If You Want My Passport

Judge David Gustafson has a message for IRS via Hendrieka Fitzpatrick, Docket No. 12797-21P, filed 3/8/22. Hendrieka wants to fight about her 2013 tax liability, but that ship sailed five years ago.

IRS says Hendrieka has a serious tax delinquency, which also seems to be correct. So IRS moves to toss Hendrieka’s petition. We all know that a Section 7345 certification to State does not let the petitioner relitigate any tax liability. See my blogpost “Ruesch to Judgment,” 6/25/20. All that’s in play is whether the certification is erroneous.

Except.

Section 7345(b)(1)(C)(ii).

A “seriously delinquent tax debt” is one for which “a levy is made pursuant to Section 6331.”

Now before my battle-hardened readers shriek “What about Section 7345(b)(1)(C)(i)? Wasn’t there an NFTL and all remedies exhausted?” Judge David Gustafson notes IRS doesn’t raise that in its answer. All IRS notes is amounts of taxes, chops, interest, and assessment dates. Nothing about NFTL.

Judge Gustafson man-‘splains.

“A ‘levy’ is a seizure of money or property pursuant to section 6331(a); and section 6330 provides a prerequisite to levy: ‘No levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made.’ Sec. 6330(a) (1). That is, first the IRS must give the notice and opportunity for hearing provided by section 6330, and then the IRS may actually make a levy pursuant to section 6331.

“However, as we read the motion, it does not allege that a ‘levy [was] made’ pursuant to section 6331, as section 7345(b)(1)(C)(ii) requires, but seems to rely instead on the IRS’s issuance of a notice of intent to levy under section 6331. Paragraph 14 on page 5 of the motion does refer to a ‘levy pursuant to I.R.C. § 6331’; but it states that that ‘levy … was issued’. Strictly speaking, a levy is not ‘issued’; rather a notice of intent to levy is issued, and then a levy (a seizure) may be made. The motion elaborates  (at 5 n.3) on the levy that was said to be ‘issued’ by explaining more precisely that ‘[a] notice of intent to levy for petitioner’s 2013 liability was issued…, notifying petitioner of her collection due process (CDP) rights under section 6330.’ As we read the motion, it stops short of alleging that a levy was actually ‘made’.” Order, at p. 2.

So must there have been an actual seizure? Or is issuance of a writ or mandate to the U S Marshal to go out and seize sufficient, even if the writ or mandate is returned unsatisfied (that is, the Marshal could find nothing to seize)?

In any event, IRS can either fold this case and rescind the certification, or show that at least they sent out the Marshal to grab. But of course, they can fold, decertify, send the grabber, and try again. See my blogpost “Ruesch to Judgment – Part Deux,” 9/22/20.

I was a little late getting this posted today, but there were 792 (count ’em, 792) orders today on DAWSON.