412 F.3d 819 (7th Cir. 2005), 04-3710, Orum v. C.I.R.

Docket Nº:04-3710.
Citation:412 F.3d 819
Party Name:Keith ORUM and Cherie Orum, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Case Date:June 23, 2005
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 819

412 F.3d 819 (7th Cir. 2005)

Keith ORUM and Cherie Orum, Petitioners-Appellants,



No. 04-3710.

United States Court of Appeals, Seventh Circuit

June 23, 2005

Argued May 2, 2005.

Page 820

Keith Orum, La Grange Park, IL, pro se.

Cherie Orum, La Grange Park, IL, pro se.

Regina S. Moriarty (argued), Department of Justice Tax Division, Washington, DC, for Respondent-Appellee.

Before BAUER, EASTERBROOK, and EVANS, Circuit Judges.

EASTERBROOK, Circuit Judge.

Keith Orum and Cherie Orum file joint tax returns. This litigation concerns their unpaid tax liabilities for 1998 and 1999. The amounts they owe (more than $85,000) for these tax years are uncontested. The Orums contend that the IRS must accept installment payments; the IRS believes that it is entitled to levy on the Orums' liquid assets and real property. The Tax Court sided with the Commissioner.

Before collecting unpaid taxes by levy, a form of self help, the Commissioner must notify a taxpayer and afford an opportunity for a hearing, at which the taxpayer may present "(i) appropriate spousal defenses; (ii) challenges to the appropriateness of collection actions; and (iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise." 26 U.S.C. § 6330(c)(2)(A). The Orums took advantage of this opportunity and proposed to pay on an installment plan. The Commissioner accepted the offer to remit $5,000 per month, starting on March 5, 2001. Over the next ten months, the Orums paid $25,000 rather than the required $50,000, and the Internal Revenue Service then demanded immediate payment in full. Another notice of intent to collect by levy followed, and in July 2002 the Orums asked for another hearing, proposing to resume installment payments. The IRS said no, for several reasons: (a) the first installment plan had failed; (b) the Orums were not current on their taxes for years after 1999 and were not remitting estimated tax (Keith Orum, a partner in Orum & Roth, a patent-law firm, must use the estimated-tax route, although Cherie Orum, a zookeeper, has income tax deducted from wages); (c) the Orums had failed to provide the Service with requested information, such as cash-flow data for Orum & Roth and copies of bank statements...

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