Attorney-at-Law

RIEN DE RIEN

In Uncategorized on 10/06/2014 at 19:16

No, not the Dumont-Vaucaire chanson immortalized by the great Edith Piaf. Rather, this is the story of a truly nothing Form 12153 that Tax Court tosses, while reserving the right to inspect others that IRS treats as no request at all.

Another short-and-sweet full-dress T. C., the story of Daniel Richard Buczek, 143 T. C. 16, filed 10/6/14, Judge Dawson writing for the unanimous court.

Dan has a checkered career, but the real fight is between IRS and Tax Court. Back in 2011, Tax Court decided Thornberry, 136 T. C. 536, which has been a thorn in IRS’s side ever since. Tax Court there decided that it had jurisdiction to review an IRS decision to toss a Form 12153 for complete frivolity, which IRS claimed Section 6330(g) prohibited.

For more about Thornberry, see my blogpost “You’ve Got to Be More Specific”, 4/19/11.

So IRS wants Tax Court to use Dan as the lever to overturn Thornberry, claiming Thornberry “eviscerates” Section 6330(g).

Judge Dawson declines.

“The administrative hearing requests that the taxpayers in Thornberry submitted are in stark contrast to petitioner’s request. A comparison of our review of the section 6330(g) determination with respect to the taxpayers’ hearing requests in Thornberry with our review of the determination with respect to petitioner’s request elucidates the standard we apply in making such a review.” 143 T. C. 16, at p. 4,

“In Thornberry v. Commissioner, 136 T.C. at 363-364, the Court held that the Appeals Office statement in the disregard letters that the IRS collection office could proceed with collection action is a determination for purposes of section 6330(d)(1). We observed that section 6703(a) clearly contemplates judicial review with respect to an Appeals Office determination that a request for an administrative hearing under sections 6320 and 6330 is a specified frivolous submission. The Appeals Office determination that a taxpayer’s entire hearing request is disregarded because his disagreement is frivolous is essentially a determination that the request is a specified frivolous submission. Indeed, the Appeals Office frequently imposes the civil penalty under section 6702(a) on a taxpayer whose hearing request was disregarded because the Appeals Office determined it was frivolous. Consequently, while section 6330(g) prohibits judicial review of the portion of a request for an administrative hearing that the Appeals Office determined is frivolous, it does not prohibit judicial review of the determination by the Appeals Office that the request is frivolous and is disregarded.” 143 T. C. 16, at pp. 10-11. (Citation omitted).

Thornberry did have a couple of valid points in their otherwise frivolous Form 12153, and IRS never stated why they were an attempt to delay, defeat, hinder or obstruct IRS from collecting the revenue. So Judge Dawson (yes, he decided Thornberry) decided Tax Court could review IRS’s tossing of Thornberry without a hearing.

But Dan’s petition “…does not challenge the appropriateness of the collection action, offer or request any collection alternatives, challenge the existence or amount of the underlying tax liability, or raise any spousal defenses. Nor does it make any assertions that would implicitly raise a legitimate issue; for example, it does not assert that the collection action would cause petitioner undue hardship or that he did not receive a notice of deficiency or otherwise have an opportunity to challenge the underlying tax liability.” 143 T. C. 16, at pp. 13-14.

So Dan’s petition is no petition, Tax Court has no jurisdiction, and IRS can go eviscerate Dan.

“In conclusion, the decision entered in Thornberry demonstrates the importance of this Court’s review of the Appeals Office’s determinations under section 6330(g) in protecting taxpayers from determinations that are arbitrary and capricious. Our Opinion today demonstrates that our review does not violate or eviscerate section 6330(g), and we therefore decline respondent’s invitation to overturn Thornberry. This case is distinguished from Thornberry, and we will grant respondent’s motion to dismiss for lack of jurisdiction on the facts presented here.” 143 T. C. 16, at pp. 14-15.

Takeaway- Judges rarely, rarely, rarely overrule their own decisions.

But thanks to a received comment, I have overruled my previous headline.

 

  1. “rien DE rien” is the correct French for that phrase !!!

    Like

  2. This case is wrongly decided. Under 6330, the function of the Tax Court is to decide between the issues raised in the Request for a Collection Due Process hearing (which is not a petition, by the way), and the RESPONSE to those issues in the Notice of Determination. When the Service issues a Disregard Determination, the Court cannot carry out its Article I function of deciding. Nor can the taxpayer argue in Tax Court, against the response of the Appeals Office to the Request, because the Appeals Office doesn’t provide its response in a Disregard Determination. Thornberry said that a Disregard Determination is not a response to the arguments in a Request, and the Appeals Office must respond to the arguments in a Request. So how does the Disregard Determination in this case comply with Thornberry? It does not comply with it. Thus, this decision violates both Article I and Fifth Amendment Due Process. It is very obviously wrongly decided, and would be reversed on appeal.

    It is always tempting for Tax Court judges to jump in and put the cart before the horse: deciding that the taxpayer’s arguments in the Request have no merit WITHOUT requiring that the Appeals Office do so. That is a mistake: it is the Tax Court violating its Article I and 6330 duty. When the Tax Court violates Article I, it is saying that it does not have jurisdiction. The Tax Court does not have the option, under our Constitution, of voiding jurisdiction. This case is an egregious error, particularly considering that the judge who wrote it, also decided Thornberry.

    Here the Court says that the Request

    …does not challenge the appropriateness of the collection action, offer or request any collection alternatives, challenge the existence or amount of the underlying tax liability, or raise any spousal defenses. Nor does it make any assertions that would implicitly raise a legitimate issue; for example, it does not assert that the collection action would cause petitioner undue hardship or that he did not receive a notice of deficiency or otherwise have an opportunity to challenge the underlying tax liability.”

    However, that is not what the APPEALS OFFICE said. The Appeals Office didn’t say ANYTHING. It did not respond in any way to the arguments in the Request. Thornberry stands for the proposition that the Appeals Office must respond to the arguments in the Request. If the Appeals Office had said in a Notice of Determination, what the Tax Court says above, then the Tax Court could have decided, between the Request and the Notice, that the Appeals Office was right. And that is the Article I function of the Court: to decide between the points of view expressed in the Request and the Notice of Determination.

    In short, in this case the Tax Court did not affirm how the Appeals Office responded to the arguments in the Request because the Tax Court doesn’t KNOW how the Appeals Office responded. Neither does the taxpayer.

    And that’s where the Fifth Amendment Due Process violation of 6330 occurred. That’s why this decision is criticized as wrong. It is certainly wrong. It shows an itchy-fingered judge who pushes due process out of the way to state his own feelings about the Request, without hearing what the Appeals Office had to say about them. That is not justice, that is Star Chamber.

    Thornberry says that the Appeals Office must respond to the arguments in the Request. Period.

    Like

Leave a Reply to jrysk (@jrysk) Cancel reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: