Attorney-at-Law

THE MICHAEL CORLEONE GAMBIT

In Uncategorized on 09/19/2018 at 17:38

“Don’t Ask” Variation

Mario Puzo’s classic has given rise to a by-word that has served me well in numerous blogposts. Today Mr Puzo’s literary gift keeps on giving, as we have the “Don’t Ask” variation. All y’all will doubtless remember Michael’s injunction to Kay, which Michael received from his father’s hand: “Don’t ask me about my business.”

Well, today Annette Faye Neitzer, disabled and ill, fighting the $21K IRS levied from her separate checking account to pay the tax debt arising from her husband’s two businesses, which had separate checking accounts and of which Annette knows nothing, wants Section 6015(f) equity, and Judge Paris is sympathetic.

Here’s Annette Faye Neitzer, Petitioner, and Richard J. Arnoldussen Intervenor, 2018 T. C. Memo. 156, filed 9/19/18.

Annette “… has undergone numerous spine and hip surgeries.  She expects her condition to deteriorate over time and expects to require further medical treatment in the future.  Her condition has limited her ability to work.” 2018 T. C. Memo. 156, at p. 3. (Footnote omitted).

While Annette was divorcing Richard (which included the year at issue), “(I)ntervenor owned interests in two businesses, which were the primary sources of his income.  During the pendency of the divorce petitioner maintained her own finances and paid her own expenses.  Her income consisted of payments from Social Security disability, veteran’s disability, long-term disability, and temporary spousal maintenance payments from intervenor.  Petitioner did not have access to the couple’s joint checking account at Johnson Bank (Johnson Bank account) during the pendency of the divorce.  Instead, she maintained her own account at Associated Bank (Associated Bank account) from which she paid her expenses.” 2108 T. C. Memo. 156, at p. 3. (Footnote omitted, but it says Annette’s bank account had proceeds from sale of the marital residence and a PI settlement Annette got).

Annette had to travel two hours to get to Richard’s accountant (who handled all of Richard’s business) to sign the 1040 for the year at issue.

And Richard played the Michael Corleone Gambit, “Don’t Ask” variation.

“Petitioner signed an authorization permitting the accountant to file the [year at issue] return but did not review or ask for additional time to review the … return.  Petitioner did not request or receive a copy of the … return at the time she signed the authorization.  Even if petitioner had requested a copy, it is not certain that she would have been given one because intervenor instructed his business accountant not to disclose to petitioner any information about his businesses or personal finances.” 2018 T. C. Memo. 156, at p. 5-6.

Richard sent IRS a bum check when Annette asked about a letter she got from IRS asking where the tax due payment was. To forestall further meddling, “…intervenor changed the mailing address on file with respondent so that future correspondence would be mailed to his business address.  Intervenor also instructed his office staff to mark ‘return to sender’ on any notices or other correspondence that was addressed to petitioner at his business address.  …respondent issued petitioner Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing.  The letter was addressed to petitioner but mailed to intervenor’s business address.  … the letter was returned to respondent as refused or unclaimed.” 2018 T. C. Memo. 156, at p. 6.

Only after IRS grabbed the $21K from Annette’s separate bank account to pay what Richard hadn’t, did Annette change her address.

Annette satisfied the three thresholds, but flunks the seven streamliners, so it’s facts-and-circumstances for equitable relief.

Richard’s withholding of information scores big, and so does Annette’s undoubted disability.

Annette gets a Section 6015(f) bye, and IRS has to hand her back the $21K, even though IRS claimed it was a windfall. Judge Paris specifically doesn’t find that the money would be a windfall, just that Annette didn’t have an economic hardship, as her divorce settlement from Richard was six figures. But that only figures as “neutral” in the mix-and-match.

If you want your intervenor client to beat a Section 6015(f), maybe the Michael Corleone gambit, “Don’t Ask” variation, isn’t a winner.

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