In Uncategorized on 05/25/2016 at 16:26

Rickey L. Drilling, 2016 T. C. Memo. 103, filed 5/25/16, has lots of troubles. Beside child support, criminal restitution to his ex-wife, and unapplied withholding that reduces his tax liability to what he said on his 1040-EZ for the year at issue, his OIC gets bounced because his RCP is enough to pay off his debt whatever time period (24 months, 60 months or 120 months) is used.

IRS wants to toss Rickey for various reasons, but I want to talk about IRS’s admission that Rickey doesn’t owe tax for the year at issue (and there’s no disagreement about what he owes for other years), so there will be no collection action taken, and therefore the much-cited Greene-Thapedi rule ousts Tax Court of jurisdiction.

No it doesn’t, says Judge Morrison, IRS hasn’t withdrawn the NFTL it filed. “Where, as here, the taxpayer seeks to withdraw a filed lien notice, and the notice has not been withdrawn nor the lien released, the case is not moot merely because the taxpayer has paid the related liability.  A lien-notice filing can cause injury to a taxpayer even after the underlying liability has been paid.  See William T. Plumb, Jr., ‘The Creation, Removal, and Impact of Tax Liens’, 20 Prac. Law. 75, 84-85 (1974)(‘Consummation of a transaction in which a taxpayer might desire to engage may be seriously impeded if notice of a general tax lien is on file in the appropriate public office, even if the taxpayer has actually paid the delinquency secured by the lien.’).” 2016 T. C. Memo. 103, at pp. 51-52.

The two cases IRS relies on didn’t involve withdrawing a NFTL. Greene-Thapedi wanted to argue underlying liability, but in a collection case that doesn’t work when there’s no collection, and the petitioner in the other case didn’t talk about withdrawal of the NFTL.

So although Rickey loses on his OIC, and loses on his claim that IRS misapplied his payments and miscalculated his tax, his case is not moot.

I can recommend Judge Morrison’s opinion, with its exhaustive (not to say exhausting) extracts from Appeals’ notes, to any sufferer from insomnia. Long before reaching page 71, you will nod out.

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