In Uncategorized on 07/10/2015 at 16:31


No, not the 1929 Billy Rose, Vincent Youmans and Edward Eliscu hit “Great Day,” which begins thus, although Charles M. Haden, Jr. & Shelley W. Haden, et al., Docket No. 18974-12L, filed 7/10/15, might cause them to shout “there’s gonna be a great day.”

IRS hit Chas & Shel with both a NFTL and a NITL.

While the NFTL sticks, because Chas & Shel never made a proposal as regards the equity in their home, which was the sticking point in the CDP regarding the NFTL, and Judge Goeke agrees, there’s something to be said for dropping the NITL.

Lifting the lien would leave IRS hanging for mucho diñero, as they say in Houston, TX, where this off-the-bencher was tried. Chas & Shel never contested liability, or dealt with the equity issue except to talk about it. And the SO was aware that Chas has Parkinson’s Disease.

NFTL stands.

But NITL is another story.

“Petitioners sought compromise of those liabilities but provided no concrete basis on which that compromise would have protected Respondent ‘ s interest in the equity in Petitioners’ home.

“However, we also note that a levy for the full amount of the tax liabilities and additions to tax would have left the Petitioners without any resources at a time when Mr. Haden was very ill.

“We also note that there was confusion as to the last conversation between the settlement officer and Petitioners’ representative regarding the…liabilities…. The settlement officer seemed confused about whether the Petitioners were seeking to obtain a loan on their property or needed more time to put the home for sale.

“The testimony is not consistent upon this, and the settlement officer himself admitted that his statement in the notice of determination was incorrect regarding the basis on which he decided to issue the notice of determination….” Order, at p. 10.

Now I’m sure, astute reader, you will say “Mein! Was ist das? Trial testimony on a CDP abuse-of-discretion review? What happened to the record rule?”

Well, Judge Goeke has some ‘splainin’ to do, and he does it.

“The evidence in this case consists of stipulations, exhibits, and testimony of the Petitioners, Petitioners’ representative at the time of the hearings before the settlement officers, and the settlement officers of the Internal Revenue Service.

“Respondent objected to the additional testimony, asserting that the Court should rely simply upon the administrative record in the case. However, the Court determined that the administrative record was insufficient to fully describe the circumstances of the interaction between Petitioners’ representative and the settlement officers.” Order, at pp. 2-3.

Anyway, at close of play Chas & Shel can keep their house for the moment, albeit with lien in place, as Judge Goeke decides that’s the least intrusive approach, balancing the interests of the US taxpayer (and I’m a big-time fan of the US taxpayer for personal reasons) and Chas & Shel.

Now the second part of today’s installment of Taishoff on Tax Court.

Peggy Moore Knoelke, et al., Docket No. 5422-12, filed 7/10/15, has real problems, which even that Obliging Jurist Judge David Gustafson can’t solve.

Peg’s cases had been closed by stipulated decisions last year. But now CDP notices rain down on Peg and hubby Mike.

Judge Gustafson: “Mrs. Knoelke stated that her husband recently had a stroke and lives in an assisted living facility and that she has power of attorney and guardianship over his affairs. Upon receiving the CDP Notices Mrs. Knoelke stated that she completed the appropriate Form 12153, Request for a Collection Due Process or Equivalent Hearing, and timely mailed them with the appropriate power of attorney forms to the IRS on behalf of her husband.

Mrs. Knoelke says she attempted to contact the IRS regarding the CDP Notices and Forms 12153, but that she was informed by the IRS that they did not receive either Form 12153 requesting a CDP hearing and that they could not speak to her regarding her husband’s tax matters because there was no power of attorney on file. Mrs. Knoelke stated that she has attempted to contact the IRS on several occasions with the same result. Mrs. Knoelke states that the IRS has begun levying payment from Mr. Knoelke’s social security benefits, despite the submission of CDP requests on his behalf. She contacted the Court to seek assistance.” Order, at pp.1-2.

The one thing Peg doesn’t have is a petition.

Judge Gustafson: “We do not have pending before us in this Court any petition for Mr. or Mrs. Knoelke. We therefore lack jurisdiction over any administrative dispute between Mrs. Knoelke (as power of attorney for Mr. Knoelke) and the IRS. Section 6330(e)(1) allows a taxpayer to file a petition in this Court to enjoin a levy action under certain circumstances, but no such petition has been filed by the Knoelkes.” Order, at p. 2

And he orders Peg to make note of this.

Judge Gustafson is such a good guy I’ll even forgive his characterization of Peg as “power of attorney for Mr. Knoelke.” No, she’s a “Representative,” according to Form 2848. The Form 2848 is a Power of Attorney.

So here’s a couple takeaways (hi, Judge Holmes).

Takeaway No 1. – Practitioner, don’t be buffaloed by the record rule. If the record doesn’t have everything it should have, move to permit testimony. But have a good reason why.

Takeaway No. 2 – The petition is the key to the Tax Court door. If you want the Tax Court door to swing open, remember the Orpheus of 106th Street, Edward Kennedy Ellington and Irving Mills in their 1931 classic: “It don’t mean a thing if it ain’t got that swing.”

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