Attorney-at-Law

CDP – WHO KNEW IT COULD BE SO COMPLICATED?

In Uncategorized on 07/25/2017 at 16:56

I’ve made my political comments on today’s events elsewhere, so I’ll turn to a designated hitter off the bat of that Obliging Jurist and puzzlemaster Judge David Gustafson. Today Judge David Gustafson is confronting IRS looking for mootness in ASG Services, LLC, Docket No. 14945-16L, filed 7/25/17.

It’s a CDP, and ASG paid up, so why not just toss the petition?

Well, ASG wants to fight about liability. You remember it was only yesterday that Dean Matty Vigon sent that hare through the thicket; well, if you don’t remember, see my blogpost “Crafty – Akin to the Weasel,” 7/24/17.

But ASG isn’t quite in Dean Matty’s mukluks. So Judge Gustafson, always a man for a bargain, poses three questions, rather than the customary four.

First, IRS isn’t playing cagey when it comes to withdrawing a lien or forswearing future collection action. ASG just coughed up. So isn’t that like Greene-Thapedi, where, the liability being satisfied, Tax Court has nothing to adjudicate?

Second, “Without the existence of any possible prospect of future collection activity as to the liabilities at issue, this case would seem to become a mere suit for refund of the taxes alleged to have been overpaid. In further entertaining the case, we would be determining liability not incident to proposed or possible collection, as section 6330(c)(2)(B) contemplates, but solely for deciding whether ASG is entitled to a refund. Pursuant to section 6512(b), such a refund claim might be pursued in a deficiency case even after the IRS had conceded the deficiency that was the jurisdictional foundation of the case; but in the CDP context, no equivalent statute exists to permit the Tax Court to entertain a refund claim even where all collection issues have been conceded or have become moot.” Order, at p. 2. (Citation omitted) (Emphasis by the Court.). So how can Judge Gustafson keep this case alive?

Third, even supposing all we have here is a refund case, isn’t ASG wanting Judge Gustafson to assume facts not in evidence? “Section 7422(a) would seem to require the filing of a timely administrative claim for refund, and section 6532(a)(1) would seem to require the petitioner to await the IRS’s issuance of a notice of disallowance (or the passage of 6 months)-but ASG has not alleged compliance with either of these jurisdictional prerequisites. (And once ASG had met those prerequisites, it could presumably file a conventional refund suit in U.S. District court, pursuant to 28 U.S.C. sec. 1346(a)(1), or in the U.S. Court of Federal Claims, pursuant to 28 U.S.C. sec. 1491.)” Order, at p. 2.

So let ASG go file the refund claim and, if they don’t get it,  sue in USDC or USCFC, right?

Except.

ASG claims the payment wasn’t a payment, but a deposit to stop interest.

OK, says Judge Gustafson, go for it, ASG. But make it good.

“ASG shall file a supplemental response to the IRS’s motion, in which ASG shall state whether it persists in opposing the IRS’s motion to dismiss on grounds of mootness and, if it does so persist, shall (1) respond to the hypotheses stated above, (2) explain whether it contends the…remittances were ‘deposits’ (and, if so, shall explain the effect on mootness), and (3) make any other response it wishes to make.” Order, at p. 3.

 

“KATIE, BAR THE DOOR!”

In Uncategorized on 07/25/2017 at 15:55

No, this is not a re-make of the 1437 Scots ballad about brave Catherine Douglas and the slain King James I. This is the unavailing argument of the FedEx driver that he couldn’t enter the Glasshouse on the Magic Day to deliver the petition in Organic Cannabis Foundation, LLC. d.b.a. Organicann Health Center, Docket No. 10593-15, filed7/25/17.

And the Organicanns aren’t just blowing smoke; there’s better than a million bucks’ worth of deficiencies here. Source unspecified, but maybe business deductions potted by Section 280E.

First the Organicanns claim the SNOD was sent to the wrong address, because the P. O. Box number was omitted. The ZIP+4 puts paid to that one, as the USPS website says the SNOD got to the P. O. Box with 78 of the 90 days remaining. Plenty of time to file a petition.

Next is the hook for today’s sermonette, the mailed-is-filed, or maybe not, rule.

The Organicanns overnighted their petition via FedEx “First Overnight.” FedEx “First Overnight” is now one of the “blessed communion, fellowship divine,” anointed by John (“Kosi”) Koskinen, Boss Hoss at 1111 Constitution Ave., NW. Except it wasn’t when the Organicanns sent in their petition. FedEx “First Overnight” didn’t make the cut for another two weeks thereafter.

So the Organicanns are out? Yes, but. They have one last dive at the goal line. But Judge Pugh stifles that one too.

“Petitioner urges the Court apply Guralnik v. Commissioner, 146 T.C. 230 (2016), to conclude that the petition was timely filed because the Clerk’s office was not accessible to the FedEx delivery driver on the last day for filing. In Guralnik, the taxpayer’s statutorily prescribed filing deadline ended on a day the Court was officially closed due to a snow emergency. Id. at 233-234. We concluded that the ‘timely mailed, timely filed’ rule did not apply because the taxpayer used the FedEx First Overnight service (as petitioner used here), which service was not then listed among the designated private delivery services under section 7206(f). Id. at 240-241. We also declined to give Notice 2015-38 retroactive effect. Id. at 241. However, we applied Rule 6(a)(3), Federal Rules of Civil Procedure, to hold that when the Clerk’s office is inaccessible because of inclement weather, government closings or for other reasons, the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or legal holiday. Unlike the snow emergency closing in Guralnik, here, the Court’s Clerk’s office was open during its normal business hours and was not inaccessible the entire day due to inclement weather, government closings, or other reasons. We, therefore, find Guralnik distinguishable and we decline to expand our holding in Guralnik to cover circumstances where an unspecified event may have blocked access for a period of time but the Clerk’s office is not inaccessible due to closure for the entire day.” Order, at p. 5.

Y’all will remember Felix Guralnik from my blogpost “Neither Equity Nor Designation,” 6/2/16. As usual, you read it here first.

Takeaway 1- Get the current list of the “blessed communion, fellowship divine” private delivery services and post a copy on every flat surface you can find.

Takeaway 2- Upon receipt of SNOD or NOD, pull a Form 2 petition off the Tax Court website, fill in a barebones “I object to everything” and send in same with a check. By the time you get the motion to strike for failure to state a claim, you’ve bought enough time to amend.

Takeaway 3- Unless it’s a DC public holiday or the Glasshouse is totally inaccessible all day, keep banging on the door. Katie Barlass is long gone.

“CRAFTY – AKIN TO THE WEASEL”

In Uncategorized on 07/24/2017 at 16:16

A phrase that brings back happy memories of my little girl laughing as she describes some story takes me to the present with Dean Matthew Vigon, 149 T. C. 4, filed 7/24/17.

IRS is being very crafty, and definitely kin to the weasel.

But Dean Matty is no angel, either; apparently he’s currently in a Canadian slammer.

Surely you remember Dean Matty and his Forms 1041, each of which IRS claims should get the $5K Section 6702 chop? What, no? See my blogposts “Robosigner?” 6/23/16, and “Not Moot Court,” 5/17/17. There now, you’re all caught up.

Once again that Obliging Jurist David Gustafson upends IRS. IRS seems to be trying to do an end-run around a bunch of missing Section 6751(b) Boss Hoss signoffs. These should have been obtained before IRS chopped Dean Matty. First IRS asked for and got a remand back to Appeals to get the Boss Hosses. IRS came back from Appeals and claimed they had them, but Judge Gustafson wasn’t convinced. My blogpost “Robosigner?” above-cited delves into the dubiety of the Boss Hosses asserted.

Remember Judge Gustafson trashed IRS’ summary J motion and ordered a trial.

So IRS gets truly crafty, akin to the weasel. “Instead, the Commissioner moved for a continuance, explaining:  that the IRS would abate the penalties at issue; that the process of abating those liabilities is almost complete; that the process of releasing the liens at issue has been initiated; and that once those processes have been completed, the IRS intends to file a motion to dismiss the case on grounds of mootness.” 149 T. C. 4, at pp. 6-7.

OK, says Judge Gustafson, that’s cool, but what about underlying liability? Isn’t Dean Matty entitled to a finding on underlying liability, as Section 6702 chops are non-assessible and he didn’t get a prior chance to contest?

No sweat, says IRS, there’s no statute of limitations on Section 6702 chops, so when we chop Dean Matty again, he gets another CDP. And we aren’t saying we won’t chop Dean Matty again.

And the famous release of lien says “With respect to each assessment below, unless notice of lien is refiled by the date in column(e) [i.e., dates in 2021 and 2022], this notice shall constitute the certificate of release of lien as defined in IRC 6325(a).” 149 T. C. 4, at p. 8.

So IRS claims it can refile four years from now, and go after Dean Matty, no doubt after it has gotten Section 6751(b)s from every Boss Hoss up to and including Com’r John (“Kosi”) Koskinen or his successor.

Tax Court review of a CDP determination is exactly that..,.the determination, not the NITL or NFTL, but what Appeals did and what Appeals found. And that means the underlying liability, if appropriate. Abating penalties and releasing the lien is all very well, but liability wasn’t determined.

Tax Court’s jurisdiction is determined when it is first invoked. Of course, circumstances may have changed since then. If a tax is paid, or if a lien is released and the statute of limitations has run such that the lien cannot be refiled, then the case is moot and should be dismissed.

Except here it isn’t.

“The Commissioner asserts, however, that the section 6702 penalty for ‘Frivolous Tax Submissions’, unlike the income tax, cf. sec. 6501(a), has no statute of limitations in the Code.  For purposes of the Commissioner’s motion to dismiss, we so assume.  The Commissioner has abated the previous penalty assessments against Mr. Vigon; but, as the Commissioner observes, if this case is dismissed, the IRS claims the right to reassess against and collect from Mr. Vigon identical section 6702 penalties for the same nine alleged frivolous submissions. Here, abatement is a tactical retreat but not a surrender.” 149 T. C. 4, at p. 19.

IRS says, “yeah, but Dean Matty gets the whole NFTL and right to a new CDP, so he can fight it out again.”

Judge Gustafson assumes for the purposes of this case that there is no SOL for Section 6702 chops.

“We assume this is true, but we see in the Commissioner’s position no reason that he could not do it again–abate the second set of assessments, moot the second CDP case, and lie in wait.  Mr. Vigon’s supposed remedy depends on his recognizing the second lien notice, timely requesting a CDP hearing before IRS Appeals, challenging the liability in that hearing, and then timely filing a Tax Court suit when IRS Appeals issues an adverse determination–all while he is incarcerated.  Our CDP jurisdiction is littered with the sad tales of taxpayers who, even when not in prison, stumble on one or more of those requirements.  But if Mr. Vigon did succeed in putting his reassessed liabilities before this Court in a future, second CDP case, the Commissioner has, in his view, the unilateral power to render the second case moot by abating the penalties, while retaining the prospect of reassessing yet again at any future time.” 149 T. C. 4, at pp. 20-21. (Footnote omitted, but IRS might be right about this one, because 6702s are about filings, not about “taxable periods to which the filing relates.”)

Don’tcha just love this stuff? It’s like the endless epistolary volleying between blowers and the Ogden Sunseteers. This could go on for decades.

Except Judge David Gustafson says “enough already.”

IRS’ weasel-wording and sleight-of-hand merely left the case sleeping, not dead. IRS doesn’t say they irrevocably release the lien or say they will not ever again assert the Section 6702 chops.

IRS, the case is not moot. Tax Court has jurisdiction.

Now about those Section 6751(b) Boss Hoss signoffs….