In Uncategorized on 08/07/2019 at 16:27

Unlike the Light Brigade, Appeals has to reason why IRS terminated an IA. So says Judge James S (“Big Jim”) Halpern, in Don R. Means, Docket No. 2018-17L, filed 8/7/19.

Don fell foul of some tax shelters and got heavy-duty deficiencies. Don, being retired, entered into an IA, but two years later IRS terminated same, and gave Don a NITL at no extra charge. Don sent in a Letter 12153, and asked Appeals why they dumped his IA.

Articulation didn’t come easy to IRS, but finally they came up with the following, after Appeals issued a NOD sustaining the NITL.

“In the Attachment to the Notice of Determination issued to petitioner, Respondent states that he did not know why the installment agreement was terminated. SO R’s notes from the hearing states the same. Yet, notes taken by another one of respondent’s agents…appear to indicate the termination may have been attributable to petitioner’s ex-wife. Respondent’s Answer to Mr. Means amended petition responds to his contention that he received no explanation of the termination by alleging that SO R informed him that it may have been due to a failure of Mr. Means, his ex-wife, or both, to provide the IRS updated financial information.” Order, at p. 3, footnote 1 (Name omitted).

Well, that’s a wee bit thin for Judge Big Jim. Section 6159 requires a notice of termination, with a 30-day lead time, stating the reason. The hodgepodge that SO R found satisfied Section 6159 didn’t satisfy Section 6331(k)(2)(C), which bars collection activity while an IA is in effect.

“Because there is no mention in the Notice of Determination of SO R’s verification of section 6159(b)(5)’s requirements being met nor any conclusive indication in the record that respondent provided such notice to petitioner, we hold that SO R failed to properly verify that ‘the requirements of any applicable law or administrative procedure’ were met as required by section 6330(c)(1). Furthermore, in the absence of such verification, we cannot agree with respondent that SO R’s determination comports with section 6330(c)(3). We therefore conclude that SO R’s determination sustaining the proposed levy was an abuse of discretion.” Order, at p. 3.

But Don isn’t home free, because SO R’s team gets a mulligan.

“For the reasons elaborated upon above, we remand this case to Appeals for a supplemental hearing to investigate whether the requirements of section 6159(b)(5) were met. On remand, if it is determined that respondent did not provide proper notice to petitioner regarding his intent to terminate the installment agreement, petitioner should either be given an opportunity to continue making payments under it to satisfy his unpaid liability for the years in issue or otherwise be provided proper notice of the intended termination, with the right to appeal, pursuant to sections 6159(b)(5) and (e) and the regulations promulgated thereunder.” Order, at pp. 3-4.

A very wise former law partner, now regrettably deceased, used to say that the trouble with winning your case short of dismissal with prejudice is that you educate your adversary.

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