In Uncategorized on 09/16/2014 at 16:34

No, not Mick Jagger’s and Keith Richards’ 1965 Number One hit for the Stones. This is Judge Ruwe’s word to Greenoak Holdings Limited, Southbrook Properties Limited and Westlyn Properties Limited, in 143 T. C. 8, filed 9/16/14.

The late James Irwin’s personal representative got a NOD from Appeals, affirming NITL on certain nonprobate assets of the late James. The late James’ personal representative didn’t petition the NOD. Green, South and West, apparently owned by a Bahamas outfit called Karamia Settlement, to which the late James had transferred assets (and as to which the late James’ personal rep claimed there weren’t assets in the probate estate sufficient to stump up the $7 Mil in tax due), file their own petition, aided by a substitute personal rep for the late James.

Green, South and West want either to be substituted in for the personal rep as petitioner  (even though it’s too late for the personal rep to petition, the 30 days from NOD having run), or that they themselves be allowed to petition, as they never got notice of the amount of tax due, which is what they want to contest.

Ordinarily, when the taxpayer didn’t have a chance to petition from a SNOD, or otherwise contest the computation of the deficiency at Appeals, Section 6330(c)(2)(b) gives them a shot in Tax Court. And we’ve seen any number of such instances where the petitioner gets a whack at the numbers if they hadn’t either had a chance before, or self-reported the numbers. And Green, South and West certainly didn’t self-report, or have a chance to contest.

Since every Section 6330 before now has been brought by the taxpayer him/her/itself, this is a case of first impression. Green, South and West claim that the late James didn’t own their property (and IRS didn’t claim they did, or specify what nonprobate assets were involved in the levy).

Now Section 6330 uses the word “person” extensively, so Green, South and West want to tag along.

“Petitioners interpret ‘person’ broadly so as to include any third party claiming an ownership right in property that might be subject to levy to collect the unpaid taxes of another person. Thus, they claim all of the rights conferred in section 6330, including the right to appeal a notice of determination to this Court, even if the notice of determination was issued only to the person who owed tax.” 143 T. C. 8, at pp. 12-13.

Once again we slide down the slippery slope of statutory construction and interpretation, and Green, South and West land on the bottom with a thump.

“A comprehensive reading of section 6330 in its context demonstrates that ‘[t]he person’ contemplated within the statutory framework is the person who owes the unpaid tax and that the only property that is subject to levy is the property of the person who owes the tax.” 143 T. C. 8, at p. 13.

The whole idea of the notice and hearing protections is to protect the property of the taxpayer. Green, South and West aren’t taxpayers. So no jurisdiction in Tax Court.

And this attempt to bring in Green, South and West by way of petition is too late. Rule 41 prohibits any amendment to a petition that tries to confer jurisdiction on Tax Court after the statutory clock has run.

That said, Green, South and West can always bring a Section 7426 wrongful levy claim in USDC. For more about Section 7426, see my blogpost “Whose Money Is It, Anyway?”, 1/11,12.


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