No, says Judge Swift. Whether Tax Court has jurisdiction to remand a case to Appeals due to change in circumstances between the CDP hearing and the Tax Court trial, even if Appeals made no error,  is a question whose answer must await another day. But there’s no remand coming for W. Russell Van Camp and Teresa Van Camp, in 2012 T. C. Memo. 336, filed 12/3/12.

Russ has enough problems, aside from not having filed returns for three years, and not contesting the liabilities IRS imposed or the NFTL or Notice of Levy, because Russ’ attorney dropped the installment agreement he was negotiating with the SO. Judge Swift: “…before final approval and implementation of the installment agreement, petitioners’ attorney informed the settlement officer that petitioners’ financial affairs were ‘going from bad to worse’ and that petitioners ‘would not be able to pay anything under an installment agreement.’

“Petitioners’ attorney did not explain to respondent’s settlement officer the specific reason petitioners would not be able to pay anything under an installment agreement (namely, the imminent disbarment of Mr. Van Camp).” 2012 T. C. Memo. 336, at p. 4.

So the SO tells Russ’ attorney the immortal words of Toni Stern’s and Carole King’s 1972 Grammy winner:  “It’s too late baby now it’s too late.”

Russ’ derelictions are too numerous to recount here, but those interested in such things can check them out at 257 P.3d 599 (Wash., 2011). Russ is disbarred after the CDP hearing.

Russ’ attorney claims changed circumstances, but doesn’t claim the SO abused her discretion or didn’t follow the law. IRS says no, and Judge Swift agrees. “Remand of a CDP case to the Appeals Office may be appropriate in limited circumstances where there occurred some omission or error in the original hearing or in the record of the hearing. These cases present no such circumstance, and respondent argues that as a matter of law we have no authority to remand a CDP case to the Appeals Office on the basis of a change in a taxpayer’s financial circumstances that occurred after the CDP hearing was completed, where the Appeals Office did not abuse its discretion and where there is no ambiguity or omission in the administrative record before the Court.” 2012 T. C. Memo. 336, at p. 6. (Citations omitted.)

When Russ’ attorney dropped the proposed installment agreement and said Russ could pay nothing, he informed the SO of Russ’ dire financial straits and abandoned any collection alternative. So even though Russ’ attorney didn’t go into details, he did disclose that Russ was bust, and the SO had no choice but to go ahead with lien and levy.

All is not lost for Russ and poor Terry, or their hapless attorney. They can go back to Appeals under Section 6330(d)(2), pursuant to which Appeals has continuing jurisdiction over collections, but which is not a continuation of the present proceeding (which is closed). And in a Section 6330(d)(2), there is no appeal to Tax Court.

IRS wants more, as always. “Respondent disagrees with petitioners and with a suggestion made in a number of our opinions that we have the authority to remand CDP cases to the Appeals Office merely where a remand may be regarded as ‘helpful’, ‘necessary’, ‘productive’, and/or due to ‘changed circumstances.’ See e.g., Kelby v. Commissioner, 130 T.C. 79, 86 n.4 (2008); Lunsford v. Commissioner, 117 T.C. 183; Kuretski v. Commissioner, T.C. Memo. 2012-262, at *11; Churchill v. Commissioner, T.C. Memo. 2011-182. Respondent contends that, absent the exercise of an abuse of discretion by the settlement officer or a defective or incomplete administrative record, this Court lacks any remand authority in CDP cases.” 2012 T. C. Memo. 336, at p. 8.

See my blogpost “Back to the Future”, 8/1/11, where the irrepressible Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, Mark V. Holmes, says Tax Court can do just that. Cf. Churchill, supra, at pp. 13-14.

Judge Swift ducks. Since on these facts Tax Court doesn’t find changed circumstances between CDP hearing and trial (Russ was broke throughout, so nothing changed), there’s no need to consider Tax Court’s jurisdiction to remand.