In Uncategorized on 06/18/2020 at 14:44

With all due deference to this sentiment, from an even more exalted authority and family law expert than STJ Panuthos, taxes are just as strong as love and death.

To explain, STJ Panuthos gives IRS partial summary J over the grieving widow (but innocent spouse) Sarah S. O’Nan, Docket No. 5115-17, filed 6/18/20. Turns out IRS assessed two (count ‘em, two) years’ worth of taxes, served a CP14 notice and demand for the elder of the years, whereupon Sarah’s spouse quitted this vale of tears eight (count ‘em, eight) days later. The following Spring IRS hit Sarah and late spouse with a NFTL, whereupon Sarah sold the marital domicile, forked over $123K to IRS in full satisfaction of both years’ liabilities, filed innocent spousery, got it, and sued for a refund timely.

Sarah’s attorney’s argument was that the lien was improper. Now that’s a problem with these orders; not being able to see all the papers, it leaves the blogger with “a bald and unconvincing narrative,” as a much greater writer than I put it. One wants to second-guess, and ask “Why not the Rodgers v US gambit? See my blogpost “Whose Money Is It Anyway?” 1/11/12.”

But that’s unfair; I have no way of knowing what tactical considerations counsel faced. And the spouse in my blogpost sought innocent spousery pre-levy, while here Sarah sought same post-lien. And STJ Panuthos’ order makes it clear that liens and levies aren’t the same. So I’ll drop Monday-morning quarterbacking.

“Petitioner asserts the tax lien in issue was untimely, as it could not arise until 10 days after assessment or, in the alternative, the due date of the Notice CP14. To support this assertion, petitioner asks the Court to compare the language of section 6321 with that of section 6331(a). She notes that the two statutes are similar in that they both require (1) a demand and (2) neglect or refusal to pay following such demand. Although the 10 day limitation found in section 6331(a) is absent from the language of section 6321, petitioner argues that a Federal tax lien should not arise until the end of 10 days because the statutes are otherwise similar.” Order, at p. 3.

Except Section 6322 says the lien arises at moment of assessment. “Accordingly, when respondent made the assessment of the [elder year’s] liability…, a section 6321 lien arose immediately and attached to all of Mr. O’Nan’s property and rights to property. Secs. 6321, 6322. Thus, the Federal tax lien was valid and arose prior to Mr. O’Nan’s death.” Order, at p. 3. (Footnote omitted).

There’s an argument about OH law, where a surviving spouse takes full title. OK, says STJ Panuthos, Sarah indubitably has title, but subject to the US tax lien. And for any OH lawyers who might chance to read this, there’s a USDC case interpreting OH law squarely on point, and IRS won that one too.

But I’m still wondering about the tactics here. I hope anyone with better insight would put me wise.




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