We all have heard in extenso the political debate about the free speech of corporations, whose personhood the Supremes blessed in 558 U.S. 310 (2010). Believe me, in this non-political blog I’m not crossing that Rubicon, whatever my off-the-blog opinions.

But The Judge with a Heart, STJ Armen, must grapple with the question whether a single-member LLC, disregarded though it may be for income tax purposes, is really a person. And he gets this conundrum in Car Werks LLC., David M. Palmer, Sole Member, Docket No. 12067-15L, 9/11/15.

Dave petitions a NOD, but it’s a NOD directed to his LLC, although IRS may want TFRPs from Dave for FICAs owing from the LLC.

The NOD is directed to the LLC and has the LLC’s TIN on it, but some other stuff as well. The NFTL is also directed to the LLC.

But Dave claims $350K in damages from IRS, who, his counsel claims, is trying to “extort him.”

STJ Armen: “In the instant case the nub of the complaint consistently voiced by counsel who subscribed the petition is that it was David M. Palmer in his individual capacity who was injured by the filing of the lien and that it is David M. Palmer in his individual capacity who is the petitioner seeking redress. But respondent maintains that no lien was ever filed against David M. Palmer in his individual capacity and that no notice of determination has been sent to him in his individual capacity. On the other hand, it is alleged in the petition that the IRS ‘filed a lien against Carwerks and taxpayer’s private property.’ (Emphasis added.).” Order, at pp. 5-6.

But it doesn’t get easier for STJ Armen.

“Complicating the matter further is the fact that the notice of Federal tax lien that was filed with the Secretary of State for the State of Montana in Helena, Montana was filed in the name of ‘Car Werks LLC, David Palmer, Sole MBR’, and reflects a ‘residence’ address on Brooks Street in Missoula, MT. In contrast, the April 16, 2015 Notice Of Determination was issued simply to ‘Car Werks LLC’ at a PO Box in Missoula, MT. As the Court understands the Commissioner’s regulations, a single-member LLC (such as Car Werks LLC) is treated as a corporation under the ‘check-the-box’ regulations for employment tax purposes for wages paid on or after September 14, 2009. See secs. 301.7701- 2(c)(2)(iv), 301.7701-2(e)(5)(ii), Proced. & Admin. Regs. If this is true, then it is not clear why respondent would have identified David M. Palmer in the notice of Federal tax lien when respondent did not do so in the Notice Of Determination and whether the inclusion of Mr. Palmer’s name on the notice of Federal tax lien was improper.” Order, at p. 6. (Footnote omitted).

How to decide whether the party liened on is Dave, the LLC, or both? Or whether Dave is the LLC and the LLC is Dave?

STJ Armen tells both sides to send in every piece of paper they’ve got (except what they’ve already filed) that bears upon the years at issue, to whomsoever the piece of paper was addressed. And the IRS has more homework.

“Further, respondent [IRS] shall state in his response whether (in respondent’s view) naming David M. Palmer on the notice of Federal tax lien and filing the notice of Federal tax lien in the name of ‘Car Werks LLC, David Palmer, Sole MBR’ was consistent with the regulations cited in the preamble to this Order and, regardless, whether such notice of Federal tax lien appropriately named ‘David Palmer, Sole MBR’ if the taxpayer against whom the lien was filed was Car Werks LLC; and if (in respondent’s view) the inclusion of Mr. Palmer’s name on the notice of Federal tax lien was appropriate, why it was so if the assessment giving rise to the lien was made against Car Werks LLC. Finally, respondent shall explain in his response the ‘residence’ address reference in such notice of Federal tax lien.” Order, at pp. 7-8.

Oh yes, here’s a practice tip for Dave’s counsel. “The parties are further advised that if the Court were to conclude that it has jurisdiction to proceed in this case on the merits, then the Court shall sua sponte strike from the petition the last sentence of paragraph 4 of the petition (‘Taxpayer seeks $350,000 in damages from IRS for malicious lien filing.’) as this Court lacks jurisdiction to award monetary damages in a collection action.” Order, at p. 8.