Henry Seggerman,, T. C. Memo. 2023-78, filed 6/22/23, was doing what your credit report says you should be doing, paying as agreed. He was paying off a restitution-based assessment (RBA) on a dubious 706, per a cooperation agreement with DOJ in USDCSDNY.

But IRS hits Henry with a NFTL, which he petitions, claiming it hurts his ability to earn income, although he can provide no proof thereof. He does prove that he can’t pay more than what he’s paying under the cooperation deal. So Appeals put Henry in CNC, but leaves the NFTL in place.

Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan keeps the NFTL.

“Petitioner argues that he never fell behind on the district court’s payment schedule and that the NFTL was prematurely filed and therefore should be withdrawn. See § 6323(j)(1)(A) (providing for discretionary NFTL withdrawal if the notice was filed prematurely or not in accordance with administrative procedures). Respondent argues that he is not bound by the district court’s payment schedule because he has independent authority to collect RBAs. Respondent also notes that petitioner and the DOJ stipulated in the cooperation agreement that ‘the existence of a payment plan set by the [c]ourt shall not bar Governmental collection efforts against any of the defendant’s available assets.’

“We agree with respondent. Section 6201(a)(4)(A) provides that ‘[t]he Secretary shall assess and collect the amount of restitution . . . for failure to pay any tax imposed under this title in the same manner as if such amount were such tax.” T. C. Memo. 2023-78, at p. 5.

Liability is off the table, of course; the cooperation deal in USDCSDNY seals that exit. And that Henry is paying as agreed doesn’t preclude a NFTL; we call that a hit-the-lottery NFTL. If Henry hits the lottery big, he might be able to pay in full, and should not be allowed to walk with the boodle in such event, leaving IRS hanging.