In Uncategorized on 07/08/2019 at 15:07

Being engaged has its upsides and downsides, as Joseph Thomas Lander & Kimberly W. Lander, Docket No. 25751-15L, filed 7/8/19, find out. This is a 33-page designated hitter from STJ Daniel A (“Yuda”) Guy, which is up for comment by the parties per Rule 183(c), and referral to Ch J Maurice B (“Mighty Mo”) Foley for ultimate disposition. See Rules 182 and 183; these don’t happen very often.

JT was in the slammer, and Kimberly had POA, and the IRS exam unit first bounced Kim’s protest of the 30-day letter, and then got the certified mail numbers wrong on the SNODs (they put JT’s SNOD in the envelope with Kim’s number, and vice versa), but the last known addresses were right.

Except Kim never picked up hers, and JT’s went to the slammer from which he had been moved before the SNOD got there (although he was still there when it was mailed).

After the usual argy-bargy, the Taxpayer Advocate got JT and Kim an audit reconsideration, which didn’t resolve their protests, so the case got sent to Appeals. In the meantime, JT got sprung.

JT & Kim argued they never got the SNODs, but the AO met with them twice, and in the end knocked off $61K of tax (and the interest thereon) and about $30K in penalties. There followed a NFTL for the rest.

JT & Kim filed Letter 12153 to fight over nonreceipt of the SNODs, to claim they couldn’t pay, and Kim wants innocent spousery.

At this CDP, the SO said they’d settled at the audit reconsideration-to-Appeals, so no go, but didn’t address collection alternatives nor innocent spousery. STJ Yuda proposes to buck those issues back to Appeals.

But the key here is engagement: JT & Kim had full opportunity to fight over the capital gain vs unreported income in one of JT’s partnerships.

First, the mixed-up certified mail numbers.

“The Court finds that the information recorded on Form 3877 and confirmed by track and confirm records is correct and accurate and that Tax Examiner M inadvertently switched the certified mail numbers associated with the [Kim] and [JT] notices when he prepared the file copies in question. Although TE M’s error caused confusion, it does not undermine the trustworthiness of the cumulative evidence related to the mailing of the notice of deficiency by certified mail outlined above.” Order, at pp. 25-26 (Name omitted).

For another case of getting certified mailings messed up, see my blogpost “Going Postal, 2/4/13.

Now for engagement.

“The record shows that petitioners were afforded a postassessment conference with the Appeals Office. After the IRS sent petitioners a notice and demand for payment of the tax due…, they requested a reexamination of their tax liability. The audit reconsideration process that followed began with a review of the matter by the Examination Division. When the Examination Division reaffirmed the adjustments to petitioners’ tax liability as determined in the notice of deficiency, they requested and were granted an independent review in the Appeals Office. AO B engaged with petitioners, took a fresh look at the record, conceded certain issues, and abated a significant portion of the tax previously assessed against them. Only then did the IRS file the tax lien that led to the additional collection review proceedings in the Appeals Office and this action.

“Petitioners’ argument that they were not given a full and fair opportunity to challenge their tax liability during the audit reconsideration process is belied by the record.” Order, at p. 30. (Name omitted).

More engagement.

“The record shows that petitioners were fully engaged with AO B, that he reviewed the evidence and arguments that they presented to him, and that in the end petitioners enjoyed a full and fair opportunity to challenge their underlying tax liability before the Appeals Office during the course of the audit reconsideration process. Under the circumstances, the Court is satisfied that the Appeals Office correctly determined, within the context of the collection review process, that petitioners had an opportunity to dispute their tax liability within the meaning of section 6330(c)(2)(B).” Order, at p. 31 (Name and footnote omitted, but the footnote says JT & Kim and pay and sue for a refund).

Be careful about getting engaged.

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