Diego E. Salazar

United States Tax Court

T.C. Memo. 2026-9

DIEGO E. SALAZAR,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 14285-23L. Filed February 3, 2026.

__________

Hugh G. Jasne, for petitioner.

Gennady Zilberman, Rossana Gallego-Manzano, and Francesca Chou,

for respondent.

MEMORANDUM OPINION

LAUBER, Judge: This collection due process (CDP) case relates

to petitioner’s income tax liabilities for 2014–2017. The Internal Reve-

nue Service (IRS or respondent) issued him a Notice of Determination

sustaining a proposed levy, and he sought review in this Court. See

§ 6330(d)(1). 1 Following a remand for a supplemental hearing, peti-

tioner executed an installment agreement (IA) that resolved the tax lia-

bilities in question. The IRS Independent Office of Appeals (Appeals)

accordingly issued him a Supplemental Notice of Determination con-

cluding that the levy, although appropriate when issued, would not be

sustained because collection action was no longer necessary.

1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the

Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and

Rule references are to the Tax Court Rules of Practice and Procedure. We round all

monetary amounts to the nearest dollar.

Served 02/03/26

2

[*2] Petitioner contends that he signed the IA “under protest,” desir-

ing to maintain a challenge to the penalties and interest determined by

the IRS for 2014–2017. Respondent has filed a Motion for Summary

Judgment, contending that there are no disputes of material fact and

that the settlement officer (SO) did not abuse her discretion in resolving

the case as she did. We agree and accordingly will grant the Motion.

Background

The following facts are based upon the pleadings, the parties’ Mo-

tion papers, Declarations, and attached Exhibits, and the certified Ad-

ministrative Record of the CDP proceeding. See Rule 121(c). Petitioner

resided in New York when he petitioned this Court. Absent stipulation

to the contrary, appeal of this case would lie to the U.S. Court of Appeals

for the Second Circuit, and we thus follow its precedent. See

§ 7482(b)(1)(G); Golsen v. Commissioner, 54 T.C. 742, 757 (1970), aff’d,

445 F.2d 985 (10th Cir. 1971).

Petitioner filed delinquent Federal income tax returns for 2014

and 2015 on December 27, 2016. He filed timely returns for 2016 and

2017. He engaged Vilsaint St. Louis of Victory Tax Services to prepare

all four returns.

The IRS commenced an examination of the four returns. Peti-

tioner participated in the examination, but his claimed deductions were

disallowed because he failed to substantiate them. Petitioner concedes

that he “significantly overreported deductions” on his 2014–2017 re-

turns and that “he failed to retain records and properly document his

deductions.”

On January 30, 2019, the IRS issued petitioner a timely Notice of

Deficiency (Notice) for 2014–2017. The Notice determined for each year

a deficiency in tax and a 20% accuracy-related penalty under section

6662(a); for 2015 only, it determined an addition to tax under section

6651(a)(1) for failure to timely file. The deficiencies totaled $47,560, the

penalties totaled $9,512, and the addition to tax for 2015 was $657.

The Notice informed petitioner of his right to dispute these ad-

justments by petitioning this Court. He failed to do so. On August 12,

2019, the IRS accordingly assessed the liabilities as determined in the

Notice.

On October 27, 2021, in an effort to collect petitioner’s unpaid li-

abilities, the IRS issued him a Notice of Intent to Levy and Your

3

[*3] Collection Due Process Right to a Hearing (levy notice). The liabil-

ities appearing on the levy notice included the liabilities determined in

the Notice, plus interest and additions to tax for failure to pay. See

§ 6651(a)(2). The interest shown on the levy notice totaled $5,802, and

the section 6651(a)(2) additions to tax totaled $11,890.

The IRS mailed the levy notice to petitioner at his address in Da-

vie, Florida (Florida address). He timely requested a CDP hearing by

submitting Form 12153, Request for a Collection Due Process or Equiv-

alent Hearing. He checked the box requesting a collection alternative

in the form of an IA. He did not challenge his underlying tax liabilities

for 2014–2017. 2

On February 11, 2023, Appeals assigned the case to SO Aliza Co-

hen. She verified that petitioner’s tax liabilities for 2014–2017 had been

properly assessed and that all applicable legal and administrative re-

quirements had been satisfied. SO Cohen sent petitioner a letter sched-

uling a teleconference for March 15, 2023, with a copy to his designated

representative at the time, Sandra Wolf.

Unable to reach petitioner at the scheduled time, SO Cohen sent

him a “last chance” letter, affording him two weeks to provide the finan-

cial information needed to consider his eligibility for a collection alter-

native. SO Cohen mailed this letter, like the previous one, to petitioner’s

Florida address, with a copy to Ms. Wolf. This letter was returned to SO

Cohen with a New York City forwarding address (New York address).

SO Cohen then sent another copy of the last chance letter to petitioner’s

New York address.

As of April 24, 2023, neither petitioner nor Ms. Wolf had re-

sponded to any of the SO’s letters. On April 25, 2023, SO Cohen closed

the CDP case and recorded her recommendation that the collection ac-

tion be sustained. On June 29, 2023, the IRS issued petitioner a Notice

of Determination sustaining the proposed levy. His Petition to this

Court was mailed on September 2, 2023, and was filed by the Court on

September 5, 2023. His Petition was thus untimely. See § 6330(d)(1).

2 In October 2021 petitioner appears to have resided at 14400 SW 16th St.,

Davie, Florida 33325. The levy notice showed the correct street address but showed

the ZIP Code number as “33325-5911008.” This apparent anomaly did not prevent

petitioner from receiving the levy notice or from timely requesting a CDP hearing. On

the Form 12153 he listed his address as 14400 SW 16th St., Bavie, Florida 33325. This

was evidently a typographical error; Bavie, Florida, does not exist.

4

[*4] On December 8, 2023, respondent filed a Motion to Remand the

case to Appeals for a supplemental hearing. The premise for the remand

was petitioner’s allegation that he did not receive certain communica-

tions from SO Cohen. Because it was “unclear which address Petitioner

resided in or had access to for mailing purposes during [the relevant]

time period,” respondent urged that petitioner “be granted an oppor-

tunity to be heard in a [supplemental] hearing” so that “the Appeals Of-

ficer can consider collection alternatives.” By Order served December

14, 2023, we granted respondent’s Motion and remanded the case to Ap-

peals.

Petitioner’s case was again assigned to SO Cohen, who reminded

petitioner that she could not consider a collection alternative unless he

submitted Form 433–A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, with supporting financial infor-

mation. By Orders served March 15 and May 17, 2024, we extended to

July 5, 2024, the time within which we expected the parties to conduct

the supplemental hearing. Petitioner eventually retained a new repre-

sentative, who now serves as his counsel in this case.

The supplemental hearing was scheduled for July 2, 2024. On

July 1, 2024, petitioner’s counsel sent SO Cohen a packet of documents

that included news items related to alleged fraud committed by Mr. St.

Louis, who had prepared his 2014–2017 returns. See supra p. 2. The

packet did not include a completed Form 433–A.

On July 2, 2024, SO Cohen conducted a telephone conference with

petitioner’s counsel. For the first time, petitioner urged that the penal-

ties and interest determined for 2014–2017 should be abated. As sup-

port for abatement, petitioner alleged that Mr. St. Louis had been con-

victed of fraud in connection with a Paycheck Protection Program loan

in 2021. SO Cohen replied that this alleged activity did not support

abatement of interest or penalties for 2014–2017. She invited him to

submit Form 843, Claim for Refund and Request for Abatement, but he

never did so.

Petitioner requested additional time “to submit a reasonable

cause abatement letter and to provide supporting documentation.” SO

Cohen granted that request and gave him two weeks, until July 16, to

submit a letter justifying abatement. Petitioner conceded that he had

no documentation to support a challenge to the tax deficiencies deter-

mined for 2014–2017.

5

[*5] Although petitioner had not submitted Form 433–A and had sup-

plied no financial information, SO Cohen offered him an IA calling for

payments of $1,645 per month. She gave him two weeks, until July 16,

2024, to decide whether to accept this offer. Petitioner asked that the

proposed monthly payment be reduced to reflect abatement of interest

and penalties, but SO Cohen explained that this was not possible unless

he supplied additional justification.

On July 16 petitioner submitted a letter requesting a 50% abate-

ment of the interest and penalties. He admitted that “mistakes were

made” in filing his 2014–2017 returns but urged that these mistakes

were “honest sins of omission only.” He also asserted that he could not

afford to pay $1,645 per month. SO Cohen replied that, if he wished to

argue for a lower amount, “Form 433–A will be required for a determi-

nation to be made on [his] ability to make monthly payments.” She gave

him another 10 days, until July 26, 2024, to decide whether to accept

her existing offer.

On August 20, 2024, petitioner’s counsel informed SO Cohen that

petitioner would accept her offer “under protest and with full reserva-

tion of rights,” including “seeking a future abatement.” SO Cohen ac-

cordingly directed petitioner to submit Form 433–D, Installment Agree-

ment. On August 29, 2024, petitioner submitted an executed Form 433–

D agreeing to an IA with a monthly payment of $1,637. (The record does

not explain why this monthly payment is $8 lower than the monthly

payment SO Cohen had initially offered.)

On September 4, 2024, Appeals issued petitioner a Supplemental

Notice of Determination. It concluded that the proposed levy, though

proper when made, would not be sustained because “the Appeals Officer

proposed an Installment Agreement in the amount of $1,637.00 begin-

ning November 02, 2024 and you agreed to the terms and conditions on

August 29, 2024.”

After the case was returned to this Court, respondent filed a Mo-

tion for Summary Judgment, contending that Appeals did not abuse its

discretion in resolving the case as it did. Petitioner timely responded to

the Motion.

6

[*6] Discussion

I. Jurisdiction

Section 6330(d)(1) provides that a taxpayer “may, within 30 days

of a determination under this section, petition the Tax Court for review

of such determination.” The Notice of Determination accordingly ad-

vised petitioner that he needed to file his Petition within 30 days of June

29, 2023, the date appearing on the Notice. The Petition was mailed on

September 2, 2023, and was filed by the Court on September 5, 2023. It

was thus mailed and filed more than a month late.

The 30-day filing deadline is a nonjurisdictional claim processing

rule and is subject to equitable tolling. See Boechler, P.C. v. Commis-

sioner, 142 S. Ct. 1493, 1501 (2022). A timeliness defense therefore can

be forfeited if not raised. See Rule 39 (“A party shall set forth . . . any

matter constituting an avoidance or affirmative defense . . . . A mere

denial in a responsive pleading will not be sufficient to raise any such

issue.”).

Petitioner included with his Petition a document captioned

“Memo for Tolling Time.” He acknowledged that his Petition was being

filed “beyond the normal 30-day time for filing appeal,” but he urged that

this deadline “is discretionary by this Court.” He represented that he

“did not receive a separate copy of the June 29th [notice of] determina-

tion by mail.” In his Answer respondent agreed “that Petitioner’s Peti-

tion was filed untimely” but “[n]either affirm[ed] nor denie[d] any legal

argument.”

Respondent does not contend, either in his Answer or in any other

document, that this case should be dismissed because the Petition was

untimely. Quite the contrary: Three months after the Petition was filed,

respondent filed a Motion to Remand, affirmatively urging that the case

be returned to Appeals to give petitioner the opportunity for a hearing.

Under these circumstances, we consider respondent to have waived any

affirmative defense or (alternatively) to have acquiesced implicitly in pe-

titioner’s argument that he qualifies for equitable tolling because he did

not timely receive a copy of the Notice of Determination.

II. Summary Judgment and Standard of Review

The purpose of summary judgment is to expedite litigation and

avoid unnecessary and time-consuming trials. FPL Grp., Inc. & Subs.

v. Commissioner, 116 T.C. 73, 74 (2001). We may grant summary

7

[*7] judgment when there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law. Rule

121(a)(2); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),

aff’d, 17 F.3d 965 (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. Sundstrand

Corp., 98 T.C. at 520. However, where the moving party makes and

properly supports a motion for summary judgment, “the nonmovant may

not rest on the allegations or denials in that party’s pleading” but must

set forth specific facts, by affidavit or otherwise, showing that there is a

genuine dispute for trial. Rule 121(d). Finding that there exist no gen-

uine disputes of material fact, we conclude that summary adjudication

is appropriate.

Section 6330(d)(1) does not prescribe the standard of review that

this Court should apply in reviewing an IRS administrative determina-

tion in a CDP case. The general parameters for such review are marked

out by our precedents. Where the taxpayer’s underlying tax liability is

properly at issue, we review the IRS’s determination de novo. Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C.

176, 181–82 (2000). Where the taxpayer’s underlying liability is not

properly in dispute, we review the IRS’s determination for abuse of dis-

cretion only. Goza, 114 T.C. at 182.

III. Underlying Tax Liabilities

While not disputing the deficiencies, petitioner challenges the

accuracy-related penalties and interest that the IRS determined for

2014–2017. During the supplemental hearing he urged that at least

50% of the penalties and interest should be abated, and he renews that

argument in this Court. “[A] request for an abatement of interest and

penalty pursuant to section 6404(e) and (f) [constitutes] a challenge to

the existence of an underlying liability.” Salahuddin v. Commissioner,

T.C. Memo. 2012-141, 103 T.C.M. (CCH) 1764, 1767; see Dick v. Com-

missioner, T.C. Memo. 2024-101, at *4–5 (“A request for abatement of

additions to tax and interest constitutes a challenge to a taxpayer’s un-

derlying liability.”); Dykstra v. Commissioner, T.C. Memo. 2017-156, 114

T.C.M. (CCH) 183, 187; Brennan v. Commissioner, T.C. Memo. 2013-

123, 105 T.C.M. (CCH) 1724, 1727.

A taxpayer may challenge his underlying liability at a CDP hear-

ing only if he did not receive a statutory notice of deficiency or did not

otherwise have a prior opportunity to dispute the liability. See

8

[*8] § 6330(c)(2)(B); Montgomery v. Commissioner, 122 T.C. 1, 9 (2004).

Petitioner had a prior opportunity to dispute the accuracy-related pen-

alties for 2014–2017 when he received the Notice. After an examination

in which he participated, the IRS mailed that Notice to his last known

address on January 30, 2019.

The Notice was issued within 3 years of December 27, 2016, the

date on which petitioner filed his delinquent 2014 and 2015 returns, and

within 3 years of the dates on which he filed his 2016 and 2017 returns.

See § 6501(a). The Notice was thus timely issued and valid. 3 Because

petitioner failed to petition this Court in response to the Notice, he was

precluded from challenging the penalties during the CDP proceeding

and cannot advance that challenge here. See Thompson v. Commis-

sioner, 140 T.C. 173, 178 (2013). 4

Although petitioner had a prior opportunity to challenge the

accuracy-related penalties, he did not have a prior opportunity to dis-

pute the interest or the section 6651(a)(2) additions to tax. Those

amounts were not determined in the Notice but were communicated to

him in the levy notice after he failed to petition this Court. Nothing in

the record indicates that he had an earlier opportunity to contest these

liabilities.

3 Petitioner appears to contend that his 2014–2017 liabilities were not timely

assessed or that the period of limitations on collection had expired. Neither argument

is correct. The IRS assessed the tax on August 12, 2019, shortly after petitioner failed

to petition this Court. The assessments were thus timely under sections 6501(a) and

6503(a)(1) (providing that, after the mailing of a notice of deficiency, the running of the

assessment period of limitations is suspended during the period in which the IRS is

prohibited from making an assessment and for 60 days thereafter). The period of lim-

itations on collection, which runs for 10 years after the date of assessment,

§ 6502(a)(1), has not yet expired.

4 Even if petitioner were entitled to challenge his liability for the penalties, he

supplied during the CDP proceeding no evidence that the penalties were “excessive in

amount,” were “erroneously or illegally assessed,” or were “attributable to erroneous

written advice” from the IRS. See § 6404(a)(1), (3), (f) (authorizing abatement on these

grounds). Instead, petitioner urged the SO to abate 50% of the penalties “out of fun-

damental fairness” on the theory that he had been victimized by an unscrupulous re-

turn preparer who had reported bogus deductions on his 2014–2017 returns. But tax-

payers have a duty to review their returns for accuracy before the returns are filed,

and the duty of filing accurate returns cannot be avoided by placing responsibility on

a tax return preparer. See Metra Chem Corp. v. Commissioner, 88 T.C. 654, 662 (1987).

Had petitioner discharged this duty, he would have seen (as he acknowledges in his

Response) that the deductions were “significantly overreported.”

9

[*9] To preserve an underlying tax liability challenge in this Court,

however, a taxpayer must properly raise that challenge during the CDP

hearing. Thompson, 140 T.C. at 178; see Giamelli v. Commissioner, 129

T.C. 107, 113 (2007). “An issue is not properly raised if the taxpayer

fails . . . to present to Appeals any evidence with respect to that issue

after being given a reasonable opportunity to [do so].” Treas. Reg.

§ 301.6330-1(f)(2), Q&A-F3; see Giamelli, 129 T.C. at 112–16. In other

words, the taxpayer must explain what he believes his correct tax liabil-

ity to be and supply the SO with some evidence to support that position.

See Giamelli, 129 T.C. at 112–16; Fleming v. Commissioner, T.C. Memo.

2017-155, 114 T.C.M. (CCH) 180, 182 (citing McRae v. Commissioner,

T.C. Memo. 2015-132, 110 T.C.M. (CCH) 89, 91); Treas. Reg. § 301.6330-

1(f)(2), Q&A-F3.

Section 6404(e) authorizes the Secretary to abate interest at-

tributable to unreasonable errors or delays by the IRS in performing a

ministerial or managerial act. Although petitioner requested abatement

of interest during the CDP proceeding, he supplied the SO with no evi-

dence that the IRS could be charged with “unreasonable error[s] or de-

lay[s]” in the processing or examination of his returns. See

§ 6404(e)(1)(A). Indeed, in his Response to the Motion, he concedes that

his argument for abatement—which he grounds on “fundamental fair-

ness”—“does not fit neatly into the above [section 6404] categories, as

they clearly do not.” See Day v. Commissioner, T.C. Memo. 2014-215,

108 T.C.M. (CCH) 452, 454 (holding that a taxpayer did not properly

raise the issue of interest abatement during a CDP hearing where he

submitted neither a Form 843 nor any information justifying abate-

ment), aff’d, 692 F. App’x 897 (9th Cir. 2017).

Finally, petitioner did not challenge, at any time during the CDP

proceeding, the additions to tax for failure to timely pay. Nor did he

supply any evidence that his failure to pay the tax shown on his returns

was “due to reasonable cause and not due to willful neglect.” See

§ 6651(a)(2). Rather, during the supplemental hearing he confined his

underlying liability challenge to the accuracy-related penalties and the

assessed interest. See Brennan, 105 T.C.M. (CCH) at 1727 (declining to

consider underlying liability challenge where taxpayer “did not raise the

issue of abating the additions to tax or [his] ‘reasonable cause’ defense

before or during the CDP hearing”). We accordingly review the SO’s

determinations for abuse of discretion only. See § 6330(c)(3); Goza, 114

T.C. at 182.

10

[*10] IV. Abuse of Discretion

Abuse of discretion exists when a determination is arbitrary, ca-

pricious, or without sound basis in fact or law. See Murphy v. Commis-

sioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006). In

deciding whether the SO abused her discretion, we consider whether she

(1) properly verified that the requirements of applicable law or admin-

istrative procedure were met, (2) considered relevant issues petitioner

raised, and (3) considered “whether any proposed collection action bal-

ances 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 § 6330(c)(3). Our review of the record establishes

that SO Cohen properly discharged all her responsibilities under these

provisions.

A. Verification

Section 6330(c)(1) requires the SO to “obtain verification . . . that

the requirements of any applicable law or administrative procedure

have been met.” SO Cohen confirmed that all such requirements were

satisfied. Specifically, she verified that notice and demand for payment

were made to petitioner within 60 days of the assessment. She secured

a copy of the Notice and of U.S. Postal Service Form 3877, Firm Mailing

Book for Accountable Mail, verifying that the Notice was sent to peti-

tioner’s last known address. Petitioner did not raise before the SO, and

he does not raise in this Court, any challenge to the proper mailing of

the Notice. To the contrary, he concedes liability for the deficiencies for

2014–2017 and seeks only abatement of interest and penalties. In any

event, the Notice was properly mailed to his last known address and was

timely. See supra p. 8 & note 3.

Petitioner contends in his Response that the IRS failed to secure

timely supervisory approval of the penalties determined in the Notice.

See § 6751(b)(1). Petitioner did not advance this argument during the

original or supplemental CDP hearing. Even if he had done so, it would

have been an impermissible challenge to his underlying liability for the

penalties. See supra pp. 7–8. In any event the examination file shows

that the revenue agent’s group manager, by signing the 30-day letter,

approved assertion of the penalties. The approval was thus timely un-

der Second Circuit and Tax Court precedent, as well as under the Treas-

ury regulations applicable to penalties assessed after December 31,

2024. See Chai v. Commissioner, 851 F.3d 190, 221 (2d Cir. 2017), aff’g

in part, rev’g in part T.C. Memo. 2015-42; Frost v. Commissioner, 154

11

[*11] T.C. 23, 32 (2020) (holding that supervisory approval must be se-

cured “before the first formal communication to the taxpayer of penal-

ties”).

B. Collection Alternatives

Section 6159(a) authorizes the IRS to enter into a written agree-

ment allowing a taxpayer to pay a tax liability in installments if it con-

cludes that the agreement “will facilitate full or partial collection of such

liability.” The decision to accept or reject an IA lies within the Commis-

sioner’s discretion. See Thompson, 140 T.C. at 179.

The SO generously offered petitioner an IA even though he had

supplied no financial information and had neglected to submit a Form

433–A. Petitioner ultimately accepted her offer by executing a Form

433–D, agreeing to an IA with a monthly payment of $1,637. Because

petitioner’s execution of the IA eliminated the need for current collection

action with respect to his 2014–2017 liabilities, the SO properly con-

cluded that the proposed levy, while appropriate when initially issued,

would not be sustained.

C. Balancing Analysis

Petitioner has not alleged that the SO failed to consider “whether

any proposed collection action balances the need for the efficient collec-

tion of taxes with [petitioner’s] legitimate concern . . . that any collection

action be no more intrusive than necessary.” See § 6330(c)(3)(C). He

has thus conceded this issue. In any event, because Appeals did not

sustain the collection action, extensive discussion of this factor was un-

necessary. For all these reasons, we conclude that Appeals did not abuse

its discretion in resolving the case as it did.

To reflect the foregoing,

An appropriate order and decision will be entered.