Michael D. Brown, 2019 T. C. Memo. 121, filed 9/16/19, was formerly a high-flying insurance salesman, peddling SDLIAs and engaging in various tax dodges. See my blogpost “Not Ready for Prime Time,” 12/3/13, and “Inventive,” 4/28/16.

Now Mike wants an OIC, because he can’t pay not only the levy on his house, but all the rest of his open years. He offers $400K for the whole shootin’ match, with an $80K Tax Increase Prevention and Reconciliation Act (TIPRA) payment he sends in with his Form 656.\

Well, Mike is still in some partnerships that have open TEFRA FPAA cases, as well as an Abusive Tax Avoidance Transaction (ATAT) investigation.

Judge Kerrigan spends 18 (count ‘em, 18) pages approving COIC’s kicking of Mike’s OIC.

But Mike wants his $80K back.

“Section 7122(c)(1)(A)(i) requires that the submission of any lump-sum OIC be accompanied by a payment of 20% of the offer amount. Any OIC paid in five or fewer payments is considered a lump-sum OIC. Sec. 7122(c)(1)(A)(ii). The legislative history of section 7122(c) refers to the 20% payment as a “partial payment” or “down payment” of the taxpayer’s liability. H.R. Conf. Rept. No. 109-455, at 234 (2006), 2006 U.S.C.C.A.N. 234, 420-421. The 20% payment of the offer amount is treated as a payment of tax rather than a refundable deposit under section 7809(b) or section 301.7122-1(h), Proced. & Admin. Regs. See Notice 2006-68, sec. 1.02, 2006-2 C.B. 105, 105.

“Under section 7122(c)(2)(A) the taxpayer may specify how he or she wants their TIPRA payment applied by making the request in writing when he or she submits the OIC. Notice 2006-68, sec. 1.04, 2006-2 C.B. at 105. If no such specification is made, the IRS will apply the TIPRA payment in the best interest of the Government. Id.” 2019 T. C. Memo. 122, at pp. 18-19.

Mike didn’t specify.

Read the bottom of Form 656: it says that the TIPRA payment is nonrefundable.

Mike then claims Section 7122(f) deemed-acceptance. But IRS met the 24-month cutoff by bouncing Mike’s OIC in less than seven months.

Mike gets shot down.