In Uncategorized on 09/12/2018 at 17:52

I have been looking for a definitive answer, if such there be, why Section 6673 chops should or should not be imposed in the case of the multi-year petition, where for the greatest part there was neither SNOD nor NOD. See my blogpost “I’m Beginning to See the Light,” 4/19/18.

Today we have two orders, both of which may yield an answer.

George Gasich, Docket No. 12943-18, filed 9/12/18, petitions “…the taxable years 2000 through 2016….” Order, at p. 1.

IRS responds, moving to toss 2000, and 2006 through 2016. “As to 2001 through 2005, however, the motion represented that research and jurisdictional discovery remained ongoing.” Order, at p. 1.  OK, if that were all I wouldn’t be writing this blogpost, but IRS also moved for a Section 6673 frivolity chop.

Ch J Maurice B (“Mighty Mo”) Foley tells IRS to get back to him with the results of their research and discovery, and on what basis they want to dispose of the missing years. I hope Ch J Mighty Mo will give us reasons why George gets the chop…or not.

And if George’s case is resolved without an answer, perhaps Ch J Mighty Mo can tell us in Paula Jeanne McAdam, Docket No. 12536-18, filed 9/12/18.

I’ve got to insert the whole story here, because the facts will determine the outcome, maybe.

PJ petitions 2000 through 2017. IRS moves to toss, and here’s the rundown.

“(1) no notice of deficiency or notice of determination was issued to petitioner for taxable years 2000 through 2002, and 2009 through 2017, that would permit petitioner to invoke the Court’s jurisdiction; and (2) the petition in this case was not filed timely as to the April 3, 2015, deficiency notice issued to petitioner for taxable years 2003 through 2008, nor was any other notice of determination issued to petitioner for taxable years 2003 through 2008 that would confer jurisdiction upon the Court. As also indicated in respondent’s motion to dismiss: (1) on June 15, 2015, petitioner filed a Tax Court petition commencing the redetermination case at docket No. 15503-15 challenging the notice of deficiency dated April 3, 2015, issued to her for taxable years 2003 through 2008; (2) petitioner was represented by counsel in that case at docket No. 15503-15; (3) on August 25, 2016, the Court entered a stipulated decision in docket No. 15503-15; and (4) that decision at docket No. 15503-15 is final [see I.R.C. secs. 7481(a)(1), 7483. In his motion respondent further requests that the Court impose an I.R.C. section 6673 penalty. Section 6673(a)(1) authorizes the Court to require a taxpayer to pay to the United States a penalty not in excess of $25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the position of the taxpayer in such proceeding is frivolous or groundless.” Order, at p. 1. (Footnote omitted.)

OK, if PJ had a chance to contest the six (count  ‘em, six) years for which she got a SNOD, and settled the whole thing two years ago, that’s final and can’t be disturbed. If that’s the basis for the Section 6673, OK, but what about the rest?

PJ responds to IRS’ motion with a letter, wherein she doesn’t dispute the jurisdictional facts. “However, petitioner does question respondent’s requesting the Court to impose the penalty, asking how the Court can impose a penalty upon petitioner here “without jurisdiction being established” in the present action at docket No. 12536-18.” Order, at p. 2.

Ch J Mighty Mo does toss PJ’s petition, but doesn’t give IRS the Section 6673 chop. But he does warn PJ “…that the Court will consider imposing such a penalty in future cases commenced by petitioner seeking similar relief under similar circumstances.” Order, at p. 2.

One free bite, I guess. But must one have actually litigated or settled a case during the period petitioned to risk the Section 6673 chop? How if one never contested, but IRS liened or levied, with or without a petitioned CDP?

I’d really like to know.

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