United States Tax Court

United States Tax Court

T.C. Memo. 2025-69

CHAD T. MACKLAND AND TINA M. MACKLAND,

Petitioners

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 9583-24L.

Filed July 1, 2025.

__________

Chad T. Mackland and Tina M. Mackland, pro se.

Rae L. Ensor and Joline M. Wang, for respondent.

MEMORANDUM OPINION

JENKINS, Judge: In this collection due process (CDP) case,

petitioners, Chad T. Mackland and Tina M. Mackland, timely filed a

Petition under section 6330(d)(1), 1 challenging a Notice of

Determination Concerning Collection Actions Under IRS Sections 6320

or 6330 of the Internal Revenue Code (NOD) issued by the Internal

Revenue Service (IRS) Independent Office of Appeals (Appeals). The

NOD sustains a proposed levy aimed at collecting unpaid assessments

related to petitioners’ 2017 and 2018 tax years and rejects their

proposed collection alternative. The NOD was issued to petitioners

following a CDP hearing and extended back-and-forth with Appeals.

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. Monetary

amounts are rounded to the nearest dollar.

Served 07/01/25

2

[*2] Respondent filed a Motion for Summary Judgment (Motion)

pursuant to Rule 121, contending that it was not an abuse of discretion

for Appeals to reject petitioners’ proposed collection alternative and

sustain the levy. Petitioners did not file a response. 2 This Court finds

that this case is appropriate for summary adjudication and that Appeals

did not abuse its discretion in rejecting petitioners’ proposed collection

alternative and sustaining the levy. This Court will thus grant the

Motion.

Background

The following facts are based on the parties’ pleadings and Motion

papers, including the Exhibits attached thereto, as well as the

administrative record. See Rule 93. The facts are stated solely for the

purpose of ruling on the Motion and not as findings of fact in this case.

See Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d,

17 F.3d 965 (7th Cir. 1994). Petitioners resided in Iowa when the

Petition was filed.

I.

Underlying Liabilities

Petitioners timely filed their federal income tax return for the

2017 tax year, reporting an income tax liability of $63,860, tax

withholding of $1,863, and a credit of $723. Petitioners did not remit any

payment with their tax return. The IRS processed petitioners’ 2017 tax

return on November 19, 2018, and in addition to petitioners’ reported

income tax liability, the IRS assessed additions to tax for failure to

timely pay and for failure to make estimated tax payments, as well as

statutory interest.

Petitioners also timely filed their federal income tax return for

the 2018 tax year, reporting an income tax liability of $13,088 and tax

withholding of $12,069. Petitioners did not remit any payment with

their tax return. The IRS processed petitioners’ 2018 tax return on

November 18, 2019, and the IRS assessed an addition to tax for failure

2 Petitioners waited until the day after the original deadline for their response

to mail a request for an extension of the deadline, indicating that they needed

additional time to retain counsel. They then requested an extension of the first

extended deadline on the grounds that “[o]btaining representation is in the final

stages.” Petitioners subsequently requested an extension of their second extended

deadline for a response, but, to this date, petitioners have not retained counsel. All in

all, this Court gave petitioners more than three months from the date of the Motion to

file a response, and the Court notes that petitioners’ pattern of delay before this Court

is consistent with their pattern of delay before Appeals.

3

[*3] to timely pay, as well as statutory interest, in addition to their

reported income tax liability. On November 2, 2020, the IRS issued to

petitioners Notice CP2000, which reflected an income tax deficiency of

$14,951, a substantial understatement of income tax penalty of $2,990

under section 6662(a) and (b)(2), and statutory interest of $1,081 for the

2018 tax year. On February 22, 2021, the IRS issued Notice CP3219A,

Notice of Deficiency, to petitioners, for the 2018 tax year, determining

an income tax deficiency as well as a substantial understatement of

income tax penalty and notifying petitioners of their right to challenge

the determination in this Court. Petitioners did not file a timely petition

with this Court disputing the Notice of Deficiency. On November 15,

2021, the IRS assessed against petitioners an additional income tax

liability of $834 for the 2018 tax year instead of the larger amount

reflected in the Notice of Deficiency. The IRS did not assess the

substantial understatement penalty reflected in the Notice of

Deficiency. 3

II.

Final Notice and Request for CDP Hearing

On June 27, 2023, the IRS issued to petitioners a Final Notice of

Intent to Levy and Notice of Your Rights to a Hearing (Levy Notice),

notifying them of a proposed levy to satisfy their unpaid income tax

liabilities for the 2017 and 2018 tax years. In response, petitioners’

representative submitted to the IRS a package dated July 25, 2023, that

contains a cover letter and a timely Form 12153, Request for a Collection

Due Process or Equivalent Hearing. On the Form 12153, under “Reason

you are requesting a hearing,” petitioners checked the box for “I am

unable to pay in full and would like a collection alternative,” as well as

the box for “Other issue(s) and/or comment(s),” next to which they

entered “PLEASE SEE COVER LETTER.” Under “Proposed collection

alternative,” they checked the box for “Installment Agreement,” as well

as the box for “Other,” referring back to the package’s cover letter for the

requested explanation. Petitioners’ representative explained in the

cover letter that petitioners were still recovering from past legal issues,

Mr. Mackland was unemployed, and Mrs. Mackland had a serious

illness. The cover letter asserts that under these circumstances,

“[e]nforced collection action would be an insidious remedy to employ.”

Petitioners’ representative also requested in the letter that petitioners

3 Respondent does not provide an explanation for the assessed amount, but

petitioners have not challenged the deficiency, and this Court need not address the

underlying amounts to make a determination with respect to the CDP proceeding and

the NOD at issue before this Court.

4

[*4] be allowed “time to explore means to obtain equity from their home

to pay down the debt” and notes that a federal tax lien placed on the

home by the IRS complicates the loan process. Petitioners did not

dispute the underlying tax liabilities for the 2017 and 2018 tax years in

the cover letter or on the Form 12153.

As part of the request for a CDP hearing, petitioners submitted

to the IRS a Form 433–A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, dated July 20, 2023. On the

Form 433–A, petitioners indicated that only Mrs. Mackland was

employed and that monthly living expenses exceeded monthly income.

Under personal assets, petitioners listed two checking accounts showing

minimal account balances, one investment account with a positive

current value, two personal vehicles, and petitioners’ primary residence

in which, petitioners reported, they had significant equity. Petitioners

also enclosed some supporting documentation with the Form 433–A,

including checking account statements showing payroll deposits for

March through June 2023; vehicle, mortgage, and medical expense

statements; and copies of certain past due notices. Despite listing an

investment account on the Form 433–A, petitioners did not provide

statements or detailed financial information related to the investment

account.

III.

CDP Hearing and Interactions Between IRS and Petitioners

A Revenue Officer (RO) reviewing petitioners’ CDP hearing

request concluded that “[t]axpayer [is] requesting [currently not

collectible] alternative.” Petitioners’ request for a CDP hearing was

assigned to an Appeals officer (AO), who verified that she had no prior

involvement with petitioners for the types of taxes and the tax years

involved in the case, confirmed that petitioners were in compliance with

their federal income tax filing obligations, and conducted her initial

analysis of the case. On August 9, 2023, the AO sent petitioners a letter

(Initial Letter) acknowledging receipt of the CDP hearing request and

scheduling a telephone CDP hearing for September 6, 2023. The Initial

Letter explains that, in order for a collection alternative to be

considered, petitioners must provide a current copy of the investment

account statement, current vehicle statements, and current paystubs for

at least the past two months. The letter also requests copies of past due

notices and any other evidence that a hardship exists. The letter notifies

petitioners that if they do not participate in the scheduled telephone

hearing or otherwise respond to the letter, Appeals will make a

5

[*5] determination based on the information petitioners previously

provided and any information on file regarding the applicable tax years.

At the request of petitioners’ representative, the AO agreed to

reschedule the telephone hearing to September 22, 2023. On the

morning of September 22, 2023, the representative notified the AO, by

fax, that petitioners intended to resolve the CDP case by taking out a

loan against their home. Enclosed with the fax were emails from two

banks indicating that petitioners had started the application process

with one bank on September 14, 2023, and with a second bank on

September 15, 2023. The representative also enclosed a second copy of

the Form 433–A, dated July 20, 2023, enclosing the same supporting

financial documents provided earlier, and notified the AO that the same

information had been previously provided to the RO. No additional or

updated financial information requested in the Initial Letter was

provided to the AO. Later in the day, the AO and the representative

participated in the scheduled telephone hearing, during which the AO

explained that the equity in the primary residence “must be addressed

prior to a collection alternative being granted” and that copies of any

loan applications should be provided for her to verify the loan

application process was moving forward. The AO agreed to allow

petitioners more time to continue the loan application process and to

contact the representative in 30 days for a status update.

On October 23, 2023, the representative submitted copies of email

communications between Mr. Mackland and his bankers indicating that

petitioners’ loan applications were in underwriting and awaiting

appraisals. Copies of the loan applications were not provided. Appeals

again agreed to give petitioners additional time. On October 26,

November 10, and December 12, 2023, and January 5, 2024, the

representative submitted additional faxes to the AO with updates from

Mr. Mackland of varying degrees of specificity about petitioners’ 2022

federal income tax return, Mrs. Mackland’s health challenges, and the

status of the loan application process; however, petitioners did not

provide copies of any loan applications.

During the months between September 2023 and January 2024,

the AO did not make a determination with respect to the CDP case and

also forestalled levy action with respect to petitioners, in part because

she understood Mrs. Mackland to be under treatment for a serious

illness. However, on February 7, 2024, the AO advised petitioners’

representative that if petitioners were unable to refinance their home or

otherwise secure access to their equity in it, she would be unable to grant

6

[*6] a collection alternative because of the equity in petitioners’ assets.

On February 14, 2024, the representative submitted to the AO a fax

enclosing email communications between himself and Mr. Mackland, in

which Mr. Mackland indicated an anticipated closing date of March 4,

2024, for a home equity loan. A copy of the loan application was not

provided. On February 15, 2024, the AO contacted the representative by

phone to discuss the status of the loan application. The representative

indicated that he would forward petitioners’ loan application to the AO

once received. He also requested a total payoff amount calculated to

March 4, 2024, the anticipated closing date of the loan, which the AO

generated on February 15, 2024, and provided to petitioners and the

representative.

On March 7, 2024, the representative submitted a fax to the AO

indicating that petitioners planned to work with a third bank to secure

the equity, that there were no signed documents for the loan available

until closing, and that there was no set date for closing. On March 11,

2024, the AO left the representative a voicemail requesting clarification

regarding the status of the loan given petitioners’ prior representations.

The AO’s Case Activity Record indicates that on March 13, 2024,

she analyzed the case further and confirmed that petitioners’ monthly

living expenses exceeded monthly income. The AO’s notes include a

currently not collectible (CNC) code, potentially suggesting that the AO

believed that collection of the liability would create a hardship for

petitioners. The notes also include an excerpt from Internal Revenue

Manual (IRM) 5.11.1.3.1(2) (Nov. 24, 2021) regarding prelevy

considerations, stating:

[L]evy determinations are made on a case-by-case basis

and revenue officers must exercise good judgment in

making the determination to levy. When determining if a

levy is appropriate consider the following:

•

Anything that the revenue officer knows about the

taxpayer’s financial condition including economic

hardship. If the revenue officer has sufficient

information and verified that the levy would cause

an economic hardship, the levy should not be issued.

While information in the IRS’s records may be

sufficient to corroborate the presence of economic

hardship, in some cases the taxpayer may need to

7

provide additional information in order to make that

determination.

[*7]

The AO’s notes conclude that “[i]f no signed loan application is received

in the next 30 days . . . AO is going to issue NOD.”

On March 14, 2024, the representative submitted a fax to the AO

indicating that because of recent hospitalizations and health challenges

faced by both Mrs. Mackland and an immediate family member

cosigning the loan, the closing date had been postponed until April 1,

2024. On April 15, 2024, the AO had a call with the representative in

which she noted that aside from early email communications with

petitioners’ bankers, petitioners had not provided any solid evidence

that they were moving forward with the loan process. The AO indicated

that she could wait only a few more weeks for information to be provided.

Despite receiving numerous faxes during the duration of her review, the

AO did not receive any documentation requested in the Initial Letter,

nor any loan-related documents. On May 13, 2024, having received no

additional information from petitioners or the representative, Appeals

issued the NOD.

IV.

NOD

The NOD explains that all legal and procedural requirements

were followed in the issuance of the Levy Notice and reflects the

determination to sustain the proposed levy. The attachment enclosed

with the NOD (Attachment) explains that the AO had no prior

involvement with respect to the specific tax periods and that the AO

verified that the requirements of any applicable law or administrative

procedure were met. Specifically, IRS records confirm the proper

issuance of the notice and demand, notice of intent to levy, and notice of

a right to a CDP hearing. The Attachment also concludes that an

assessment was properly made for each tax and period to which the Levy

Notice relates, that notice and demand for payment was mailed to

petitioners’ last known address, and that there was a balance due when

the Levy Notice was issued.

The Attachment notes that petitioners did not raise a challenge

to their underlying liabilities. It also notes that petitioners have equity

in assets that must be addressed before a collection alternative can be

established. It explains the background of the case, detailing the

interactions between the AO and petitioners, as well as petitioners’

failure to provide sufficient documentation to demonstrate that they

8

[*8] were moving forward with the home loan process. The Attachment

further explains that the AO reviewed the information on file, including

the information petitioners provided, which the administrative record

shows included the Form 433–A and supporting documentation, and

concluded that the actions taken or proposed were appropriate under

the circumstances.

With regard to the requested collection alternative, the

Attachment explains: “In the 7 months since the date your hearing was

held you did not provide sufficient documentation to confirm you were

in the process of liquidating your assets. Since the equity in assets was

not addressed, an installment agreement could not be established.”

Finally, the Attachment concludes:

Internal Revenue Code § 6330 requires the Appeals Officer

to consider whether any collection action balances the need

for efficient collection of the unpaid taxes with the

legitimate concern that such action be no more intrusive

than necessary. Appeals determined the proposed levy did

balance the need for efficient tax collection. You have

equity in assets that needs to be address[ed] prior to a

collection alternative of an installment agreement being

established.

Discussion

I.

Summary Judgment Standard

Summary judgment serves to “expedite litigation and avoid

unnecessary and expensive trials.” Fla. Peach Corp. v. Commissioner,

90 T.C. 678, 681 (1988). Either party may move for summary judgment

regarding all or any part of the legal issues in controversy. Rule

121(a)(1). In the U.S. Court of Appeals for the Eighth Circuit, to which

an appeal of this case would presumptively lie, see § 7482(b)(1)(G)(i),

review of CDP determinations for abuse of discretion is limited to the

administrative record, see Robinette v. Commissioner, 439 F.3d 455,

461–62 (8th Cir. 2006), rev’g 123 T.C. 85 (2004). In cases in which

judicial review is based solely on the administrative record, a motion for

summary judgment and any response in opposition to a motion for

summary judgment must include a statement of facts with references to

the administrative record. Rule 121(j). In deciding whether to grant

summary judgment, the Court considers factual materials and

inferences drawn from them in the light most favorable to the

9

[*9] nonmoving party. Sundstrand Corp., 98 T.C. at 520. The

nonmoving party may not rest upon mere allegations or denials in the

pleadings but must set forth specific facts showing that there is a

genuine dispute for trial. Rule 121(d); see also Celotex Corp. v. Catrett,

477 U.S. 317, 324 (1986).

In the Motion, respondent argues that there was no abuse of

discretion because Appeals fully complied with the requirements of

section 6330(c)(3). Accordingly, respondent argues, summary

adjudication is appropriate. Petitioners have not argued that the

administrative record is incomplete or should be supplemented, nor

have they filed a motion to complete or supplement the administrative

record pursuant to Rule 93(b). This Court finds, on the basis of the

record before it, that this case is appropriate for summary adjudication.

II.

Standard for Review

If the underlying tax liability is not at issue, the Court reviews

Appeals’ determination for abuse of discretion. Sego v. Commissioner,

114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 182

(2000). In reviewing for abuse of discretion, the Court does not conduct

an independent review of the collection alternatives and does not

substitute its judgment for that of Appeals; rather, the Court’s review is

limited to determining whether Appeals’ decision was arbitrary,

capricious, or without sound basis in fact or law. Murphy v.

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

2006). If the underlying tax liability was properly at issue in the CDP

hearing, the Court reviews the determination de novo. Lunsford v.

Commissioner, 117 T.C. 183, 185 (2001) (citing Goza, 114 T.C.

at 181–82).

In a CDP hearing, a taxpayer may raise challenges to the

existence or amount of an underlying liability only if the taxpayer did

not receive a statutory Notice of Deficiency for the tax liability or did not

otherwise have an opportunity to dispute it. See § 6330(c)(2)(B); Treas.

Reg. § 301.6330-1(e)(1). These challenges may include challenges to the

liability the taxpayer reported on a return. Treas. Reg. § 301.63301(e)(1). The term “underlying liability” includes any tax deficiency,

additions to tax or penalties, and statutory interest. See Montgomery v.

Commissioner, 122 T.C. 1, 7–8 (2004); Katz v. Commissioner, 115 T.C.

329, 338–39 (2000). An opportunity to dispute the underlying liability

includes a prior opportunity for a conference with Appeals that was

offered either before or after assessment of the liability unless the

10

[*10] opportunity was offered before the assessment of a tax subject to

deficiency procedures. See Treas. Reg. § 301.6330-1(e)(3), Q&A-E2; see

also Lewis v. Commissioner, 128 T.C. 48, 61–62 (2007).

To preserve an underlying tax liability challenge, a taxpayer must

properly raise that challenge during the CDP hearing. See Thompson v.

Commissioner, 140 T.C. 173, 178 (2013); Giamelli v. Commissioner, 129

T.C. 107, 113–14 (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. As

discussed supra Background Part I, for the 2017 tax year, the IRS

assessed the income tax liability petitioners reported, additions to tax

for failure to timely pay and for failure to make estimated tax payments,

and statutory interest. For the 2018 tax year, the IRS assessed the

income tax liability petitioners reported, additions to tax for failure to

timely pay, and statutory interest. The IRS also issued a Notice of

Deficiency to petitioners for the 2018 tax year. Petitioners failed to

timely petition this Court to dispute the Notice of Deficiency, and the

IRS ultimately assessed against petitioners an additional income tax

liability of $834. Petitioners did not dispute the underlying liability for

the 2017 or 2018 tax year in their Form 12153 or in the Petition.

Accordingly, this Court reviews Appeals’ determination for abuse of

discretion. See Sego, 114 T.C. at 610; Goza, 114 T.C. at 182.

In conducting this review, this Court looks to the reasons offered

in the NOD, as supplemented by other documents in the record, such as

Appeals’ case activity notes. See Serna v. Commissioner, T.C. Memo.

2022-66, at *8; see also Kasper v. Commissioner, 150 T.C. 8, 24–25 (2018)

(“Although we may not accept any post hoc rationalizations for agency

action provided by the Commissioner’s counsel, we may consider any

‘contemporaneous explanation of the agency decision’ contained in the

record.” (quoting Tourus Records, Inc. v. DEA, 259 F.3d 731, 738 (D.C.

Cir. 2001))).

III.

Evaluation of Appeals’ Determination

This Court considers whether Appeals (1) properly verified that

the requirements of any applicable law or administrative procedure

were met; (2) considered any relevant issues petitioners raised; and

(3) considered whether the proposed collection actions balance the need

for the efficient collection of taxes with the legitimate concern of

11

[*11] petitioners that any collection action be no more intrusive than

necessary. See § 6330(c).

A.

Verification

This Court has authority to review satisfaction of the verification

requirement regardless of whether the taxpayer raised that issue at the

CDP hearing. See Hoyle v. Commissioner, 131 T.C. 197, 202–03 (2008),

supplemented by 136 T.C. 463 (2011). This Court concludes, from a

review of the administrative record, that Appeals conducted a thorough

review of the record and verified that all applicable requirements were

met. Accordingly, this Court concludes that there was no abuse of

discretion with regard to the verification requirement.

B.

Issues Petitioners Raised

A taxpayer may raise “any relevant issue relating to the unpaid

tax or the proposed levy” at a CDP hearing, including challenges to the

appropriateness of collection actions and requests for collection

alternatives. See § 6330(c)(2)(A). As discussed supra Discussion Part II,

petitioners did not dispute their underlying liabilities on Form 12153 or

in the Petition. On the Form 12153, petitioners indicated that they were

requesting a CDP hearing because they were “unable to pay in full and

would like a collection alternative,” which the RO apparently

interpreted as a request for CNC status. However, petitioners did not

claim economic hardship or that they would need to retain the equity in

their home to meet reasonable basic living expenses. Rather, on the

Form 12153 and the accompanying cover letter, petitioners specifically

requested an installment agreement and additional time to access the

equity in their home to satisfy their tax liabilities, the process for which

they indicated was complicated by the filing of a federal tax lien.

In the Petition, petitioners allege that Appeals abused its

discretion by denying an installment agreement and determining that

the IRS has no other effective means of collecting the tax than to levy.

They disagree with the determination in the NOD that the levy action,

despite its intrusiveness, is necessary for the collection of tax.

Petitioners argue that the IRS abused its discretion in determining that

it has no other effective means of collecting the tax than to levy, “because

it will effectively render the Petitioners and their family homeless.” The

Petition further argues that an installment agreement is the most viable

alternative to allow petitioners to remain in their home while allowing

the IRS to collect all the taxes due. Finally, the Petition asks this Court

12

[*12] to remand the case to Appeals with direction to grant petitioners’

request for an installment agreement.

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

agreement allowing a taxpayer to pay a tax liability in installments if it

concludes that the agreement “will facilitate full or partial collection of

such liability.” The decision to accept or reject an installment agreement

lies within the Commissioner’s discretion. See Thompson, 140 T.C.

at 179. 4 Consistent with the statutory predicate in section 6159(a) for

an installment agreement that it “facilitate” collection, the IRM

indicates that installment agreements should generally not be allowed

in lieu of full or partial payment if taxpayers have the means to pay from

income or equity in assets. See IRM 5.14.1.2(1) (Mar. 31, 2023); see also

IRM 8.22.4.2.1(4) (May 12, 2022) (referring to IRM 5.14 for

consideration of installment agreements in a CDP hearing). 5 In

analyzing a taxpayer’s financial condition, the IRS considers, among

other things, equity in encumbered assets. See IRM 5.15.1.3(2)(d) (Aug.

29, 2018). If a taxpayer has equity in assets, including equity in real

property, that could be used to fully or substantially satisfy a liability,

the IRS is to explore with the taxpayer the possibility of liquidating or

borrowing against those assets, unless it would impose economic

hardship. See IRM 5.14.1.4(5) (Mar. 31, 2023).

Economic hardship exists when, considering a taxpayer’s unique

circumstances, the taxpayer is unable to pay reasonable basic living

expenses. Treas. Reg. § 301.6343-1(b)(4); IRM 5.15.1.2(16) (Nov. 22,

2021). To determine whether economic hardship exists, the IRS will

consider any information provided in good faith by a taxpayer, including

medical expenses, extraordinary circumstances, and any other factors

that the taxpayer may raise. See Treas. Reg. § 301.6343-1(b)(4). If the

IRS’s analysis of a taxpayer’s financial condition shows that the

taxpayer cannot pay, the IRS may consider CNC status. IRM 5.14.1.4(7)

and (8). Although the AO’s notes include a CNC code suggesting that

collection of the liability would create a hardship for petitioners, the AO

apparently determined, in requiring petitioners to borrow against the

equity in their house, that the economic hardship exception did not

apply.

4 Petitioners did not meet the requirements of section 6159(c) so as to require

the IRS to enter into a full payment installment agreement.

5 Citations herein are to provisions of the IRM as in effect during the relevant

portion of Appeals’ consideration of Petitioners’ case.

13

[*13] The record shows that Appeals considered petitioners’ unique

circumstances, including their financial health and Mrs. Mackland’s

illness, as well as the limited financial information available to the AO.

However, the Initial Letter had requested additional financial

information necessary to consider any collection alternative, including

recent paystubs as evidence of their income, investment account

statements as evidence of their assets, and evidence of economic

hardship. At no point did petitioners provide the additional requested

financial information. The Tax Court has repeatedly held that Appeals

does not abuse its discretion by rejecting collection alternatives and

sustaining the proposed collection action because of the taxpayer’s

failure to submit financial information requested to consider it. See

Orum v. Commissioner, 123 T.C. 1, 13 (2004), aff’d, 412 F.3d 819 (7th

Cir. 2005); see also Scanlon v. Commissioner, T.C. Memo. 2018-51, at *24

(collecting cases and concluding that it was not an abuse of discretion to

reject an installment agreement on the basis of a lack of financial

information). Accordingly, Appeals did not abuse its discretion in

declining to allow petitioners to enter into an installment agreement

based on the limited information that it had.

Along with their request for an installment agreement,

petitioners provided the IRS a completed Form 433–A showing

significant equity in their home. They explained that they were

interested in borrowing against the home equity in order to pay their

tax liabilities and that they needed additional time to access the equity.

Petitioners’ expressed interest was consistent with the IRM guidance

prioritizing borrowing for full or partial payment. Accordingly, the AO

appropriately focused on allowing petitioners an opportunity to borrow

to pay their tax liability. In considering a taxpayer’s qualification for a

collection alternative, such as an installment agreement, it is not an

abuse of discretion to rely on guidelines set forth in the IRM. See Orum,

123 T.C. at 13.

By the time Appeals finally issued the NOD to petitioners, more

than nine months had elapsed since the AO had first contacted them,

which was already weeks after they had indicated the intent to obtain a

loan against their home and could have begun attempting to do so. Cf.

Shanley v. Commissioner, T.C. Memo. 2009-17, 2009 WL 195929, at *6

(taking into account the amount of time from a taxpayer’s request for a

CDP hearing in determining whether Appeals provided the taxpayer a

reasonable amount of time to provide financial information). The AO,

considering petitioners’ unique circumstances, provided multiple

extensions of time to allow petitioners to access the equity in their home.

14

[*14] However, despite the allotted time and multiple requests from the

AO, petitioners never produced solid proof of their attempts, such as

copies of loan applications, loan commitment letters, or loan denial

letters.

There is no set amount of time that Appeals must allow a

taxpayer to arrange the taxpayer’s affairs to facilitate collection, and the

Court has held that Appeals does not abuse its discretion by not waiting

a certain amount of time before making a determination. See Scanlon,

T.C. Memo. 2018-51, at *24–25; cf. McCarthy v. Commissioner, T.C.

Memo. 2013-214, at *11–12 (holding that Appeals also does not abuse

its discretion by not setting a deadline by which assets must be

monetized). Furthermore, it is not an abuse of discretion “to move

forward with a determination after receiving no communication from

the taxpayer” who has been given sufficient time to respond, Powell v.

Commissioner, T.C. Memo. 2023-48, at *6, as Appeals did a month after

the AO’s last call to the representative, which failed to spur action from

petitioners. Given the AO’s extreme forbearance, Appeals did not abuse

its discretion in proceeding to issue the NOD sustaining the proposed

levy action when it became apparent that monetization of petitioners’

home equity was not coming to fruition.

Furthermore, the Tax Court has specifically held that Appeals

does not abuse its discretion by rejecting an installment agreement if a

taxpayer refuses to borrow against or liquidate assets to satisfy tax

liabilities. See Scanlon, T.C. Memo. 2018-51, at *23–24 (collecting cases

and concluding that it was not an abuse of discretion to reject an

installment agreement because taxpayers refused to borrow against

individual retirement accounts); Tillery v. Commissioner, T.C. Memo.

2015-170, at *17 (holding that a settlement officer acted in the bounds

of his discretion in rejecting an installment agreement after the

taxpayers made unsuccessful attempts to borrow against their assets);

McCarthy, T.C. Memo. 2013-214 (holding that it was not an abuse of

discretion to reject an installment agreement after a taxpayer attempted

to borrow against assets and was approved for a loan but ultimately did

not do so). Petitioners contend that the existence of a federal tax lien

made it difficult to complete the loan process; however, there is no

indication in the administrative record that petitioners made any

request for the IRS to subordinate the tax lien under section 6325(d). In

any event, any difficulty in obtaining a loan should not have prevented

petitioners from providing proof of their attempts to secure the loan as

requested by the AO. Although petitioners did not explicitly refuse to

borrow against their home, and in fact claimed they were attempting to

15

[*15] do so, their failure to provide any solid proof of their attempts

could be understood as a refusal.

And finally, taxpayers requesting a collection alternative are

required to request it with specificity, and “it is not an abuse of

discretion for [Appeals] to decline to consider a collection alternative

where the taxpayer does not put an offer on the table.” Powell, T.C.

Memo. 2023-48, at *5; see also Pough v. Commissioner, 135 T.C. 344, 351

(2010) (finding that it was not an abuse of discretion to decline to enter

into an installment agreement given that the taxpayer did not a submit

a written proposal for such an agreement). Even if the AO had

considered allowing petitioners to enter into an installment agreement

instead of borrowing against their home, it would not have been an

abuse of discretion for Appeals to decline to do so on the basis that

petitioners neither proposed a specific installment amount nor provided

financial information for the AO to analyze to determine whether any

particular amount would be appropriate. See White v. Commissioner,

T.C. Memo. 2024-53, at *8 (collecting cases and concluding that Appeals

could “properly have rejected any proposed collection alternative on

either ground”).

Petitioners ask this Court to remand this case to Appeals with

direction to grant petitioners’ request for an installment agreement.

This Court has authority to remand a CDP case for consideration when

remand would be helpful, necessary, or productive. See Churchill v.

Commissioner, T.C. Memo. 2011-182, 2011 WL 3300235, at *5–6

(collecting cases). In a case such as this, in which Appeals allowed

reasonable time for responses to requests and thoroughly considered

and addressed petitioners’ arguments, but nevertheless rejected them,

that standard is not satisfied, and remand is not warranted.

C.

Balancing Analysis

Petitioners allege that Appeals was incorrect in its assessment of

“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.” See

§ 6330(c)(3)(C). They disagree with the determination in the NOD that

the levy action, despite its intrusiveness, is necessary for the collection

of tax. Appeals concluded in the NOD that it would be necessary to

address petitioners’ equity in their assets before establishing an

installment agreement. The administrative record in this case does not

show that Appeals acted in a manner that was arbitrary, capricious, or

16

[*16] without sound basis in fact or law. Indeed, the administrative

record shows that the AO attempted to accommodate petitioners. Given

petitioners’ ongoing failure to cooperate during the process for

considering collection alternatives, it was reasonable for Appeals to

reject the viability of such alternatives. Accordingly, Appeals did not

abuse its discretion in its determination.

Conclusion

Finding no abuse of discretion, this Court will grant the Motion

and sustain Appeals’ determination related to the levy to collect

petitioners’ unpaid liabilities for the 2017 and 2018 tax years. This

Court has considered all arguments made by the parties and, to the

extent they are not addressed herein, deems them to be moot, irrelevant,

or without merit.

To reflect the foregoing,

An appropriate order and decision will be entered.