That’s Judge Rose E. (“Cracklin'”) Jenkins’ take on how Appeals (and IRS’ trial counsel) handled Avalon Home Health, Inc., T. C. Memo. 2025-107, filed 10/16/25, when they tried to work out an IA.

Though proper mailing of the SND and the Letter 3172 which followed was disputed, Judge Jenkins finds that the defective USPS Form 3877 is probative evidence (if not enough to raise a presumption) of mailing, hence Avalon can’t dispute underlying liability, but only abuse of discretion. Here, though it looks like Appeals verified all steps, “given the absence from the administrative record of documents apparently reviewed by Appeals, this Court declines to conclude that there was no abuse of discretion with regard to the verification requirement.” T. C. Memo. 2025-107, at p.l13. (Footnote omitted, but it says the USPS Form 3877 for Letter 3172 and the Notice CP210 are not in the administrative record IRS filed).

While discussion of installment payments and partial payments by Avalon’s officers did happen, “entry into an installment agreement requires more formality than an offer by a taxpayer and continued payment on an optimistic assumption that it will be accepted—specifically, a written agreement.” T. C. Memo. 2025-107, at p. 14.

Nevertheless, Avalon’s trip to Appeals went through four (count ’em, four) separate AOs over a three year period, while Avalon’s request for audit reconsideration was on hold because Avalon asked for a CDP; unhappily, nobody told either Avalon or Appeals that the CDP had to be withdrawn to get audit reconsideration. Avalon refused, afraid if they did drop the CDP their payments and IA would be gone. And the NOD states Avalon dropped its request for an IA, which Avalon disputes.

Finally, “neither the record nor petitioner’s posture before this Court lends credence to the idea that petitioner indicated disinterest in an installment agreement, supporting a denial. And there is no other indication in the record of why the installment agreement actually was denied. It is also not clear whether the one-week deadline that the Fourth SO gave petitioner’s representative to reply to him was reasonable, given the years-long pendency of petitioner’s case, the delays in which can largely be attributed to the IRS’s failure to communicate about petitioner’s audit reconsideration request. Cf. Long v. Commissioner, T.C. Memo. 2023-130, at *10. Thus, this Court cannot conclude that the denial was not an abuse of discretion.” T. C. Memo. 2025-107, at p. 16.

For the story of Kevin Long, see my blogpost “I’ve Heard That Song Before,” 10/30/23.

Back to Appeals to clean this up, hopefully to give the Avalons their IA, with full credit for payments made.