Sherrie L. Webb v. Comm’r; T.C. Memo. 2021-105| August 31, 2021 Weiler, J. | Dkt. No. 7819-20L

Short Summary: It was not an abuse of the Commissioner’s discretion not to provide a collection alternative when the taxpayer did not furnish necessary documentation that may have justified alternatives, such as currently not collective (CNC) status.

Key Issues: To justify collections alternatives, including CNC status, the taxpayer must provide documentation necessary to show that the alternative is warranted.

Primary Holdings:

Although petitioner sought to have her account placed into CNC status, the Appeals Officer was unable to provide a collection alternative – including granting CNC status – since petitioner did not furnish necessary documentation. On the basis of these circumstances Appeals performed a balancing test, concluding that the proposed levy did balance the needs of collection with the concerns of petitioner. On the basis of its review, the court held that the Appeals Officer did not abuse her discretion in so concluding.

Key Points of Law:

The taxpayer may propose the suspension of collection activity as a collection alternative. To justify an account’s being placed into CNC status, the taxpayer must supply all relevant information requested by Appeals, including financial statements for consideration of the facts and issues involved in the hearing. An Appeals officer does not abuse his or her discretion in denying CNC status where the taxpayer has not submitted the financial information necessary for the officer to make such a determination.

Insight: Not a profound insight but an obvious and important one: when the Appeals Officer requests additional information, respond. The Appeals Officer here requested information from the taxpayer through her representative and, after he withdrew, multiple times from the taxpayer directly. Having failed to provide that information, the taxpayer could not show that the Appeals Officer abused her discretion.

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