STJ Daniel A (“Yuda’) Guy has the message for IRS as hereinabove at the head hereof set forth (as my already-on-their-second-dirty-Grey-Goose-Martini colleagues would say), delivered via designated hitter,  Albert Carnesale & Robin Carnesale, Docket No. 25757-18S, filed 9/30/19.

It’s Al’s & Robin’s trusty accountant who sends in the check that kicks off the match. Al & Robin agree on the tax due, but want to contest the chops. Trusty accountant sends in check in reply to CP2000, stating “’[Petitioners] received the IRS notice CP2000 * * *. We agree with the changes of the tax liabilities. However, we would like to request that [the IRS] waive the penalty being assessed. * * * Payment for [the tax due] is enclosed with this letter in order to remedy the situation expeditiously.’” Order, at p. 1.

Well, that’s not how you do it per Rev. Proc. 2005-18, 2005-1 C.B. 798. Trusty accountant didn’t provide the 7.02 statement, showing what tax, what year, how calculated, and basis for belief trusty accountant is right.

So IRS wants to toss Al & Robin, as payment was a payment and not a deposit, hence no valid deficiency.

Howbeit, “…IRS recorded petitioners’ remittance as ‘Advance payment of tax owed’. No assessments were entered, however, for the tax, penalty, or interest proposed in the Notice CP2000, which left a credit balance in petitioners’ account. Contrary to the procedures established in Rev. Proc. 2005-18, supra, upon which respondent relies, petitioners’ remittance was not offset by a corresponding assessment of additional tax to which the ‘payment’ relates. See sec. 6213(b)(4).

“On this record, the Court concludes that respondent treated petitioners’ remittance as a deposit, not as a payment, and respondent did not assess additional tax equal to the amount of the remittance before issuing the notice of deficiency.” Order, at p. 2 (Citations omitted).

IRS and trusty accountant could have saved time by reading my blogposts “Which Is It?” 8/27/15, and “Went to Make a Deposit,” 10/5/16.