In Uncategorized on 05/26/2020 at 15:54

That’s if you’re dealing with a computational adjustment from a NOD, not a SNOD. Here’s Judge Albert G (”Scholar Al”) Lauber to tell you all about it.

Amanda Iris Gluck Irrevocable Trust, 154 T. C. 11, filed 5/26/20, got a heavy-duty computational adjustment following a FPAA on a partnership wherein it was an indirect partner, hitting it for three years’ worth of tax. IRS sought to collect on the last two of those years. AIGIT petitions four (count ‘em, four) years, because the comp adjustment wiped out AIGIT’s claimed NOL from Year One.

IRS says no collection action for Year One, so that’s off the table. And IRS applied various other credits to Year Two, so no tax due for that year and thus no collection action. Greene-Thapedi and all that, y’know.

AIGIT says they want to fight about the shootdown of the 2012 NOL. If they get that, they owe nothing, so AIGIT proposes no collection alternative.

Judge Lauber: “The SO declined to consider petitioner’s underlying liability challenge, reasoning that it had had a prior opportunity to dispute its [Year Three and Year Four] liabilities…by paying the tax and filing refund claims. Respondent now concedes (correctly) that the SO’s rationale was erroneous. When section 6330(c)(2)(B) refers to a prior ‘opportunity to dispute such tax liability,’ it means an opportunity to dispute the liability in a prepayment posture.” 154 T. C. 11, at p. 12 (Citations omitted)(Emphasis by the Court).

Now we all know that in the SNOD (deficiency) context, comp adjustments are off the table. In the TEFRA days when the facts of this case took place, the fight at partnership level settled liability, so all that’s left is arithmetic, no second bite.

But here there was no first bite.

“The liabilities at issue arose from computational adjustments to petitioner’s [Year Three and Year Four] returns, which the IRS believed necessary to make those returns consistent with the reporting by the partnerships in which petitioner held interests. We generally lack jurisdiction to review computational adjustments in deficiency proceedings. See sec. 6230(a)(1). But our review in CDP cases is not so limited.

“In CDP cases involving assessable penalties (viz., penalties not subject to deficiency procedures), we have jurisdiction to review a taxpayer’s underlying liability for the penalty provided that he raised during the CDP hearing a proper challenge thereto. See Yari v. Commissioner, 143 T.C. 157, 162 (2014) (ruling that section 6330(d)(1) ‘expanded the Court’s review of collection actions * * * where the underlying tax liability consists of penalties not reviewable in a deficiency action’), aff’d, 669 F. App’x 489 (9th Cir. 2016)….” 154 T. C. 11, at p. 13 (Further citations omitted).

For the backstory on Yari, see my blogpost “The $100,000 Misunderstanding,” 9/15/14.

Anyway, the door is open, and IRS’ claim that AIGIT is fighting about the (closed) Year One is misplaced. AIGIT is claiming they should have been allowed a carryforward into Years Three and Four. And Tax Court can always go back to a closed year when a carryforward is on the table.

AIGIT also claims IRS messed up the computations, because the partnership from whence cometh this mess netted out some income and deductions.

The SO considered none thereof. So no summary J for IRS.


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