In Uncategorized on 03/12/2014 at 22:01

Even if it doesn’t help you, the manual might have been amended after you started your case. That’s the story of Michael M. Kan, Docket No. 23678-12S L, filed 3/12/14.

But unlike The Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, Judge Mark V. Holmes, Judge Whelan isn’t a fan of remands.

Mike claims he slipped below the low-income barrier between the time he submitted his OIC and personal 433-B, and the time Appeals confirmed IRS’ decision to deny. Mike hadn’t paid the $150 fee (now $185: see my blogpost “The Price of Peace”, 12/11/13) or the 20% deposit with his 656.

The SO wasn’t buying, and neither was Appeals. Mike claims he should have gotten a reconsideration, based on changed facts between the time he sent in the forms and the time the SO bounced them.

No, says Judge Whelan. When Appeals bounced Mike’s OIC, the IRS Manual said that the SO need consider only matters as they stood at date of submission.

Eight months after the NOD bouncing Mike’s submission, the Manual was amended to provide that the SO should check applicant’s income at time of submission and at “current time”, and take the lower amount in deciding whether to dispense with the fee and deposit.

Too late for Mike.

“Neither party called this change in the applicable provisions of the Internal Revenue Manual to the Court’s attention. This change–taking place well after the Office of Appeals had issued the subject notice of determination–does not affect our conclusion that the SO did not abuse her discretion in rejecting petitioner’s offer in compromise and approving the proposed levy. Furthermore, we do not consider this change–taking place after petitioner’s case was presented to the Court-to be an appropriate basis for remand of the case to the Appeals Office. See, e.g., Kehoe v. Commissioner, T.C. Memo. 2013-63, at *5-6 (‘the Court has also remanded where the law changed between the CDP hearing and the Tax Court trial if that may have affected a taxpayer’s presentation of his case.’); Churchill v. Commissioner, T.C. Memo. 2011-182, *5 (“we’ve also remanded where the law changed between the CDP hearing and the Tax Court trial if that may have affected a taxpayer’s presentation of his case.’). Order, at p. 11, footnote 1.

By the way, Mike’s equity in his home was enough to pay the tax in full. Even though he claimed he needed the home office for his business, he never put in a 433-B for the business.

Still, I bet Judge Holmes would have remanded.

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