Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has recommended nonacquiescence in the case of L.A. Cox, CA-10, 2008-1 USTC ¶50,165, in which the Tenth Circuit Court of Appeals held that an IRS Appeals officer was disqualified from conducting a Collection Due Process (CDP) hearing regarding a married couple's tax liabilities for two tax years because the officer had considered those liabilities during a CDP hearing for a prior year. The Tenth Circuit ruled that the officer's consideration of those liabilities was "prior involvement" prohibited under Code Sec. 6330(b)(3). In a footnote, the Tenth Circuit stated that its holding would, by implication, invalidate the current version of Reg. §301.6330-1(d)(2), which expressly excludes prior CDP hearings from the definition of "prior involvement."

  The IRS determined that the Tenth Circuit erred by failing to give proper deference to the Service's construction of "involvement" in the regulations. The conclusion that "involvement" has a plain meaning is incorrect because the term is not defined in the statute or legislative history and is inherently ambiguous.

  An Appeals officer is not legally precluded by the "no prior involvement" language from conducting a taxpayer's CDP hearing for a given tax year because he considered the taxpayer's compliance history when evaluating eligibility for collection alternatives during a prior CDP hearing. There is no disqualifying involvement when the same officer holds consecutive CDP hearings for the same taxpayer who has accrued new unpaid tax liabilities. Instead, "prior involvement" refers to an Appeals officer having considered the tax year at issue in a prior non -CDP context, such as when the Appeals officer worked on collection of the tax as a revenue officer.

AOD 2009-01,
2009FED ¶46,366

AOD 2009-01, IRPO ¶51,284

Other References:

 
Code Sec. 6330

  CCH Reference - 2009FED ¶38,184.16

  CCH Reference - 2009FED ¶38,184.28

 
Code Sec. 7521

  CCH Reference - 2009FED ¶42,791.30

  Tax Research Consultant

  CCH Reference - TRC IRS: 51,056.15