MEMORANDUM AND ORDER
This case arises out of Suzanne Carlson's appeal under26 U.S.C. §§ 6320(c) and 6330(d)(1), which allow taxpayers to appealto a United States District Court determinations by the InternalRevenue Service as to the appropriateness of actions to collectunpaid taxes.
A. Procedural Posture
On February 4, 2005, Suzanne Carlson filed a complaint seekingjudicial review under 26 U.S.C. §§ 6320(c) and 6330(d)(1) of theInternal Revenue Service Appeals Officer's determination tosustain the United States Notice of Federal Tax Lien and itsNotice of Intent to levy upon Carlson's assets to satisfy herpast-due federal tax liabilities. Carlson challenges thedetermination of the Internal Revenue Service Appeals Officer. In her complaint, Carlson alleges that the "hearing was notproperly held due to the bias of the [Appeals] Officer." Compl.[Doc. No. 1] ¶ 16. Further, she alleges that this failureviolated her Fifth Amendment rights. Id. ¶ 18.
On April 22, 2005, the United States filed this Motion toAffirm the Appeals Officer's Determination, to Dismiss theAppeal, or for Summary Judgment [Doc. No. 3].
On June 23, 2004, the Internal Revenue Service ("IRS") sentCarlson, by certified mail, a "Final Notice — Notice of Intent toLevy and Your Right to a Hearing" ("Final Notice"). R. at 64,68.1 The Final Notice informed Carlson that the IRSintended to levy upon all her property and rights to property tosatisfy past-due liabilities, and informed her of her right toappeal the intent to levy to the IRS Appeals Office. Id. at 64.On June 25, the IRS sent Carlson a "Notice of Federal Tax Lienand Your Right to a Hearing under IRC 6320," which informedCarlson that a lien had been filed, and again noted her right toappeal the collection action and to discuss payment options.Id. at 72.
The IRS received Carlson's Form 12153 Request for a CollectionDue Process Hearing ("due process hearing") on July 23, 2004,within the 30 days as required by law. Id. at 57. In an attachment to the form, Carlson also noted that "[i]t is inthe best interest of the government and the taxpayer that anOffer in Compromise be entered into." Id. at 58.
On August 18, 2004, the IRS Appeals Office sent Carlson aletter describing the appeals process. Id. at 29-32. Inaddition, the two page letter noted that [t]he law requires that an individual be current with filing their federal income tax returns before a collection alternative can be considered. I have reviewed your account and found that the IRS has no record of receiving your federal income tax returns for tax periods ending 12/2000, 12/2001, 12/2002, and 12/2003. . . . If you have not filed [the above returns] please file with the IRS Service Center no later than Sep. 17, 2004 and provide this office with a copy of the returns.Id. at 29 (emphasis added).
On September 8, 2004, the Appeals Officer sent a letter toCarlson's attorney, Timothy Burke ("Burke"), scheduling the dueprocess hearing for October 11, 2004, to be held byteleconference, and informing him of the procedure to be followedas prescribed by law. Id. at 22-24. In addition, thecorrespondence informed Burke that for there to be considerationof a collection alternative, Carlson would need to provide
— A completed Collection Information Statement with all required attachments (Form 433-A for individuals and/or Form 433-B for businesses.) — Signed tax return(s) for the following tax periods . . .: Type of tax: Form 1040 Period or Periods: 12/2000 12/2001 12/2002 12/2003 — Proof of estimated tax payments for the period(s) listed below: 12/2004Id. at 23 (emphasis omitted in part). The letter requested thatthe listed items be sent "within 14 days of this letter" andadvised that the Appeals Officer could not "consider collectionalternatives in your hearing without the information requested."Id.
On September 10, 2004, Burke acknowledged receipt of theSeptember 8 letter and requested that the hearing be rescheduledand be in person rather than via telephone conference call. Id.at 21.
The hearing was rescheduled as a face-to-face hearing forOctober 14, 2004 through a letter from the Appeals Officer toBurke dated September 15, 2004. Id. at 20.
On October 14, 2004, the hearing was held at the Boston AppealsOffice with Appeals Officer Lisa Boudreau ("Boudreau"). Seeid. at 18-19. In this face-to-face conference, the partiesdiscussed the possibility of an offer in compromise. Id. at 18.In order to qualify for an offer in compromise, a taxpayer mustbe current with the filing of their individual tax returns.Despite the September 17, 2004 deadline set in the August 18,2004 letter, and the additional request that the returns be filedwithin 14 days of the September 8, 2004 letter, Carlson did notfile the returns prior to or at the hearing. See id. AlthoughCarlson had not yet filed her late returns, she was given until November 30, 2004 to file: her 2000, 2001, 2002, and 2003returns; "[c]ompleted collection information statements with allrequired attachments"; a breakdown of her 2004 income throughNovember 30, 2004; and a completed offer in compromise form.Id. at 18; Appellant's Mem. in Opp'n to Appellee's Mot.("Appellant's Mem.") [Doc. No. 7, Attach. 1] at 2. In the lettersummarizing the conference, Boudreau also stated that "[m]ydetermination in this case will be made with the informationavailable on November 30, 2004." R. at 19.
In a letter dated November 23, 2004, Carlson, through herattorney, requested an additional 30 days "to complete theaccounting" for her personal and corporate returns. Id. at 17.The letter noted that Ms. Carlson reports that she has made substantial progress in completing her accounting records. The largest bank accounts have been reconciled as of this date. Unfortunately, she has been unable to dedicate sufficient time to complete her accounting records by November 30, 2004 due to the significant health issues of her longstanding friend. These issues include his losing his sight in one eye, diabetes and surgery on one of his feet. This series of medical issues has required Ms. Carlson to drive her friend to many medical appointments and to expend considerable time attending to his needs. Additionally, Ms. Carlson's son has been involved in some mischief which has required the expenditure of her time. For these reasons, the taxpayer asks for an extension of thirty days to respond to your request for information.Id. On the copy of the letter provided in the government's exhibit,there is a "Received" date stamp indicating that the letter wasreceived on November 29, 2004. Id.
In a letter dated November 30, 2004, the Appeals Officer deniedthe request. Id. at 15. In the letter, Boudreau stated that: At the conference a period of six weeks was given for the requested information to be provided. This was a reasonable time frame and no additional extension is being granted. As stated in my previous correspondence, my determination will be made with the information available on November 30, 2004.Id.
On January 5, 2005, the IRS issued a "Notice of DeterminationConcerning Collection Action(s) Under Section 6320 and/or 6330"("Notice of Determination"). Id. at 7-13. The attached fourpage "Summary and Recommendation" presented a brief factualbackground, and discussed and analyzed the matters considered atthe appeals hearing. Id. at 10-13. In summarizing the mattersconsidered at the hearing, the document: (1) reviewed theapplicable law and administrative procedures and noted that the"statutory and administrative requirements . . . were in fact metin this case", id. at 11; (2) listed the relevant issuespresented by the taxpayer, id. at 12-13; and (3) discussed the"[b]alancing of the [n]eed for the [e]fficient [c]ollection ofthe [t]axes with the [c]oncerns [t]hat the [c]ollection [a]ction[b]e [n]o [m]ore [i]ntrusive [t]han [n]ecessary." Id. at 13. In reviewing the issues presented by the taxpayer, the summarynoted that Carlson "felt that an offer in compromise was a moreappropriate action due to her circumstances" and that [a]n offer in compromise was proposed as a collection alternative. The taxpayer had not filed forms 1040 for 2000, 2001, 2002 or 2003 so she did not qualify to submit an offer in compromise. She was given six weeks, until November 30, 2004, to prepare and file the returns. . . . Ms. Carlson did not complete any of the required actions. On November 29, 2004 a letter was received from Mr. Burke requesting an additional extension of time to have the income tax returns completed. No additional time was granted, and a letter was sent to Ms. Carlson, with a copy to Mr. Burke, confirming that the determination would be made with the information available on November 30, 2004. Ms. Carlson does not qualify to submit an offer in compromise.Id. at 12-13.
In analyzing the balancing of the interests of the taxpayer andthe IRS, the Service noted that Ms. Carlson proposed an offer in compromise as a less intrusive means to satisfy her liability. She did not qualify to submit an offer due her lack of compliance with required filings and possible estimated tax payments. Ms. Carlson was given an opportunity to become compliant with filing and payment requirements. Her representative agreed at the conference that the six week time frame given to comply was reasonable. The taxpayer did not file outstanding returns, provide current income information, or provide any other information. No viable collection alternative was proposed. Filing of the Notice of Federal Tax Lien and issuance of the Final Notice and the proposed levy action are necessary to provide for the efficient collection of the taxes despite the potential intrusiveness of enforced collection.Id. at 13. C. Federal Jurisdiction
This Court has subject matter jurisdiction pursuant to26 U.S.C. §§ 6320(c) and 6330(d)(1).
A. Standard of Review
The Internal Revenue Restructuring and Reform Act of 1998,which created the due process hearings, provides that a taxpayermay appeal a decision arising from such a hearing. See26 U.S.C. § 6330(d). The statute is silent as to the standard ofreview. Olsen v. United States, 326 F. Supp. 2d 184, 187 (D.Mass. 2004) (Lindsay, J.). As noted by Judge Lindsay, althoughthe First Circuit has yet to address the applicable standard ofreview, [t]he legislative history accompanying the statute, . . . indicates that where, as here, the appellants underlying tax liability is not at issue, "the appeals officer's determination as to the appropriateness of the collection activity will be reviewed using an abuse of discretion standard of review." H. Rep. No. 105-599 at 266 (1998).Id. at 187 (noting that other courts have reviewed decisions byappeals officers under the abuse of discretion standard, citingDudley's Commercial and Indus. Coating, Inc. v. UnitedStates, 292 F. Supp. 2d 976, 985 (M.D. Tenn. 2003); KitchenCabinets, Inc. v. United States, 2001 WL 237384, *2 (N.D. Tex.Mar. 6, 2001) (unreported decision); TTK Mgmt. v. UnitedStates, 2000 WL 33122706, *1-2 (C.D. Cal. Nov. 21, 2000)(unreported decision)). B. The Internal Revenue Service Restructuring and Reform Actof 1998
In 1998, following a year of congressional investigations andhearings concerning the IRS, President Clinton signed theInternal Revenue Service Restructuring and Reform Act into law.Mesa Oil, Inc. v. United States, 2000 WL 1745280, *2 (D.Colo. Nov. 21, 2000) (unreported decision). This law "change[d]the way in which the IRS governs itself, institute[d] newtaxpayer rights,. . . . fortif[ied] taxpayer rights andimprove[d] customer service." Id. "The Congress believed thatthe former IRS organizational structure was one of the factorscontributing to the inability of the IRS to properly servetaxpayers and the proposed structure would help enable the IRS tobetter serve taxpayers and provide the necessary level ofservices and accountability to taxpayers." Joseph J. Thorndike,Reforming the Internal Revenue Service: A Comparative History,53 Admin. L. Rev. 717, 775-76 (2001) (quoting 1998 Staff of J.Comm. on Taxation, 105th Cong., General Explanation of TaxLegislation Enacted in 1998, at 21 (J.Comm. Print 1998))(internal quotation marks omitted).
Under section 6320, the IRS must give the taxpayer writtennotice of the filing of a notice of lien under section 6323.26 U.S.C. § 6320(a)(1). The statute sets out the time and method forthe notice, as well as the information that must be included.Id. at § 6320(a)(2). The taxpayer then has a right, within 30 days, to request a hearing with the IRS Office of Appeals. Id.at § 6320(a)(3)(B). "The hearing under this subsection shall beconducted by an officer or employee who has had no priorinvolvement with respect to the unpaid tax. . . . before thefirst hearing under this section or section 6330." Id. at §6320(b)(3).
At the hearing, "[t]he appeals officer shall . . . obtainverification from the Secretary that the requirements of anyapplicable law or administrative procedure have been met." Id.at § 6330(c)(1). See § 6320(c). The taxpayer may raise anyrelevant issues, including offers of collection alternatives suchas offers in compromise. Id. at § 6330(c)(2).
In formulating her determination, the appeals officer isrequired to consider: (1) whether the requirements of anyapplicable law or administrative procedure have been met; (2) anyissues raised by the appellant relating to the unpaid tax,including offers of collection alternatives such as offers incompromise; and (3) whether the proposed collection actionbalances the need for the efficient collection of taxes with thetaxpayer's legitimate concern that the collection action be nomore intrusive than necessary. Id. at § 6330(c).
C. The Motion to Affirm
Under section 6330, Carlson has a right to judicial review ofthe determination made at the due process hearing. 26 U.S.C. § 6330(d); Olsen, 326 F. Supp. 2d at 188 (noting that "[u]nder§ 6330(c), the scope of [the district court's] review is limitedto whether the appeals officer abused her discretion when, afterholding a collection due process hearing, she upheld the proposedenforcement action.").
The government argues that this Court should affirm thedetermination of the IRS Appeals Officer "because the AppealsOfficer verified that the requirements of any applicable law oradministrative procedure have been met, considered all issuesraised at a collection due process hearing, and determined theNotice of Federal Tax Lien is proper and that enforced collectionof the taxpayer's past-due federal tax liabilities isappropriate." Appellee's Mem. in Supp. of Mot. to Affirm ("Gov'tMem.") [Doc. No. 4] at 1.
1. The Appeals Officer did not abuse her discretion, and sheheld a fair and impartial hearing.
Carlson alleges in her complaint that the appeals officer wasnot impartial because she was motivated by the "desire topromptly close the hearing," Compl. ¶¶ 14-16, and that suchfailure violated her rights under the Fifth Amendment of theUnited States Constitution and the rights granted to her underthe Internal Revenue Code. Id. ¶ 18.
The Internal Revenue Restructuring and Reform Act defines"impartial officer." Pursuant to 26 U.S.C. § 6330(b)(3), thestatute states: "Impartial officer — The hearing under this subsection shall beconducted by an officer or employee who has had no priorinvolvement with respect to the unpaid tax . . . before the firsthearing under [section 6330] or section 6320."26 U.S.C. § 6330(b)(3). As noted by the government, "[t]he Appeals Officerhad no prior involvement with respect to the past-due liabilitiesin this case and there is no allegation to the contrary." Gov'tMem. at 7 (internal citation omitted). Thus, the Appeals Officerwas impartial. 26 U.S.C. § 6330(b)(3). See Harrell v.C.I.R., 86 T.C.M. (CCH) 378 (2003) available at 2003 WL22137919 ("The operative terms of section 6330(b)(3) provide that`impartial' concerns the Appeals officer's prior involvement withrespect to the unpaid tax before the hearing.").
In addition, the government argues that the Appeals Officer"did not act in a biased manner." Gov't Mem. at 7. The governmentpoints out that the Appeals Officer complied with the law,considered the factors as enumerated in section 6330(c), and waswithin her discretion when she denied Carlson's request for anadditional extension to file her late returns so she would beable to pursue an offer in compromise. Id. at 8-10. Thegovernment notes that the Appeals Officer "in fact, gave Carlsonsubstantial time and notice to file her delinquent federal taxreturns before and after the [due process] hearing." Id. at 7-8(noting that the "Appeals Office informed Carlson almost twomonths before the hearing that she had to file her income tax returns for 2001 through 2003 before any collection alternativecould be considered").
In support of its argument, the government points to theSummary and Recommendation: Section I . . . demonstrates that the Appeals Officer reviewed Carlson's administrative file and concluded that the information contained in the file showed that the IRS followed the law and administrative procedures. . . . The Appeals Officer determined that a statutory lien had arisen upon Carlson's failure to pay the past-due liabilities after notice and demand was made. The Appeals Officer also determined that the Notice of Lien Filing was sent according to law, and that the requisite final notice of intent to levy was issued prior to commencement of collection action. . . . Indeed, Carlson's pleading raises no issue as to the Appeals Officer's verification that the requirements of any applicable law or administrative procedure have been met. Section II . . . demonstrates that the Appeals Officer considered the issues raised by Carlson, which were limited only to collection alternative precluded from consideration by Carlson's own failure to file her tax returns and other financial information. . . . Section III . . . demonstrates that the Appeals Officer balanced the need for efficient collection of taxes with the concern that the collection action be no more intrusive than necessary. The Appeals Officer considered the alternatives proposed by Carlson, to the extent that they could be considered because of Carlson's failure to file her tax returns for tax years 2000 through 2003; no viable collection alternative was ever proposed. Collection activity by the IRS was made necessary by Carlson's repeated failure to meet her filing obligations in the [due process hearing] context, and, of course, her filing requirements under the law, as well as her failure to offer any viable alternative for the collection of her past-due liabilities here.Id. at 9-10. Carlson argues that the "unambiguously expressed intent ofCongress" in enacting the Internal Revenue Restructuring andReform Act of 1998 was to
"Protect Taxpayers Subject to Audit or Collection Activities", to grant taxpayers an impartial hearing at which they can file an Offer in Compromise and instruct the Service that it "should be flexible in finding ways to work with taxpayers who are sincerely trying to meet their obligations and remain in the tax system" and to "make it easier for taxpayers to enter into offer-in-compromise agreements."Appellant's Mem. at 5-6 (citing Act's legislative history).Carlson contends that the Appeals Officer failed to "be flexible"and did not "make it easier for [her] to enter into [an]offer-in-compromise agreement." See id. at 6-7. The onlyevidence Carlson points to support her argument that the Servicefailed to resolve the matter in good faith is that: The inadequacy of . . . [the] record does not provide sufficient information as to the reason of the reasons [sic] why the Service failed to grant the necessary additional time to the Plaintiff. The paucity of information however, evidence a predisposition of the Service to summarily dispose of the issues before it.Appellant's Mem. at 11. She goes on to conclude that: "Thesefacts lead to a sole conclusion that the Service acted toexpeditiously close this matter for its administrativeconvenience in derogation of the rights granted to thePlaintiff." Id.
The only legal case offered in support of this argument isMesa Oil. Id. at 10-11. In Mesa Oil, similarly an appeal ofa due process hearing, the federal district court remanded thecase for further consideration. 2000 WL 1745280 at *1. The court foundthat the Appeals Officer "abused her discretion in concludingthat the proposed collection action balance[d] the need for theefficient collection of taxes with the legitimate concern of theperson that any collection action be no more intrusive thannecessary," in light of the fact that "the levy would put Mesaout of business." Id. at *3. In doing so, the court noted thatthe Determination was lacking information as to "whether thecollection officer considered appropriate factors given that MesaOil is an ongoing business." Id. at *4. Thus the court"remand[ed] for consideration of the appropriate factors and afully elucidated Determination that explains the reasons for theconclusion." Id. at *5.
The matter before this Court is distinguishable in that, unlikeMesa Oil, here there is no question as to why an alternativewas not considered. Carlson had failed to file the paperworknecessary, including her late returns, a prerequisite toacceptance of an offer in compromise. There is no need to remand— the Appeals Officer was clear as to why the levy was upheld.
In addition to her "lack of good faith" argument, Carlsoncontends that the IRS abused its discretion by failing to providea full, fair and impartial hearing. Appellant's Mem. at 11-12.She notes that "Ms. Boudreau did not negotiate with Ms. Carlsonbecause she gave no consideration to Ms. Carlson's request for an additional thirty days to complete all of the requisite returnsand financial statements necessary for her offer-in-compromise."Id. at 12.
In her opposition, Carlson cites the Internal Revenue Manualwhich notes that "[i]t is an accepted business practice toresolve these issues through negotiation and compromise." Id.(citing Internal Revenue Manual § 126.96.36.199). She also notesthat, according to the manual, "[t]he Commissioner is authorizedto grant a reasonable extension of time for filing any return. . . such extensions of time shall not be granted for more than 6months." Id. at 13 (citing Internal Revenue Manual §1.6081-1).
Carlson's reliance on the Internal Revenue Manual as supportfor her appeal is misplaced. As noted in Olsen,2"[c]ourts have held . . . that `the Internal Revenue Manualconfers no rights on taxpayers,' and that `the procedurescontained therein are intended only to aid in the internaladministration of the IRS.'" 326 F. Supp. 2d at 188 n. 2 (citingUnited States v. Horne 714 F.2d 206, 207 (1st Cir. 1983) ("Theassessment made against the defendant complied with all relevantstatutes and regulations. Whether or not it also complied withthe rules contained in the Internal Revenue Manual has no bearingon its validity. The provisions in the Manual are not codified inthe Code of Federal regulations. Even if they were codified, the provisions would notbe `mandatory.'") and Chavez v. United States, 2004 WL1124914, *4 (W.D. Tex. May 18, 2004)).
Regardless of the weight or lack thereof to be granted to theinternal procedures of the IRS, the crux of Carlson's argument isthat she was deprived of a fair determination because she was notgiven an additional extension beyond the six weeks following herdue process hearing, she was deprived of a fair determination.Yet, it was Carlson's failure to prepare her returns — despiteample notice that she would need to complete those returns inorder to qualify for a flexible alternative — that precluded herfrom attaining the determination she desired.
In Rodriguez v. Commissioner of Internal Revenue, 85 T.C.M.(CCH) 1414 (2003) available at 2003 Tax. Ct. Memo LEXIS 151,*11, the United States Tax Court noted that [t]he Commissioner's decision not to process an offer in compromise or a proposed collection alternative from taxpayers who have not filed all required tax returns is not an abuse of discretion. . . . The decision not to accept the offer in compromise submitted by petitioner on account of her failure to file all required returns was an entirely reasonable exercise of the Commissioner's discretion in administering the offer in compromise program.
In her brief, Carlson seems to imply that she first learned ofthe need for her late returns to be filed on October 14, 2004, atthe due process hearing. See Appellant's Mem. at 12-13. Areview of the correspondence in the record refutes thishalf-hearted contention. As early as August 18, 2004, the IRSAppeals Office had informed Carlson that in order for a collectionalternative to be considered she must be current in the filing ofher federal income tax returns. R. at 29. That same letter set adeadline of September 17, 2004 for her to file her missingreturns. Id.
On September 8, 2004, another letter was sent, again noting theneed for the returns in order for a collection alternative to beconsidered. Id. at 23. This letter requested the late taxreturns to be filed within 14 days. Id.
By the date of the due process hearing, Carlson already hadfailed to meet two deadlines. At the face-to-face conference, theparties agreed to an additional 45 days for Carlson to file theinformation. Although reasonable minds may disagree as to whetherthe Appeals Officer should have given her yet again more timeto file the returns, she did not abuse her discretion by refusingto grant an extension.
Finally, Carlson argues that the Administrative Record andDetermination Letter are inadequate and urges this Court toremand the matter. Appellant's Mem. at 7-10 (citing Borges v.United States, 317 F. Supp. 2d 1276 (D.N.M. 2004) and MesaOil, 2000 WL 1745280). Carlson notes that, Ms. Boudreau does not cite any Internal Revenue Manual, Revenue regulation or procedure to justify her determination that a reasonable time of six weeks was allowed and that no further time need be granted for Ms. Carlson to prepare the requisite information to make an offer-in-compromise. Appellant's Mem. at 7.
In Borges, the court considered whether the Appeals Officerhad properly performed a financial analysis.317 F. Supp. 2d at 1284 ("The record before the Court is insufficient to determinewhat financial analysis was performed by the Appeals Officer.").Here, as discussed above, the record is sufficient to determinewhether the Appeals Officer abused her discretion in denyingCarlson more time to get her late returns to the IRS, aprerequisite for consideration of an offer in compromise. It isundisputed that the first notification informing Carlson of theneed for the delinquent returns was dated August 18, 2004, almosttwo months before the hearing, and over three months before theNovember 30, 2004 deadline in question. See Mesa Oil, 2000 WL1745280 at *18-19 (noting that "[w]hile a full stenographicrecord is not required, there must be enough informationcontained in the documentation created by the IRS for a court todraw conclusions about statutory compliance and whether the[Appeals Officer] abused his or her discretion. . . . the lack ofa record makes it impossible to tell . . . what factors wereconsidered by the [Appeals Officer] in making herDetermination.").
D. Failure to State a Claim
The government also argues that Carlson's appeal should bedismissed for failure to state a claim upon which relief can be granted, or in the alternative, for summary judgment. In a twoparagraph section of its memorandum, the government argues thatCarlson fails to state a claim upon which relief can be grantedbecause she does not challenge the Appeals Officer'sdetermination, but rather focuses on the Appeals Officer's denialof an extension to file her late returns. Gov't Mem. at 10-11
In fact, Carlson complains that "[t]he hearing was not properlyheld due to the bias of the [Appeals] Officer," Compl. ¶ 16(Count I); and that the failure "was violative of the rightsgranted to [her] by the Internal Revenue Code and theFifth Amendment to the United States Constitution." Id. ¶ 18(CountII).
Although this Court now holds that "Carlson received dueprocess," Gov't Mem. at 10, were all of the assertions in theComplaint taken as true, she has stated a claim. Thus, it wouldbe inappropriate to grant the government's motion to dismiss.
For the reasons stated, the government's motion to dismiss forfailure to state a claim is DENIED. The government's motion toaffirm the Appeals Officer's Determination is GRANTED.