In Uncategorized on 04/05/2021 at 19:38


My late and much-lamented colleague Stan had a favorite phrase: “Lo and behold!” I can hear his voice as I note the unsealing (or unStealthing) of Kennith Lee and Cathy Lee, Docket No. 20765-19, filed 4/5/21.

I hasten to state that I do not take credit for the foregoing unsealing (or unStealthing). Post hoc, propter hoc remains as fallacious as ever, but it does bring a grimace to my battered visage when I do a bird of Svithjod on Vic Lundy’s granite façade.

Kin and Cath got five (count ’em, five) NODs for nine (count ’em, nine) years’ worth of taxes. Back in 2017, Kin copped to one year of filing a false return, and admitted to underreporting four years. “Petitioners’ underlying tax liabilities in this case arose from their failure to pay the entire income tax reported for the 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, and 2017 taxable years and restitution-based assessments for the 2008, 2009, 2010, and 2011 taxable years.” Transcript, at pp. 4-5.

Kin wanted an IA folding in the current year’s taxes, but he’d defaulted on IAs in the past, hadn’t paid estimateds for ten years, and was unresponsive when the SO said no fold-in.

Cath wanted innocent spousery, but the SO wasn’t buying. And Cath wanted the present year fold-in; ditto. No further input from Cath, so SO closed the file and NODed.

True, the IRM permits a fold-in of unassessed but current liabilities; IRM pt. (Sept. 19, 2014) (“If it appears a taxpayer will have a balance due at the end of the current year, the accrued liability may be included in an agreement”). But that’s not mandatory, and Tax Court had held a bunch of times that fold-ins are not required. Especially is that so where the taxpayer has a shady record.

“Based on the circumstances in this case and the testimony proffered at trial, we find no abuse of discretion in the SO declining to include petitioners’ estimated tax liabilities for the 2019 taxable year in the proposed installment agreement and conditioning her acceptance of the agreement on petitioners’ payment of those liabilities, especially given petitioners’ history of noncompliance in paying their estimated taxes for the last ten years and defaults on previous installment agreements.” Transcript, at p. 14.

IRS won’t fold. And wins.

I want to acknowledge Judge Nega’s careful phraseology; a person acting by virtue of a  Form 2848 is a “representative,” not a Power of Attorney.

And to thank the Genius Baristas for unsealing this opinion. For whatever reason.


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