In Uncategorized on 06/25/2020 at 20:52

Judge Albert G (“Scholar Al”) Lauber has a reprise of the miscoded CAP-CDP duo, which caused IRS to certify to State Dep’t that Vivian Ruesch, 154 T. C. 13, filed 6/25/20, was a serious tax delinquent. This means State grabbed Vivian’s passport. IRS unscrambled the computer-generated frittata, told State “let her go, let her go, God bless her,” and Vivian is decertified.

Now I’m sure my readers are wondering why this rehash of my blogpost “So Many Taxes, So Little Time,” 1/30/19, is furnishing forth the table in a full dress T. C.

Well, because Jersey Boys. Yes, the famous Hackensack Hardchargers want Judge Lauber to knock out Vivian’s liabilities altogether. But there’s a wee wingéd creature in the cliché.

Judge Lauber says he can’t do it, and anyway it’s moot. Remember, this is pore l’il ole Article I Tax Court.

“Section 7345(e)(1) permits a taxpayer who has been certified as having a seriously delinquent tax debt to petition this Court to determine ‘whether the certification was erroneous or whether the * * * [IRS] has failed to reverse the certification.’ If we find that a certification was erroneous, we ‘may order the Secretary [of the Treasury] to notify the Secretary of State that such certification was erroneous.’ Sec. 7345(e)(2). The statute specifies no other form of relief that we may grant.” 154 T. C. 13, at pp. 9-10.

Well, IRS already told State “fuggedaboutit,” as we say on this island where both Judge Scholar Al and my colleague Peter Reilly, CPA, attended a prestigious preparatory school, where such language was never used. So what else to do?

The Jersey Boys riposte, “plenty.”

First, IRS may go back to its old ways and wrongly recertify. Nope, says Judge Scholar Al.

“Nor is there any reasonable expectation that the alleged violation will recur. Petitioner’s challenge to her liability for the penalties is now pending in the IRS Appeals Office. Under section 7345(b)(2)(B), the IRS is barred from recertifying petitioner as a person with a seriously delinquent tax debt during the pendency of that CDP proceeding. If petitioner in that proceeding is determined to have no liability for the penalties, there is no reason to believe that the IRS would defy the law by recertifying her anyway. And if she is ultimately determined to be liable for the penalties, a certification by the IRS at that point would not be a ‘violation,’ assuming that the other requirements for a ‘seriously delinquent tax debt’ are then met. See sec. 7345(b). If petitioner believed that those other requirements were not met, she would be free to seek review of that future certification in this Court at that time. Any future violation, should it occur, will not escape judicial review.” 154 T. C. 13, at p. 19.

Unlike a Section 6330 levy, there’s no limit to the number of Section 7345 passport reviews. Y’all will recall Judge David Gustafson upending IRS in my blogpost “Crafty – Akin to the Weasel,” 7/24/17, because IRS ducked the CDP Matty Dean Vigon brought for the Section 6702s that lacked Section 6751(b) Boss Hoss sign-offs. IRS withdrew the penalties and claimed mootness, expressly reserving the right to try again. Now Matty Dean was in a Canadian slammer, and filing another CDP four (count ’em, four) years down the road (IRS claiming no SOL on 6702s) didn’t sit well with Judge Gustafson, especially with the one-CDP rule for Section 6330s.

But here there’s no limit.

Vivian can contest liability at her CDP, which will generate a NOD, which Vivian can petition. Or she can pay and sue for a refund.

But the Jersey Boys aren’t finished yet.

“Petitioner asks that we exercise ‘judicial discretion’ to issue a ruling that determines her underlying tax liability now, rather than await the outcome of the CDP litigation. Because we currently lack jurisdiction over her underlying liability challenge, we must demur to this request. There clearly remains a dispute between petitioner and the IRS about the penalties, but that dispute does not give rise to a justiciable controversy in this case. ‘[I]f a case raises a question within the jurisdictional purview of the [T]ax [C]ourt, and that question is subsequently resolved, the case is moot notwithstanding the existence of other live controversies between the taxpayer and the IRS’ that currently lie outside this Court’s jurisdiction.” 154 T. C. 13, at p. 23. (Citation omitted).

Vivian has gotten all Tax Court could give.

Though the Jersey Boys couldn’t get more from Tax Court, they can get more from Taishoff: a Taishoff “good try, third class.”




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