Today William James Basie meets William Shakespeare yet again, as we examine Irvin Hannis Catlett, Jr., 2019 T. C. Memo. 86, filed 7/11/19. Irv is petitioning a NOD from a CDP, but IRS has withdrawn the NFTL and abated all the assessments underlying same, so Judge Albert G (“Scholar Al”) Lauber dismisses Irv’s petition as moot.

Irv ran a tax prep operation, from which he got the assessments and NFTL at no extra charge. He went down in USDCDMD on one count of conspiracy to defraud the US of A (18 USC §371), ten (count ‘em, ten) counts of Section 7206(2) prepping phony tax documents, and one count of Section 7212 obstruction. 4 Cir. affirmed, so Irv at time of petition is our guest, and is expected to remain so until 2026.

Oh, and the District Court ordered $3.8 million in restitution, to be paid $500 per month during Irv’s three years of supervised release, which commences when Irv is sprung.

Well, since Irv doesn’t owe until he starts his supervised release in 2026, IRS can’t assess, lien or levy. But once he rejoins the Free World, IRS will be back.

Irv yells “No! Remember Vigon!” I’m sure all y’all vividly recollect Matthew Dean Vigon, star of my blogpost “Crafty – Akin to the Weasel,” 7/24/17.  Irv’s argument is that releasing the lien and abating the assessments doesn’t determine my liability, and I didn’t get a fair trial.

Judge Scholar Al distinguishes both himself and Matty Dean.

“The Tax Court is an Article I court that is not directly constrained by the case or controversy requirement under Article III of the Constitution.  However, the same principles apply to the exercise of our judicial power.  Accordingly, we will dismiss a case as moot if the parties’ subsequent actions have produced a situation in which neither party retains any ‘legally cognizable interest in the outcome.’

“Generally, a CDP case becomes moot when we can grant the taxpayer no further relief.” 2019 T. C. Memo. 86, at p. 7. (Citations omitted).

But of course Tax Court can redetermine liability where petitioner had no chance to litigate same before. Except Irv did. He lost his trial in USDCDMD, 4 Cir affirmed, and that affirmation is final.

“The instant case differs from Vigon in a critical respect.  The premise of our analysis in Vigon was that the taxpayer had raised a proper challenge to his underlying liability for the penalties, a challenge that we had the authority to adjudicate. Petitioner, by contrast, has not raised a proper challenge to his underlying liability for the restitution, and we have no authority to adjudicate that question. His liability for the restitution was fixed by the District Court’s sentencing order, which is now final, and section 6201(c)(4)(C) bars him from challenging the amount of the restitution he has been ordered to pay.” 2019 T. C. Memo. 86, at pp. 11-12.

Matty Dean was fighting Section 6702 nonassessables. You can’t petition those, since you get no SNOD for those, so no Tax Court trial. Irv got a USDC trial and a 4 Cir appeal.

“In sum, petitioner’s underlying liability for the restitution is not properly before us.  By withdrawing the NFTL filing and abating the assessments as premature, respondent has afforded petitioner all the relief to which he was entitled at the CDP hearing.  Because there is no other relief that we can possibly grant, there is no case or controversy left for us to decide, and we will accordingly dismiss this case as moot.  If respondent elects to reassess the restitution after petitioner is released from prison, current law permits petitioner to challenge that collection effort (on grounds other than nonliability for the restitution) at a future CDP hearing. And if he is dissatisfied with the outcome of that hearing, he may petition this Court for review.” 2019 T. C. Memo. 86, at p. 13.

I make the morning line 8 to 5 that Irv will be back in 2026.

Edited to add, 8/25/21: Hope no one took the bet. See my blogpost “Running Around the Bases,” 8/16/21.