This could happen to any one of us (and, if we’re candid, it probably has). But for both sides to miss a critical point is less common (although, again, in a long enough run of play, it probably has). Both IRS’ counsel (both of them) and his trusty attorney missed the Letter 1153 opportunity in David A. Garrett, Docket No. 14206-22L, filed 3/27/23.

Judge Courtney D. (“CD”) Jones denies summary J to IRS in this TFRP for want of verification at Appeals. The NOD says the SO verified that applicable legal and admin requirements were. satisfied, any issues raised by Garrett were considered, and collection no more intrusive than necessary. Trusty attorney apparently didn’t reply to summary J motion; neither did Garrett.

There were interim payments made by the corporation reducing the amount of unpaid trust funds, but that doesn’t affect the Section 6672 chop. The problem arises from a statement in IRS’ moving papers. IRS claims the SO properly verified the assessed TFRP.

Judge C D Jones: ” However, in light of the foregoing assertion that the penalty assessment was properly verified, the Court is perplexed by respondent counsel’s statement that “[p]etitioner did not have a prior opportunity to dispute the underlying liabilities.” (docket entry no. 9, pg. 11). A TFRP assessment is valid if the IRS issues Letter 1153 to the taxpayer’s last known address, assesses the penalty more than 60 days after the mailing of that letter, and the penalty was assessed within the time permitted by law. Generally, receipt of Letter 1153 constitutes the taxpayer’s opportunity to dispute their underlying liability. Thus, respondent’s simultaneous assertions that the penalty assessment was properly verified, which contemplates that Mr. Garrett received a letter 1153 and had a chance to contest his underlying liability,  and that Mr. Garrett has not had a chance to challenge his underlying liability, which contemplates that Mr. Garrett did not receive a letter 1153 and that the penalty was not properly assessed, seem irreconcilable. In light of these contradictory statements,  and given the limited administrative record, the Court is unable to conclude that the verification requirement was properly satisfied, absent some alternative explanation.” Order, at p. 6. (Citations omitted).

I may venture a wild guess that IRS’ counsel used a form declaration, or maybe one from a previous case, and didn’t do enough custom tailoring. Howbeit, no summary J.

Takeaway- When both sides miss it, very often the judge won’t.