Industrial Investors - Page 12




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          2.   Hearing Location                                                       
               Although that error is enough to force a remand, Industrial            
          also argues for a remand to an IRS office less than two time                
          zones away.  It claims that the Commissioner also abused his                
          discretion in deciding to hold the CDP hearing in Oklahoma City             
          instead of somewhere closer to Santa Monica, where Industrial has           
          its principal place of business.  The applicable regulation is              
          clear that a face-to-face CDP hearing is not required by the                
          Code.  Sec. 301.6330-1(d)(2), Q&A-D6, Proced. & Admin. Regs.  We            
          also agreed in Katz v. Commissioner, 115 T.C. 329, 337-38 (2000),           
          that a CDP hearing via telephone satisfies the Code’s                       
          requirements when it is an honest attempt to accommodate a                  
          taxpayer’s preference.  But the regulation does command the                 
          Commissioner, if a taxpayer wants a face-to-face hearing, to                
          offer him “a hearing at the Appeals office closest to * * * [his]           
          principal place of business.”  Sec. 301.6330-1(d)(2), Q&A-D7,               
          Proced. & Admin. Regs.5                                                     




               4(...continued)                                                        
          particular issue, we can leave any analysis of a different                  
          approach to another day.  At least until then, we must continue             
          to follow our decision in Drake.                                            
               5 Section 301.6330-1, Proced. & Admin. Regs., has since been           
          changed to enable the IRS in some situations to avoid having to             
          schedule face-to-face hearings at the closest Appeals Office.               
          See T.D. 9291, 2006-46 I.R.B. 887.  However, those changes do not           
          apply to this case.                                                         





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