In Uncategorized on 04/14/2017 at 21:18

A designated hitter from that Obliging Jurist, Judge David Gustafson, channels Judge Lauber’s earlier rendition of this 1966 Paul Simon classic. See my blogpost “Slow Down, You Move Too Fast,” 9/24/13.

Once again, Appeals are in a red-hot rush during the holidays. Here’s the story of Keith Chambers Brown, Docket No. 4894-16SL, filed 4/14/17.

Keith Chambers’ construction business got hammered and nailed (sorry, guys) by the real estate meltdown commencing 2009, and he owed undisputed tax plus one unfiled year’s return. IRS gave him a NFTL.

He went to Appeals, claiming the NFTL put him out of business, as he could not borrow from banks with an NFTL. He wanted an OIC and a lien lift.

I’m throwing in the dates here, contrary to my usual practice, because they’re especially relevant.

On December 15, Appeals scheduled a hearing for January 13, less than a month later. The AO told Keith Chambers he’d need to have the missing return in her hands by that date. Keith Chambers said he’d need thirty days to generate the return.

The AO said “no return, no OIC, lien sustained.” So the AO generated the NOD sustaining the lien within 14 days after January 13.

Judge Gustafson, his usual genteel self, notes that between December 15 and January 13, “the holidays intervened.” Order, at p. 2.

“Appeals thus handled the case in a month and a half–commencing it on December 15, 2015, and concluding it on January 27, 2016–and its entire communication with the taxpayer apparently consisted of one letter and one telephone conversation.” Order, at p. 2.

Undaunted, Keith Chambers files the missing return on February 25 and sends off his petition the next day, beating the thirty-day clock.

Fast (or maybe not so fast) forward.

“More than a year after the petition was filed, the Commissioner moved for summary judgment on April 13, 2017 (i.e., 60 days before the trial calendar at which this case will be tried, which is the last day permitted by Rule 121(a) for filing a motion for summary judgment).” Order, at p. 2.

That’s perfectly cool, because they did beat the deadline. But the way they beat the deadline does not please Judge Gustafson. And there are State courtiers I have encountered who pull the same…well, let me not characterize, but those types get a similar response.

“Mr. Chambers elected this Court’s ‘small case’ procedures pursuant to 26 U.S.C. section 7463 and Tax Court Rules 170-174. Under those procedures, cases are handled ‘as informally as possible, consistent with orderly procedure.’ Rule174(c). A motion for summary judgment in a small case is not improper but is less common than in regular cases. If a motion for summary judgment is granted in a small case and decision is entered without trial, the taxpayer–who elected informal procedures–may feel that he did not get his day in court. We acknowledge that a motion for summary judgment could be helpful and appropriate in some small cases, but we think this is not such a case, for the reasons we now explain.” Order, at p. 3.

Some Judge ‘splainin’.

“The flaw in Mr. Brown’s CDP hearing on which Appeals based its determination was his failure to file his [missing] return. He was told by letter of December 15, 2015, to produce the overdue return in less than a month; and when he explained that he needed 30 more days, no additional time was given. We cannot say definitively whether this was an unreasonable deadline. If there was good reason for the denial of more time, then presumably we should sustain Appeals’ decision; but the record before us gives no reason that the Appeals officer denied Mr. Brown any additional time. There is no indication of Mr. Brown’s having been unresponsive, nor of prior incidents of delay on his part.” Order, at p. 3.

“‘[S]etting unreasonable deadlines can constitute an abuse of discretion’. In the admittedly anecdotal experience of the undersigned judge, the month-and-a-half duration of this CDP case seems very short (an impression that, if incorrect, the IRS could correct at trial). On the one hand,we must applaud the efficiency of an Appeals officer who processes her business so briskly; but on the other hand, it is possible, under the few facts we have, that this denial was not reasonable. The IRS’s motion for summary judgment that was filed more than a year after Appeals was finished with the case was timely, but its deliberate submission did not vindicate the pace of Appeals’ handling of the case.” Order, at p. 4. (Citaiton omitted).

So let’s see if Keith Chambers was a wiseguy, or the AO was arbitrary and capricious. And the best way to do that is to try the case.

IRS, I suggest you move to remand to Appeals for a lengthy supplemental hearing.



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