# United States Tax Court

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URL: https://www.frixlaw.com/law-library/documents/agency%3Atax-court%3Af7926db4ff9beb61

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

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.

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[*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.

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[*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.

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[*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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Atax-court%3Af7926db4ff9beb61. Public record. Not legal advice.