The trusty attorney for Jon B. Novak, T. C. Memo. 2026-52, filed 6/127/26, gets a Taishoff “Good Try, Third Class” for her run-the-checklist attack on the filing of the NFTL, but Judge Rose E. (“Cracklin'”) Jenkins heaves the IRM at her, taking down her petition.

The date when the NFTL was prepared is irrelevant. While the RO may tell the taxpayer that s/he is considering rejection of the CA, s/he may not tell taxpayer that the CA will be rejected until the CDP is concluded. And Jon got all the breaks. 

“The Internal Revenue Manual (IRM) instructs IRS employees that although the intention to recommend rejection of an installment agreement should be communicated to a taxpayer, actual rejection of agreements must not be conveyed before independent administrative review. IRM 5.14.1.4(11) (Mar. 31, 2023).7 It also instructs that enforcement action may not be taken while installment agreements are pending. Id. However, it also specifically provides that NFTLs generally should be filed in connection with installment agreements to ensure the government’s interest is protected. See IRM 5.14.1.4.3(1)(a) (Dec. 23, 2022); see also IRM 5.14.1.4.3(2) (noting that NFTLs may be filed while installment agreements are pending and during the rejection process); IRM 5.12.2.6(1) (Oct. 14, 2013) (providing that an NFTL should generally be filed if the aggregate unpaid balance of assessments is $10,000 or more). It instructs that taxpayers should be advised in advance about the plan to file an NFTL and given an opportunity to make full payment. IRM 5.14.1.4.3(1)(b). The RO followed the protocol set forth in the IRM by conveying the intent to reject the installment agreement before the rejection was actually effected, as well as by indicating that an NFTL would be filed and providing petitioner an opportunity to fully pay his liabilities before that. It is generally not an abuse of discretion to follow IRM guidelines. Cf. Mission Organic Ctr., Inc. v. Commissioner, Nos. 6937-23L, et al., 165 T.C., slip op. at 10 (Dec. 16, 2025). Petitioner had an opportunity to avoid the NFTL filing by fully paying the liabilities, and he had the opportunity to dispute the NFTL filing after the fact through the CDP process. He also had the opportunity to request withdrawal of the NFTL, potentially invoking section 6323(j)(1)(C), given his claim that the NFTL impeded his ability to liquidate assets to pay his liabilities. See IRM 5.12.9.4 (Sep. 6, 2019); see also Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien. Accordingly, petitioner’s rights were not nm violated.” T. C. Memo. 2026-52, at pp. 10-11.

For the Mission Organic’s story, see my blogpost “Expensive Pottery,” 12/16/25.