Attorney-at-Law

NO CONTEST

In Uncategorized on 02/28/2022 at 12:30

Michael S. Wright, Docket No. 7909-19L, filed 2/28/22 (the Last of the Palindromes), did in fact contest his underlying liability. The SO at the CDP concluded he hadn’t, and gave him a NOD, sustaining the NFTL.

Mike took an IRA draw, of which half went to loved-once in the ongoing CA divorce proceedings. Mike said “…his assets had been frozen by the state court overseeing the divorce proceeding, and that he had a hearing scheduled to ‘work toward settlement and division of assets.” Order, at p. 2. Mike also said his ex had gotten half, so she should be liable for half. And they were CA residents, a community property state.

Despite the IRC’s solicitude for community proprietors, Section 408(g) puts paid to that argument. The distributee of the IRA draw is on the hook for the whole boat, per Section 408(d)(1). Of course, Mike can fight it out with loved-once in CA court.

That said, the SO’s erroneous conclusion that Mike couldn’t contest liability at the CDP is not a bar to summary J for IRS. Remand won’t work here, because the only arguments Mike raised to avoid liability for the whole IRA distribution were losers.

Now before my ultra-sophisticated readers yell “QDRO!”, note Mike never raised Section 408(d)(6). Order, at p. 7. Judge Emin (“Eminent”) Toro had this one; I wonder what That Obliging Jurist, Judge David Gustafson would have done.

Would Judge Gustafson have sent this back to Appeals with a nudge nudge, wink wink, to Mike to try for a QDRO?

I don’t know, and it’s futile to speculate. But Taishoff says Mike might (could be) (maybe so) want to consider a Rule 162 reconsideration.

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