Attorney-at-Law

AN OFFSET ISN’T A LEVY

In Uncategorized on 02/21/2012 at 16:27

Such is the lesson of Robert B. Anderson, 2012 T. C. Mem. 46, filed 2/21/12. Bob was accused of frivolity for his 2006 and 2007 returns, which showed zero. However, his 2008 and 2010 returns showed (apparently valid) refunds, which IRS grabbed, thus satisfying IRS’ claims for 2006 in full, while Bob’s timely CDP request was pending.

Bob never got a SNOD, just a letter stating he was frivolous. Bob’s request for a collection alternative went down in flames when he failed to file a Form 433-A, despite two requests from IRS.

IRS moves for summary judgment on 2006; Bob is fully paid up via the grab of his 2008 and 2010 refunds, so nothing more to fight about. Bob cries “foul, they grabbed my refunds while my CDP was pending, which was a levy, and CDP suspends all collection activity.”

Nope, says Judge Halpern. This was an offset, not a levy. There’s Circuit Court of Appeals learning on this point (Boyd v. Commissioner, 124 T.C. 296, 300 (2005), aff’d, 451 F.3d 8 (1st Cir. 2006). Yer out, Bob. 2006 is history.

But as for 2007, IRS wants partial summary judgment. No go, IRS, says Judge Halpern. Even though Bob attached to his CDP request a preprinted 23-item checklist (on which he checked 21 items), and all but two seemed frivolous: “[R]espondent appears to argue for summary adjudication in his favor with respect to the first assignment of error on the ground that petitioner’s initial 2007 return, showing zero wages, was incorrect ‘due to petitioner’s frivolous position echoed in his CDP request, petition, and amended petition.’ While there is much in the attachment to the CDP request, the petition, and the amended petition that strikes us as frivolous, paragraph 7 of the attachment does state that petitioner had no opportunity to challenge the penalty and paragraph 20 of the attachment does raise claims of denial of due process and of the right to appeal imposition of the penalty. Those do not strike us as frivolous positions; indeed, they raise genuine issues as to material facts.” 2012 T. C. Mem. 46, at p. 7.

Bob wanted to be sent back for a face-to-face conference with Appeals (a standard delaying dodge), but Judge Halpern heads that off, telling Bob to save his arguments for the trial in Tax Court.

Lest Bob should feel too elated by his goal-mouth save on summary judgment, Judge Halpern shows him the Section 6673(a)(1) $25,000 frivolity penalty yellow card: “We are concerned that petitioner may have instituted this proceeding to delay collection of the penalties at issue. We caution petitioner to proceed with section 6673(a)(1) in  mind.” 2012 T.C. Mem. 46, at p. 9.

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