In Uncategorized on 01/03/2020 at 18:33

No, not the Marvel Comics classics of my youth. Rather, today we have STJ Diana L (“The Taxpayer’s Friend”) Leyden refusing to lift the Section 6330(e)(1) suspension of collection in Percy Squire, Docket No. 13308-19L, filed 1/3/20.

IRS is once again somewhat parsimonious with detail. See my blogpost “The Uncertainty Principle – Redivivus”), 7/15/16, which involved an LLC bearing Percy’s name. IRS argues that Percy’s prior trips to Appeals and The Glasshouse at 400 Second Street, NW, manifest a desire to delay.

“To support this argument, respondent points to the fact that petitioner has filed four petitions, including this case, in the last eight years, all of which have disputed Notices of Determination Concerning Collection Action. Respondent relies on the outcomes of two of petitioner’s prior cases and the fact that petitioner did not make the required estimated tax payments … to support his contention that petitioner is exploiting the collection review procedure to unreasonably delay respondent from collecting taxes from petitioner.” Order, at p. 2.

To lift the suspension, Section 6330(e)(2) requires a showing by IRS that there’s no dispute about liability and IRS has “good cause shown” for the lift.

Percy claims he did dispute liability at the CDP. IRS says Percy didn’t, and also didn’t offer information to justify a collection alternative and wasn’t current with his 1040-ES.

But IRS is cutting corners again, and just as with the LLC in the blogpost above cited, the record shows it.

There’s no declaration supporting IRS’ motion, so STJ Di finds herself teaching a class in procedure.

“Respondent’s motion is supported only by one exhibit, Exhibit A. That exhibit does not support respondent’s assertion that petitioner did not challenge the underlying liability in a CDP hearing. The Court has generally considered a motion to permit levy at the same time as a dispositive motion, such as a motion for summary judgment. A motion for summary judgment is usually filed with a declaration of the settlement officer and includes documents that support the arguments made in the motion for summary judgment, including whether petitioner challenged the underlying liability in a CDP hearing.” Order, at p. 2, footnote 2.

IRS should always seek summary J sustaining the NOD simultaneously with seeking a suspension lift. And remember always: marshal and lay bare your proofs.

“Section 6330 does not include a definition of the term ‘good cause’. The Court has held, however, that respondent may show good cause that a levy should not be suspended where the taxpayer has used the collection review procedure to espouse frivolous and groundless arguments and otherwise needlessly delay collection.” Order, at p. 2. (Citation omitted).

What the record shows is that the taxes at issue were self-reported, and that Percy participated in the CDP hearing at Appeals. What the record also shows is no evidence that Percy filed the CDP primarily to delay collection.

IRS doesn’t tell a believable tale of suspense, but they can try again. With the right proofs.

Note, which I didn’t know before: Percy is an attorney, admitted in Tax Court.




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