In Uncategorized on 04/07/2017 at 19:17

Judge Halpern has a designated hitter for us today, as Tax Court invariably issues no opinions on a Friday.

And he again stresses that, no matter how thinly an issue was raised at a CDP, provided that it was not frivolous, it will receive de novo review, rather than the usual abuse of discretion for everything else.

Kevin Scott Bjornson, Docket No. 3615-16L, filed 4/7/17 gets CNC (Currently Not Collectible) from Appeals for seven (count ‘em, seven) tax years. The NITL IRS wanted got knocked out.

Kevin Scott claimed on his Form 12153 that he was not responsible for some or all of the taxes. But he put in no information at all as to three of the years at the CDP. As for the rest, he put in what the SO called illegible checks for one year, and information relating to employment taxes and not income taxes as to the other years. However, his financial information was enough to put Kevin Scott in CNC status.

So why is Kevin Scott on for trial next month in Seattle?

Kevin Scott says he owes less than IRS claims he owes, whether currently collectible or not.

“Thus, as we understand petitioner, he is not challenging his underlying liabilities for the years in issue by claiming that the amounts reported on his returns overstated his actual liabilities. Instead, petitioner challenges only the extent to which the taxes remain ’unpaid’. Compare sec.6330(c)(2)(A) (allowing a taxpayer to raise at a CDP hearing ‘any relevant issue relating to the unpaid tax or the proposed levy’), with sec. 6330(c)(2)(B) (allowing a taxpayer to challenge ‘the existence or amount of the underlying tax liability for any tax period if the * * * [taxpayer] did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability’). As we wrote in Freije v. Commissioner, 125 T.C. 14, 26 (2005): ‘Since an ‘unpaid tax’ is the sine qua non of the Commissioner’s authority to levy, * * * a claim directed at the status of the tax as “unpaid” is a “relevant issue relating to the unpaid tax or the proposed levy”.” Order, at p. 2.

But whether Kevin Scott owes the exact amount IRS says or not, if he didn’t raise the issue at the CDP, he’s out at Tax Court.

Except he did. IRS concedes Kevin Scott proffered some stuff for some years.

“The SO’s determination that those documents were not credible evidence does not necessarily mean that petitioner did not ‘properly raise’ the issue. Therefore, section 301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs., may not have prevented us from considering the amount of petitioner’s unpaid taxes for [three of the years]. In his response to respondent’s motion, however, petitioner says nothing about any year [except one}. Therefore, petitioner has not identified any genuine dispute as to material fact in regard [four of the years]. We thus treat petitioner as having conceded the amounts of his unpaid taxes for those years.” Order, at p. 3.

So, Kevin Scott has nothing for three years out of seven. And he didn’t object when IRS sought summary J as to three of the rest.

IRS gets summary J on six years. Nothing to try next month on those.

But as to the seventh, it’s another story.

“Petitioner’s response does, however, raise a genuine dispute as to material fact in regard to [the last of the seven]–that is, the amount of the tax he owes for that year that remains unpaid. Again, the SO’s determination that the documentation petitioner submitted to her did not demonstrate uncredited payments does not prevent petitioner from bringing before us any evidence he may have in regard to his unpaid tax….” That issue is the only one remaining for consideration at the scheduled trial.” Order, at p. 3.

It’s an old story…raise every nonfrivolous issue. Raise them at the CDP. Raise them in opposition to the summary J motion.

Or as a much finer writer than I put it, “A lawyer is not to tell what he knows to be a lie: he is not to produce what he knows to be a false deed; but he is not to usurp the province of the jury and of the judge, and determine what shall be the effect of evidence—what shall be the result of legal argument.” James Boswell, A Journal of a Tour to the Hebrides with Dr. Samuel Johnson, LL.D., London, 1785.


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