In Uncategorized on 01/17/2020 at 15:36

Judge Mark V Holmes discusses how an OIC transitions from Appeals to COIC and back again in Franklin H. Orienter & Sharon E. Orienter, Docket No. 20004-13L, filed 1/17/20.

Frank & Sharon had health problems, big medical bills, and $300K in unpaid taxes owed for four (count ‘em, four) years, but IRS only gave them a NITL for one of those years. Frank & Sharon wanted to settle all four years, and gave Appeals an OIC for all of them. That’s when the trouble started.

“When a taxpayer has filed a request for a CDP hearing, the COIC rejection automatically gets sent to the Appeals Office. And that’s just what happened here. The COIC rejection letter sent to the Orienters noted that ‘[a] final determination on the offer will be issued by [the Appeals Office] in conjunction with the CDP case.’” Order, at p. 3.

The RCP was way over the OIC that Frank & Sharon put in.

Tax Court can consider abuse-of-discretion for one year for which there’s proper petition if it’s part of a multi-year OIC for years not petitioned. What Tax Court can’t do is stop collection for the out years.

Section 6330 says Appeals must consider law and administrative procedure. Everyone agrees the IRM is “administrative procedure.” But Appeals says they followed procedure, and Frank & Sharon say they didn’t. So we have what Judge Holmes characteristically describers as “the intersection, or perhaps one might say at the point of collision, of a couple lines of authority.” Order, at p. 3. Vintage Holmes, as another partitive genitive bites the dust.

The “couple” lines? IRM creates no rights for the taxpayer, and Judge Holmes has a bushelbasketful of cases that say so. But agency rules that constrain others also bind the agency, say another bushelbasketful of cases. Since Frank & Sharon are New Yorkers, 2 Cir wants agencies to follow even those procedures not yet published in Fed Register. I know, Tax Court has to Golsen these cases to DC Cir, since they’re prior to the 2015 effective date of the amendment to Section 7482(b)(1)(G).

But Judge Holmes is a master at ducking.

IRM (Jul. 18, 2013) sets forth the steps to take when Appeals gets back an OIC that COIC bounced. And the AO did that. He reviews the entire file, recalculates the RCP using the assets and values identified by COIC, and determines if the special circumstances described in the file warranted acceptance of the [original] offer.

Frank’s & Sharon’s attorney wants to testify about discussions with the AO, but that’s not a fact question, that’s an abuse of discretion question.

“The Orienters have not raised a factual dispute that the Appeals officer excluded material evidence of his consideration of their request from the administrative record. There is reasonable disagreement about the merits of his decision, but that’s not enough to conclude that he abused his discretion.

“This also means that we need not plumb the difficult questions raised by the Commissioner in opposing the Orienters’ motion for waiver of conflict of interest to allow their attorney to testify — we’ll deny that motion because the testimony wouldn’t make a difference to an issue material to the case.” Order, at p. 10.

I really want to see something more than the blanket assertion that a petitioner’s attorney can’t testify. That isn’t what the ABA Model Rules say, and I’ve blogged that often enough. But Judge Holmes isn’t going there.

Frank & Sharon wanted a face-to-face, but they live in Monroe County, Appeals has no money for roadies, and Frank & Sharon can’t travel to Nassau County where the local Appeals crew hangs out. No right to a face-to-face anyway.




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