In Uncategorized on 07/01/2020 at 19:56

IRS has them, when they try to fraud-chop John Thomas Minemeyer, 2020 T. C. Memo. 99, filed 7/1/20. John Thomas is no angel; he went down for Section 7201 tax evasion for two (count ’em, two) different years in USDCDCO. IRS was looking for $100K in 75% chops for both years.

Judge Kerrigan tells the story of one of those years.

“… a revenue agent visited petitioner in prison and provided him a Form 4549, Income Tax Examination Changes, for [years at issue]. No letter from respondent was attached to the report. Petitioner signed the Form 4549 agreeing to deficiencies and penalties but later requested that the agreement be withdrawn.” 2020 T. C. Memo. 99, at p. 3.

” Upon petitioner’s request, respondent withdrew and disregarded the Form 4549 that petitioner signed…. a Letter 950, commonly referred to as a 30-day letter, was sent to petitioner. L, the immediate supervisor of the revenue agent, signed the 30-day letter as group manager. A Form 4549-A, in which respondent asserted that petitioner was liable for a section 6663 fraud penalty of $42,708 for [one year at issue], was included with the 30- day letter. The Form 4549-A included the words ‘corrected report’ at the top of both pages of the form. The revenue agent signed the Form 4549-A. Above the revenue agent’s signature the following statement was included: ‘This Report supersedes the report issued….'” 2020 T. C. Memo. 99, at p. 4. (Name omitted).

There followed a SNOD, of course, countersigned by L.

I can almost hear my readers shouting “Boss Hoss! Jailhouse 4549 not Boss Hossed! Clay!”

Of course, Judge Kerrigan is on this one like cliché on rice.

“When the revenue agent visited petitioner in prison, he provided petitioner a Form 4549, which petitioner signed. Petitioner contends that he was under duress to sign the Form 4549 and for that reason he withdrew his consent. During respondent’s counsel’s opening statement at trial he contended that petitioner received a preliminary form before the formal communication in the 30-day letter and that petitioner signed it, agreeing to the fraud penalty for [one of the years at issue]. This statement is an acknowledgment that the Form 4549 communicated an intention to impose a penalty.

“Respondent did not offer this Form 4549 into evidence. Therefore, we cannot determine whether the Form 4549 or the 30-day letter was the initial determination for the purpose of section 6751(b). Without the Form 4549 we cannot determine whether that form clearly reflected the revenue agent’s conclusion that petitioner should be subject to a penalty. If the Form 4549 was the initial determination of the fraud penalty for [one of the years at issue], there is no evidence of its timely written approval.” 2020 T. C. Memo. 99, at pp. 7-8. (Citation omitted).

IRS has burden of production to establish Section 6751(b) sign-off. No earlier 4549, so IRS dropped the burden.

Note that hitting John Thomas with a 4549 while he was sitting in the slammer was less than a brilliant move; if SOL was an issue, the 30-day letter, duly Boss Hossed, would have served. And not saving the 4549 was even less brilliant.




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