Pursuant to Tax Court Rule 50(f), orders shall not be treated as precedent, except as otherwise provided.

UNITED STATES TAX COURT

WASHINGTON, DC 20217

KVC
GREGORY P. MCGUCKIN,
Petitioner,

v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

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8185-15 L.

ORDER AND DECISION

This collection review case involving the filing of a Federal tax lien is before the Court
on respondent's Motion For Summary Judgment, filed July 20, 2015, pursuant to Rule 121.1 On
October 15, 2015, petitioner filed Response To Motion for Summary Judgement, objecting to the
granting of respondent's motion; on October 21, 2015, petitioner filed a First Amended
Response.
Background
Petitioner submitted an offer-in-compromise (OIC) to the Internal Revenue Service (IRS)
on August 12, 2013, hoping to settle his assessed Federal income tax liabilities for the taxable
(calendar) years 2008, 2009, 2010, 2011, and 2012. The IRS rejected petitioner's OIC and
informed him so in a letter dated July 31, 2014, which petitioner concedes receiving. Petitioner
did not appeal his rejected OIC to respondent's collections appeal program (CAP) within the 30day period as explained in the letter.
After the foregoing, the IRS issued a Notice Of Federal Tax Lien (NFTL) Filing And
Your Rights To A Hearing dated September 30, 2014. Petitioner, through his power of attorney
(POA), timely requested a so-called collection due process (CDP) hearing on an IRS Form
12153. Petitioner had previously appointed Thomas F. Kelly, Esq. (Mr. Kelly) as his POA on
June 11, 2014, prior to respondent's OIC denial letter, by signing a Form 2848 ("Power Of
Attorney And Declaration Of Representative"). Petitioner checked the box in paragraph 2 of the
Form 2848, which authorized the IRS to send Mr. Kelly notices and communications.
The Settlement Officer (SO) conducted the CDP hearing with Mr. Kelly on February 11,
2015. Mr. Kelly requested that the SO withdraw the lien and send the case to respondent's CAP
1 All Rule references are to the Tax Court Rules of Practice and Procedure; and unless otherwise
indicated, all section references are to the Internal Revenue Code of 1986, as amended.

SERVED Feb 12 2016

-2to appeal the OIC denial. He did not submit any documents or propose any collection
alternatives. In fact, Mr. Kelly stated in a letter to the SO that petitioner's purpose of the CDP
hearing was to request lien withdrawal based on the procedural issues that he raised in the
petitioner's Form 12153 and that he therefore would not be providing any of the financial
information requested by the SO. See Case Activity Record entry dated January 5, 2015. Mr.
Kelly claimed that in accordance with Form 2848, the IRS was required to send him a copy of
the July 31, 2014 OIC rejection letter but failed to do so. Mr. Kelly further claimed that if he had
received it, he would have timely appealed the denial of the OIC, during which appeal, Mr. Kelly
claimed, the IRS would have been prohibited under its Internal Revenue Manual (IRM) from
filing the NFTL. Mr. Kelly did not dispute petitioner's underlying liability or that petitioner
received the OIC denial letter in time to file an appeal.
The SO reviewed the Integrated Collection System (ICS) history of the case. She noted
that IRS records indicated that a copy of the July 31, 2014 OIC rejection letter was mailed to Mr.
Kelly at his ofce address. She also noted that the OIC was denied because it was determined
that petitioner could full pay his outstanding liabilities through an installment agreement. In
addition, the SO noted, contrary to Mr. Kelly's claim, that IRM provisions and publications do
allow the IRS to file a NFTL during an OIC investigation and appeal. Finally, the SO reviewed
section 6323(j) and determined that petitioner did not meet any of the four specific criteria
authorizing the IRS to withdraw a NFTL. On February 23, 2015, the SO issued a Notice Of
Determination Concerning Collection Action(s) (notice of determination) sustaining the filing of
the NFTL. Petitioner then filed a timely appeal to this Court from the notice of determination
and requested the Court to order a withdrawal of the NFTL and remand the case to CAP so that
petitioner could appeal the denial of his OIC.
Standard of Review
Pursuant to section 6320(c), petitioner timely sought review in this Court of the notice of
determination. Because petitioner raises no dispute as to his underlying tax liability for any of
the years in issue, the Court reviews respondent's determination for an abuse of discretion. Goza
v. Commissioner, 114 T.C. 176, 181-182 (2000). An abuse of discretion occurs if the Appeals
Office exercises its discretion "arbitrarily, capriciously, or without sound basis in fact or law."
Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Discussion
Petitioner alleges that respondent abused his discretion by denying petitioner's request to
withdraw the NFTL for the tax years at issue and by not sending the case back for an Appeals
conference to consider the OIC denial. His argument is premised on two points: (1) respondent
was required to mail a copy of the rejected OIC letter to Mr. Kelly and did not do so, and (2) if
Mr. Kelly had received the copy, he would have filed an appeal, which he presumes would have
been successful, and during which respondent would have been prohibited from filing a NFTL.
Because, as petitioner argues, the NFTL should never have been filed, it must therefore be
withdrawn and the case returned to respondent's appeals process. Notably, petitioner did not
propose any other collection alternative or provide the SO any of the information she requested
to evaluate collection alternatives.

-3A Federal tax lien arises automatically after notice and demand for an assessed tax
liability is not paid. h sections 6321, 6303. The record in this case shows that the tax
liabilities for the years at issue were all assessed prior to August 26, 2013. Although the lien
exists as a matter of law, to ensure its priority with relation to other creditors, respondent is
authorized to file a NFTL. See sec. 6323(a). There is no legal authority that restrains respondent
from filing an NFTL until after an OIC and appeal is concluded. Accordingly, respondent was
within its authority to file a NFTL in this case well before it actually did so on September 30,
2014.
Respondent is permitted but not required to withdraw a NFTL under four situations,
including where "the filing of such notice was premature or otherwise not in accordance with
administrative procedures" or "the withdrawal of such notice will facilitate the collection of the
tax liability" or "the withdrawal of such notice would be in the best interests of the taxpayer * *
* and the United States." See sec. 6323(j). The authority to withdraw a NFTL is permissive, and
respondent is generally not required to withdraw a NFTL even if the conditions are fully met.
S_e_e,g, Taggart v. Commissioner, T.C. Memo. 2013-113, at *16-17 ("Section 6323(j) uses
discretionary, not mandatory, language, and the Commissioner is not required to withdraw the
lien even for one of the reasons stated in section 6323(j).").
Petitioner's claim that respondent would not have been able to file the NFTL if petitioner
had initiated a CAP appeal is without merit. It is well settled that the IRM is not law. h
Epstein v. Commissioner, T.C. Memo 1989-498, citing Keado v. United States, 853 F.2d 1209,
1214 (1988) (stating procedures or rules adopted by the IRS are not law). But even if it were,
I.R.M. 5.8.1.10 (01-01-2015), Withholding Collection, para. 5 provides that there is no
prohibition on filing Notices of Federal Tax Lien while an offer is pending. Further, Form 656
Booklet, Offer In Compromise, also provides that the IRS may file a NFTL during the offer
investigation. Thus, even if petitioner had appealed his OIC denial, nothing prevented
respondent from filing the NFTL during that process.
Petitioner's claim that had his POA received a copy of the OIC denial letter, he would
have appealed and thus respondent would not have been able to file a NFTL is not material given
respondent's authority and policy to the contrary. Notwithstanding evidence in the record that a
copy was mailed to Mr. Kelly, respondent is not required to send a copy of correspondence to
petitioner's POA. See Bond v. Commissioner, T.C. Memo. 2007-240 (noting that sending
copies to powers of attorney is a mere courtesy to the taxpayer, not an obligation of the IRS). But
even if respondent were required to send a copy of correspondence to petitioner's POA, in the
circumstance of an OIC denial respondent has the option of notifying the taxpayer or the POA.
S_e_e sec. 301.7122-1(f)(1) Proc. & Admin. (providing that an offer in compromise [is] not
rejected until the IRS issues a written notice to the taxpayer g his representative). Thus, July 30,
2014 notice of OIC denial to petitioner was sufficient.
The settlement officer in the instant case did not abuse her discretion either by sustaining
the NFTL, by not withdrawing it, or by not sending the case back to the collection appeals
process to permit an appeal out of time. Further, petitioner made clear his intent not to provide
the SO relevant information requested during the administrative collection due process hearing.
S_e_e Green v. Commisisoner, T.C. Memo. 2014-180, at *3. Ultimately the SO properly verified

-4that all requirements of applicable law and administrative procedure were met in the processing
of petitioner's case and that the filing of the Federal tax lien balances the Government's interest
in the efficient collection of taxes with petitioner's concerns that the collection action be no more
intrusive than necessary. Granted, the filing of a Federal tax lien has consequences, but it is far
less intrusive than a levy, as it does not deprive a taxpayer of property but merely assures the
Government of priority vis--vis other possible creditors of the taxpayer. Elliott, Federal Tax
Collections, Liens, and Levies, par. 9.05 (2d ed. 2005); see United States v. Whiting Pools, Inc.,
462 U.S. 198, 210-211 (1983).
In sum, the Appeals Office did not abuse its discretion in this case. Respondent was
within his authority to file the NFTL during the OIC process. As noted, even if petitioner had
met the conditions of sec. 6323(j), lien withdrawal is discretionary. Thus, the SO did not abuse
her discretion in not granting lien withdrawal under sec. 6323(j).
Petitioner admits that he provided no financial or similar information for the SO to
consider. Further, petitioner concedes he received the OIC denial notice dated July 30, 2014.
Therefore, he received actual notice in time to file an appeal and was not prejudiced by
respondent. See Erickson v. Commissioner, T.C. Memo. 2000-09 (holding that failure to mail a
copy of a deficiency notice to a power of attorney, where the taxpayer received actual notice in
time to file a petition for redetermination, was not prejudicial because the lack of mailing to
power of attorney did not prevent actual notice to petitioner).
Summary judgment may be granted with respect to all or any part of the legal issues in
controversy "if the pleadings, answers to interrogatories, depositions, admissions, and any other
acceptable materials, together with the affidavits or declarations, if any, show that there is no
genuine dispute as to any material fact and that a decision may be rendered as a matter of law."
Rule 121(a) and (b). The fact that petitioner disputes whether the IRS mailed Mr. Kelly a copy
of the OIC rejection letter is immaterial because petitioner had actual notice of the rejection and
the IRS was not required to mail a copy of an OIC rejection letter to Mr. Kelly.
Upon review of the record, the Court concludes that respondent's Motion For Summary
Judgment is well founded based on both the averments therein and exhibits thereto and the
supporting Declaration of Settlement Officer Florence Mathis. Thus, the Court finds that that
there is no dispute as to a material fact and that respondent is entitled to judgment as a matter of
law sustaining the February 23, 2015, notice of determination upon which this case is based.
Premises considered, it is
ORDERED that respondent's Motion For Summary Judgment, filed July 20, 2015, is
granted. It is further
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-5ORDERED AND DECIDED that respondent may proceed with the collection action
(lien) in respect of petitioner's outstanding income tax (Form 1040) liabilities for the taxable
(calendar) years 2008, 2009, 2010, 2001, and 2012, as determined by respondent's Appeals
Office in its Notice Of Determination Concerning Collection Action(s) Under Section 6320
and/or 6330, dated February 23, 2015, upon which notice this case is based.

(Signed) Robert N. Armen, Jr.

Special Trial Judge

Entered:

FEB 12 2016