Edward F. Murphy owed federal income taxes in excess of.$250,000 for 1992-2001. He offered to settle this liability by paying $10,000. The Internal Revenue Service (IRS) rejected Murphy’s offer, concluding that he could afford a larger settlement payment. Murphy appealed to the United States Tax Court, which upheld the IRS’s ruling. Murphy now appeals the Tax Court’s decision. We affirm.
I.
In April 2002, the IRS issued Murphy a notice of intent to levy on his property to collect on his outstanding income tax liability. Murphy then exercised his right to request a collection due-process hearing (CDP hearing) before the IRS executed the levy. See 26 U.S.C. § 6330. In July 2002, the IRS assigned Murphy’s case to an appeals officer.
On October 3, 2002, the appeals officer met with Murphy’s attorney to begin the hearing. At this meeting, counsel informed the officer that Murphy did not contest his tax liability but rather would make an “offer-in-compromise” of $10,000 to settle his liability through 2001. Murphy’s offer was based on his claimed inability to pay the full amount owed due to special circumstances.
In response to a request for information about Murphy’s special circumstances, counsel told the officer that Murphy was ill but refused to disclose the nature of the illness. The officer set an October 31, 2002 deadline for Murphy to submit certain outstanding documents necessary for considering his offer, including his 2001 tax return. Murphy missed this deadline and several subsequent extensions before finally filing the 2001 tax return on January 8, 2003.
On January 22, 2003, the appeals officer informed counsel that she required additional information from Murphy by February 5, 2003, including verification that Murphy had. tendered his estimated tax payment for 2002. , Murphy missed this deadline by a week.
A month later, the appeals officer notified counsel that Murphy’s offer-in-compromise was insufficient because she calculated that he could make a larger settlement payment in light of his current income and expenses. The letter included a summary of the officer’s calculations, and set an April 9, 2003 deadline for Murphy to increase his offer. Counsel subsequently told the officer that Murphy could not make a larger payment and that the calculation was erroneous. The officer granted Murphy ten days to offer a counter-proposal or to demonstrate any error in the calculation. Murphy did not respond by the deadline. A week after the deadline, counsel telephoned the officer to report that Murphy had been hospitalized but again declined to disclose the nature of Murphy’s illness. Counsel promised to provide Murphy’s counter-proposal by May 9, 2003, but he did not do so.
After Murphy missed the May 9th deadline, the appeals officer determined that Murphy’s offer-in-compromise could not be accepted because it was not commensurate with his ability to pay and because he had missed filing deadlines on multiple occasions. The IRS adopted the appeals officer’s recommendation and sent Murphy a letter stating that the agency would proceed to levy on his property.
*30 Murphy appealed this ruling to the Tax Court. The court held an evidentiary hearing during which Murphy unsuccessfully sought to introduce testimony from himself and the appeals officer. In a thorough opinion, the Tax Court ruled that (1) most of the testimony that Murphy sought to offer during the evidentiary hearing was irrelevant, 1 (2) the appeals officer reasonably terminated Murphy’s hearing without providing further extensions after Murphy missed several filing deadlines, and (3) the IRS did not abuse its discretion in determining that Murphy’s offer-in-compromise was insufficient.
II.
On appeal, Murphy raises three arguments. First, he claims that the Tax Court abused its discretion in excluding his testimony and the testimony of the appeals officer. Second, he argues that the court erred in determining that the IRS acted reasonably in ending the CDP hearing without providing him with further extensions to submit additional information. Finally, he contends that the court erred in. concluding that the IRS acted within its discretion in rejecting his offer-in-compromise.
Before addressing these arguments, we provide a brief summary of the CDP hearing process and the taxpayer’s right to appeal. In 1998, Congress established the CDP hearing process to temper “any harshness caused by allowing the IRS to levy on property without any provision for advance hearing.”
Olsen v. United States,
To proceed with a levy after a CDP hearing, the IRS must verify that it has met all the requirements to move forward with a levy, reject the taxpayer’s defenses and proposed collection alternatives, and determine that the “proposed collection action balances the need for efficient collection of taxes with the legitimate concern of the person that any collection be no more intrusive than necessary.” Id. § 6330(c)(3). An aggrieved taxpayer may appeal to the Tax Court. Id. § 6330(d)(1) (as amended by Pub.L. No. 109-281, § 855(a)). 2
A. Extra-Record Evidence
During the evidentiary hearing before the Tax .Court, Murphy testified about the circumstances that made him unable to offer a larger settlement payment, and the appeals officer testified concerning the process that she employed to evaluate Murphy’s offer-in-compromise. The IRS objected to the introduction of this testimony on the basis that the Tax Court should not consider evidence that was not part of the administrative record of the CDP hearing. The court rejected this ar *31 gument but still excluded the evidence as irrelevant. The IRS urges us to affirm this ruling on an alternative ground: Tax Court review should be limited to the administrative record.
We recently considered this issue in the context of a taxpayer appeal to the district court from the denial of an offer-in-compromise made during a CDP hearing.
See Olsen,
We now conclude that, for the reasons articulated in
Olsen,
the administrative record rule also applies to a taxpayer’s CDP hearing appeal to the Tax Court.
See Robinette v. Comm’r,
As mentioned above, there are limited exceptions to the administrative record rule. A reviewing court may accept evidence outside the administrative record where there “is a strong showing of bad faith or improper behavior” by agency decisionmakers,
Town of Norfolk v. U.S. Army Corps of Eng’rs,
Neither exception applies here. The appeals officer’s testimony may have been admissible if the existing administrative record had been inadequate to permit effective judicial review, but the record in this case was clearly sufficient. It included a log of the appeals officer’s actions in considering Murphy’s offer, contemporaneous notes that the officer made during the hearing, copies of correspondence with Murphy’s counsel, and a memorandum outlining the officer’s basis for decision.
See Robinette,
B. Conduct of the Hearing
Murphy contends that the IRS abused its discretion in the conduct of his CDP *32 hearing. He argues that the appeals officer acted “with a clear predisposition toward an inflexible and expeditious determination of ... the matter” by declining to grant him additional extensions to file more information.
The relevant regulations do not provide a time period within which a CDP hearing must be concluded. Rather, they instruct the IRS to complete the hearing “as expeditiously as possible under the circumstances.” 26 C.F.R. § 301.6330-1(e)(3). Thus, there is no requirement that an appeals officer “wait a certain amount of time before rendering [a] determination as to a proposed levy.”
Clawson v. Comm’r,
Murphy’s CDP hearing had been ongoing for eight months before the appeals officer concluded it. During that time, Murphy missed numerous deadlines despite repeated extensions. To the extent that his failure to meet filing deadlines was caused by illness, he was less than forthcoming with the IRS, as he refused to disclose even the nature of the illness until after the hearing had ended.
It is apparent that the appeals officer did not conclude the hearing because of an unyielding determination to end the matter quickly, but rather because she reasonably believed that there was little hope that Murphy would timely provide the required information. Were we to find an abuse of discretion on this record, we would transform CDP hearings from a shield against invasive government conduct into a taxpayer’s tool to delay the timely collection of delinquent tax liabilities by seeking endless extensions. We will not do so.
See, e.g., Carlson v. United States,
C. Rejection of the Offer-in-Compromise
Finally, we turn to the IRS’s rejection of Murphy’s $10,000 offer-in-compromise. We review the Tax Court’s decision de novo.
See Fargo v. Comm’r,
The IRS may compromise a taxpayer’s liability where it has a “[djoubt as to col-lectability” of the debt. 26 C.F.R. § 301.7122-l(b)(2). A doubt as to collecta-bility exists “in any case where the taxpayer’s assets and income are less than the full amount of the liability.” Id.
Once a doubt as to collectability is established, the “decision to accept or reject an offer to compromise ... is left to the discretion of the [IRS].” Id. § 301.7122(c)(1). In exercising this discretion, the IRS must consider all the facts and circumstances of the taxpayer’s ease, including whether they warrant acceptance of an amount that might not otherwise be acceptable under the IRS’s policies and *33 procedures. Id. There is no dispute that Murphy established a doubt as to collecta-bility and therefore was eligible to compromise his debt. The only question is whether the IRS abused its discretion in declining to accept Murphy’s proposed compromise.
The IRS may reject an offer-in-compromise because the taxpayer’s ability to pay exceeds the compromise proposal.
See Fargo,
Based on information provided by Murphy, the appeals officer calculated that, after expenses, Murphy had a monthly surplus of $1,128. The officer multiplied this figure by 60 months (a reasonable period until Murphy could expect to retire) for a total of $67,680 in available income. The officer then added realizable equity to conclude that Murphy could offer to pay $82,164 to settle his tax liability.
Murphy has never mounted a serious challenge to these calculations. After complaining to the appeals officer that her proposed compromise figure was too high, Murphy never offered an explanation for why the officer’s calculations were unreasonable. Even now, Murphy offers only a conclusory allegation that the appeals officer’s calculation was “preposterous.” On this record, the IRS did not abuse its discretion in rejecting Murphy’s offer-in-compromise. 3
Affirmed.
Notes
. The court did admit testimony from the appeals officer explaining the meaning of certain notes and symbols that appeared in the record.
. Prior to the enactment of Pub.L. No. 109-281, appeals from CDP hearings were heard in federal district court if the Tax Court did not have jurisdiction over the underlying tax liability. See 26 U.S.C. § 6330(d)(1)(B) (repealed by Pub.L. No. 109-281, § 855(a) (2006)).
. Murphy has not presented a developed argument that the IRS abused its discretion by declining to accept his offer-in-compromise because of special circumstances.
See United States v. Zannino,