In Uncategorized on 06/14/2019 at 15:52

It’s Friday, and. as usual, the Glasshouse Gang has neither opinion nor designated hitter to send the blogger off to the Magnolia City for a Father’s Day visit. I wish Judge Nega had designated this off-the-bencher, Paul M. Harris & Rosemary Harris, Docket No. 4519-18L, filed 6/14/19.

Paul & Rosemary need an installment agreement, because they have neither paid estimated nor the balance due for the year at issue. Paul & Rosemary claim they didn’t have the cash to pay, but that cuts no ice either with Appeals when they try to get the additions for late payment and failure to pay estimateds scrubbed, nor with Judge Nega when they petition Appeals’ denial of the IA.

“With respect to the year at issue, petitioners dealt with a number of significant personal expenses and inconsistent cash flow. The record in this respect, however, does not support a determination that timely payment of their tax bill stood to impose an undue financial hardship upon petitioners. Further, the record does not suggest that petitioners exercised ordinary business care and prudence in providing for payment of their tax liability. Petitioners did not make estimated tax payments, or otherwise set aside and account for their tax bill for the year at issue. Rather, the record suggests that petitioners made a decision to administer their personal finances in a manner which came at the expense of their taxes for the year at issue. On that record, we conclude that petitioners did not have reasonable cause for their failure to timely pay, and that petitioners are liable for the addition to tax under section 6651(a)(2) for the year at issue.” Order, transcript, at p. 11.

Paul & Rosemary do no better with the estimateds. “As relevant here, to the extent reasonable cause might except a taxpayer from this addition to tax, a taxpayer also must have, either: (1) become disabled, or (2) retired after having attained the age of 62 during that, or the preceding taxable year. As discussed above, the record does not support petitioners’ argument that their failures were grounded in reasonable cause. Further, the record lacks any evidence suggesting that petitioners otherwise meet the age and retirement, or disability requirements to qualify for exception under this section. On that record, we conclude that petitioners are liable for the addition to tax under section 6654 for the year at issue.” Order, transcript, at p. 12.

Finally, Paul & Rosemary balk at paying the $225 fee for the IA.

“Through 31 U.S.C. 9701, Congress authorized the Secretary to prescribe regulations imposing fees for services rendered by the Commissioner, in order to defray the costs incurred by the Government in providing those services. Pursuant to that grant of authority, the Secretary promulgated regulations that impose a user fee on taxpayers that, as relevant here, enter into installment agreements. Secs. 300.0(b)(1) and 300.1(c), User Fee Regs. These fees and the amounts charged therefor are mandatory unless a taxpayer meets certain poverty-based criteria not at issue here. See sec. 300.103)(3), User Fee Regs.; see also sec. 6159(f) (2).” Order, transcript, at p. 14.

Even though the hard-laboring SO at Appeals spent months working with Paul & Rosemary on an IA, Paul & Rosemary refused to pony up, so the SO closed the file.

Apparently Paul & Rosemary were frustrated. That is not unusual in such cases, but it really doesn’t help.

“While petitioners’ frustration is palpable, their argument does little to change our view of the character of the SO’s actions. Regulations require taxpayers to pay a user fee when they enter into an installment agreement. Accordingly, the SO’s actions — inclusion of this fee in the terms of the agreement, and refusal to accept an installment agreement lacking that fee — were actions rooted in applicable law. For that reason, we hold that the SO did not abuse her discretion.” Order, transcript, at p. 15.

So IRS will now levy.

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