Feisal Ahmed, 2021 T. C. Memo. 142, filed 12/28/21* sent in a check which would have satisfied his TFRPs, except his trusty attorneys claimed it was a bond and not a payment. IRS claimed that, since the TFRPs had already been assessed, since Feisal had petitioned a NOD, won partial summary J,  had a remand to Appeals (with no supplemental NOD issued), IRS had the cash in hand to pay everything in full, and had released the NFTL, there was nothing to bond, as IRS wasn’t going to take any further collection action.

Judge Michael B (“Iron Mike”) Thornton finds that, before he petitioned, Feisal paid off one of the four FICA/FUTA quarters he was supposedly “bonding,” so only three are open. And Feisal now (seemingly) concedes that his “bond” doesn’t comply with Section 6603(a), so all three can only be bonded based on a judicially-created “facts and circumstances” scenario, which Judge Iron Mike distinguishes, because in those cases the bond was tendered before the tax had been assessed.

As usual, the most interesting part of the opinion is in a footnote, which I recommend to all my readers who take an interest in bonding.

“Sec. 6603(a), as enacted in 2004, provides that a taxpayer may make a cash deposit with respect to ‘any tax imposed under subtitle A or B or chapter 41, 42, 43, or 44 which has not been assessed at the time of the deposit.’ Respondent asserts that petitioner’s $625,000 remittance failed to qualify as a deposit under sec. 6603(a) because petitioner’s TFRP liabilities had already been assessed at the time of the remittance. Seemingly on this basis petitioner concedes the nonapplicability of sec. 6603. Neither party has addressed what would seem to be a more fundamental impediment to treating the remittance as a deposit under sec. 6603(a), namely that TFRP liabilities are imposed under sec. 6672, which is in chapter 68 in subtitle F of the Code, rather than in any of the subtitles or chapters listed in sec. 6603(a).” 2021 T. C.  Memo. 142, at p. 9, footnote 4.

Feisal’s trusty attorneys are much-respected colleagues, for whom I have high personal and  professional regard. This case is an illustration and a cautionary lesson to us all.

However much we may think we know, and however cleverly we may craft our case, the devil is always in the cliché: read the statute; read the cross-referenced statutes.

Here be dragons.

*Feisal Ahmed 2021 T C Memo 142 12 28 21