We got a T. C. Opinion today (Vidal Suriel, 141 T. C. 16, filed 12/4/13), but it’s about the tobacco settlement agreement, and therefore unlikely to occur in the world in which my readers and I practice. In short, “economic performance” means something that changes your bank balance, and Vidal’s jousting with the Master Settlement Agreement Fund didn’t get there until Vidal’s Sub S wrote the check.

But we did get an order out of Ch J Thornton, J S Karaoke, LLC and John E. Strauser, Docket No. 17867-13, filed 12/4/13, that brings out a point we ordinary practitioners might consider.

IRS moves to toss J S Karaoke, LLC, from John’s petition and from the caption of the case, because they never issued a SNOD or NOD to, about or concerning J S Karaoke, LLC.

John objects. “Although petitioners object to the motion, petitioners state in the motion that John E. Strauser is the sole owner of J S Karaoke, LLC.” Order, at p. 1.

There should be a racehorse named “readtheregulations” (wow, just 18 characters!).

Ch J Thornton: “The ‘check-the-box’ regulations contain provisions concerning a business entity’s classification for Federal tax purposes. See Medical Practice Solutions, LLC v. Commissioner, 132 T.C. 125 (2009); sec. 301.7701-3(a) and (b)(1), Proced. & Admin. Regs.” Order, at p. 1.

So IRS, read the regulations, and Ch J Thornton will give you an open-book quiz.

“…respondent [IRS] shall file a Supplement to his motion to dismiss. In that Supplement respondent shall set forth and discuss fully respondent’s position as to classification of J S Karaoke, LLC for Federal tax purposes and Mr. Strauser’s ownership interest in petitioner J S Karaoke, LLC.” Order, at p. 2.

Disregard the disregarded at your peril.

No, not the old Saturday Night Live crew, but rather the case of Michael D. Brown and Mary M. Brown, 2013 T. C. Memo. 275, filed 12/3/13. The problem is the bonus depreciation Mike took on his Bombardier Challenger 604 flying machine.

Mike was a flying insurance salesman, selling big-ticket multi-million-dollar policies to the very rich, to get around estate taxes. So successful was Mike that IRS generated Notice 2002-59, 2002-2 C.B. 481, just a scant three weeks after Mike trumpeted a split-dollar life insurance maneuver that, so he told the New York Times, could save $9 in tax for every $1 of premium.

Amazing how these tax maneuverers feel compelled to spill the beans at the very door of 1111 Constitution Avenue, NW. Like IRS doesn’t read the papers.

And as for the split-dollar gambit, see my blogpost “The Split”, 8/29/12, wherein it appears that Steve Neff and Brad Jensen, master builders, were blown up when IRS torpedoed Mike’s brilliant maneuver.

Back to the main story. Mike needed to jet around the country, to meet and greet his high-priced clientele. Commercial travel wasn’t convenient, and chartering meant he was at the mercy of an owner who might whisk his magic carpet away just when Mike most needed it.

So he bought his own. But he had to get it placed in service by year’s-end, and he had a very narrow timeframe to do it. Moreover, he wanted special modifications, like a $200K conference table and a couple of widescreen monitors, and extra subhydraulics (whatever those may be) and a few doodads, so the total bill was $500K, and there was no way his jet  would be completely modified before year’s-end.

Thus, he’d be back to 30% bonus depreciation and not the 50% one-time Congressional largesse special.

Mike, never taking “no” for an answer, paid for and took delivery of the plane at year’s-end, signed a post-delivery agreement with the builders to soup up the plane as Mike required. Mike testifies on the trial he absolutely has to have the conference table and the widescreens in order to wow the stratospheric highrollers he’s trying to sell (and also the CPAs and lower-echelon brokers who send him leads).

Just before the ball drops at Times Square, Mike takes the plane as unmodified, flies to Seattle and then to Chicago, and gets letters signed by a client and a fellow broker saying how they talked business.

Of course the flight logs and the fuel receipts don’t jibe. IRS busily nails Mike for tax fraud on other items, and they settle, but Mike wants to fight for the bonus depreciation. He did pay for the plane, took title and flew it.

But that intrepid unraveller of depreciation, The Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, Judge Mark V. Holmes, isn’t flying with Mike.

For Judge Holmes’ disquisitions on depreciation, see my blogposts” Basis For Dummies”, 11/24/11, and “The Sum of Its Parts”, 3/12/12.

Mike did use the plane, and he claims it was ready for air transport, which it was. But that’s not the point. Placing an item of property in service means not only that it works generally, but is fit for the specific use the taxpayer intended, and is ready for that specific use on a regular, ongoing basis, unless frustrated by circumstances beyond the taxpayer’s control.

Reviewing the cases, Judge Holmes concludes: “These cases teach us that not just any use of an asset will satisfy the placed-in-service standard. An asset must instead be available for its intended use on a regular, ongoing basis before we can find it ‘placed in service’ in the tax year in question.” 2013 T. C. Memo. 275, at p. 37. (Emphasis by the Court).

Any use will not suffice. The specific intended use is what controls, and as Mike testified, without the conference table and the widescreen monitors, the plane didn’t answer Mike’s specific insurance-flogging needs.

“The problem with the Challenger was that, although it would have been, as Brown said, ‘perfect for some buyers,’ it wasn’t complete for him without the ’two business requirements that [he] needed.’ And without those two …modifications, the Challenger wasn’t ‘in a state of availability for the specific intended function in Brown’s insurance business….” 2013 T. C. Memo. 275, at p. 37.

Mike does avoid the 75% fraud chop, because, though he may have filed fraudulent returns in other years, IRS couldn’t prove he committed fraud with the Challenger. But Mike does get hit with the 20% substantial understatement.

No, not Karl Marx. This is the story of Crescent Holdings, LLC, Arthur W. Fields and Joleen H. Fields, A Partner Other Than The Tax Matters Partner, 141 T. C. 15, filed 12/2/13, another romp through the wonderful world of TEFRA, FPAA, and the alleged collision between Section 721 and Section 83.

Question presented- Did Art get a capital interest or an income interest? And if the interest was subject to substantial risk of forfeiture, when did he get whatever he got?

Art was running real estate deals for a subsidiary of Duke Power. Duke sold out to a slew of Morgan Stanley hedge funds, and Art got a 2% piece of the LLC wherein Duke kept the balance of its interest, along with the fundies.

But Art had to stick around at the helm of the LLC for three years, or else his interest was forfeit, and he made no Section 83 election to recognize the FMV of what he got in Year One.

Nevertheless, Art got two hefty K-1s for profits he never got. He paid the tax thereon for each year, but yelped that he got no cash. So the LLC fronted him the money to pay the taxes.

Whereupon the LLC started to go south, Art bailed before the magic three years, and the DIP brought an AP in Bankruptcy Court to claw back the cash they paid Art. Art settled, and then petitioned the FPAA that said he was a partner.

The DIP intervened in the Tax Court case, claiming what Art got was an income interest, not a capital interest.

No, says Judge Ruwe, it was capital. Read the Agreement, as amended. If the LLC liquidated the minute after Art signed the deal, he was entitled to a distribution out of capital.

And Section 721 applies to property, not services. What Art provided was services, not property. But Section 83 covers property for services where the right to that property is subject to substantial risk of forfeiture. Art’s 2% never vested; there was a substantial risk.

As for any conflict between Section 721 and Section 83, here’s Judge Rowe: “Section 83 governs the timing of income recognition when property is transferred in exchange for services. Section 721 provides that the contribution of property to a partnership in exchange for an interest in the partnership is a nonrecognition event for the partner and partnership. Section 83 does not conflict with section 721.” 141 T. C. 15, at p. 39.

“Since petitioner forfeited his right to the 2% interest before it substantially vested, he never owned the interest. Petitioner never received any of the economic benefits from the undistributed partnership income allocations to the 2% interest. Requiring petitioner to recognize the partnership allocations in his income is inconsistent with the fact that he received no economic benefit from the allocations. When petitioner’s interest was forfeited to Crescent Holdings, his right to the 2% interest and to receive any benefit from the partnership income allocations reverted to Crescent Holdings.” 141 T. C. 15, at p. 46 (Footnotes omitted).

So the tax on the 2% piece belonged to the LLC, not Art. He never got nothin’.

 Even When He Gets It Wrong

Another life insurance small claimer, the usual loan against cash value, with a deemed distribution not an annuity, so it’s taxable. And it’s not cancellation of debt, it’s repayment of a loan (extinguishment of debt), so Section 72 makes it taxable whether or not the distributee is insolvent, thus Section 108 doesn’t apply.

Ordinarily I wouldn’t blog a case like Samuel Brach and Lillian Brach, 2013 T. C. Sum. Op. 96, filed 12/2/13, except that Sam and Lil get off the 20% understatement chop because they relied on Moses (“Mighty Mo”) Neuman, EA.

Sam was disabled, and when he couldn’t make premium payments on his life insurance policy, Guardian Life sent him $3K and a 1099-R stating Sam got $65K, of which $32K was taxable and the rest was his investment in the contract (now where have we heard those words before? No prize for the correct answer).

Sam and Lil gave Mighty Mo every W-2 and 1099 they got. Mighty Mo went over their financial position, decided they were insolvent and therefore the $32K wasn’t taxable, and thus Sam and Lil’s Social Security wasn’t taxable either.

Mighty Mo never attached a Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), nor their 1099-SSAs, nor the 1099-R, to Sam and Lil’s Form 1040.

Deficiency time. Sam and Lil petition.

Of course the distribution from Guardian wasn’t cancellation of debt, it was repayment of the loan, and therefore treated as if Guardian wrote Sam a check and Sam wrote Guardian a check. Everything over Sam’s aggregated paid-in premiums is taxable, and therefore so is the Social Security, at least in part.

What about the 20% understatement chop?

Sam and Lil got lucky; they drew The Judge with a Heart, STJ Armen: “Petitioners retained Mr. Neuman, an enrolled agent, to prepare their 2010 tax return. As an enrolled agent, Mr. Neuman practiced before the Internal Revenue Service as a tax professional, a fact known to petitioners.” 2013 T. C. Sum. Op. 96, at p. 13.

“The status of enrolled agent can tend to show competence. See Mills v. Commissioner, T.C. Memo. 2013-4; see also Mortensen v. Commissioner, 440 F.3d 375, 388 (6th Cir. 2006) (‘Much like a taxpayer’s reliance on an attorney or an accountant, reliance on an enrolled agent is a factor we may consider in determining the reasonableness of a taxpayer’s actions’.), aff’g T.C. Memo. 2004- 279. An enrolled agent is an individual who has displayed ‘special competence in tax matters’. 31 C.F.R. sec. 10.4(a) (2007). In the instant case, the record demonstrates both that petitioners reasonably believed that Mr. Neuman was competent to prepare their return and that they had no reason to question his advice.” 2013 T. C. Sum. Op. 96, at p. 14.

And Sam and Lil told Mighty Mo the whole story, and were unsophisticates. So no 20% chop.

Makes me feel good, as an EA, to know that my status “can tend to show competence” and that I have “displayed special competence in tax matters.”

That obliging jurist Judge David Gustafson once again makes the critical point about Tax Court practice and procedure: “The Tax Court exists in order to create a means for resolving tax disputes as inexpensively as possible. In every Tax Court case, the taxpayer’s opponent is his Government. A majority of Tax Court petitioners are self-represented; and many Tax Court cases involve amounts in dispute that are less than the cost of hiring counsel.”. Martin E. O’Neill, Docket No. 31218-12, filed 12/2/13, at p. 1.

 For yet another example of the foregoing, see my blogpost “Another Argument”, 6/7/12. Ailing Dorothy Weaver gets hit with a $1700 penalty because she didn’t call her tax preparer to testify on a trial. How can a self-represented, disabled person know to do this, or be physically able to do this, or to pay an attorney or a USTCP to do this? Judge Kroupa said she couldn’t turn a blind eye to the requirements of law. Maybe not, but it just isn’t fair.

Judge Gustafson refuses to allow IRS to depose Marty O’Neill, even though in the usual Federal (or even State) Court plenary case, party depositions are routine. We all learned on Day One of practice, when you serve the answer, simultaneously serve the notice to admit, the notice to produce, the notice to inspect, the demand for a bill of particulars, and deposition notices of all and sundry.

But that’s not how the Tax Court rules provide, even though “…respondent [IRS] reasonably seeks to take the deposition in order to obtain relevant information, and that the taking of the deposition would contribute to the efficiency of the development of the case and of subsequent settlement or trial.” Order, at p. 1.

Remember, this is the sixty-buck-ticket-to-justice. Judge Gustafson: “And even where (as here) the amount at issue justifies hiring counsel, the prevailing petitioner typically obtains no recovery that might cover litigation costs, and the relevant fee-shifting statute, section 7430, is remarkably stingy. However, the cost of depositions– including the cost of paying counsel to prepare for them and to attend and conduct them, and the cost of paying a court reporter to attend and to provide transcripts–is one of the major expenses of litigation, even for the non-deposing party who is merely defending against the other party’s discovery. It is a cost so significant that it is sometimes virtually disabling and makes litigation impractical.” Order, at pp. 1-2.

As for stingy Section 7430, when was the last time a petitioner got more than a soldier’s farewell from Tax Court in a Section 7430?

So Tax Court Rule 74(c)(1)(A) provides that depositions are allowed only in extraordinary circumstances. And so far IRS’ case seems ordinary. So if Judge Gustafson allows the depositions here, the door would be wide open for depositions in every case.

However, Marty isn’t completely safe at home: “Respondent may renew the motion upon a showing of extraordinary circumstances. Or, if respondent makes documented attempts at discovery but at trial is surprised by petitioner’s testimony, respondent may at that time move for appropriate relief, including negative inferences, the exclusion of evidence, or a continuance.” Order, at p. 2.

Practitioners, read and heed.

 Costa Rica 1A, Cayman 1B

Remembering the words of the late California Congressman Sonny Bono’s 1967 hit, Treasury works through the Thanksgiving holiday to spread the FATCA web farther and deeper.

Treasury announced that two havens have come into the fold. Costa Rica and Treasury will share information, while the Cayman Islands FFIs will provide info to Treasury.

Moreover, the Cayman-Treasury Tax Information Exchange Agreement of 2001 has been superseded by a new and improved model.

Meanwhile, Treasury claims 16 agreements “in substance” (the devil being you-know-where) have been reached. More to follow.

And the beat goes on.

I’m a fan of notices to admit; they can narrow issues, save trial time, and make one’s adversary think twice before advancing a doubtful claim.

But the very liberality which Tax Court accords to Rule 90 Requests for Admission (the Tax Court equivalent of our State Court notices) can create a trap for the requester. It’s too easy to try to prove your case that way, and in doing so, go a bridge too far and get a judicial slap.

An IRS attorney is the recipient of such a slap in Jody J. Cavis, Docket No. 1111-13S, filed 11/29/13.

Now both FRCP 36 and Rule 90 provide that merely because a requested admission presents a genuine issue for trial, the recipient of the request cannot object and refuse to respond. Maybe the response can obviate the need for a trial, or at least narrow what has to be tried.

But there are limits, and here The Judge With a Heart, STJ Armen, sets them down:

“Upon review, the Court regards the Request For Admissions as inappropriate, if not abusive, and shall therefore relieve petitioner of the obligation to respond to it.

“Respondent’s [IRS’] aforementioned Request For Admissions consists of 3 numbered paragraphs. The first numbered paragraph is a venue statement, but venue is already established by the Petition filed January 14, 2013. The second numbered paragraph incorporates a copy of the December 12, 2012 notice of deficiency from which petitioner appealed to this Court, but a copy of such notice is already in the record by virtue of the parties’ pleadings. The third numbered paragraph represents a conclusory statement that seeks petitioner’s concession of the sole substantive issue in this case, an issue that petitioner clearly raises in paragraphs 5 and 6 of the Petition filed January 14, 2013.” Order, at p. 1.

So, on his own motion, Judge Armen tosses IRS’ request and tells Jody to forget about it.

Takeaway- You can try to get your adversary to admit ultimate facts, if you use a certain amount of subtlety; but a frontal assault will only get you STJ Armen’s response: “Don’t ask.”

Best holiday wishes to all.

 So many questions, and so little time. Alas, we now have one more unanswered question, the impact of the immigration status of Lee Ang on his Tax Court Section 6330 review. See my blogpost “Angst”, 11/4/13, to which one styling him/herself “Lee” responded “wheres the answer??”

I of course replied “Ask Judge Laro. I haven’t got a clue.”

Well, Lee’s inquiry and my reply will have to remain buried among the mysteries of Tax Court, as Judge Laro’s pen apparently is sealed.

Judge Laro issues an order in Lee Ang, Docket No. 13309-12L, filed 11/26/13,  presumably after receiving the briefs (or the concessions) described in my blogpost aforesaid, in which he orders that the “parties shall by December 9, 2013, file with the Court a memorandum briefing the following issues:

“(1) On what date did the IRS provide petitioner with a written statement of the jeopardy levy, as required by section 7429(a)(1)(B); and,

“ (2) Whether petitioner’s letter dated September 20, 2011, entitled ‘Request for Administrative Relief of Jeopardy Levy’, is a proper request for administrative review of the jeopardy levy pursuant to section 7429(a)(2).” Order, at pp. 1-2.

Nothing about alien status or its impact on Tax Court litigation. Sorry Lee, in the immortal words of Robert Allen Zimmerman’s Number 14 all-time greatest hit “The answer, my friend, is blowin’ in the wind.”

Incidentally, Judge Laro finds enough fact questions to blow off IRS’ motion for summary judgment.

And IRS (and you practitioners out there) should remember that per Rule 50(a), if you want Tax Court to help you, make a motion, don’t send billets doux.

For more to that effect, see Gregory Lane Hartwell & Sharon Marlene Shiller Hartwell, Docket No. 19383-12, filed 11/26/13, wherein that Obliging Judge David Gustafson points out in a designated hitter: “The recent filing [a status report seeking a 30-day break to file decision documents] should have been a motion-not only because the rule requires it, but also because (a) the Court’s docketing system enables it to track “Motions” (to ensure that they are acted on), whereas a request in a report may fall between the cracks, and (b) where the Court is inclined to grant a request for relief, it can do so very easily where a motion is filed by simply stamping the  motion ‘Granted’, whereas respondent’s recent filing requires the Court to prepare a separate order. We do so, but would appreciate respondent’s future compliance with Rule 50(a).” Order, at p. 1.

It was an IRS lawyer who didn’t read the rules, not a pro se who might be forgiven.

The Judge Who Writes Like A Human Being, a/k/a The Great Dissenter, Mark V. Holmes, is a great fan of the remand to Appeals. See my blogpost “Back To The Future”, 8/1/11; although IRS isn’t happy with Judge Holmes’ liberal views. See my blogpost “Demand For Remand”, 12/3/12.

But that inveterate tax dodger William B. Meyer gets some judicial largesse from Judge Holmes in 2013 T. C. Memo. 268, filed 11/25/13.

Bill got nailed twice for frivolous filings, each time to the tune of $15K. Judge Holmes: “But for his 2000 tax year, Meyer decided not to file a return at all. Meyer told us at trial that he would not file a 2000 tax return unless he had a notice of deficiency and accompanying papers ‘to work from,’ because his records were ‘chaotic at best.’ The Commissioner believes Meyer earned more than more than $1 million in taxable income for 2000.” 2013 T. C. Memo. 268, at p. 2.

IRS gave Bill a SFR and a SNOD. But the USPS Form 3877 attesting to the certified mailing of the SNOD is dubious, and the SNOD itself is nowhere to be found. At least, not yet.

Bill never petitions the SNOD (which he claims he never got), but does petition the levy notice. Those things generally attract the notice even of persons whose view of the Code is somewhat casual.

The AO ordered a Form 4340 Certificate of Assessments, Payments And Other Specified Matters, but never finds the SNOD. “The Form 4340 had an entry which indicated that a $465,390 tax had been ‘assessed by examination’ and that there was an ‘audit deficiency per default of 90 day letter.’ Although that form apparently satisfied the Appeals Officer that a notice of deficiency existed, he was unable to find a copy of the notice before the CDP hearing.” 2013 T. C. Memo. 268, at p. 4.

When the AO asked Bill at the face-to-face CDP if there were any irregularities in the procedures IRS used, Bill said IRS never gave him a copy of the SNOD, even though he repeatedly asked and even filed a Freedom of Information request to get it.

“The Appeals officer was clearly aware that if he did not get verification that the Commissioner properly mailed a notice of deficiency to Meyer’s last known address, the assessment would be invalid; he wrote in his case activity record, ‘it is potentially possible that account will have to be abated & a new SNOD issued.’” 2013 T. C. Memo. 268, at p. 5.

Leaving out the tautological locution “potentially possible”, there’s a problem here. No SNOD, no mailing, no deficiency, no case.

The AO let Bill dispute his liability, but closes the case based on the dubious 3877 (the details of which you can read for yourself: a doubtful postmark, an illegible signature, and no number of items mailed filled in), that Bill discussed no collection alternatives (and couldn’t avail himself of any, as he hadn’t paid subsequent years’ taxes), and that the Form 4340 was close enough for jazz.

No, says Judge Holmes. While the Form 4340 is presumptive evidence, the taxpayer can identify any irregularity. Unless taxpayer does so, the Form 4340 is sufficient.

“Here, however, Meyer plainly did identify an irregularity in the assessment procedure–he argued that he never received the notice of deficiency. See Hoyle v. Commissioner, 131 T.C. at 205 n.7 (‘[W]here a taxpayer alleges no notice of deficiency was mailed he has * * * “[identified] an irregularity”, thereby requiring the Appeals officer to do more than consult the computerized records’ (quoting Chief Counsel Notice CC-2006-19 (Aug. 18, 2006))). Thus, the Appeals officer could not rely on ‘computerized records’ like the Form 4340. Instead, we have said that ‘[t]he Appeals officer may be required “to examine underlying documents in addition to the tax transcripts, such as the taxpayer’s return, a copy of the notice of deficiency, and the certified mailing list.’” Id. (quoting Chief Counsel Notice CC-2006-19). Therefore, the Appeals officer had a duty to dig deeper; at the very least, he had to examine other evidence to verify that the notice was properly mailed.” 2013 T. C. Memo. 268, at pp. 15-16. (Footnotes omitted, but read them: Judge Holmes’ best lines are in the footnotes).

And here’s the gist of one omitted footnote. “The Commissioner argues that Meyer disputed only his receipt of the notice of deficiency, and not its existence, during the CDP hearing. Thus, says the Commissioner, since the challenge to the existence of the notice is not part of the administrative record, it was never in dispute before the Appeals officer and we should not consider it. We think that’s splitting hairs a bit too fine–especially in a pro se setting. As an initial matter, we think Meyer did put the existence of the notice at issue at the CDP hearing. The declaration he gave to the Appeals officer at the CDP hearing says not only that he didn’t receive a notice of deficiency, but also that he had been unable to obtain a copy from the IRS after several requests. And that was on top of the fact that the Appeals officer himself was unable to find a copy of it. Even if Meyer’s declaration didn’t say the magic word ‘existence’, we have indicated that challenging receipt is also a challenge to a notice’s existence.” 2013 T. C. Memo. 268, at p. 15, footnote 10.

But is the dicey USPS Form 3877 a stronger a ledge for IRS to stand on? Even though this is a CDP and not a deficiency case, deficiency case principles rule.

“In deficiency cases, we have acknowledged that a failure to precisely comply with the Form 3877 mailing procedures may not be fatal if the Commissioner can come forward with other evidence that the mailing procedures were followed. See Clough, 119 T.C. at 188; Coleman, 94 T.C. at 91-92. Likewise, in a CDP case we want to stress that an Appeals Officer’s reliance on a defective Form 3877 to verify that the IRS had fulfilled its requirements to mail out a notice of deficiency is not an abuse of discretion per se–if the administrative record shows that he relied on other evidence that corrects or explains the defects, he could meet his verification obligation regarding the mailing issue.” 2013 T. C. Memo. 268, at pp. 25-26.

Except the AO didn’t. “The Appeals officer could’ve sought a declaration or some other kind of verification from an IRS employee involved in preparing the Form 3877 (or, if there was one, the USPS employee signing off on that form)…or obtained other habit or documentary evidence…to verify proper mailing. The administrative record, however, doesn’t indicate he sought any of these alternatives.” 2013 T. C. Memo. 268, at pp. 26-27. (Citations omitted).

And the administrative record is what governs here, where Ninth Circuit is the forum for appeals.

So does Judge Holmes toss IRS or send the case back to Appeals?

It’s close call, but Judge Holmes remands. Several Tax Court opinions came down between the CDP and the Tax Court trial, which the AO couldn’t have known about, showing what he should have done. So the case goes back to Appeals, not merely on the present administrative record but to complete it.

Especially to come up with the SNOD and proof that it was properly mailed.

Takeaway- If you dispute receipt, dispute existence (unless, of course, the SNOD is attached to the IRS’ answer).