In Uncategorized on 06/29/2015 at 17:36

The ongoing love affair between Tax Court and Chenery I and Chenery II (see my blogposts “Chen-Chenery,” 8/21/14, “He Loves Chenery,” 12/17/14, and “Chenery on the Roof,” 2/4/15) hits a snag when STJ Lewis (“Oh What a Name”) Carluzzo confronts Chenery meeting a SNOD.

All the cited blogposts and cases referred to therein involved abuse-of-discretion challenges to NODs after CDPs.

Today, it’s a SNOD (claimed to be invalid) in Jeremy Edwin Porter & Ruth Ann Porter, Docket No. 16966-14, filed 6/29/5.

Jer & Ruth claim the SNOD is invalid, so toss their petition.

One asserted ground for invalidity is that the SNOD they got doesn’t have all the pages that were found in the administrative record. So what, says STJ Lew. It says you owe $X for Year A. A SNOD need not take a prescribed form, or list every reason for assertion thereof. If it has the amount and the tax year, that’s enough.

And a SNOD may be factually erroneous, but that doesn’t invalidate it.

Besides, Chenery applies to abuse-of-discretion.

“While this Court has applied Chenery in reviewing notices of determination concerning collection action in collection proceedings brought under section 6330(d), we have never applied Chenery in the context of a deficiency case. It is well established that deficiency cases are reviewed de novo, and, except in limited circumstances, the Court does not look behind the notice of deficiency. In a deficiency case, the Court’s ‘determination as to a petitioner’s tax liability must be based on the merits of the case and not any previous record developed at the administrative level.’ Consequently, Chenery is inapplicable here.” Order, at p. 3. (Citations omitted).

Jer & Ruth try the Administrative Procedures Act, but STJ Lew blows that one off. “To the contrary, this Court has held that the APA does not modify provisions of the Internal Revenue Code. (‘[T]he APA does not limit or repeal our de novo review procedures.’)….In this respect, the specific procedures that Congress has prescribed for this Court in the Internal Revenue Code may differ from the more general rules embodied in the APA.” Order, at p 4. (Citations omitted).

And the IRM doesn’t help Jer & Ruth, because IRS needn’t follow it, and anyway it gives no rights to taxpayers.

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