In Uncategorized on 08/12/2021 at 16:20

I wish to thank ex-Ch J L Paige (“Iron Fist”) Marvel for adding another specimen to my collection of taxation stealthy bits and pieces. Today it’s a six-month extension of time to do something at Appeals that doesn’t seem to have been transmitted to the petitioners or their representatives.

The story is told in Hyrum McKay Bates and Katherine Call Bates, 2021 T. C. Sum. Op. 25, filed 8/12/21. Hy and Katherine filed four (count ’em, four) years, leaving balances due for each. Notices followed, and then a NITL. Hy and Katherine petitioned. At the phoneathon CDP, the reps and the SO seemed to strike a deal for an IA, and the SO faxed a Form 433-D embodying same the same day, giving Hy and Katherine a week to sign.

They didn’t. Here’s the time line; it’s material.

“During the hearing, which took place on July 9, 2019, petitioners’ representatives and the SO discussed and tentatively agreed to a monthly installment amount. Petitioners’ representatives asked the SO to prepare and to fax a completed Form 433-D, Installment Agreement, reflecting the monthly installment agreement. The SO prepared and faxed the Form 433-D on July 9, 2019, and gave petitioners until July 16, 2019, to execute and return it. Neither petitioners nor petitioners’ representatives returned a signed Form 433-D to the SO, and on January 16, 2020, the SO closed the case. On January 30, 2020, the Internal Revenue Service (IRS) issued a notice of determination sustaining the proposed levy.” 2021 T. C. Sum. Op. 25, at p. 4. (Footnote omitted, but it says Hy and Katherine meanwhile filed another year and didn’t pay, the SO checked that out as she was bouncing the CDP, and noted any IA would have to be modified accordingly).

Leaving aside that the Independent Appeals Office, not IRS, conducts CDPs and issues NODs, and leaving aside that Appeals can bounce a CDP if the taxpayer doesn’t agree to a  collection alternative after being given an opportunity to do so (although a week is short, it isn’t short enough to torpedo a NOD, especially when neither the taxpayer nor the reps contacted the SO during that week to reject or seek a modification), what raises my age-whitened eyebrows is the six (count ’em, six) months between July and January.

What happened? Did anybody talk to anybody? Did the SO ask the reps what happened to the IA? Did the reps do anything? Did Hy and Katherine? Assuming the SO didn’t have to do anything or talk to anyone, why wait six months? Of course if the reps did nothing and Hy and Katherine did nothing, Hy and Katherine have nothing to complain about with Appeals, although the reps may get The Phone Call when Hy and Katherine see Judge Iron Fist’s opinion and decision.

Even more puzzling, and what gives rise to the headline or caption first set forth at the head hereof (as my already-coming-about on-the-port-tack colleagues would say), is Judge Iron Fist’s stated grounds for affirming the NOD.

“Our review of the record establishes that the SO verified that the requirements of applicable law or administrative procedure had been met and discussed with petitioners’ representatives the terms for an installment agreement. The SO and petitioners’ representatives tentatively agreed to those terms, and on July 9, 2019, the SO prepared and faxed to petitioners’ representatives a Form 433-D, which reflected those terms. The SO afforded petitioners six months to sign and return the Form 433-D, but petitioners did not do so. The amount of time the SO allowed before closing petitioners’ case was reasonable and adequate for them to submit a signed Form 433-D. When petitioners did not respond, the SO closed their case after considering the issues they properly raised and performing the analysis required by section 6330(c); and the IRS issued a notice of determination sustaining the proposed levy.” 2021 T. C. Sum. Op. 25, at pp. 6-7.

The SO gave the reps (and presumably their principals, Hy and Katherine) one week, namely, viz., and to wit, until July 16, 2019, to sign and return the IA.

If there were later communications, extensions, negotiations, billets doux, or whatever, on or before January 16, 2020, that memorialized any extension of the July 16, 2019, deadline, either these never made it into the record or never made it into this Sum. Op.

Which leaves me with the Stealth Extension.


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