Attorney-at-Law

THERE WERE JUST SEVENTEEN

In Uncategorized on 03/18/2020 at 16:31

I paraphrase Sir Paul, because Sean MacNamee, 2020 T. C. Memo. 37, filed 3/18/20, is contesting just seventeen (count ‘em, seventeen) $1K Section 6694(a) preparer chops, IRS having dropped pre-trial the other nineteen (2 for an out year, and 17 Section 6694(b) $4K willful-or-reckless chops) arising out of Sean’s tax prep, and Sean conceding the income tax he owes.

Sean claims he never got a final administrative determination when he went to Appeals on the 36 (although Appeals did drop 2, leaving 34, of which IRS as aforesaid is only challenging 17). Sean wouldn’t sign a Form 872-D, preparer chop version of the consent to extend the applicable 3SOL. So, as there were only a few days until 3SOL ran out, and the chops are assessables, IRS chopped Sean for the whole 36.

Sean sent in Letter 12153, but at Appeals he was told he couldn’t contest liability, which IRS now concedes was wrong. Sean petitioned that four (count ‘em, four) months late, and so was tossed.

So Sean then got a NITL, went to Appeals, got told he had had a prior chance to contest, so NOD, which he now petitions.

Clear? Thought not. Howbeit, Judge Albert G (“Scholar Al”) Lauber thought it was.

Sean claims he had no chance to contest, and cites a Section 6672 TFRP case.

Judge Lauber: “Petitioner participated in a CDP hearing regarding these penalties. During the hearing he attempted to challenge the penalties, but SO1–erroneously, as respondent now concedes– did not permit him to do so. Petitioner could have challenged SO1’s determination, as well as his underlying liability for the penalties, by filing a timely petition for review in this Court, which he failed to do. Because he failed to take advantage of a prior opportunity to contest the penalties, his underlying liability for the penalties was not properly before SO2 during the second CDP hearing, and he is thus precluded from now advancing that challenge in this Court.” 2020 T. C. Memo. 37, at p. 13.

But what about a “final administrative determination”?

Note that IRS conceded the 17 Section 6694(b) $4K willful-or-reckless chops because, unlike the $1K Section 6694(a) chops, the $4Ks can be assessed at any time; no 3SOL, so Sean should’ve gotten a hearing and a final administrative determination on those.

But as for the $1Ks, the Section 6672 TFRP case is inapplicable, because Section 6672(b)(3) expressly extends the 3SOL until “30 days after the Secretary makes a final administrative determination with respect to such protest.” Section 6694(a) has no such provision.

Takeaway- Petition. When in doubt, petition. When you have any non-frivolous argument (unlike Sean’s claim for $1 million in damages to offset his own income tax liabilities), petition.

Takeaway 2- Sometimes an Appeals goof can help, when it’s too late to remand. If SO1 had given Sean the chance to contest, and he lost, he’d be worse off. Likewise if he’d timely petitioned SO1’s goof and gotten a remand.

 

 

 

 

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