Apparently the USDCDAZ thought IRS could not vary Congress’ SOL for the Section 6707A chop, but IRS is taking an appeal. But this came up after Appeals bounced Laidlaw’s Harley Davidson Sales, Inc., Docket No. 14616-14L, filed 10/16/15.

So we have a designated hitter off the bat of that Obliging Jurist, Judge David Gustafson.

Apparently the biker fell foul of the Sterling Benefit Plan, a dodge more particularly bounded and described in my blogpost “Splitsville,” 7/14/15.

IRS hit biker with the chop at audit, and biker went to Appeals. Remember, the Section 6707A is non-assessable, so no SNOD necessary.

Biker claims SOL bars all but $10K of the $95K IRS wants. Biker also contests the liability.

Biker is out on liability. He had his chance at Appeals, put in evidence and participated.

Judge Gustafson: “It is true that petitioner’s first appearance before IRS Appeals was in a context that did not afford judicial review. However, with or without an opportunity for judicial review, ‘[a] conference with the Appeals Office provides a taxpayer a meaningful opportunity to dispute an underlying tax liability.’ Lewis v. Commissioner, 128 T.C. 48, 61 (2007). If petitioner contends that this regime violates the Constitution, then that contention fails: ‘It has long been established, moreover, that there is no constitutional requirement for a prepayment forum to adjudicate a dispute over the collection of a tax.’ Laing v. United States,423 U.S. 161, 210 (1976), citing Phillips v. Commissioner, 283 U.S. 589, 595-596 (1931). Petitioner is not foreclosed from hereafter litigating its liability in a refund claim context, either in Federal district court or in the Court of Federal Claims.” Order, at p. 4.

The magic words are, of course, “prepayment forum.” Pay first, sue later is the rule.

But in May v United States, CV-14-00910-PHX-NVW (D. Ariz., Jun 15, 2015), Judge Wake waved off the chop, claiming no extension of the SOL.

So Judge Gustafson sends biker back to Appeals, so that Appeals can consider the impact of the May decision. And also biker’s argument that Section 6707A(d)(2), which bars judicial review of IRS’ decision to rescind the penalty (or not), is unconstitutional.

Judge Gustafson: “Even if Appeals has discretion to rescind penalty or not rescind, it would seem that Appeals does not have discretion simply to ignore the rescinding request and to fail to rule on it. And even if we are barred from reviewing Appeals’ determination as to rescinding penalty (and even if that bar is constitutional), it would seem that in a CDP case we can review a wholesale failure to make any determination whatsoever as to rescinding penalty.” Order, at p. 5.

So IRS wins; biker had his chance to contest liability, and gets no second prepayment bite. But he goes back to Appeals on SOL and judicial review.