William J. (“Old Bill”) Wise, Esq., cannot save Laidlaws Harley Davidson Sales, Inc., T. C. Memo. 2023-90, filed 7/19/23, as the Laidlaws materially participated in challenging the deficiency and entered into a stipulated (agreed) decision (the “2016 decision”, what we State courtiers would call a “judgment”) fixing tax and chops.

Now the bikers want to challenge the enhanced Section 6662A chop for failing to report a listed transaction, per Notice 2007-83, 2007-2 C.B. 960. The bikers claim inadequate Section 6751(b) Boss Hossery, and failure of IRS to consider all comments per APA. When IRS hit them with NITL and NFTL, they asked for a CDP.

“Petitioner represented to the settlement officer that the only ground on which it challenged the collection activities was respondent’s lack of compliance with section 6751(b) related to the 2008 section 6662A penalty. Petitioner requested that the collection due process hearing be rescheduled to allow for the attendance of an additional attorney, who would argue that respondent failed to comply with section 6751(b). The settlement officer rejected this request on the basis that petitioner was precluded from advancing that argument.” T. C. Memo. 2023-90, at p. 3. (Footnote omitted).

Judge Travis A. (“Tag”) Greaves says Old Bill is too late.

“In the prior [deficiency] case petitioner challenged the assessment of the penalty under section 6662A. That penalty was specifically noted in the 2016 decision. Further, petitioner materially participated in the proceedings as it instituted the proceeding, filed numerous motions, and engaged in settlement negotiations resulting in the stipulated decision. Thus, the issue of the section 6662A penalty satisfies the requirements of section 6330(c)(4), and petitioner is precluded from arguing the penalty was improperly determined.” T. C. Memo. 2023-90, at p. 5.

Old Bill fares no better with trying to unscramble the Section 6662A-Notice 2007-83-APA frittata.

“Verifying compliance with the APA is a substantive review. Like verifying the retroactive repeal of a statute, verifying APA compliance would require the settlement officer to comb through the record created at the time of publication and ascertain the applicable requirements of the APA. To require this analysis of every publication relied upon by the IRS would impose a substantive review, which is not a proper inquiry under section 6330(c)(1). Rather, the APA challenge to the validity of Notice 2007-83 is a challenge to the underlying liability. Petitioner cannot challenge the underlying liability in this case, and therefore the settlement officer did not abuse his discretion in not verifying compliance with the APA.” T. C. Memo. 2023-90, at p. 9.

Oh yes, to all my readers who are yelling “Hey dude, read your blogpost ‘Listing Is Legislating,’  11/9/22,” I reply that Judge Tag Greaves cites the Green Valley Invs. case, and says maybe so it might could be peradventure that IRS flunked the APA test on Notice 2007-83, but an SO needn’t check that out in a Section 6330(c)(1) verification.

Laidlaws is 9 Cir bound. With $16,800 on the table, is it worth bonding and appealing?

But again my mantra rings true: Participate, stipulate, but don’t capitulate.