Attorney-at-Law

WAIT ‘TIL MY STOCKS RECOVER

In Uncategorized on 07/06/2016 at 16:03

Here’s a designated hitter from STJ Lewis (“A Name to Conjure With”) Carluzzo, which is a variant on my blogpost “Wait ‘til I Finish My Lawsuit,” 3/26/13.

Hear now the long-term stock market hold played by Thomas Richard Linell, 4818-15L, filed 7/6/16.

Thom was behind in his uncontested tax liabilities, but claims in his CDP that IRS shouldn’t have rejected his proposed IA.

Hard-hearted IRS says “Cash in your IRAs and pay us in full.” Thom says “The stocks in my IRAs tanked and I’d have the 10% Section 72(t) hit if I cashed in, so wait a while and when they come back you can levy, and then I don’t get hit with the 10%.”

No go, says STJ Lewis.

“At the hearing [on the CDP] petitioner candidly admitted that he took advantage of his rights under sections 6320 and 6330 not so much to insist upon a collection alternative to the proposed collection actions, but to avoid having to liquidate his retirement account(s) at a time when the value of the assets in the account(s) was greatly diminished. The administrative hearing that preceded the filing of the petition in this case concluded with the issuance of the notice almost 18 months ago…. As of that date, petitioner anticipated that the value of the stock held in the retirement account(s) would ‘increase significantly in the next month or so.’ About eight months later, in his response to respondent’s motion [for summary J] petitioner projected that the value of the stock in the retirement accounts would ‘recover in the next twelve months’. As it turns out, petitioner’s challenge to respondent’s proposed collection actions is directed not so much to respondent’s rejection of his request for a collection alternative as it is to respondent’s apparent refusal to wait until the assets in his retirement account(s) appreciated to an amount that would allow for the underlying liabilities to be paid without completely extinguishing the balance in the account(s).” Order, at p. 2.

Maybe so, Thom, but that’s your problem. Game over.

STJ Lewis isn’t interested in stock market fluctuations. “Regardless of whether the assets in the retirement account(s) have appreciated as petitioner expected, and regardless of how petitioner’s challenge to respondent’s determination is characterized, we find that petitioner has failed to establish that respondent abused his discretion by (1) rejecting petitioner’s proposed collection alternative, or (2) apparently refusing to wait until the assets in the retirement account(s) appreciated. That being so, respondent’s determination to proceed with collection as shown in the notice will be sustained.” Order, at p. 2.

But maybe Thom and IRS can craft a Motion for Entry of Decision that gives Thom the Section 72(t)(2)(A)(vii) escape hatch.

But I’ll bet IRS will be watching the clock, to make sure Thom doesn’t keep them waiting for his stocks go up.

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