The now-famous gambit is not solely the CDP petitioner’s move, but IRS can play it too. They do, in Mark G. Pfetzer, 2021 T. C. Memo. 145, filed 12/30/21*. Mark claims he never got the SNODs for the nine (count ’em, nine) years he never filed, but for which he got SFRs at no extra charge.

He also gets a NFTL.

Though he never petitioned the SNODs, he did petition the CDP sustentation of the NFTL. Appeals claims prior chance to contest, but the administrative record leaves IRS’ counsel with the Michael Corleone classical. Mark plays the Luke 18:1-8 defense, claiming at every chance he never got the SNODs.

The case comes before Judge Pugh via Rule 121, which included “… a joint stipulation of facts that included the following exhibits: the lien filing notice, petitioner’s hearing request, correspondence between petitioner and respondent during the initial administrative hearing and during remand, the notice of determination and supplemental notice of determination, SO S’s case activity record (case notes), and TXMODA transcripts for 2004 through 2012. Not included as stipulated exhibits are  (1) respondent’s complete administrative record; (2) any of the notices of deficiency; or (3) any proofs of mailing to petitioner’s last known address.” 2021 T. C. Memo. 145, at p. 7. (Footnote omitted, but it explains TXMODA, a form of IRS cyberbabble that generates transcripts, which we know are insufficient to prove mailing of SNODs.)

Judge Pugh, having sat through a hearing, a remand, and now this Rule 121, is a wee bit testy.

“Petitioner asserted during the administrative hearing and now before us that respondent failed to verify that a notice of deficiency was issued and mailed to petitioner’s last known address for each tax year in issue. Respondent attempts to deflect this challenge by asserting that it relates to the underlying tax liability, which he argues petitioner cannot challenge. But proper verification is not a challenge to the underlying liability; it is a stand-alone requirement in section 6330(c)(1) and is independent of the issues that may be considered under section 6330(c)(2) (such as the taxpayer’s underlying tax liability). Hoyle v. Commissioner, 131 T.C. at 200-203.

“We remanded this case to IRS Appeals to clarify the record as to what SO S relied upon in determining that the notices of deficiency were properly issued and sent to petitioner’s last known address, directing the parties specifically to Hoyle. Respondent has not pointed to evidence in the record showing that SO S examined underlying documents but rather has argued that her examination of the lien filing notice and the computerized tax transcripts satisfied the verification requirement in section 6330(c)(1).” 2021 T. C. Memo. 145, at p. 11. (Name omitted).

Not enough that some documents might exist somewhere to show something; there were copies of SNODs and PS3877s for a few of the years at issue, but no showing SO S looked at them, or that they made it into the admin record.

And the record rule rules: if it ain’t in there, it ain’t out here.

Mark wins.

*Mark G Pfetzer 2021 T C Memo 145 12 30 21