Attorney-at-Law

WEIGHED IN THE BALANCE

In Uncategorized on 02/01/2019 at 16:00

Judge David Gustafson is checking the old Danielian scales, and Gerard Jackson & Mary Anne Jackson, Docket No. 3661-18L, filed 2/1/19 come up short.

Gerry is a lawyer who owes beaucoup tax over five (count ‘em, five) years. He tries an IA, but misses his own estimated tax number, so Appeals tosses his IA and sustains IRS’ NFTL.

Gerry claims not exercising discretion is an abuse of discretion (Appeals just applied IRM IRM pt. 5.14.1.4.2(4) 5.14.1.4.2(3) (Sept. 19, 2014)).

That’s a nonstarter. “We have frequently held that it is not an abuse of discretion for Appeals to decline to accept a collection alternative when a taxpayer is not in compliance with current tax obligations. See, e.g., Huntress v. Commissioner, T.C. Memo. 2009161. But the Jacksons complain that, by following this rule, SO G failed even to exercise her discretion and thus abused that discretion. If this were correct, then it would be an inherent abuse of discretion for the IRS to establish any general requirements for collection alternatives. One could always argue that an SO’s decision based on any such rule would constitute an abuse of discretion because the SO simply followed the rule rather than exercising discretion in deciding whether to agree to the proposed collection alternative by reference to other considerations.” Order, at p. 6. (Name omitted).

“The IRS’s principle of declining installment agreements proposed by taxpayers who are not even currently in compliance is not arbitrary, capricious, or without sound basis in fact or law. SO G stood on firm ground when she invoked that principle to decline the installment agreement that the Jacksons proposed.” Order, at p. 6. (Name omitted).

Gerry seems to be claiming that Appeals should review his IA and balance that against the NFTL, and then balance NFTL against “least instrusive.”

Nope, says Judge Gustafson.

“..the Jacksons assume that we first review IRS Appeals’ declining of the installment agreement pursuant to section 6330(c)(2)(A)(iii) (‘offers of collection alternatives’) and then review it again pursuant to section 6330(c)(3)(C) (’balanc[ing]’). But their contention reflects a misunderstanding of the balancing that the statute requires. The statute required IRS Appeals to balance intrusiveness against the need for tax collection not in evaluating the proposed installment agreement but in evaluating the ‘proposed collection action’–i.e., the filing ofthe NFTL. Such balancing discerns whether the lien filing is unnecessarily intrusive, not whether denial of an installment agreement is intrusive.” Order, at p. 7.

But Gerry never argued that the lien was intrusive.

 

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