In Uncategorized on 01/04/2017 at 00:52

I’ve often blogged the famous Chenery rule. The administrative record controls; what the agency did, not what the agency might have done, controls.

And Judge Holmes loves Chenery.

But in Richard Conant Giller, Docket No. 16755-14L, filed 1/3/17,  he delves more deeply into the record rule.

IRS wants summary J. But there’s a problem here. There’s a dispute whether a return was filed for the year at issue.

“For his part, respondent did not explain in the notice of determination either that Mr. Giller made this argument or why he was rejecting it. The Chenery rule– that a reviewing court reviews an agency’s action only on the ground the agency itself offers…would ordinarily require that we not uphold the notice of determination for this reason alone. The administrative record, however, makes the Commissioner’s reasoning clear — the settlement officer who conducted the hearing checked IRS records and learned that according to them there was no evidence that Mr. Giller had ever filed a…tax return. If a reviewing court can discern the agency’s reasoning even if it is not completely clear in the agency’s decision, that is good enough to allow that reasoning to be the basis for review.” Order, at p. 1 (Citations omitted).

So IRS claims there’s no evidence RCG filed a return for the year at issue. But RCG claims he did, and proffers evidence never produced at his CDP.

“This proof doesn’t include an actual copy of that return but features instead only a certified-mail receipt that shows he mailed something to the IRS at the time the return was due (although, as he admits, to the wrong IRS address); and a copy of a ‘certificate of electronic filing’ from Intuit tax-preparation software (although without any proof of acceptance of the return by the IRS which, as the Intuit form states, would be proof that the IRS had accepted the return).” Order, at pp. 1-2.

If this case was tried de novo, no summary J.

But it isn’t. This is abuse of discretion. IRS didn’t have this evidence before it when Appeals issued the NOD. Contrary to RCG’s argument, the record was closed.

Anyway, “In the notes from the CDP hearing, the settlement officer noted her disbelief in Mr. Giller’s story — why would someone both e-file and mail something too? And why was there no indication in the IRS’s records of any challenge by Mr. Giller to the substitute for return that the IRS prepared under IRC § 6020(b).” Order, at p. 2.

Takeaway– Put in everything you’ve got at the very beginning.


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