In Uncategorized on 09/18/2015 at 21:10

The Judge With a Heart, STJ Armen, takes up the tune from Sara Bareilles’ and Jack Antonoff’s 2013 digital hit “Brave,” and finds Heather Hope Jupena-Elmer, Docket No. 18172-14SL, filed 9/18/15, did just that, even though the Form 1098 for the home mortgage interest she claims she paid, and which she deducted, only names her ex-husband.

Heather Hope also claims she never got the SNOD. IRS claims they sent it, but shortly afterward Heather Hope filed her 1040, which was currently due, and it showed a different address.

IRS hit Heather Hope with a NITL. Heather Hope came back with Form 12153, asking for CNC because she was broke and was trying to get info concerning the mortgage interest from her exes: her ex-husband and ex-CPA.

The AO claims Heather Hope had prior opportunity to contest, notwithstanding Heather Hope’s protestations. “Even though petitioner’s name did not appear on the Form 1098, in her letter she stated the residence was her ‘joint home’ and she is ‘the second person on the loan, although [her] name does not show.’” Order, at p. 2.

To no avail.

“…petitioner participated in an administrative hearing with respondent’s Appeals Office. Therein, the Appeals officer asked petitioner her address on… the date the notice of deficiency was issued, and petitioner could not recall if she was using a Post Office Box or lived at the same address at which she resided as of the date of the hearing, but petitioner did state that she did not receive the notice of deficiency and that as of the date of the administrative hearing had not lived at the old address ‘for over a year plus’. Petitioner continued to dispute the underlying liability.’ Order, at p. 2.

Would it surprise you that “(T)he Appeals officer determined that the underlying liability was not properly in issue because of the previous notice of deficiency and failure to challenge the liability at that time.”? Order, at p. 2. It shouldn’t.

IRS moves for summary J. Heather Hope objects. IRS has a problem.

“There is nothing in the record establishing petitioner’s last known address as of the date that the notice of deficiency was issued…. Further, there is nothing in the record to contradict petitioner’s assertion that she did not receive the notice of deficiency. Finally in this regard, there is nothing in the record to demonstrate that petitioner may have refused to accept delivery of, or neglected to claim, the notice of deficiency.” Order, at p. 3.

But IRS isn’t through.

“Respondent argues that even if petitioner is entitled to dispute the underlying liability, she failed to do so.” Order, at p. 4.

“To dispute a liability, a taxpayer must properly raise the merits of the liability during the administrative hearing. If the taxpayer raises the underlying liability but does not provide the Appeals officer with any evidence after being given an opportunity to do so, the underlying liability is not ‘properly raised.’ Respondent argues that petitioner did not provide sufficient evidence to properly raise the underlying liability.” Order, at p. 4. (Citations omitted).

But IRS is out.

“Petitioner raised the underlying liability in her Form 12153. Later, petitioner provided the Appeals officer with a copy of a Form 1098…, which form reflected that mortgage interest had in fact been paid on the residence giving rise to the deduction for the year in issue. Concurrently with the Form 1098, petitioner stated that she was a joint owner of the home and she was listed on the loan. Throughout the administrative hearing process, petitioner continued to argue her entitlement to the mortgage interest deduction.” Order, at p. 4.

In summary J, nonmovant gets all the breaks, and Heather Hope has plenty. There are several fact questions: what was Heather Hope’s last known address when IRS mailed the SNOD; and did Heather Hope refuse or neglect to pick up the SNOD.

Takeaway– Say it. Keep saying it.

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