Tax News

CCH (cch.taxgroup.com) reports:

The estate of a deceased taxpayer, which was allowed to substitute for the taxpayer in a Collection Due Process (CDP) appeal, did not establish abuse of discretion in the IRS' rejection of the taxpayer's installment agreement request, and could not challenge the underlying liability since that issue was never raised during the prior CDP hearing. The taxpayer was not current on his estimated tax payments which, under IRS guidelines, was required as a condition to entering into an installment agreement; therefore, the IRS Appeals officer did not abuse her discretion in rejecting the proposed installment agreement.
Although the taxpayer's wife, acting as executrix of his estate, claimed the taxpayer overstated his income and failed to deduct alleged payments in order to conceal unlawful activities, such issues were never raised in the CDP hearing. In accordance with Reg. §301.6320-1(f)(2), there was no authority or jurisdiction to consider these issues for the first time on appeal.
In a prior decision, R.B. Magana, Dec. 54,765, the possibility was left open in unusual cases of considering issues on appeal not raised during the CDP hearing. However, if the issue of the underlying liability is never considered by Appeals, there is no basis on which to conclude that Appeals' discretion has been abused and, therefore, no authority to consider the issue.
In one of three separate dissenting opinions, in which four judges concurred, the basis for applying an "abuse of discretion" standard of review was questioned because no such language appears in the code sections governing CDP appeals. This dissent argued in favor of retaining the latitude contemplated by Magana
to consider special circumstances, and concluded that, because of the unusual circumstances of the taxpayer's death, the underlying liability should have been considered.
J. Giamelli, 129 TC No. 14, Dec. 57,155
Other References:
Code Sec. 6320
CCH Reference - 2007FED ¶38,134.028
Code Sec. 6330
CCH Reference - 2007FED ¶38,184.50
CCH Reference - 2007FED ¶38,184.60
Tax Research Consultant
CCH Reference - TRC IRS: 51,056.25
CCH Reference - TRC LITIG: 6,136.25