In Uncategorized on 09/27/2018 at 16:03

To take or not to take a proffered remand is a decision that requires careful analysis. I’ve argued before that an offeree may not wish to give Appeals a chance to remedy an abuse of discretion that could derail IRS’ case. Even more is this the case where Tax Court has given Appeals a blueprint how to remedy all their faults in the order to remand.

But the remand might help where the offeree has the blueprint of what evidence to proffer and what arguments to make, from the same source.

Today that Obliging Jurist, Judge David Gustafson, revisits Lauri Denise Johnson & David Michael Roberson, Docket No. 22224-17L, filed 9/27/18.

Back on 9/10/18, Judge Gustafson, finding serious question whether Lauri & David got the SNOD upon which this case is based, asked parties to show cause why he shouldn’t remand for Appeals to review the nonreceipt issue and whether David & Lauri can dispute the underlying liability.

Judge Gustafson held a phoneathon with IRS and Lauri (who spoke both for herself and David).

“The Court observed that, where IRS Appeals has abused its discretion in the CDP process, the Commissioner does not have a right to a remand. But the Court explained for Ms. Johnson’s benefit: that many petitioners benefit from a remand (since, for example, it gives them another opportunity to seeks remedies from Appeals at a supplemental hearing); that the remand does not deprive the taxpayer of ultimate judicial review of Appeals’ supplemental determination; and that if there is no remand and the Court simply decides that Appeals’ determination cannot be sustained, that decision, without more, does not bar the IRS from future collection activity, for which activity section 6330(b)(2) (“One Hearing Per Period”) may preclude judicial review. Ms. Johnson nonetheless stated that petitioners do not want a remand and will be ready to proceed to trial.” Order, at pp. 1-2.

OK, so Judge Gustafson will try receipt or nonreceipt. And then either toss the NOD for abuse (in which event Lauri & David get to try their underlying liability, if any), or sustain it, with no challenge to underlying liability.

“Ms. Johnson seemed to state that the petitioners intend to prove 16 ‘due process’ violations committed by the IRS. We will not prejudge this issue before hearing it. But we advise petitioner that defects behind the IRS’s issuance of an SNOD are usually out of bounds in a de novo consideration of a taxpayer’s liability; rather, the case simply begins with the IRS’s (arguably defective) determination and then effectively cures any such defects by allowing the taxpayer to demonstrate her actual tax liability. A taxpayer could not avoid her actual liability by proving that the IRS did a bad job in its examination of her tax return. On the other hand, it is true that defects committed by Appeals in the CDP process can indeed be reviewed in a CDP case like this one; but if, in a case like this one, the Court makes such a review and determines that Appeals abused its discretion by failing to follow correct procedure in considering a challenge to underlying liability, then the remedies are either (1) a remand to Appeals so that it can engage in a proper hearing (which remedy petitioners decline) or, if there is no remand, then (2) a de novo trial before the Tax Court on the issue of underlying liability. Again, the taxpayer could not avoid her tax liability simply by showing that Appeals did a bad job in the CDP hearing.” Order, at p. 2.

Since the SNOD dealt with medicals, charitables and “miscellaneous” deductions, let Lauri & David gather up their papers and show them to IRS, so they can stipulate them into evidence, rather than do a one-at-a-time introduction.

Takeaway- Be ready to go to trial on all issues if you reject a remand.





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