In Uncategorized on 07/29/2020 at 16:47

When it comes to money, other than a deposit clearly so denominated, it’s dealer’s choice with the IRS; IRS’ discretion is far, wide and broad. And Section 6330 avails not when Greene-Thapedi is on the job.

Today STJ Daniel A (“Yuda”) Guy provides a designated hitter reminder for Brian Dean Swanson, Docket No. 15964-19L, filed 7/29/20. Brian Dean filed a 1040X for Year One, which earned him the thirty-day frivolity yellow card. On day thirty-one, or shortly thereafter, IRS chopped Brian Dean with the Section 6702 $5K.

Brian Dean never paid the chop, nor the tax he owed for Year Two. IRS gave him a NITL for both the chop and the tax at no extra charge, which he appealed. Appeals sustained the NITL, so Brian Dean petitions the NOD.

Brian Dean wants to invoke Section 6751(b) Boss Hossery for the Section 6702, and claims he had a refund coming for Year Three, which should be applied to the tax he owes for Year Two.

Clear? Thought not.

But IRS shortstopped the Year Three refund and applied it to the Year One Section 6702 chop. Wherefore IRS claims so much of Brian Dean’s summary J motion as relates to the Section 6702 chop is moot. And Brian Dean is hanging for Year Two tax.

STJ Yuda agrees.

“As a preliminary matter, overpayments by a taxpayer may be applied to other tax liabilities of the taxpayer at the discretion of the IRS. Sec. 6402(a), sec. 301.6402-3(a)(6)(i), Proced. & Admin. Regs….. As mentioned above, the IRS applied petitioner’s overpayment for [Year Three] to fully offset the section 6702 penalty assessed for [Year One]. Given the IRS’s broad discretion, petitioner’s assertion that his [Year Three] overpayment should have been applied to his outstanding tax liability for 2015 is misplaced.” Order, at p. 3. (Citations omitted).

And once an obligation to the fisc is satisfied, by whatever means necessary, pore l’il ole Tax Court has no jurisdiction, even if the Supremes suggest they might have a wee bit more.

“Although the Tax Court is an Article I rather than an Article III court, the Supreme Court has held that the Tax Court exercises Federal judicial power. Freytag v. Commissioner, 501 U.S. 868, 890-891 (1991). For present purposes, a case filed pursuant to section 6330 is moot if the Federal income tax liability that the Commissioner is attempting to collect has been paid in full so that no collection action is appropriate.” Order, at pp. 3-4. (Citation omitted, but it’s Greene-Thapedi).

Once again, frivolity is its own reward.





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