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IRS PROCESSING OF NOTICES OF DELINQUENT TAXES DUE
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Start of Collection Action
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1040 Notice Procedure
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Business Taxpayers
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Accelerated Issuance
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Notice of Levy
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APPENDIX
Collection Due ProcessDiefenbaugh v. Weiss, 86 AFTR 2d 2000-
IRC § 6320, 6330 Appeal of Income Tax Liabilities. Case dismissed. The Tax Court has exclusive jurisdiction over levies to collect income taxes and not the district court.
Miller v. Commissioner, 115 T.C. 40 (2000)
Notice of Participation under IRC § 6015. An individual whose former spouse was granted as a spouse under section 6013(e) was not entitled to a Notice of Participation rights under section 6015.
Pierson v. Commissioner, 115 T.C. 39 (2000)
Taxpayer contested proposed IRS levy actions based upon frivolous tax protestor arguments: The court held that Pierson failed to raise a valid defense or challenge the Internal Revenue Service's proposed levy. It further warned subsequent tax protestors of potential sanctions.
Samuel and Bernice Boone Trust v. Commissioner, T.C. Memo 2000-
Case dismissed because the tax liability arose from a non-
Stephen C. Loadholt Trust, et al. v. Commissioner, T.C. Memo 2000-
The Tax Court held that it lacked jurisdiction to review administrative collection actions taken by the Internal Revenue Service in an erroneous refund case because of no jurisdiction over the underlying tax liability.
Meyer, et ux. v. Commissioner,115 T.C. 31 (2000)
The Tax Court held that the determination letters issued to a couple after they requested an appeal hearing but before a conference was scheduled are invalid in light of section 6330. The couple was not provided an opportunity for hearing before the determination letters were issued. Thus, the court concluded that the determination letters were invalid.
Katz v. Commissioner, 115 T.C. 26 (2000)
A Collection Due Process hearing is not required to be held in person. The taxpayer requested that the hearing be held in West Palm Beach. The court held that it was sufficient that the taxpayer had a hearing by telephone with the Appeals Officer. The court further held that there was no explanation as to why a one-
MacElvain v. Commissioner, T.C. Memo 2000-
Partial summary judgment granted to the government with respect to litigation of the nature and the amounts of the tax liability. The taxpayer previously agreed to the liabilities in question in a stipulated decision entered by the Tax Court.
Van Es v. Commissioner, 115 T.C. 25 (2000)
The court held that it lacked the jurisdiction to review an Internal Revenue Service determination of frivolous return penalties. The court further held that the Internal Revenue Service had initiated and completed its levy action prior to the effective date of section 6330. Thus, Van Es was not entitled to the protection of that section for prior collection activities. Van Es was granted thirty days after the order of dismissal to file an appeal with the U.S. district court.
Howard v. Commissioner, T.C. Memo 2000-
The Tax Court had previously sustained an Internal Revenue Service determination of a deficiency by the Service. The court held that the taxpayer could not now contest the underlying tax liability in a Collection Due Process proceeding.
Anderson, et ux. v. Commissioner, T.C. Memo 2000-
The Tax Court lacked jurisdiction to hear an employee's challenge to FICA liability. The taxpayer had contested an IRS determination that he was liable for self-
McCune v. Commissioner, 115 T.C. 7 (2000)
The court held that it lacked jurisdiction on an individual's petition because he failed to file his initial petition with a U.S. district court within thirty days of the notice of adverse collection action determination.
Davis v. Commissioner, 115 T.C. 4 (2000)
The court held that an individual does not have the right to subpoena witnesses and documents in an Internal Revenue Service Collection Due Process hearing and that the Appeals Officer conducting the hearing may rely upon Form 4340 ("Certificate of Assessments and Payments") to verify the assessment.
Sego, et ux. v. Commissioner, 114 T.C. 37 (2000)
The court held that the Service did not abuse its discretion in allowing collection to proceed against a tax protestor couple who refused to properly respond to notices of deficiency. The court determined that the taxpayers repudiated their right to challenge a levy by returning the Internal Revenue Service notices with frivolous defenses on it and not filing a petition.
Hoffman v. Commissioner, T.C. Memo 2000-
The court sustained an Internal Revenue Service notice of determination concerning collection actions under section 6320 and/or 6330. The taxpayer received a deficiency notice and did not file a Tax Court petition. When the Internal Revenue Service issued a Notice of Intent to Levy, he requested a Collection Due Process hearing. At the hearing he presented only frivolous arguments. The court specifically warned Hoffman that it was authorized to impose substantial penalties on taxpayers who institute proceedings with frivolous and groundless positions.
Offiler, et al. v. Commissioner, 114 T.C. 30 (2000)
The court held that it lacked jurisdiction to hear an individual's claim for relief for tax liability because she did not timely request a Collection Due Process after the final Notice of Intent to Levy. The taxpayer did not file within thirty days and only filed an appeal after the Internal Revenue Service had issued Notices of Levy.
Van Fossen v. Commissioner, T.C. Memo 2000-
The court held that the taxpayer could not contest Internal Revenue Service collection actions because he had received a deficiency notice before the assessment of the underlying tax liabilities. The taxpayer failed to raise other defenses to the proposed collection actions.
Goza v. Commissioner, 114 T.C. 12 (2000)
The court held that a tax protestor was not entitled to contest his tax liabilities before the Internal Revenue Service Appeals Office under section 6330 because he had already received the deficiency notice and had disregarded his opportunity to challenge the liability. The taxpayer did not raise further defenses to the 6330 notice.
Moore v. Commissioner, 114 T.C. 11 (2000)
The court held that it lacked jurisdiction to review a responsible person's administrative appeal under Section 6320 because it lacked jurisdiction over the underlying taxes and penalties arising under section 6672.
Provenzano v. United States, et al., 86 AFTR 2d para. 2000-
The district court held that the taxpayer had not met the jurisdictional prerequisites for court jurisdiction because he did file a refund claim with the Internal Revenue Service, allow six months to pass between the filing for the refund and the suit in federal court; nor did he pay the assessed tax liability of least one employee for periods at issue. Therefore, the court would not consider the taxpayer's 6320 and 6330 contest to the underlying tax liability, although the court granted the government's motion to dismiss and allowed Provenzano thirty days to amend his claim and properly state a claim upon which relief could be granted.
AJP Management v. United States, 87 AFTR 2d para. 2001-
The court found that the Appeals Officer did not abuse discretion when he issued a determination to allow the IRS to serve Notices of Levy to collect employment taxes. The taxpayer argued that a better option was an installment agreement or an Offer in Compromise. The court noted that the taxpayer continued to incur additional tax liabilities during the pendency of its appeal.
TTK Management v. United States, 87 AFTR 2d para. 2001-
Same facts, same owners, same holding as AJP Management above.
Mesa Oil, Inc. v. United States, 87 AFTR 2d para. 2001-
The court entered judgment ordering a remand of the corporation's tax case to the Appeals Officer's finding that the Officer who originally heard the company's appeal failed to meet statutory requirements of impartiality. Mesa Oil, Inc. fell behind in its payroll taxes and the Internal Revenue Service issued a Notice of Intent to Levy and a hearing notice under Section 6330. The Internal Revenue Service also filed a tax lien and issued an notice pursuant to 6320. The court found that the Appeals Officer failed to make a proper balancing analysis and failed to make an adequate record of the hearing. The taxpayer had proposed a one year repayment plan for its tax liabilities. The Appeals Officer denied that proposal and the court held that the determination letter indicated that the Appeals Officer prejudiced the case by making conclusions before Mesa's statutorily mandated hearing. The court specifically ordered that a new Appeals Officer by assigned to hear a new Collection Due Process hearing. The court further reminded the Appeals Officer to create an adequate record of the proceedings to secure Mesa's right to judicial review.
Konkel v. Commissioner, et al. 86 AFTR 2d para. 2000-
The court held that there was no abuse or indiscretion by the Appeals Officer in issuing a Final Notice of Determination. The taxpayer had previously contested a proposed 6672 penalty through his representative, but that representative subsequently withdrawn the protest. Konkel's new protest filed in response to an IRC § 6330 notice raised the same issues with respect to the underlying tax liability. Konkel denied knowledge that his representative had previously requested an appeal and withdrawn it. The court held that Konkel had been given an opportunity for a hearing on the underlying tax liability. Because he had an opportunity, he could not now contest the liability. The taxpayer apparently failed to raise other defenses allowed under section 6330.
Johnson v. Commissioner, et al., 86 AFTR 2d para. 2000-
Case dismissed. Taxpayer had failed to file a timely Collection Due Process appeal and there was no statutory provision allowing appeal of an equivalent hearing.
Lewis v. I.R.S., et al., 86 AFTR 2d para. 2000-
The court dismissed the taxpayer's petition because the proper jurisdiction for income tax liabilities was in the U.S. Tax Court.
Sparks v. United States, 85 AFTR 2d para. 2000-
The court granted the government's motion for summary judgment holding that an individual is barred from relitigating her individual tax liabilities. The taxpayer had failed to file her individual income taxes for 1993 and 1994. She received a deficiency notice from the Internal Revenue Service based upon a Substitute For a Return (SFR). The taxpayer previously petitioned to the U.S. Tax Court seeking redetermination of liabilities claiming that she was a non-
Wylie v. Commissioner, T.C. Memo 2001-
Taxpayer contested the underlying tax liability and alleged that Form 4340, Certificate of Assessments and Payments, was not a proper basis to verify the assessments. Petitioner raised no other arguments and offered no collection alternatives. The respondent moved for summary judgment and a motion was granted after the taxpayer failed to respond.
CHAPTER 1
IRS PROCESSING OF NOTICES
OF DELINQUENT TAXES DUE
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1040 Notice Procedure
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Business Taxpayers
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Accelerated Issuance
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Notice of Levy
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CHAPTER 2
IRS COLLECTION PROCEDURES
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Meeting Statutory Requirements
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Liens on All Taxpayer Property
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Notice Five Days After Filing
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An Overview of the Due Process Procedures
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FOR HEARING UPON FILING OF NOTICE OF LIEN Page 8
Requirements of Notice
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and Judicial Review on Periods of Limitation Page 12
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and Judicial Review on Statutes of Limitation Page 16
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Required Notices Page 16
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CHAPTER 3
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Guaranteed Availability of Installment Agreements
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Prior Administrative Rights
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Modifications of Installment Agreements
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Collection Information Statements
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Amount of Payments
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Substantial Net Worth
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Cash Flow Statement
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Completion of Page 4 of CIS
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Allowable Expenses
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Necessary Expenses
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Conditional Expenses
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Expenses Which Will Not Require Substantiation
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Housing Expense
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Transportation
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Necessary Expenses (Other)
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Necessary Expenses: Other Unsecured Debts
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Necessary for Production of Income
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Excessive Necessary and Conditional Expenses
Incurred after Assessment of Tax Liability
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Applications of the Standards
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Harsh Results of IRS Policies
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60-
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Withholding by Employer
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Bargaining Tactics
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Direct Debit Installment Agreements
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OF PAYMENT AGREEMENTS Page 28
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Taxpayer Assistance Orders
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Nonexclusive
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Extension of Statute of Limitations
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Release of Levy When Amount Is Uncollectible
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APPENDIX Page 32
EXHIBITS Page 37-