The 1908 British music hall song echoes through Tax Court today, as Thomas F. Kelly, Esq., strives mightily to undo the tax lien filed against his client, Gregory P. McGuckin, Docket No. 8185-15L, filed 2/12/16. STJ Armen, The Judge With a Heart, may not have seen Mr Kelly, but he has heard from him. The result is not gratifying.
Greg McG filed an OIC, but got bounced. He didn’t petition for a CAP, but he did get an NFTL. Mr Kelly, denominated by STJ Armen as a “POA” (which is a piece of paper, Judge; the party who grants the POA is the “taxpayer,” and the party receiving powers thereunder is the “representative”; see Form 2848), claims he should have gotten the denial letter from OIC Unit, as his principal’s timely-filed POA said he should get correspondence. So he offers no alternatives, even though OIC Unit decided Greg McG could do an IA and pay in full thereby.
“Mr. Kelly claimed that in accordance with Form 2848, the IRS was required to send him a copy of the…OIC rejection letter but failed to do so. Mr. Kelly further claimed that if he had received it, he would have timely appealed the denial of the OIC, during which appeal, Mr. Kelly claimed, the IRS would have been prohibited under its Internal Revenue Manual (IRM) from filing the NFTL. Mr. Kelly did not dispute petitioner’s underlying liability or that petitioner received the OIC denial letter in time to file an appeal.” Order, at p. 2.
Well, the SO noted the record showed that a copy of the letter had been mailed to Mr Kelly at his office address. And the IRM did not prohibit filing a NFTL while an OIC was being reviewed. And while IRS can withdraw a NFTL, it doesn’t have to, and the four (count ‘em, four) magic criteria (premature, or otherwise not in accordance with established procedures, or will facilitate collection, or in best interests of taxpayer and the fisc) don’t apply here. And even if all four did, IRS doesn’t have to, and Tax Court can’t make them.
“A Federal tax lien arises automatically after notice and demand for an assessed tax liability is not paid. The record in this case shows that the tax liabilities for the years at issue were all assessed prior to August 26, 2013. Although the lien exists as a matter of law, to ensure its priority with relation to other creditors, respondent is authorized to file a NFTL. There is no legal authority that restrains respondent from filing an NFTL until after an OIC and appeal is concluded. Accordingly, respondent was within its authority to file a NFTL in this case well before it actually did so….” Order, at p. 3. (Citations omitted; but I can’t tell the significance of the August 26, 2013 date; the NFTL wasn’t sent until September 30, 2014. And Greg McG submitted his OIC on August 12, 2013. So what gives?).
Howbeit, the IRM isn’t law and gives taxpayers no rights. And the Regs give IRS the option of sending bounces of OIC either to taxpayer or representative; see Reg. 301.7122-1(f)(1). Greg McG got the bounce timely and could have filed a CAP. Neither he nor Mr Kelly had the right to stall a NFTL while he did so.
Summary J for IRS.