Admin Record Variation

A classic line from a classic movie furnished me with great taglines for blogposts. I’ve said that it’s a gift that keeps on giving. Today, IRS plays a new variation in Jared Mitchell & K. Sullivan Mitchell, Docket No. 10883-19L, filed 10/13/20.

IRS wants summary J on the NITL with which it hit Jared & K. But you think you got problems? “In connection with their submission of an offer in compromise, petitioners informed the Appeals Office that Mr. Mitchell had been convicted of securities fraud, was incarcerated at that time, and had been ordered to pay restitution in excess of $9 million.” Order, at pp. 1-2.

But if Jared & K. have problems, IRS is not far behind.

“The record indicates that the Appeals Office rejected petitioners’ offer in compromise and, after reviewing their tax return for 2018, concluded that they could pay their outstanding tax liability in monthly installments of $2,150. Petitioners maintain that they provided all financial information that they had access to in connection with the IRS’s evaluation of their offer in compromise. When petitioners declined the proposed installment agreement, the Appeals Office issued the notice of determination in dispute.” Order, at p. 2.

My argute readers have already discovered what’s wrong with this picture, but I’ll let STJ Daniel A (“Yuda”) Guy tell the story.

“Respondent’s motion for summary judgment is not properly supported. What the record lacks is any documentation, such as a Form 433-A, Collection Information Statement, and related financial records, which would tend to show that the Appeals Office properly evaluated petitioners’ reasonable collection potential and their overall ability to pay the taxes they owe for the years in issue. Similarly, there are no transcripts of account (such as Forms 4340) that would demonstrate that the Appeals Office properly verified that the IRS followed all applicable laws and procedures in this case.” Order, at p. 2.

So, Appeals, do it right, build a record. And Jared & K., play nice, and give Appeals everything you got. So that when y’all come out, you’ve got something in your hands.