See my blogpost “EFTPS,” 10/10/18, for the story on how to set up the Electronic Federal Tax Payment System to pay all your Federal tax payments.

It sure would have helped Chad Cassiday & Kelly Cassiday, Docket No. 11643-20L, filed 9/2/21.* While Judge Buch is remanding Chad & Kelly back to Appeals, the remand he orders is broader than what IRS is asking for.

“On April 16, 2018, Mr. Cassiday went to his bank and withdrew approximately $2.8 million to pay the Cassidays’ 2017 taxes. The money was withdrawn from their account on that day to create three separate cashier’s checks: two made payable to the Internal Revenue Service (one for $2,500,000 and the other for $326,316) and one made payable to the State of Michigan. (There were two separate checks to the IRS because the branch manager at the bank could not approve a single check in excess of $2.5 million.) Because the money was withdrawn from the Cassidays’ accounts for the bank to prepare the cashier’s checks, the Cassidays received no further benefit (such as interest) from those funds. Mr. Cassiday put the two checks that were payable to the IRS in a single envelope and mailed it to the IRS. The IRS cashed the smaller check, but the IRS never cashed the check for $2,500,000. Instead, the IRS imposed interest and penalties because of the apparent shortfall.” Order, at p. 1

 IRS then began its collection efforts. IRS hit Chad & Kelly with NFTL and NITL for “deficiency,” interest and chops. Except Chad & Kelly loudly protested at their CDP that they had paid.

Appeals blew it by not addressing Chad’s & Kelly’s underlying liability issue. IRS admits that, but their request for remand only speaks to interest abatement.

Judge Buch: “…before getting to the issue of whether interest should be abated, the Commissioner must address whether interest should have accrued at all. The Cassiday’s claim, at least according to their petition, is that interest was improper in the first instance. Their position, simply stated, is that they timely mailed their tax payment to the IRS. While we are not deciding the facts or law in this order, the Cassidays’ argument is that the liability was timely paid. Section 6601 imposes underpayment interest beginning on the last date prescribed for payment until the ‘date paid.’ Section 7502(a)(1) provides that ‘if any * * * payment required to be made * * *on or before a prescribed date * * * is, after such * * * date, delivered by United States mail to the agency, * * * the date of the United States postmark stamped on the cover in which such * * * payment * * * is mailed shall be deemed to be the * * * date of payment.’ We understand the Cassidays’ position to be that, because they timely mailed their payment, they do not owe any interest. Before considering whether the interest can or should be abated under section 6404(e) because of an unreasonable error or delay, the Commissioner must first consider whether the interest was properly imposed in the first instance.” Order, at pp. 2-3.

I hope Chad & Kelly get a total win. But win or lose, they had to engage counsel (a distinguished practitioner of many years’ tax experience in a prominent MI firm; I can’t think his fees are cheap), and go through meetings, document compilations, one and now a second CDP, waste time, effort, and endure emotional stress.

Remember how Judge Buch suggested paying taxes by means of a “certified check” in the Malasky case, discussed in my blogpost hereinabove cited?

Of course, no bank has issued “certified checks” in years, as they’re so easily forged or fraudulently altered. The banks  now issue official bank tellers’ checks, for which you have to jump through hoops, and they’re also fraud bait.

I urge my readers and their clients to consider EFTPS. I’ve used it for years with never a problem. If you’re worried about having your bank account hacked (although it probably has been already, and so has the US gov’t), create a dedicated account at your bank to use only for EFTPS payments.

And tell ’em Chad, Kelly and Taishoff sent ya.

*Cassiday 11643-20L 9 2 21