DANA RAY REYNOLDS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9864-18L.
UNITED STATES TAX COURT
Filed January 26, 2021.
T.C. Memo. 2021-10
THORNTON, Judge
Served 01/26/21
Eric M. Heller, for respondent.
MEMORANDUM OPINION
THORNTON, Judge: In this collection due process (CDP) case petitioner seeks review under
Background
A. The Underlying Criminal Case
Petitioner developed strategies to use corporations to conceal assets and evade income tax. He marketed these strategies through various corporate entities using videotapes, seminars, and written publications. He applied these strategies to his personal finances to conceal assets and pay personal living expenses with funds taken from the corporations but not reported as income. On October 18, 2010, pursuant to a plea agreement, he pleaded guilty to two counts of subscribing false Federal income tax returns under
On October 20, 2010, the U. S. District Court for the Central District of California entered its judgment and probation/commitment order (judgment), sentencing petitioner to 18 months in prison for each of the two counts on which he was convicted, with the terms to be served concurrently, followed by one year of supervised release. Pursuant to
The U.S. Court of Appeals for the Ninth Circuit affirmed petitioner‘s conviction and his sentence. See United States v. Reynolds, 463 F. App‘x 647 (9th Cir. 2011).
After serving his prison time, on July 22, 2011, petitioner was placed on supervised release for one year. On July 22, 2012, his supervised release ended.
B. Internal Revenue Service Collection Activities
On August 26, 2013, pursuant to
Respondent audited petitioner‘s income tax returns for his taxable years 2002 and 2003. On November 25, 2013, respondent issued to petitioner a notice of deficiency, determining deficiencies of $78,787 and $55,319 for taxable years 2002 and 2003, respectively. In that notice of deficiency respondent also determined that petitioner was liable for
Petitioner timely petitioned this Court with respect to the notice of deficiency dated November 25, 2013. On October 6, 2015, this Court entered a stipulated decision that petitioner was liable for deficiencies of $78,787 and $30,327 for taxable years 2002 and 2003, respectively, and for
On June 18, 2014, Noe Trujillo (Advisor Trujillo), an advisor in the IRS Collection Advisory Group, secured a copy of the District Court‘s judgment and made an initial analysis of petitioner‘s case.4 He forwarded it for a collection investigation, directing that “[a]ny enforcement action on this account should be coordinated with [Collection] Advisory.” Advisor Trujillo directed the revenue officer to “[r]eview Interim Guidance Memorandum SBSE-05-0713-0044 for additional guidance regarding RBA.”
Petitioner‘s case was assigned to Revenue Officer (RO) Martha L. Marquez for investigation. Her initial analysis revealed that for taxable year 2013 petitioner and his wife, Faisuly Reynolds, had filed a joint tax return that included a Schedule C, Profit or Loss From Business (Sole Proprietorship), for American Entrepreneurial Academy (AEA) showing wages paid of $332,800.5 RO Marquez
After communicating with the Collection Advisory Group and the Treasury Inspector General for Tax Administration and after attempting unsuccessfully to learn petitioner‘s home address, on October 28, 2014, RO Marquez made a field visit to petitioner‘s place of business. She explained to petitioner and his representative, Certified Public Accountant Craig Murrel, who was on a speaker phone, that the IRS and the DOJ would be working simultaneously to get the restitution and the RBAs paid. RO Marquez handed petitioner a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (FNIL) with respect to the RBAs made on August 26, 2013. Upon returning to her office, RO Marquez noticed that the FNIL was erroneously addressed to both petitioner and his wife. RO Marquez promptly issued a new FNIL addressed only to petitioner and sent it by certified mail to his last known address, a private mail box. The two Letters
On October 30, 2014, Mr. Murrel spoke by telephone with RO Marquez and requested documentation of petitioner‘s liabilities that respondent was seeking to collect. RO Marquez emailed Advisor Trujillo and requested a copy of the District Court‘s restitution order.
On November 5, 2014, RO Marquez and Mr. Murrel spoke again by telephone. Mr. Murrel proposed putting petitioner on a payment plan but indicated that he had to consult with petitioner before making a specific proposal. Later that day, RO Marquez mailed Mr. Murrel a letter requesting that by December 9, 2014, petitioner submit financial information for himself and Mrs. Reynolds, including proof of all income, “court orders and verification of payments for 09/01/2014 to present“, and a completed and signed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Form 433-B, Collection Information Statement for Business. On November 6, 2014, RO Marquez received by fax from Mr. Murrel an updated
On November 20, 2014, respondent filed a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under
On November 26, 2014, Mr. Murrel submitted on petitioner‘s behalf two Forms 12153, Request for a Collection Due Process or Equivalent Hearing, regarding the FNIL issued on October 28, 2014, and the NFTL filed on November 20, 2014. On each Form 12153 the box was checked indicating “I Cannot Pay Balance“. In nearly identical letters attached to the hearing requests petitioner disputed the assessments of interest and penalties and stated that because “OFFERS IN COMPROMISE AND INSTALLMENT PAYMENT PLANS ARE NOT AVAILABLE WITH RESPECT TO RESTITUTION ASSESSMENTS, THE TAXPAYER CANNOT PAY THE REFERENCED AMOUNTS IN FULL AS EARNINGS AND SOURCES OF INCOME FAIL TO YIELD REQUIRED
On December 1, 2014, RO Marquez received and reviewed the Forms 12153. That same day she sent petitioner a letter advising him that for the IRS Office of Appeals (Appeals)8 to consider a collection alternative he had to submit by December 12, 2014, a completed Form 433-A and a completed Form 433-B. Petitioner failed to submit any of the requested financial information.
On December 22, 2014, RO Marquez consulted with Advisor Trujillo about petitioner‘s case. On December 29, 2014, she called Mr. Murrel, who indicated that petitioner had hired an attorney to represent him going forward. Mr. Murrel was unable to explain why petitioner had not provided the requested financial information. RO Marquez forwarded petitioner‘s case to Appeals.
On March 13, 2015, petitioner‘s case was assigned to Settlement Officer (SO) Scott D. True. On March 23, 2015, petitioner‘s new counsel, Alvah Lavar Taylor, sent SO True a supplement to petitioner‘s Forms 12153. On this supplement, boxes were checked indicating, with respect to collection alternatives, “Installment Agreement” and “I Cannot Pay Balance“. With respect to “Lien“, a
On July 13, 2016, SO True and petitioner‘s counsel Jonathan T. Amitrano (Mr. Taylor‘s co-counsel) met for a face-to-face hearing. They agreed that Mrs. Reynolds’ name was improperly included on the FNIL. Mr. Amitrano reiterated petitioner‘s request that interest and penalties be abated and that, consistently with the District Court‘s restitution order, petitioner be placed on a plan to pay each month the greater of 10% of monthly income or $100. He urged that in the light of the District Court‘s restitution order, no collection information statement should be required. SO True indicated that he would solicit the views of the IRS Chief Counsel‘s Office and that until further notice petitioner did not need to provide a collection information statement.
On July 15, 2016, SO True requested an advisory opinion from the Chief Counsel‘s Office. On September 6, 2016, an attorney in the Chief Counsel‘s Office, Amy A. Long (Attorney Long), informed SO True that petitioner‘s case would need to be coordinated with respondent‘s National Office. On October 19, 2016, SO True sent Attorney Long additional documents which she had requested and sent a request for additional information to Advisor Trujillo, who sent the additional requested information to Attorney Long on October 20, 2016.
On May 8, 2017, Mr. Amitrano faxed to SO True, who forwarded to Attorney Long, a copy of a letter dated May 5, 2017, that petitioner had received from the U.S. Attorney‘s Office for the Central District of California (U.S. Attorney). The letter requested that petitioner appear on May 25, 2017, at the office of the DOJ‘s Financial Litigation Unit (FLU) to show cause “why you have not entered into arrangements for the payment of the judgment entered against you on October 18, 2010 * * * on which there is a current unpaid balance of $191,637.75.” In his cover letter to SO True, Mr. Amitrano stated that he found the U.S. Attorney‘s letter a “bit confusing as our firm always believed (and we still believe to this day) that restitution is collected by the IRS.” That cover letter went on to say that Mr. Amitrano had communicated to the DOJ his understanding that
In May 2017 the DOJ began issuing to petitioner a monthly “Debtor Statement” showing a $65 payment due from petitioner each month and generally indicating (after the first such statement) receipt of petitioner‘s timely $65 payment. Since June 2017 petitioner has been making monthly restitution payments of $65 to the U.S. Attorney. The IRS periodically credited these payments against petitioner‘s RBA for taxable year 2000 (ostensibly crediting the earliest year first).
Meanwhile, SO True had placed petitioner‘s collection case in suspense status awaiting Attorney Long‘s advice. On December 6, 2017, Mr. Amitrano was in SO True‘s office for an in-person hearing on an unrelated case. They walked together to Attorney Long‘s office to inquire about petitioner‘s case. Attorney Long indicated that she had not received certain information that she had previously requested, prompting SO True to return to his office and forward to her Advisor Trujillo‘s email of October 20, 2016, which contained the requested information. On the same day, Attorney Long followed up with an email to SO True requesting additional information. SO True forwarded Attorney Long‘s
On February 20, 2018, SO True noted in his case activity record that he had completed his followup and that he
should be able to close this [case] sustaining Collection as far as the dispute as to liability. Pursuant to IRM [Internal Revenue Manual] 8.7.1.11(5), the Office of Appeals is not authorized to consider or process criminal restitution appeals. Appeals must not abate or adjust any restitution-based assessment. The judge ordered TP [taxpayer] to pay the greater of $100/mo or 10% of his gross income. That‘s what goes to DOJ. The IRS can collect more if the TP wants to pay.
After additional research, on February 22, 2018, SO True made another entry in his case activity record, stating among other things:
The amount of restitution ordered payable to the Service creates two separate debts for the same liability. These two separate debts provide two different means for collection, but the liability cannot be collected twice.
- The first debt is the restitution judgment which the Department of Justice Financial Unit (DOJ FLU) is responsible for collecting.
- The second debt is the restitution-based assessment (RBA) which will be assessed and collected by the Service in the same manner as if it was a tax.
In an entry dated February 23, 2018, SO True noted:
Per IRM 5.1.5.17.1(1), prior to initiating collection action an RO [revenue officer] will determine the taxpayer‘s assets and income,
using the Collection information Statement as an information source, verify information provided by the taxpayer, and in coordination with Advisory and the Department of Justice, determine what, if any, civil enforcement actions may be taken to collect outstanding tax assessments.
On February 26, 2018, SO True reviewed petitioner‘s IRS account and noted that petitioner and his wife‘s joint return for taxable year 2016 included a Schedule C reporting gross receipts or sales of $798,652. That same day, SO True mailed to petitioner, with a copy to Mr. Amitrano, a letter requesting that within 14 days, i.e., by March 12, 2018, petitioner provide a completed collection information statement, Form 433-A, as well as any additional information that petitioner wished to provide for consideration. The letter stated: “Once the 14 days have passed, the Appeals Office will make a determination in the hearing you requested by reviewing the Collection administrative file and whatever information you provided.” On March 12, 2018, Mr. Amitrano requested, and SO True granted, an extension until March 23, 2018, to submit the requested information.
In the meantime, on March 1, 2018, SO True emailed Attorney Long, stating that he was “getting ready to close” petitioner‘s case and inquiring how he should address the issue of interest on the restitution. The response came the next day, advising that in accordance with this Court‘s Opinion in Klein v. Commissioner, 149 T.C. 341 (2017), petitioner is not liable for interest and failure-to-pay penalties on the restitution.
On March 23, 2018, Mr. Amitrano faxed to SO True a Form 433-A which indicated that petitioner had zero income, zero living expenses, and no assets other than “Personal Effects” valued at $500. The Form 433-A left blank the questions about petitioner‘s marital status, his spouse‘s name and Social Security number, and information about his spouse‘s employment and any dependents. By way of explanation for these omissions, Mr. Amitrano‘s cover letter stated that “because Mr. Reynolds and his wife have entered into a postnuptial agreement which provides that all income is separate property, the attached financial statement does not include Mr. Reynolds’ wife‘s income or expenses.” The cover letter also stated that petitioner suffered from “multiple severe health issues over the past few years * * * [which] coupled with his prior criminal conviction, have resulted in Mr. Reynolds being unable to find work. As such he currently focuses on being a stay-at-home dad to his two children.”
Attached to Mr. Amitrano‘s letter was a copy of a marital agreement between petitioner and his spouse, identified as Faisuly Herrera Alfonso, dated October 4, 2005, and providing among other things that “[a]ll property of either party that was owned before their marriage * * * will be entirely his or her
On March 23, 2018, after reviewing petitioner‘s submission, SO True noted in his case activity record that the time for petitioner to submit additional information had expired and that there were no unresolved issues. He wrote: “At this point it appears this appeal is being maintained primarily for delay. It doesn‘t appear that TP [taxpayer] has any intention of voluntarily paying his RBA.” Stating that “[a]ll issues in this case have been addressed“, SO True concluded that the NFIL and the NFTL should be sustained.
On March 26, 2018, SO True forwarded his draft Appeals case memorandum (ACM) to Acting Appeals Team Manager (ATM) Brian Hefty (Acting ATM Hefty) for his review. On April 2, 2018, Acting ATM Hefty and SO True discussed whether an Appeals Referral Investigation (ARI) request should be made to the IRS Collections Division.9 On April 4, 2018, SO True referred this question to Acting ATM Teresita Paz (Acting ATM Paz), who reviewed
On April 17, 2018, Appeals issued to petitioner a notice of determination, signed by Acting ATM Paz, sustaining the NFIL and the NFTL. The attachment to the notice of determination, prepared by SO True, states in part:
When a restitution amount is assessed under
IRC § 6201(a)(4) , the statutory tax lien arises and the general ten-year statute of limitations for collection applies. IRS will generally collect assessed restitution in the same manner as other collection cases. Collection action will be subject to the Collection Due Process rights afforded a taxpayer under§§ 6320 and6330 ; however you are precluded from contesting the existence or amount of the underlying tax liability upon which the restitution is based.* * * * * * *
The amount of restitution ordered payable to the IRS creates two separate debts for the same liability. These two separate debts provide two different means for collection, but the liability cannot be collected twice.
- The first debt is the “restitution judgment” which the Department of Justice Financial Litigation Unit (DOJ FLU) is responsible for collecting.
- The second debt is the “restitution-based assessment” (RBA) which will be assessed and collected by the IRS in the same manner as if it was a tax.
The IRS can enter into an installment agreement only if it meets the following requirements:
- the entire amount of restitution ordered is satisfied at the conclusion of the installment agreement,
- the minimum periodic payment under the installment agreement is at least equal to the minimum periodic payment under the court ordered restitution plan, and
- the payment period under the installment agreement is no longer than the payment period of the court ordered restitution plan.
Your Collection Information Statement, Form 433-A for individuals, shows no assets, income or expenses. Your jointly filed Form 1040 return for tax year 2016 contains a Schedule C with $798,652 in gross receipts. You have a postnuptial agreement that you apparently assert prevents the IRS from collecting from community property. Based on the information in the administrative file, it isn‘t clear that the underlying amount of your restitution-based assessments is currently not collectible.
You claim to have medical issues, but you didn‘t show why your medical issues prevent you from making any payments on your restitution-based assessments. If, as you claim, you have no expenses, then making payments wouldn‘t cause an economic hardship.
Petitioner, while residing in California, timely petitioned this Court.
Discussion
A. Statutory Framework and Standard of Review
Where the underlying liability is not properly at issue in a collection proceeding, we review Appeals’ determination for abuse of discretion, asking whether it was arbitrary, capricious, or without sound basis in fact or law. See, e.g., Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff‘d, 469 F.3d 27 (1st Cir. 2006); Sego v. Commissioner, 114 at 610.10 As this Court has acknowledged, however: “When faced with questions of law * * * the standard of review makes no difference. Whether characterized as a review for abuse of discretion or as a consideration ‘de novo’ (of a question of law), we must reject erroneous views of the law.” Kendricks v. Commissioner, 124 T.C. 69, 75 (2005).
In this proceeding petitioner challenges respondent‘s collection authority under
B. Respondent‘s Legal Authority to Collect RBAs
1. Carpenter v. Commissioner
Petitioner contends that respondent lacks the legal authority to take administrative collection action to collect RBAs under
Petitioner contends that this Court‘s Opinion in Carpenter conflicts with the rationale of Klein v. Commissioner, 149 T.C. 341. We disagree. Klein held that
Petitioner does not dispute that the court-ordered restitution was currently due and payable when respondent instituted the collection actions at issue. Pursuant to
Petitioner contends that even if respondent generally has the authority to pursue administrative collection under
Petitioner‘s argument is without merit. In the first instance, petitioner has provided no evidence of any formal payment plan with the DOJ. The record merely shows that in May 2017 the DOJ began billing petitioner $65 a month and that since June 2017 he has generally been making monthly restitution payments of $65 to the U.S. Attorney. Regardless of how these payments might be characterized, they were not the result of any installment agreement under
C. Exercise of Discretion
In deciding whether SO True abused his discretion in sustaining the collection actions, we consider whether he: (1) properly verified that the requirements of any applicable law or administrative procedure have been met; (2) considered any relevant issues petitioner raised; and (3) determined whether “any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of * * * [petitioner] that any collection action be no more intrusive than necessary.” See
1. Coordination With the DOJ
Petitioner argues that SO True failed the verification requirement of
The Interim Guidance Memorandum (IGM) then in effect provided instructions “for Collection employees working Federal restitution cases.” IRS Memo. SBSE-05-0713-0044, at 1 (July 10, 2013). The IGM explained that “[b]ecause the DOJ retains its ability to enforce the restitution order while the Service has a parallel ability to collect administratively, communication with the DOJ is important prior to taking enforcement action to collect restitution-based assessments.” Id. at 3. According to the IGM, collection advisors “will be familiar with the court order and conditions of probation and should be contacted by the RO for guidance on how to coordinate with the local FLU“, and such
Consistently with these directives, after completing her initial analysis of petitioner‘s case and before taking any further actions, RO Marquez contacted Advisor Trujillo. The record indicates that RO Marquez and Advisor Trujillo had ongoing communications about petitioner‘s case. By the time RO Marquez transferred petitioner‘s case to Appeals, the IRM had been updated to state that “Revenue Officers will contact an advisor prior to taking administrative enforcement action to collect RBAs. The advisor is responsible for coordinating civil actions with the Department of Justice Financial Litigation Unit (DOJ FLU).” IRM pt. 5.1.5.18(2) (Dec. 16, 2014). RO Marquez fulfilled her responsibilities as set forth in the IRM with regard to coordinating petitioner‘s case with the DOJ.
Petitioner suggests that SO True erred by failing to coordinate with the DOJ. We disagree. In March 2015 when SO True was assigned petitioner‘s case, the IRM stated that “Advisory is responsible for monitoring and coordinating actions on probation and restitution cases.” IRM pt. 5.1.5.16(1) (Dec. 16, 2014);
The record shows that SO True had ongoing communications about petitioner‘s case with both collections advisors and Attorney Long. In May 2017 Mr. Amitrano sent to SO True a copy of the letter from the U.S. Attorney requesting that petitioner appear at the DOJ FLU office to discuss payment arrangements for petitioner‘s restitution balance. Consistently with the directives of the IRM, SO True immediately forwarded the letter to Attorney Long for her consideration.
The record before us does not contain the work records of the collection advisors or Attorney Long by which we might evaluate the nature or extent of their coordination with each other or with the DOJ. The record does show,
We have generally held that there is no abuse of discretion when an Appeals officer relies on guidelines published in the IRM to evaluate a proposed IA. See, e.g., Orum v. Commissioner, 123 T.C. 1, 13 (2004), aff‘d, 412 F.3d 819 (7th Cir. 2005); Tillery v. Commissioner, T.C. Memo. 2015-170; Maselli v. Commissioner, T.C. Memo. 2010-19. At all relevant times the IRM has stated that “[t]he IRS may not enter into an IA that would ultimately result in the taxpayer paying an amount less than, or less frequently than, a court ordered restitution payment plan.” IRM pt. 5.1.5.18.5(1) (Oct. 6, 2017). The IRM further states that “[t]he IRS should
In his supplement to the Forms 12153 and again during his administrative CDP hearing, petitioner requested an IA whereby he would pay each month the greater of 10% of his monthly income or $100.13 Petitioner‘s Form 433-A indicated that he had zero income and no prospects for any income. Consequently, petitioner was essentially proposing to pay $100 per month. Petitioner does not meaningfully dispute that his proposed partial payment installment agreement (PPIA) would not have resulted in his satisfying the entire amount of his RBAs. He contends, however, that SO True nevertheless abused his discretion in rejecting the proposed PPIA because “there is no statute which prohibits such an agreement and * * * the DOJ, which is given authority to collect unpaid restitution obligations, itself entered into such an agreement with petitioner.”
Petitioner‘s arguments lack merit. Although
3. Rejection of Currently Not Collectible Status
In certain circumstances a taxpayer‘s account may be placed in currently not collectible (CNC) status, which has the effect of suspending all collection action against that taxpayer. Wright v. Commissioner, T.C. Memo. 2012-24, slip op. at 7.
Suspension of collection activity is a collection alternative that the taxpayer may propose and that the Appeals Office must consider. See
sec. 6330(c)(2)(A)(iii) ,(3)(B) . But to justify an account‘s being placed in CNC status, the taxpayer must supply evidence of his financial circumstances, including “the money that is available to him and the expenses that he bears.” Pitts v. Commissioner, T.C. Memo. 2010-101, 99 T.C.M. (CCH) 1406, 1411; seesec. 301.6330-1(e)(1) ,
Proced. & Admin. Regs. An Appeals officer does not abuse his discretion in denying CNC status where the taxpayer has not submitted the necessary financial information. Wright v. Commissioner, T.C. Memo. 2012-24; Mahlum v. Commissioner, T.C. Memo. 2010-212; Swanton v. Commissioner, T.C. Memo. 2010-140.
Chadwick v. Commissioner, 154 T.C. 84, 95 (2020).
Petitioner contends that respondent abused his discretion by rejecting petitioner‘s request for CNC status based on economic hardship. As a preliminary matter, we note that this issue has little bearing on that part of respondent‘s determination sustaining the NFTL. Even if petitioner had been granted CNC status, respondent still would have been entitled to take steps to protect IRS interests, such as by filing an NFTL. See Kyereme v. Commissioner, T.C. Memo. 2012-174 (holding that it was not an abuse of discretion for the Commissioner to deny lien withdrawal to a taxpayer who had been previously placed in CNC status); IRM pt. 5.16.1.2.9(3) (Dec. 17, 2015) (explaining that where an RBA account is closed because of CNC hardship, “[t]he government may take steps to protect its interest, such as filing a NFTL“).
By contrast, levy action would be prohibited if respondent had determined that a levy would create economic hardship because of petitioner‘s financial condition. See
Petitioner‘s Form 433-A, submitted in 2018, listed no income, no expenses, and no assets (not even a bank account) apart from $500 of “personal effects“. Petitioner left blank those portions of the Form 433-A that called for information about his marital status and his spouse, including her identifying information and wage earnings. Mr. Amitrano‘s cover letter indicated that petitioner‘s spouse‘s information was omitted because of the existence of a 2005 marital agreement, a copy of which was attached to the letter.
After reviewing these statements SO True determined that petitioner had failed to show that his RBAs were not currently collectible, noting in his case activity record: “At this point it appears this appeal is being maintained primarily for delay.” Petitioner contends that SO True abused his discretion by not doing more to investigate petitioner‘s financial circumstances. Citing IRM pt. 8.22.7.4 (Aug. 9, 2017), petitioner contends that SO True should have asked an RO to conduct a field investigation to verify petitioner‘s statements. The IRM provision petitioner cites states in pertinent part that an ARI “may be necessary” if the appropriateness of “CNC hardship can‘t be determined without additional
The attachment to the notice of determination references various circumstances supporting a conclusion that petitioner‘s Form 433-A was unreasonable on its face, making further investigation unnecessary. As the notice of determination notes, petitioner‘s Form 433-A reported no assets (not even a bank account), income, or expenses even though Schedule C of his and his wife‘s joint return for taxable year 2016 (apparently petitioner‘s most recently filed tax return at the time of SO True‘s determination) showed $798,652 of gross receipts.14 Petitioner‘s Form 433-A also appears deficient on its face in that it fails
The attachment to the notice of determination also notes petitioner‘s reliance on the marital agreement as allegedly preventing respondent from collecting from community property. We need not decide whether this agreement was valid. Even if it were valid, respondent was entitled to require petitioner to provide financial information about the nonliable spouse. See Ranuio v. Commissioner, T.C. Memo. 2010-178;
Furthermore, as noted in the attachment to the notice of determination, although petitioner claimed to have medical problems, he provided no information as to how those medical problems would impair his ability to make payments on
The attachment to the notice of determination indicated that in the absence of any claimed living expenses, petitioner had failed to demonstrate economic hardship justifying CNC status, stating that “[i]f, as you claim, you have no expenses, then making payments wouldn‘t cause an economic hardship.” As this statement suggests, if it were true, as petitioner claimed, that he had no assets, then there was no levy source at the time of the determination; if, however, a levy source were subsequently to become available, by petitioner‘s own admission he had no living expenses that would cause a levy to give rise to economic hardship.15 Consequently, even accepting at face value the financial information petitioner submitted, respondent did not abuse his discretion in determining, on the basis of the information that petitioner provided, that he did not qualify for CNC status.
4. Withdrawal of NFTL
Petitioner contends that SO True abused his discretion by failing to consider petitioner‘s request that the NFTL be withdrawn. Respondent contends that
In reviewing a determination under
The record indicates that during his CDP hearing petitioner never expressly raised the issue of withdrawal of the NFTL apart from checking the box “Withdrawal” on his supplemental Form 12153 and even then did not provide the explanation called for on the form. Petitioner‘s counsel‘s letter which accompanied the supplemental Form 12153 made no mention of any request for withdrawal of the NFTL. The record does not indicate that petitioner ever presented to Appeals any evidence with respect to this issue during the CDP
In any event, in this proceeding petitioner has not adequately explained on what grounds withdrawal of the NFTL would be appropriate.
On brief petitioner argues primarily that the NFTL was improper because, he says, respondent lacks the authority under
D. Conclusion
We have declined petitioner‘s invitation to reconsider our holding in Carpenter v. Commissioner, 152 T.C. 202, upholding the Secretary‘s independent authority to assess and administratively collect criminal restitution. We have also rejected petitioner‘s argument that respondent is otherwise barred from collecting the unpaid RBAs. Furthermore, respondent‘s determinations in the notice of determination were not the result of any abuse of discretion. Accordingly, except with respect to the conceded amounts of interest and penalties, we sustain the
We have considered all the parties’ arguments and conclude that, to the extent not discussed above, they are moot, irrelevant, or without merit.
To reflect the foregoing,
An appropriate order and decision will be entered.