In Uncategorized on 05/13/2020 at 17:50

Judge Colvin kicks Martin D. Kirkley and Sheila G. Kirkley, 2020 T. C. Memo. 57, filed 5/13/20, back to Appeals. Mart and Sheila owe the Feds around $3 million from their Sub S, and don’t deny it. They want an IA, but only have around $3K per mensem wherewith to pay, and one bank denied their home equity loan.

Mart and Sheila went to Appeals, but the SO said they had to sell their house and some land their Sub S owned before they could get an IA.

No, says Judge Colvin.

“IRM pt. states in pertinent part that the SO should ‘explore the possibility of liquidating or borrowing against * * * assets’ when considering an installment agreement “unless * * * the asset is necessary for the production of income or the health and welfare of the family.’ The property listed to be sold in… the notice of determination includes property used by petitioners’ S corporation and petitioners’ principal residence. The record does not show whether the SO considered whether those properties were ‘asset[s] necessary for the production of income or the health and welfare of the family.’

“IRM pt. states that when a taxpayer has equity in assets ‘the taxpayer will normally be required to make a good faith attempt to utilize equity before the Service [IRS] will approve a’ partial payment installment agreement (i.e., a payment plan where the taxpayer pays less than the total outstanding liability). However, IRM pt. states that when the taxpayer cannot ‘secure a loan or liquidate an asset following a good faith attempt to do so, the * * * [SO] will need to make a seizure/levy determination’. IRM pt. does not require taxpayers to liquidate all of their assets; instead, it requires that the SO make a ‘levy determination’. Making a levy determination is not the same thing as imposing a levy. Budish v. Commissioner, T.C. Memo. 2014-239, at *19, *22, *25. Thus, IRM pt. does not support the SO’s conclusion that petitioners were required to liquidate all their assets before the IRS would accept an installment agreement.” 2020 T. C. Memo. 57, at pp. 10-11. For the Budish case, see my blogpost “Cast in Bronze,” 11/24/14.

And the SO’s notes are so skimpy one can’t tell if or how she did the Section 6330(c)(3)(C) no more intrusive than necessary test.

Remanded. Note to SO – If at all possible, make the deal.

Now for the lien/levy. Mart and Sheila got a NITL and a NFTL. They sent in the Form 12153 timely on the NITL (levy), but 18 (count ‘em, 18) days too late for the NFTL (lien). Judge Colvin wants to know what effect the late lien CDP request has on jurisdiction. And he cites some cases.

Now I’m not giving advice to Mart and Sheila’s trusty attorney, who is doing great. But he might want to consider maybe taking a wee quick peek at my blogpost “Le Quinzième Juillet,” 4/10/20. Equitable tolling of the SOL won’t work for petitions from SNODs or NITLs, because statutory stays are involved, and Anti-Injunction Act considerations arise. But this is a NFTL: there’s no stay of collection. And the issue for the timely Form 12153 is the same for NFTL and NITL: did the SO abuse her discretion?




Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: