Mason v. Commissioner (T.C. Memo. 2021-64)

On May 20, 2021, the Tax Court issued a Memorandum Opinion in the case of Mason v. Commissioner (T.C. Memo. 2021-64). The primary issue presented in Mason was whether Appeals abused its discretion by reviewing the Centralized Unit's decision for abuse of discretion instead of reviewing the Masons’ offer on its merits. Background: A Lesson in Bureaucracy Victor and Katherine Mason owed back taxes. They didn't deny it, but they said they didn't have the money to pay. They submitted an offer to compromise the debt, and the IRS routed it to the part of the bureaucracy--the Centralized Offer-In-Compromise Unit--that reviews these offers. But another part of the IRS began sending collection notices to the Masons. The Masons asked for a hearing with the IRS Appeals Office. IRS Appeals is supposed to consider alternatives to forced collection at these hearings, including offers like the one that the Masons wanted. What…

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Shitrit v. Commissioner (T.C. Memo. 2021-63)

On May 20, 2021, the Tax Court issued a Memorandum Opinion in the case of Shitrit v. Commissioner (T.C. Memo. 2021-63). The primary issue presented in Shitrit was whether the Tax Court had jurisdiction to entertain the suit subsequent to the IRS’s concession that its certification of the petitioner’s tax debt as “seriously delinquent” was erroneous. Background Mr. Uriah Shitrit is a dual citizen of Israel and the United States. Mr. Shitrit did not file a Federal income tax return for 2006. Unfortunately for Mr. Shitrit, three separate companies reported that he received income in 2006. In light of this third-party reporting, the IRS prepared an IRC § 6020(b) substitute for return for Mr. Shitrit's 2006 tax year. The IRS issued a notice of deficiency to Mr. Shitrit, determining a deficiency of $102,000, interest of $4,300, and additions to tax of $37,000 for failure to timely file under IRC §…

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