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Chang v. Commissioner (T.C. Memo. 2020-19)

On January 29, 2020, the Tax Court issued a Memorandum Opinion in the case of Chang v. Commissioner (T.C. Memo. 2020-19). The issues presented in Chang were (1) whether petitioners timely mailed requests for CDP hearings; and if so (2) whether the Tax Court had jurisdiction to review the subsequent decision letters issued by the IRS.

Equivalent Hearing

Where a person does not timely request a Collection Due Process (CDP) hearing with respect to a determination, the IRS may instead hold an “equivalent hearing.” See Treas. Reg. § 301.6320-1(i)(1) (notice of federal tax lien); Treas. Reg. § 301.6330-1(i)(1) (notice of intent to levy). If an equivalent hearing is held and the IRS issues a decision letter, that letter does not constitute a notice of determination under § 6330(d)(1), and the Tax Court generally does not have jurisdiction to hear a challenge to the IRS’s decision.

Jurisdiction over Decision Letter in (Very) Limited Circumstances

The petitioner did not receive a notice of determination with respect to either the lien or the levy notice because, according to the IRS, he did not timely request a hearing. A determination is normally necessary for the Tax Court to take jurisdiction under IRC § 6330. See Inv. Research Assocs., Inc. v. Commissioner, 126 T.C. 183, 187 (2006).

If, however, a taxpayer timely requests a CDP hearing and determination, but the IRS erroneously determines that the request was insufficient (i.e., that it was late filed), then the Tax Court will take note of the denial of the CDP hearing and treat the decision letter as a quasi-determination, thereby permitting the Tax Court to take jurisdiction over the matter. Craig v. Commissioner, 119 T.C. 252, 258 (2002). In the present case, however, the Tax Court did not find the CDP hearing request to have been mailed timely, and, as such, no jurisdiction existed.

Original opinion: (T.C. Memo. 2020-19) Chang v. Commissioner

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