898 (as Mr. Ramdas reported on his Form 433-A), instead of the $106,839 that the IRS determined. However, the error was harmless in the context of determining Mr. Ramdas's RCP, as we now show.
Mr. Ramdas listed his monthly income as $9,581 on his Form 433-A (at page 4), and listed eight monthly expenses totaling $29,165, ostensibly leaving him with zero to pay toward his income tax liabilities. The OIC Unit, however, determined that he had monthly disposable income of $5,654. Neither in his petition nor in his opposition to the motion for summary judgment did Mr. Ramdas dispute the OIC Unit's determination of his disposable income, but we nevertheless review the issue briefly.
The OIC Unit's income and expense figures differed from Mr. Ramdas's (in some respects to his advantage, but overall to his disadvantage), and both are set out here:
| *132 | ||
| Monthly income | $9,851 | $13,434 |
| Monthly expenses | ||
| Food, clothing, misc. | $526 | $798 |
| Housing & utils. | 23,771 | 1,759 |
| Transportation— | ||
| ownership cost | 460 | 448 |
| Transportation— | ||
| operating cost | 300 | 300 |
| Out-of-pocket health care | 600 | 97 |
| Taxes | 3,058 | 4,317 |
| Life insurance | 100 | -0- |
| Union dues | -0- | 60 |
| Student loan | ||
| Total expenses | 29,165 | 7,779 |
| Monthly disposable income | (19,314) | 5,655 |
The *141earnings statements from Mr. Ramdas's job, which were submitted with his Form 433-A, showed Mr. Ramdas's total wages in 2009 to be $165,815. This would indicate Mr. Ramdas's monthly income in that year was $13,818. On his Form 433-A Mr. Ramdas predicted that he would have a decrease in income because in the future he would have "Less overtime opportunities". This may be the reason that the OIC Unit used a lesser monthly income amount, $13,434, and we see no basis for criticizing that figure.
*133 As is evident above, for several of the claimed expenses, the OIC Unit arrived at different numbers, and we consider those for which the OIC Unit's amount was less than Mr. Ramdas's:
*135
On the basis of these determinations, the Appeals Officer reckoned that the difference between the allowable amounts of his expenses, totaling $7,779, and his monthly income, $13,434, represented the money Mr. Ramdas had above his basic living expenses which was available to pay taxes—to wit, $5,654 per month of disposable income.
Then, in accordance with
We find no material flaws with the OIC Unit's analysis of Mr. Ramdas's future income potential, and Mr. Ramdas has not alleged any specific defects. Even if, in order to construe the facts most favorably to Mr. Ramdas for purposes of this motion, we were to find that the OIC Unit overstated Mr. Ramdas's *136 monthly income amount, the OIC Unit's ultimate conclusion cannot be criticized. Appeals determined Mr. Ramdas's *145monthly income to be $13,434 on the basis of his prior year's earnings. However, Mr. Ramdas stated to Appeals that he earned $55.17 per hour, that his prior year's income had included significant overtime, and that his income was likely to decrease in the future because his opportunity for overtime work was decreasing. If Mr. Ramdas's future monthly income is computed without overtime on the basis of a standard 40-hour work week, his monthly income would have been only $9,563,12 not $13,434. This lower figure corresponds more closely to the $9,851 monthly income amount that Mr. Ramdas originally reported on his Form 433-A. If we therefore compute Mr. Ramdas's monthly disposable income by beginning with the monthly income figure that he listed—$9,851—and subtracting his expenses as determined by the OIC Unit (but reduced, where appropriate, to correspond to his lower income amounts), his disposable monthly income is no less than $2,268:
| *137 | |
| Monthly income | $9,851 |
| Monthly expenses1 | |
| Food, clothing, misc. | $739 |
| Housing & utils. | 1,629 |
| Transportation— | |
| ownership cost | 448 |
| Transportation— | |
| operating cost | 300 |
| Out-of-pocket health care | 90 |
| Taxes | 24,317 |
| Life insurance | 0 |
| Union dues | 60 |
| Student loan | |
| Total expenses | 7,583 |
| Monthly disposable income 2,268 | |
| 1Using a lower figure for Mr. Ramdas's monthly income | |
| results in his portion of the total household income | |
| being lowered from 81% to 75%. As a result, any | |
| expense that was originally prorated on an 81% | |
| share—i.e., food, clothing, misc., housing & | |
| utilities, and out-of-pocket medical expenses—is now | |
| allowed on the basis of a 75% share. | |
| 2Although it is likely that Mr. Ramdas's taxes will | |
| decrease as his income does, we will not attempt to | |
| recompute Mr. Ramdas's new tax liability. We note that | |
| leaving this figure as is works in Mr. Ramdas's favor. | |
If *146Mr. Ramdas could pay $2,268 per month towards his income tax liabilities over 120 months, his future income potential would be $272,160 (i.e., $2,268 times 120 *138 months). This total is less than the total the OIC Unit determined, $678,480, but is still much more than the $1,500 that Mr. Ramdas proposed to pay in his OIC.
It is possible to bend over backwards even further for Mr. Ramdas: In October 2010, after the OIC Unit had completed its analysis but before Appeals had rejected the OIC, the IRM was modified. The new provision,
Thus, even assuming in *147Mr. Ramdas's favor all the facts that might be disputed, by taking into account as equity in assets only the amount to which he agreed, $10,898, and the lower amount for future income potential, $108,664, on the basis of his income figures and the amended IRM, even then Mr. Ramdas's RCP would be $119,562, an amount sufficient to fully pay his outstanding income tax liabilities of $64,410. As a result, Appeals did not err in refusing to accept Mr. Ramdas's OIC based on doubt as to collectibility.
As an alternative to considering his OIC on the basis of doubt as to collectibility, Mr. Ramdas asked Appeals to consider his OIC on the basis of a claim of effective tax administration (ETA). Regulations adopted pursuant to The levy [should be released when it] is creating an economic hardship due to the financial condition of an individual taxpayer. This condition applies *148if satisfaction of the levy in whole or in part will cause an individual taxpayer to be unable to pay his or her reasonable basic living expenses. The determination of a reasonable amount for basic living expenses will be made by the director and will vary according to the unique circumstances of the individual taxpayer. Unique circumstances, however, do not include the maintenance of an affluent or luxurious standard of living.
In his petition Mr. Ramdas argued that he should have been allowed to enter into an IA once his OIC had been rejected. However, while Mr. Ramdas did check a box on his Form 12153 indicating that he desired an IA, he never actually proposed to Appeals any specific payment amounts or installment schedule either formally on a Form 433-D, "Installment Agreement", or informally. As a result, we cannot find that Mr. Ramdas proposed an IA for consideration, and it is not an abuse of discretion for an Appeals officer to sustain a levy and not consider an IA *141 when the taxpayer has proposed none.
On his Form 12153 *150Mr. Ramdas requested an "abatement of penalties". On the record before us it is unclear which penalties Mr. Ramdas was challenging—the accuracy-related penalty under
Mr. Ramdas's accuracy-related penalty under
*142A taxpayer cannot challenge the underlying liability in a CDP hearing if he received a notice of deficiency,
Nonetheless, it was incumbent upon Mr. Ramdas to specifically raise any abatement claim related to the
We cannot review Appeals' determination on the basis of an issue that was never raised before or considered by Appeals.
Mr. Ramdas's request for a CDP hearing also alleged that the levy would be "a hardship [and] a burden." We consider this contention as a challenge to Appeals' determination that the levy would not be "more intrusive than necessary", for purposes of
In any event, there is no evidence that Mr. Ramdas's attorney ever addressed this issue before Appeals. As a result, we cannot consider this argument for the first time here.
In his petition Mr. Ramdas asserts that the "IRS Appeals improperly closed [his] case". The contention is without merit. On the basis of our review of the record, we find the following timeline related to Mr. Ramdas's CDP hearing:
Mr. Ramdas timely requested his CDP hearing in September 2009. On his Form 12153 he raised various issues (e.g., *156OIC, IA, penalty abatement, and hardship). After having his case reassigned to a local office for a face-to-face hearing, Mr. Ramdas's attorney requested a later hearing date. Mr. Ramdas's face-to-face CDP hearing occurred in March 2010. At that hearing, Mr. Ramdas's attorney submitted Mr. Ramdas's financial information (on a Form 433-A), with some, but not all, of the required substantiation, and submitted an OIC. At that hearing, Mr. Ramdas's attorney did not raise or discuss the other issues raised on his Form 12153. The Appeals Officer requested that Mr. Ramdas provide additional information regarding his income and assets and forwarded his OIC to the OIC Unit for consideration. In June 2010 the OIC Unit issued its recommendation that Mr. Ramdas's OIC be rejected because he could fully pay his liabilities. In July 2010 Mr. Ramdas's attorney met with the Appeals Officer again to further discuss the proposed OIC. At this second face-to-face meeting, Mr. Ramdas's attorney again did not raise or discuss the other issues raised in his *147 Form 12153, nor did she provide the additional information that had been previously requested. In September 2010 Mr. Ramdas provided the Appeals Officer *157with some, but not all, of the additional information requested. Six months later, in March 2011, the Appeals Officer issued a notice of determination rejecting Mr. Ramdas's OIC and determining to sustain the proposed levy.
We find no defects in the CDP hearing process or the issuance of the notice of determination. The Appeals Officer properly recounts his verification as required by
The IRS's Office of Appeals did *158not abuse its discretion in denying Mr. Ramdas's OIC and sustaining the proposed levy to collect his unpaid income tax for 2005. As a result, respondent's motion for summary judgment will be granted.
Footnotes
1. Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986 as in effect at all relevant times (codified in 26 U.S.C., and referred to herein as "the Code"), and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. In June 2010 the IRS totaled Mr. Ramdas's liabilities as follows:
Tax period Unpaid liability↩ 2005 $17,803.41 2006 5,038.75 2007 17,017.00 2008 24,551.00 3. Mr. Ramdas's petition states that Appeals made a determination as to 2005 through 2008. However, the IRS's notice of determination at issue in this case involves Mr. Ramdas's liability for only one year—2005—and this Court lacks jurisdiction to review collection of the liabilities for the years not included in the notice of determination.
See Sullivan v. Commissioner , T.C. Memo. 2009-4Sec. 6330(c)(2)(A) ,(d) . Therefore, in evaluating the Appeals Officer's exercise of discretion in rejecting the OIC, we take 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)aff'd ,412 F.3d 819↩ (7th Cir. 2005) .4. This amount is slightly lower than the $2,000 Mr. Ramdas reported on his Form 433-A. The OIC Unit used the lowest balance shown on the account statements submitted with the OIC. As this works in Mr. Ramdas's favor, we accept the lower number.↩
5. The OIC Unit limited its June 2010 equity analysis to two properties Mr. Ramdas owned—107-12 113th Street and 107-34 116th Street. Because Mr. Ramdas had not yet provided any information regarding his properties, the OIC Unit used public records and recent comparable sales to determine the values of these properties, and any equity that might exist.
6. Mr. Ramdas reported a fair market value of $4,500 on his Form 433-A. The OIC Unit discounted the asset to 80% of that value to obtain the quick-sale value for purposes of determining Mr. Ramdas's equity in the car.↩
7. For convenience we have rounded the amounts of Mr. Ramdas's income and expenses to the nearest dollar.↩
8. The two properties used in the OIC Unit's June 2010 equity analysis were listed in Mr. Ramdas's attorney's September 2010 letter as "[p]roperties in good standing".↩
9. In the September 2010 letter, Mr. Ramdas's attorney estimates the fair market value of the 116th Street property to be $350,000—i.e., $32,200 less than the OIC Unit's estimate. However, since Mr. Ramdas gave no basis for his estimate (e.g., comparables, appraisal, etc.), the OIC Unit did not abuse its discretion in using its higher figure.↩
10.
Section 7122(c)(2)(A)↩ requires the Secretary to prescribe guidelines for evaluating offers-in-compromise and to "develop and publish schedules of national and local allowances designed to provide that taxpayers entering into a compromise have an adequate means to provide for basic living expenses."11. Pursuant to
Internal Revenue Manual pt. 5.15.1.4(3)↩ (Oct. 2, 2009), a taxpayer will be allowed to claim shared household expenses based only on his proportionate share of the total household income. The information that Mr. Ramdas and his wife supplied showed that Mr. Ramdas's income constituted 81% of the total household income.12. We calculate his income by multiplying his hourly rate, $55.17, by 40 hours per week and by 52 weeks per year, yielding annual income of $114,754. Dividing that annual total by 12 yields monthly income of $9,563.↩
13. The amount Mr. Ramdas owed for failure to pay an amount not shown but required to be shown on a return within 21 days of notice and demand,
sec. 6651(a)(3) , is referred to in that provision as an "addition to tax". However, since the levy notice refers to the failure-to-pay addition undersection 6651(a)(3)↩ as a "penalty", we will assume Mr. Ramdas could have been requesting the abatement of this "penalty" when he filed his Form 12153.14. A petition commencing a CDP case in this Court must contain "[c]lear and concise assignments of each and every error which the petitioner alleges to have been committed in the notice of determination. Any issue not raised in the assignments of error shall be deemed to be conceded."
Rule 331(b)(4) . Mr. Ramdas's petition did not clearly or concisely raise failure to abate thesection 6651(a)(3)↩ addition, and we find that he has conceded that issue because of lack of specificity in his petition.
2013 T.C. Memo. 104 (Ramdas v. Comm'r) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.