Tax News

CCH (cch.taxgroup.com) reports:

In cases where the Tax Court is to review notices of determination that have been supplemented, only the position taken by the IRS in the final supplemental notice is subject to review, not each notice individually. Thus, where a dispute was remanded three times to the IRS Appeals office and a supplemental notice issued each time by Appeals, the court need not review the first and second supplemental notices but only must review the final supplemental notice, as it contained all of the issues necessary for a determination of whether an abuse of discretion occurred.
The IRS had issued to a married couple a notice of determination imposing a lien for several years' alleged unpaid liability. The couple claimed that they did not owe tax for the first of the years at issue and that the lien deprived them of their sole source of emergency funds. Ultimately, after three remands to IRS Appeals office, the IRS agreed that no tax was owed for the first of the years at issue and entered into an installment plan for the other years, but refused to release the lien. The couple agreed to enter a stipulated agreement but could not agree with the IRS as to the wording of the decision document.
The couple sought wording in the decision that would declare the IRS's assessment of the first years' unpaid liability void, while the IRS sought language declaring it moot. Citing precedent from cases that involved only one tax year ( L. Greene-Thapedi , Dec. 56,401; and W.P. Chocallo , Dec. 55,675(M)), the court declared the assessment moot, finding no difference in a case where liability from one year out of several years was determined to have been satisfied.
The couple also sought wording that the court specifically was not upholding the determinations with respect to the incorrectly assessed year (the initial notice of determination, the first supplemental notice and the second supplemental notice) and then sustaining the third supplemental notice with respect to years other than the improperly assessed year. The IRS, on the other hand, sought wording that would sustain the notice and the three supplements, except with respect to the incorrectly assessed year.
The court determined that it need not review all notices and supplemental notices but only must review the final supplemental notice, as it contained all of the issues necessary for its abuse of discretion determination. However, the married couple's wording that the notice of determination as supplemented three times was sustained with respect to years other than the incorrectly assessed year was proper.
R. Kelby, 130 TC No. 6, Dec. 57,420
Other References:
Code Sec. 6330
CCH Reference - 2008FED ¶38,184.60
Tax Research Consultant
CCH Reference - TRC IRS: 51,056.25