William Howard Peak, 2021 T. C. Memo. 128, filed 11/10/21*, takes his text from George and Ira Gershwin’s 1937 hit, when he claims the Notice CP12 made a deal between IRS and him, allowing him to duck tax on about $13K in 1099R money.

Judge Tamara Ashford, while sympathetic toward Wm H’s “…alleged financial straits, we have no authority to disregard the express and unambiguous wording of the statutory provisions.” 2021 T. C. Memo. 128, at p.8, footnote 5.

The CP12 corrected a math goof relating to Wm H’s Social Security and tax computation, told him, if he didn’t object to the new math, to expect a $182 refund within four to six weeks “as long as you don’t owe other tax or debts we’re required to collect.” 2021 T. C. Memo. 128, at p. 8.

Wm H says he has a deal with IRS, and the SNOD hitting him for the untaxed 1099R money is invalid.

Judge Ashford: “A Notice CP12 is not, however, a settlement agreement. A settlement agreement ‘is in all essential characteristics a mutual contract by which each party grants to the other a concession of some rights as a consideration for those secured’.

“No concession of rights or consideration was exchanged by the IRS and petitioner through the… Notice CP12. A Notice CP12 is issued as a first notice to inform the taxpayer of a math error on an individual return that changes the refund amount claimed on that return. Internal Revenue Manual (IRM) pt. 21.3.1.5.8(1) (Sept. 12, 2017); see also IRM pt. 3.14.1.6.12 (Jan. 1, 2017). The …Notice CP12 that the IRS sent petitioner did just that…..” 2021 T. C. Memo. 128, at p. 9 (Citations omitted).

Besides, “(P)ursuant to section 6501(a), the IRS is authorized to assess any additional Federal income tax with respect to a filed Federal income tax return within three years after the return is filed. As the IRS sent petitioner the January 6, 2020, notice of deficiency well within that three-year period of limitations, it was not unlawful for the IRS to do so after sending petitioner the… Notice CP12.” 2021 T. C. Memo. 128, at p. 10.

Wm H claims he got erroneous advice from the IRS helpline, but that doesn’t help. IRS can always correct errors of law.  

Settle your case with a CP12? Nice work if you can get it, but as Ira said “And if you get it won’t you tell me how?”

*William Howard Peak 2021 T C Memo 128 11 10 21