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Although petitioner did not raise the installment agreement
argument in his petition, petitioner may pursue the argument as
long as his failure to provide respondent with notice of the
argument did not prejudice respondent. See Pagel, Inc. v.
Commissioner, 91 T.C. 200, 212 (1988), affd. 905 F.2d 1190 (8th
Cir. 1990). The existence of prejudice depends on “the amount of
surprise and the need for additional evidence on behalf of the
party opposed to the new position.” Id. Upon examination of the
record,16 we find no prejudice to respondent, and we consider the
issue.
B. Whether a Remand of the Case to Appeals Is Appropriate
Taxpayers are entitled to only one section 6330 hearing for
the taxable period for which the tax is unpaid. Sec. 6330(b)(2).
After the hearing, the Appeals Office maintains jurisdiction over
16On the basis of evidence in the record, we find it
unlikely that petitioner’s failure to raise the collection
alternatives issue in the pleadings unduly surprised respondent
or prevented respondent from submitting any necessary, additional
evidence. In the stipulation of facts, respondent stipulated
that consideration of an installment agreement “was deferred
pending the resolution of the statute of limitations issue.” On
petitioner’s Form 12153, Request for a Collection Due Process
Hearing, submitted as an exhibit, he claimed to “[retain] the
right to request collection arrangements other than collection by
levy if any liability is determined to be valid.” Additionally,
after the hearing, in the notice of determination, also submitted
as an exhibit, Appeals Officer Mares discussed petitioner’s
counsel’s refusal to consider an installment agreement at the
hearing. Appeals Officer Mares noted that petitioner’s counsel
would not discuss the installment agreement “because she
[believed] the assessment was barred by statute” and concluded
that “[petitioner] declined an offer to explore collection
alternatives to the proposed collection action.”
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