I just blogged today the case of Mike S. Wright (see my blogpost “No Contest,” 2/28/22), where the AO’s erroneous conclusion that Mike had a chance to contest made no difference. But now Scott Nicholas Shaddix, T. C. Memo. 2022-11, filed 2/28/22, has the same bœuf as his OIC was denied, but he had additional substantiation and never had an exam.

Two of his four (count ’em, four) years-at-issue get tossed, as IRS never gave him a SNOD or NOD. But notwithstanding that, IRS’ own records show Scott never got a SNOD or participated in any exam, despite what two SOs say.

And the bounce of the OIC sets up the right of Tax Court review, even if the year at issue is out.

The OS (offer specialist) who looked at Scott’s OIC was convinced his RCP was as Scott stated. However, the OS wanted Scott to sign Form 2261-C, Collateral Agreement—Waiver of Net Operating Losses, Capital Losses, and Unused Investment Credits, thereby demanding Scott waive a bunch NOLs (hi, Judge Holmes), which would trigger a bunch chops which he might otherwise offset by whatever NOLs were left after the amount of tax compromised plus the payment Scott was making on the OIC.

Scott says no.

Judge Albert G. (“Scholar Al”) Lauber says Scott should have had the chance to dispute liability and offer additional substantiation. So he remands Scott.

“If Appeals concludes on remand that petitioner is not entitled to dispute his underlying liabilities for [years at issue], it shall explain the factual and legal basis for that conclusion. If Appeals determines that petitioner is entitled to dispute these liabilities, it shall offer him the opportunity to submit relevant evidence and then resolve his underlying liability challenge. We do not reach at this time the question whether Appeals abused its discretion in declining to accept petitioner’s OIC. In addition to presenting, at the supplemental hearing, appropriate evidence concerning his underlying tax liabilities, petitioner is free to resume negotiations concerning the terms that should properly be included in such an offer.” T. C. Memo. 2022-11, at p. 9.