In Uncategorized on 11/18/2014 at 15:47

In the CDP universe, between the Heaven of “abuse-of-discretion, lien (or levy) rejected” and the Hell of “lien (or levy) sustained”, lies the limbo of “currently not collectible”, a state of suspense, where taxpayers await the Day of Judgment.

You’ll remember Gregory Scott Savoy, who strove mightily against this indeterminate status. No? Then see my blogpost “Sorry, Sorry”, 9/20/13.

Well, Greg has company, and it’s really a company, Alabama Biodiesel Corporation Inc., Docket No. 22426-13L, filed 11/18/14, a designated hitter from one whose name is definitely his fame, STJ Lewis (“The Right Spelling”) Carluzzo.

IRS claims Alabama owes some excise taxes, but didn’t pay. IRS gave Alabama a NITL, but later sent Alabama a notice that the levy was no longer appropriate because they’re putting Alabama in currently-not-collectible status.

Of course, Alabama petitioned before IRS’s change of heart, claiming they had no opportunity to contest the underlying liability.

Oh yes you did, says IRS, but as we’re not now coming after y’all for the tax you owe, your petition should be dismissed as moot. And IRS so moves.

Oh no, says STJ Lew.

“In general, in a section 6330 proceeding a taxpayer may challenge the existence or the amount of an excise tax if the taxpayer ‘did not otherwise have an opportunity to dispute such tax liability’. Sec. 6330(c)(2)(B). According to the notice, the ‘underlying liability could not be considered in the CDP proceeding as the record shows * * * [that petitioner] had a prior opportunity to deal with Appeals on that issue.….’ According to the petition, petitioner ‘is not liable for the excise taxes at issue’, and contrary to the representations made in the notice, it did not have a prior opportunity to dispute that liability. Respondent’s motion, as supplemented, proceeds as though petitioner is not entitled to challenge the existence or the amount of the underlying liability in this case, a point obviously in dispute.” Order, at p.1.

Well, because there’s clearly a fact dispute (did Alabama get a chance to contest at Appeals), IRS’s motion fails.

Alabama may now be in uncollectible Limbo, but their tax fight is still alive.

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