In Uncategorized on 08/24/2017 at 15:05

If you’re of a certain age, that phrase conjures memories of a line never actually spoken in the 1948 classic movie Treasure of the Sierra Madre. But Ch J. L. Paige (“Iron Fist”) Marvel confirms IRS’ SNOD, even though IRS never gave an SFR to Kevin J. McDuffie & Anne Marie McDuffie, Docket No. 7851-17, filed 8/24/17.

This is a mutual tosser. IRS wants Kev tossed because the petition was 65 days late. Kev wants the case tossed because the SNOD, he says, was invalid.

Undisputed that Kev & Anne Marie never filed for the year at issue. Also undisputed that IRS never gave either one of them a SFR before giving them a SNOD. All they got was the Form 4549 audit changes and the Form 886-A, ‘splainin’.

Kev says the SNOD is based on MFS, and that’s wrong. Also with no SFR, so no valid SNOD.

Wrong, says Ch J Iron Fist.

“Contrary to petitioners’ argument, the Court concludes that the…deficiency notice issued to Mr. and Mrs. McDuffie…is valid. No income tax return need be filed in order for the Commissioner to issue a valid notice of deficiency. Roat v. Commissioner, 847 F.2d 1379 1381 (9th Cir. 1988). Moreover, where a joint notice of deficiency is issued by the Commissioner and it is later decided no valid joint return was filed, this Court still retains jurisdiction to determine the individual tax liability of each spouse. Stanley v. Commissioner, 81 T.C. 634, 639 (1983).

“Where a taxpayer fails to file a return, I.R.C. section 6020(b) allows the Secretary (or the District Director or other authorized internal revenue officer or employee), sec. 301.6020-1(b)(1), Proced. & Admin. Regs.), to prepare a substitute for return ‘from his own knowledge and from such information as he can obtain from testimony or otherwise.’ Section 6020(b), however, is permissive and not mandatory. United States v. Stafford, 983 F.2d 25, 27 (5th Cir. 1993); Roat v. Commissioner, 847 F.2d at 1381. It is thus firmly established that section 6211(a) does not require the Commissioner to prepare a substitute for return before determining a deficiency and issuing a notice. Geiselman v. United States, 961 F.2d 1, 5 (1st Cir. 1992); Schiffv. United States, 919 F.2d 830, 832 (2d Cir. 1980); see also Roat v. Commissioner, 847 F.2d 1381-1382 (even when a substitute for return is prepared for a taxpayer, the Commissioner need not use that ‘return’ in determining the taxpayer’s deficiency under section 6211(a)).” Order, at p. 7.

And it’s the fact of the determination of a deficiency, not whether the deficiency actually exists, that gives Tax Court jurisdiction.

So Kev & Anne Marie could try their case. Except they filed too late and admitted they filed too late (Order, at p. 2, footnote 2), so they’re out.

But they can pay and sue in USDC or USCFC. Or try working it out with IRS out of court.


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