I’ve not gone in for science fiction. Rather, I want to set forth Judge Patrick J. (Scholar Pat”) Urda’s discussion of the parallel courses of a CDP and an audit reconsideration.

Michele Lee Pazden, 2021 T. C. Memo. 107, filed 9/2/21*, sent in a letter after she got a SNOD for a year for which she hadn’t filed timely. Apparently that was good enough to constitute a petition, which got tossed for Michele Lee’s failure to ante up the sixty Georges. This, of course, sinks Michele Lee’s future attempts to fight about liability.

But before the toss Appeals offered Michele Lee an informal hearing, whereat Michelle Lee was asked for a return, and tendered a 1040 three months late stating she would seek audit reconsideration. IRS gave Michelle Lee a NITL, for which she sought CDP. Appeals deemed the audit reconsideration to be a claim adjustment, and sent it to an RA. The RA heard out Michelle Lee, and bounced her claim adjustment.

Meanwhile, back at Appeals, Michelle Lee’s CDP founders when she wants to fight liability. Appeals said she had her chance, but they’d take a second look at audit reconsideration. The SO at Appeals checked with the RO at AR, and tossed Michelle Lee again. Michelle Lee petitions the CDP, and claims she should have had a second SNOD as a result, so she could contest liability.

Clear? Thought not.

Judge Scholar Pat: “Ms. Pazden nonetheless argues that her audit reconsideration request and the subsequent examination should have triggered a second notice of deficiency for [year at issue], giving her another opportunity to challenge the underlying liability. The IRS’ authority to issue a notice of deficiency, however, is predicated on the Secretary’s determining a deficiency in the taxpayer’s income tax. See sec. 6212(a). The IRS here did not determine any additional tax deficiency in the wake of the audit reconsideration examination, and a second notice was not required.” 2021 T. C. Memo. 107, at p. 8.

Michelle Lee wants Judge Scholar Pat to review the audit reconsideration. No; audit reconsideration runs parallel with a CDP, but Tax Court has no jurisdiction over an AR, an AR is purely discretionary, and the caselaw says Appeals need not wait on an AR to issue a NOD.

Michelle Lee plays the Taxpayer Bill of Goods, but that’s a loser. No new rights. And her demand for remand craters also;  nothing new here.

*Michelle Pazden 2021 T C Memo 107 9 2 21