In Uncategorized on 09/10/2019 at 20:27

Eric W. Johnson, the attorney who furnishes “honest representation at reasonable rates,” as starring in my blogpost thus entitled, is furnishing the same to Jason Stewart and Kristy Stewart, 2019 T. C. Memo. 116, filed 9/10/19.

But he did get testy with a RO, who dropped in on him to discuss an initial collection investigation after Jason and Kristy dropped a Letter 12153 for a CDP for a NFTL, claiming they were unable to pay and asking for an IA. Turns out Jason and Kristy self-reported more than a million in income over a couple years (hi, Judge Holmes), but paid nothing.

The RO’s notes of the meeting showed the meeting was something less than jolly.

“RO W’s notes state that Mr. Johnson was ‘uncooperative’ and ‘unwilling to provide financial information’ on petitioners’ behalf. RO W.’s notes also state that Mr. Johnson concluded the visit by informing him ‘we’re done’ and that Mr. Johnson directed RO W. out of his office.

“Also…RO W. sent Mr. Johnson a followup letter containing statements consistent with R. Wagner’s ICS history notes of the meeting from earlier that day. This letter stated: ‘You refused to provide any collection information and stated it would be provided directly to the office appeals. You then brusquely directed me to leave your office.’” 2019 T. C. Memo. 116, at p. 3. (Name omitted).

IRS followed up with a NITL, and Jason and Kristy asked for a CDP for that. The ICS was conducted by SO W., with whom Mr. Johnson got on a lot better.

“SO W. requested from Mr. Johnson the financial information from petitioners needed for IRS Collections to investigate and verify that financial information before CNC status could be granted. Mr. Johnson provided the requested financial information, a Collection Information Statement (CIS), to SO W. Mr. Johnson requested that petitioners be placed in CNC status for six months, as they were pursuing potential litigation, had fluctuating income, and could not currently pay their back taxes.” 2019 T. C. Memo. 116, at p. 4.

The CIS went from SO W to RO W, the latter reviewed same, and recommended monthly payments and no CNC. RO W.’s notes went into the administrative file.

“SO W. relied on the information and documents in respondent’s administrative file regarding petitioners to make his determinations. The ICS history, containing RO W’s comments regarding his visit with Mr. Johnson…, was a part of this administrative file.” 2019 T. C. Memo. 116, at p. 5. (Names omitted).

NOD issues, confirming collection actions.

Mr Johnson claims improper ex parte communication between RO W and SO W. “Petitioners contend that the ICS history transmitted to SO W. as part of the administrative file was an ex parte communication. They contend that they were not aware that RO W’s ‘gratuitous characterization’ of petitioner’s counsel was part of the administrative record. Petitioners request that their case be remanded to the Appeals Office and assigned to a different settlement officer who has not been exposed to the alleged ex parte communication. Respondent contends that the alleged ex parte communication was a permissible transmittal of petitioners’ administrative file between the revenue officer and the settlement officer during the CDP process.” 2019 T. C. Memo. 2019 T. C. Memo. 116, at p. 8.

Judge Kerrigan has this one.

“Generally, the administrative file transmitted to the Appeals Office by the revenue officer is not considered to be an ex parte communication. See id. sec. 2.03(4), 2012-10 I.R.B. at 459. Rev. Proc. 2012-18, sec. 2.03(4)(d), 2012-10 I.R.B. at 460, further states:

“The originating function, however, shall refrain from placing in the administrative file any notes, memoranda, or other documents that normally would not be included in the administrative file in the ordinary course of developing the case if the reason for including this material in the administrative file is to attempt to influence Appeals’ decision-making process. For example, the originating function should not include gratuitous comments in the case history, a memo to the file, or a transmittal document * * * if the substance of the comments would be prohibited if they were communicated to Appeals separate and apart from the administrative file. In contrast, it is permissible to contemporaneously include statements or documents that are pertinent to the originating function’s consideration of the case in the administrative file even if the substance of those comments, statements, or documents would be prohibited if they were communicated to Appeals separate and apart from the administrative file.” 2019 T. C. Memo. 116, at p. 9.

They key is whether the inter-agency communication was made to the substance of the case or an attempt to influence the outcome.

“Petitioners’ administrative file, which included RO W’s notes, was transmitted and reviewed by SO W. However, RO W’s notes did not address the substance of the issues or suggest any positions to be taken in petitioners’ CDP proceedings.” 2019 T. C. Memo. 116, at p. 10.

“Ex parte communications are allowed when the communications involve matters that are ministerial, administrative, or procedural and do not address the substance of the issues or positions taken in the case. See Rev. Proc. 2012-18, sec. 2.02(6), 2012-10 I.R.B. at 458. RO W’s notes in petitioners’ administrative file were procedural. While RO W did make comments regarding Mr. Johnson’s generally ‘uncooperative’ nature, these comments were made contemporaneously as a part of his job function as a revenue officer. See id. sec. 2.03(4)(d), 2012-10 I.R.B. at 460.” 2019 T. C. Memo. 116, at pp. 10-11.

No remand, NOD sustained.

C’mon, Judge, RO W’s remarks had nothing to do with his “job function as a revenue officer.” He was steamed at Mr. Johnson, whether justifiably or not I certainly cannot say, as I wasn’t there when Mr. Johnson showed RO W the door. But it’s clear that RO W and SO W are on the same team (Appeals’ statutory independence notwithstanding), and it’s as old as baseball that the pitcher who throws at a teammate starts a bench-clearing that every member of the team must join. And they don’t quickly forgive or forget.



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