United States Tax Court

United States Tax Court

T.C. Memo. 2025-107

AVALON HOME HEALTH, INC.,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 19369-24L.

Filed October 16, 2025.

__________

Christopher P. Housh, for petitioner.

Julie Vandersluis Skeen and Grant S. Spicer, for respondent.

MEMORANDUM OPINION

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

petitioner, Avalon Home Health, Inc., timely filed a Petition under

section 6330(d)(1), 1 challenging a Notice of Determination Concerning

Collection Actions Under 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 as it

relates to the collection of an unpaid income tax liability for petitioner’s

2014 tax year.

Respondent filed a Motion for Summary Judgment (Motion)

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

for Appeals to sustain the levy. The IRS’s actions with respect to

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 10/16/25

2

[*2] petitioner’s CDP request were far from a model of good government,

and the Motion’s attempts to gloss over them are unavailing. This Court

will remand the case to Appeals for consideration of petitioner’s request

for an installment agreement.

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). When the Petition was filed, petitioner’s

place of business was in California.

I.

Before the CDP Request

Petitioner filed tax returns for each of tax years 2014, 2015, 2016,

and 2018. Petitioner’s return for the 2014 tax year was filed on February

26, 2016. On March 21, 2016, the IRS assessed $5,880 of tax with respect

to the return, additions to tax under sections 6651(a)(1) and (2) and 6654

of $1,323, $382, and $106, respectively, and statutory interest of $203.

Additional amounts under section 6651(a)(2) and/or amounts of

statutory interest with respect to the 2014 tax year were also assessed

on February 26 and May 21, 2018.

On June 11, 2018, a Notice of Deficiency with respect to

petitioner’s 2014 tax year was sent via certified mail. The certified mail

list, in addition to bearing petitioner’s mailing address and the certified

mail tracking number reflected on the Notice of Deficiency, shows the

total number of items listed and received. In addition to being initialed

and dated next to “Total Number of Pieces Listed by Sender,” the list,

next to “Postmaster and Date,” has another set of initials and a stamp

indicating the postal service station and a date of June 11, 2018.

According to an IRS transcript of petitioner’s addresses, the address

reflected on the Notice of Deficiency and on the certified mail list was

used by petitioner from approximately February or March of 2016 until

approximately October 2018. Nevertheless, the Notice of Deficiency was

returned stamped “Return to sender / Attempted – Not Known / Unable

to Forward.”

On November 26, 2018, the IRS assessed additional tax of

$400,828 based on the Notice of Deficiency, as well as an additional

amount of $100,207 under section 6651(a)(1) and an accuracy-related

3

[*3] penalty under section 6662 of $80,166. Case activity notes indicate

that Notice CP210, which is not in the administrative record, was issued

on the same day.

On April 16, 2019, the IRS mailed Letter 3172, Notice of Federal

Tax Lien and Your Right to a Hearing, with respect to liabilities for tax

years 2013, 2014, 2015, and 2016, to petitioner via certified mail. Case

activity notes indicate that a copy was also sent to a representative for

petitioner. For the 2014 tax year, Letter 3172 reflects an assessment

date of March 21, 2016, but a lien amount of $590,906, consistent with

all the assessments up to the date of the letter, including those following

from the Notice of Deficiency. The letter explains: “You have a right to

a hearing with us to appeal this collection action and to discuss your

payment method options.” However, petitioner did not request a hearing

in response to Letter 3172. Petitioner explains that “Petitioner has no

recollection of receiving the [letter] and was not represented by” the

representative to whom a copy of Letter 3172 was sent “at that time.”

Petitioner’s address reflected on Letter 3172 is also on the

certified mail log, U.S. Postal Service (USPS) Form 3877, Firm Mailing

Book For Accountable Mail, indicating its mailing. And according to an

IRS transcript of petitioner’s addresses, petitioner used that address

from approximately October 2018 until approximately October 2020.

The address also appears on petitioner’s tax return for the 2018 tax year

filed on September 26, 2019, as does the name of the representative to

whom the IRS indicates a copy of Letter 3172 was mailed. However,

petitioner states that although all of the documents reflect Suite 101 as

the address for petitioner, the “public record show[s] that the business

was in Suite 203, or Suite 106 during the period of 2010 through 2025.”

Although the IRS transcript does show petitioner’s address as Suite 106

starting in approximately 2020, it never reflects Suite 203, and it

reflects completely different addresses for petitioner before

approximately October 2018 and after approximately October 2024.

In addition to reflecting petitioner’s mailing address shown on

Letter 3172, USPS Form 3877 bears the certified mail tracking number

provided on Letter 3172. Next to “Affix Stamp Here (if issued as a

certificate of mailing . . .)” and “Postmark and Date of Receipt” it is

stamped with USPS and a date of April 16, 2019, accompanied by a

signature. However, the page of USPS Form 3877 provided by

respondent (which is attached to the Motion but not included in the

administrative record) is one of 221 pages and includes only the number

4

[*4] of items provided by the IRS (both as listed on the page and in total)

but not the numbers received by the postal service.

An additional amount under section 6651(a)(2) and additional

statutory interest were assessed on May 18, 2020. On August 16, 2021,

the IRS issued petitioner Letter 11, Notice of Intent to Levy and Your

Collection Due Process Right to a Hearing (Levy Notice). The Levy

Notice reflects $908,872 owed with respect to the 2014 tax year.

II.

CDP Request

On August 25, 2021, the IRS received petitioner’s Form 12153,

Request for a Collection Due Process or Equivalent Hearing, for tax

years 2014, 2015, 2016, and 2018. The Form 12153 requests an

installment agreement as a collection alternative and states:

The taxpayer believes there are better avenues to resolve

the liability than enforced collection activity. The

taxpayers dispute the 2014 tax liability as they were not

provided the opportunity to challenge the removal of

expenses on the return and are in the process of doing an

audit reconsideration request.[2]

III.

Payments with Respect to 2014 Tax Year Liability

With respect to its 2014 tax year liability, petitioner paid $10,000

in August 2021 and generally paid $5,000 per month from September

2021 through July 2025.

IV.

Interactions Between Petitioner and IRS

Petitioner’s case was assigned to four consecutive settlement

officers (SOs) during its more than three-year pendency with Appeals.

The SOs all determined that they had no prior involvement with

petitioner for the types of tax and tax years associated with the case.

A.

First SO

The first SO (First SO) determined that there was a balance due

only for tax year 2014, as the amounts due for tax years 2015, 2016, and

2018 had been paid. She mailed petitioner a letter dated November 1,

2 Petitioner’s representative has intermittently referred to petitioner’s

executives as the taxpayers in this case.

5

[*5] 2021, acknowledging receipt of the CDP hearing request and

scheduling a telephone CDP hearing for January 12, 2022. The letter

also requested that petitioner provide a completed Form 433–B,

Collection Information Statement for Businesses, and financial

information necessary for consideration of an installment agreement.

On January 11, 2022, the First SO received a fax from petitioner

with an incomplete Form 433–B and some, but not all, of the requested

financial information. Because of an apparent mixup, the hearing

scheduled for January 12, 2022, did not occur, and on January 13, 2022,

the First SO mailed petitioner a letter requesting contact and complete

financial information by January 27, 2022. A hearing was eventually

rescheduled for February 9, 2022.

On February 9, 2022, the First SO and petitioner’s representative

attended the rescheduled CDP hearing. The First SO requested that the

representative fax to her a copy of the request for audit reconsideration

that the representative indicated petitioner had submitted. The First

SO also pointed out that the financial information submitted was still

incomplete and requested that petitioner submit by March 3, 2022, the

following: a completed Form 433–B; 12 months of current bank

statements from each bank and account; 3 months of current utility

bills; credit card statements; a copy of petitioner’s lease; a list of

accounts receivable; proof of liabilities, assets, and expenses; and any

other supporting documentation. Noting that the previously submitted

Form 433–B did not support petitioner’s ability to pay the proposed

installment agreement payment amount, the First SO also requested

that, if that continued to be the case, petitioner submit a letter outlining

the indicated plan of eliminating pay to petitioner’s key employees in

order to afford the proposed payments.

The First SO subsequently received the requested financial

information accompanied by a letter, not included in the administrative

record, apparently explaining that petitioner was willing to pay $5,000

per month until the audit reconsideration request had been reviewed,

with the understanding that the overpayment would be refunded to

petitioner, with interest, when the audit reconsideration was completed.

The First SO forwarded the relevant information to the Automated

Collection System (ACS) Support unit and the Memphis audit

reconsideration unit, asking the latter for a response as to whether

petitioner’s request was under review. At petitioner’s representative’s

prompting, the First SO continued to check in with the audit

reconsideration unit as time passed, to no avail.

6

[*6] The First SO was informed by the ACS Support unit that,

according to the information petitioner provided, petitioner could not

pay the 2014 tax liability, but that petitioner had failed to provide

additional information requested. The First SO forwarded this

information to petitioner with a cover letter dated June 28, 2022,

indicating that because of the failure to provide requested information,

an installment agreement could not be granted. The letter invited

petitioner to indicate any disagreement by July 28, 2022, and noted that

the First SO would consider any response along with ACS’s review

before making a decision. It warned that nonresponse could lead to a

conclusion that petitioner did not wish to proceed, followed by a

determination.

In the meantime, the First SO obtained the certified mail list for

the Notice of Deficiency issued to petitioner for the 2014 tax year and

verified that it was sent to petitioner’s last known address. However,

she subsequently concluded that because Form 4549, Income Tax

Examination Changes, was not signed, petitioner was entitled to dispute

the underlying liability in the CDP hearing.

On July 6, 2022, petitioner’s representative responded to the First

SO by faxing the information that the ACS Support unit had requested.

On an August 17, 2022, call, the First SO instructed petitioner’s

representative to resubmit petitioner’s audit reconsideration request by

certified mail, given that petitioner’s representative had no proof of a

prior submission. 3 The First SO and petitioner’s representative also

discussed the fact that petitioner did not appear to be able to pay the

balance due. With respect to the possibility of an installment agreement,

the First SO’s notes reflect that petitioner’s executives planned to reduce

their pay in order to be able to make $5,000 monthly payments “if placed

in an [installment agreement]” and that a followup call was scheduled

for August 24, 2022, “to discuss if the [taxpayer] could be placed in an

[installment agreement].” According to the First SO’s notes, on August

24, 2022, she “advised [petitioner’s representative] to continue to have

the Officers make voluntary payments towards the balance due.” The

First SO’s notes for both calls reflect no outstanding information

required from petitioner. And petitioner indicates: “Regarding the

discussion about the payment agreement, petitioner recalls the

conversation as being that the payment agreement was agreeable to

3 This Court makes no finding as to whether petitioner had, in fact, previously

submitted an audit reconsideration request.

7

[*7] respondent, but that the case was going to be kept open to make

sure that the respondent’s audit reconsideration unit [sic].”

B.

Audit Reconsideration Request

Case activity notes indicate that petitioner was provided a copy

of the November 26, 2018, Notice CP210 on August 25, 2022. On August

29, 2022, the IRS received what was labeled a resubmission of

petitioner’s audit reconsideration documents submitted in July 2021.

The letter alleged that the IRS had “erred in treating the removal of an

expense from the return as being a math error letter CP210 and not

requesting information or providing information to the taxpayer of the

reason its expenses were being denied by the IRS.” The First SO placed

the case in suspense pending consideration of petitioner’s audit

reconsideration request.

C.

Second and Third SOs

Petitioner’s request was reassigned to the second SO in March

2023 and to the third SO in August 2023. Both attempted to obtain

updates on consideration of petitioner’s audit reconsideration request,

to no avail.

D.

Fourth SO

Petitioner’s request was assigned to the fourth SO (Fourth SO) in

June 2024. Notably, the Fourth SO shortly thereafter noted in his case

activity notes that petitioner’s case was “[r]eviewed . . . as part of . . . 10

oldest cases” and eventually noted that it was “[r]eviewed . . . as part of

5 oldest cases.” The Fourth SO also tried, to no avail, to obtain updates

on the consideration of petitioner’s audit reconsideration request. The

Fourth SO was informed by the IRS Taxpayer Advocate Service, which

petitioner’s representative had contacted, that audit reconsideration

was precluded by the open CDP case but that petitioner’s representative

would not withdraw the CDP request to allow audit reconsideration to

proceed.

However, the Fourth SO concluded that even though petitioner

had not received the Notice of Deficiency mailed on June 11, 2018, the

issuance of the Letter 3172 on April 16, 2019, precluded review of the

underlying liability in the CDP hearing. The Fourth SO advised

petitioner’s representative of this in a call on October 29, 2024, and

followed up with a fax containing the Notice of Deficiency and Letter

3172 on October 30, 2024. The Fourth SO’s declaration in support of the

8

[*8] Motion puzzlingly states: “I advised petitioner he could only be

considered for a collection alternative if he withdrew his CDP appeal, at

which point an audit reconsideration could be opened.” However, his

case activity notes more understandably state: “I advised collection

appeal could only offer him a collection alternative because lien was

issued with appeal rights.”

The Fourth SO and petitioner’s representative spoke again on

November 1, 2024. According to petitioner:

Petitioner inquired if the payment agreement could be

listed as finalized in order to make it where the CDP codes

would be closed as an accepted agreement to allow the

respondent’s audit reconsideration unit to feel comfortable

to move forward. Respondent’s SO did not provide an

answer about simply formalizing the installment payment

agreement and being able to close the CDP codes . . . .

According to the Fourth SO’s case activity notes, they discussed the

possibility of petitioner’s withdrawing the CDP request to allow audit

reconsideration, the possibility of the Fourth SO’s issuing a Notice of

Determination, and the possibility of the IRS’s granting petitioner’s

refund claim. Petitioner’s representative indicated that he wanted time

to think about the options. The Fourth SO indicated that he would issue

a Notice of Determination if he had not heard back by November 8, 2024.

Despite the mention of a possible collection alternative in the

Fourth SO’s notes with respect to the October 29, 2024, call, there is no

indication that petitioner’s representative indicated in either that call

or the one on November 1, 2024, that petitioner was not interested in an

installment agreement. And, to the contrary, petitioner argues that the

Fourth SO’s declaration omits relevant parts of the conversations

including “related to . . . inquiries about accepting the payment

agreement.”

When the Fourth SO had not heard back from petitioner’s

representative by November 12, 2024, he prepared the NOD. The Fourth

SO had determined, after speaking with the First SO, that there had not

been approval of the section 6662 accuracy-related penalty satisfying

the requirements of section 6751(b). Accordingly, the Fourth SO also

completed a request to abate the section 6662 penalty on November 12,

2024; the request was signed by his manager on November 18, 2024.

9

[*9] V.

NOD

The NOD, dated November 20, 2024, explains that the proposed

levy action is not upheld with respect to the 2015, 2016, and 2017 tax

years given that there is no balance outstanding with respect to them. 4

It further explains that the proposed levy action is upheld with respect

to the 2014 tax year. It elaborates that although petitioner disagreed

with the balance owed with respect to that year, review of the

underlying liability for that year is precluded because petitioner had

appeal rights in connection with the Letter 3172. Nevertheless, the NOD

explains that the section 6662 accuracy-related penalty for the 2014 tax

year was abated. It further states: “You did not want a collection

alternative for a balance you did not agree with. Consequently, we have

little option but to sustain Collection’s proposed levy action.”

The attachment to the NOD (Attachment) explains that the

Fourth SO had no prior involvement with respect to the specific tax

periods and that he 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 petitioner’s last known address, and that there was a balance due

when the Levy Notice was issued. The Attachment explains that a

review of the assessment file did not confirm that proper managerial

approval was obtained in advance of the assessment of the section 6662

penalty and that it has therefore been abated in full.

The Attachment lays out the history of the interactions between

petitioner and Appeals. It indicates that in response to the Fourth SO’s

question whether petitioner was interested in an installment

agreement, petitioner’s representative “said [petitioner] do[es] not want

to have an installment agreement for a balance [petitioner] do[es] not

owe.” It further explains with respect to the consideration of collection

alternatives that petitioner’s representative “would not agree to a

collection alternative for a balance [petitioner] did not owe.” The

Attachment concludes:

4 Respondent’s Motion notes that the references to 2017 are in error, as the

years raised in Form 12153 were 2014, 2015, 2016, and 2018.

10

[*10] Since you did not agree to a collection alternative, the IRS

has little choice but to collect your tax liability as best it

can by means of the proposed levy action until you decide

to voluntarily pay. It is my judgment to sustain the

proposed levy action as it balances the efficient collection

of taxes with your legitimate concern that the collection

action be no more intrusive than necessary.

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 deciding whether to grant summary judgment, the Court

considers factual materials and inferences drawn from them in the light

most favorable to the 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 U.S. Court of Appeals for the

Ninth Circuit, to which an appeal of this case would presumptively lie,

see § 7482(b)(1)(G)(ii), review of CDP determinations is limited to the

administrative record unless the underlying liability is at issue, see

Keller v. Commissioner, 568 F.3d 710, 718 (9th Cir. 2009), aff’g in part

T.C. Memo. 2006-166, and aff’g in part, vacating in part decisions in

related cases.

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.

11

[*11] 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). 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 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).

As discussed supra Background Part I, after assessing tax,

additions to tax, a penalty, and statutory interest with respect to the

2014 tax year, on April 16, 2019, the IRS issued Letter 3172, offering

petitioner an opportunity for a CDP hearing in which it could have

disputed those amounts. Although the letter reported an incorrect

assessment date for most of the amounts that did not correspond to

petitioner’s self-reporting on its return for the 2014 tax year, the amount

listed as the outstanding balance reflected the assessed amounts and

was sufficient to put petitioner on notice that there was an amount to

dispute.

Respondent has produced Letter 3172, USPS Form 3877, and

both a transcript and petitioner’s tax return for the 2018 tax year

reflecting the address included on Letter 3172 and USPS Form 3877 as

petitioner’s last known and correct address as of April 16, 2019. The

letter was sent by certified mail to petitioner’s last known address, and

it was not returned to the IRS. The page of USPS Form 3877 attached

to the Motion does not demonstrate exact compliance with mailing

procedures, because it does not reflect the number of items received by

the USPS. See Massie v. Commissioner, T.C. Memo. 1995-173, 1995 WL

225549, at *3, aff’d, 82 F.3d 423 (9th Cir. 1996) (unpublished table

decision). Accordingly, there is not a presumption of regularity in favor

of respondent that applies to shift the burden to petitioner to establish

that Letter 3172 was not received. See Coleman v. Commissioner, 94

T.C. 82, 88–91 (1990); see also United States v. Zolla, 724 F.2d 808, 810

(9th Cir. 1984). However, USPS Form 3877 nevertheless serves as

12

[*12] probative evidence of the mailing of Letter 3172. See Portwine v.

Commissioner, T.C. Memo. 2015-29, at *11–12, aff’d, 668 F. App’x 838

(10th Cir. 2016); Massie v. Commissioner, 1995 WL 225549, at *3.

Petitioner states that respondent has not provided a “true copy”

of Letter 3172, providing instead a computer-generated printout that

includes a “Facsimile Federal Tax Lien Document” together with a copy

of the Letter 3172. However, section 6330 does not require Appeals to

give a taxpayer copies of what it consults. See Nestor v. Commissioner,

118 T.C. 162, 166–67 (2002). Nor does it prescribe specific documents

that Appeals must consult in undertaking its verification task. Cf.

Roberts v. Commissioner, 118 T.C. 365, 371–72 (2002), aff’d per curiam,

329 F.3d 1224 (11th Cir. 2003); Alamo v. Commissioner, T.C. Memo.

2017-215, at *34 (rejecting arguments against a computer-generated,

reprinted notice, considering consistency in tracking number, name, and

address among the notice and USPS Form 3877), aff’d, 751 F. App’x 583

(5th Cir. 2019).

Furthermore, although petitioner did not respond to Letter 3172,

and “has no recollection of receiving” it, petitioner has not denied that

Letter 3172 was received. And in fact, petitioner continued to use the

address to which Letter 3172 was sent for return filing after Letter 3172

was mailed. Petitioner does not attempt to reconcile its statement about

what public records might have showed about its address with what its

own filings indicate was its address, and its statements about addresses

and representation are questionable. Given the foregoing, this Court

concludes that petitioner received Letter 3172 and therefore had a prior

opportunity to dispute the underlying liability reflected thereon. 5 Thus,

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

5 As noted supra Background Part I, an additional amount under section

6651(a)(2) and additional statutory interest were assessed on May 18, 2020, after

Letter 3172 was issued. However, petitioner has consistently articulated its dispute

with respect to the underlying liability both before Appeals and before this Court as

relating to the additional tax assessed, which was reflected in Letter 3172.

13

[*13] 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 petitioner raised; and

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

for the efficient collection of taxes with petitioner’s legitimate concern

that any collection action be no more intrusive than necessary. See

§ 6330(c)(3).

A.

Verification

Petitioner has not disputed that the Notice of Deficiency was

mailed or that the address to which the Notice of Deficiency was mailed

was petitioner’s last known address nor raised any other dispute related

to the verification requirement. Nevertheless, 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). Appeals obtained the Notice of Deficiency and the certified

mail list and confirmed that they reflect petitioner’s last known address

as of June 11, 2018. The certified mail list demonstrates exact

compliance with mailing procedures. See Massie v. Commissioner, 1995

WL 225549, at *3; Stein v. Commissioner, T.C. Memo. 1990-378. And the

returned mail indicates that the Notice of Deficiency was mailed. Cf.

Alamo, T.C. Memo. 2017-215, at *25–26 (“Logic dictates that an item

cannot be returned as unclaimed unless it was first mailed.”).

Accordingly, this Court concludes that the Notice of Deficiency was sent

via certified mail to petitioner’s last known address and was valid. See

§ 6212(a). Furthermore, on the basis of its review, this Court has no

reason to doubt that Appeals ultimately conducted a thorough review of

the record and verified that all applicable requirements were met.

However, given the absence from the administrative record of

documents apparently reviewed by Appeals, 6 this Court declines to

conclude that there was no abuse of discretion with regard to the

verification requirement.

6 It is particularly noteworthy that, as noted supra Background Part I, Notice

CP210 and USPS Form 3877 for Letter 3172 are not included in the Administrative

Record respondent filed.

14

[*14] B.

Issues Petitioner Raised

In addition to raising a dispute with respect to the underlying

liability, review of which is precluded for the reasons discussed supra

Discussion Part II, petitioner requested an installment agreement

pursuant to which petitioner proposed to pay $5,000 per month. In its

Petition, petitioner argues:

Respondent’s written decision willfully ignores that the

petitioner has believed it was in an installment payment

agreement; has acted as though it was in an installment

payment agreement; and voiced concerns about what the

attempts to close the Collection Due Process Hearing

through a withdrawal action would do to the payments

made through the installment payment agreement over the

past two years.

However, entry into an installment agreement requires more formality

than an offer by a taxpayer and continued payment on an optimistic

assumption that it will be accepted—specifically, a written agreement.

See § 6159(a) (describing installment agreements as “written

agreements” that the government “is authorized to enter into”); Treas.

Reg. § 301.6159-1(c)(1)(i), (2) (indicating that a proposed installment

agreement is not accepted until notification by the IRS and that an

installment agreement must be in writing). Petitioner has provided no

written documentation of the purported installment agreement.

Moreover, the administrative record reflects that the First SO

consistently indicated that consideration of an installment agreement

was still pending. And petitioner claims that the installment agreement

with Appeals was effective, and that petitioner began making payments

in the amount requested pursuant to it, in August 2021, before

petitioner’s request was even under consideration by Appeals,

underscoring that petitioner’s payments could not have been pursuant

to any sort of agreement. Accordingly, this Court does not agree with

petitioner that the IRS inappropriately denied the existence of an

installment agreement. And, in fact, in its Response to Motion for

Summary Judgment (Response), petitioner “states that if a summary

judgment is issued, it should be in favor of formalizing the installment

payment agreement.”

Although this Court does not have authority to grant the

requested relief, petitioner also states that the Fourth SO “elected to

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[*15] disregard the ability to formalize the acceptance of the $5,000 per

month, instead offering only the option of withdrawing the Collection

Due Process request.” Accordingly, petitioner can be understood more

broadly to dispute the NOD’s denial of an installment agreement, and

this Court reviews that denial for abuse of discretion.

Although there was some delay by petitioner in submitting the

financial documentation requested by the IRS in connection with an

installment agreement, the administrative record suggests—consistent

with petitioner’s articulation of the August 24, 2022, call—that by the

time the First SO completed her work on the case, she thought sufficient

information had been submitted. She indicated in her case activity notes

that consideration of the installment agreement had yet to be completed

but put the case in suspense pending a determination with respect to

petitioner’s audit reconsideration request. There is no indication in the

administrative record that any subsequent SO reviewed or otherwise

arranged for the review of the information that petitioner had submitted

to the First SO shortly before she placed the case in suspense. And there

is no indication in the Fourth SO’s case activity notes that he considered

petitioner’s eligibility for an installment agreement, consistent with

petitioner’s statement in the Response that the Fourth SO “did not make

any consideration about collection alternatives.”

The Fourth SO’s case activity notes indicate that his initial

conversation with petitioner’s representative focused on explaining that

petitioner would not be able to obtain review of the underlying liability

pursuant to the CDP case. The followup conversation could be

understood as a more fulsome discussion of petitioner’s options, and the

option presented of issuing a notice of determination could be

understood as potentially encompassing an option of agreeing to enter

into an installment agreement instead of sustaining the levy. However,

there is no indication in the Fourth SO’s notes that the installment

agreement was discussed. Therefore, this Court is skeptical of the

statement in the NOD that petitioner’s representative “said [petitioner]

do[es] not want to have an installment agreement for a balance

[petitioner] do[es] not owe.”

Significantly, in that regard, respondent’s Motion does not

mention petitioner’s purported disinterest in an installment

agreement—the only reason stated in the NOD—as the basis for

denying the installment agreement. Instead, it argues that “petitioner

did not timely provide the requested financial documentation to [the

First SO] and the audit reconsideration team. Therefore, [the First SO]

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[*16] properly determined that an installment agreement could not be

granted.” But, as pointed out, the First SO’s case activity notes do not

reflect that determination and, in fact, indicate to the contrary, as

petitioner understood. And the declaration of the Fourth SO submitted

in support of the Motion similarly indicates that “petitioner’s eligibility

for an installment agreement was being determined” when the First SO

put petitioner’s case in suspense and when the case was reassigned from

the First SO. Furthermore, the Court does “not accept any post hoc

rationalizations for agency action provided by the Commissioner’s

counsel.” Kasper, 150 T.C. at 24–25.

As noted, neither the record nor petitioner’s posture before this

Court lends credence to the idea that petitioner indicated disinterest in

an installment agreement, supporting a denial. And there is no other

indication in the record of why the installment agreement actually was

denied. It is also not clear whether the one-week deadline that the

Fourth SO gave petitioner’s representative to reply to him was

reasonable, given the years-long pendency of petitioner’s case, the

delays in which can largely be attributed to the IRS’s failure to

communicate about petitioner’s audit reconsideration request. Cf. Long

v. Commissioner, T.C. Memo. 2023-130, at *10. Thus, this Court cannot

conclude that the denial was not an abuse of discretion.

C.

Balancing Analysis

As to “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), the NOD again relies on the assertion that petitioner

rejected the option of an installment agreement. Given its skepticism of

this assertion, this Court cannot conclude on the record before it that it

was not an abuse of discretion to determine that sustaining the levy was

more viable than considering the installment agreement that petitioner

had requested and still seeks.

IV.

Conclusion

Given the foregoing, this Court will grant respondent’s Motion in

part, in that this Court will sustain the determinations in the NOD with

respect to the 2015, 2016, and 2018 tax years, but will otherwise deny

respondent’s Motion and remand this case to Appeals for a supplemental

hearing, in which this Court expects that Appeals would focus on

consideration of petitioner’s request for an installment agreement with

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[*17] respect to the 2014 tax year liability and on the scope of the

administrative record. See Kelby v. Commissioner, 130 T.C. 79, 86 n.4

(2008).

To reflect the foregoing,

An order will be issued remanding the case to Appeals for further

consideration.