On June 18, 2020, the Tax Court issued a Memorandum Opinion in the case of Cosio v. Commissioner (T.C. Memo. 2020-90). The primary issue before the court in Cosio was whether the petitioner received a reasonable opportunity to present evidence pertaining to his tax liability for 2015, when all notices sent to the petitioner referenced his 2012 liability and his right to a hearing thereupon.
From the limited facts set forth in the Tax Court opinion, the petitioner does not appear to have been a “model” taxpayer. Petitioner filed his 2015 return a month after the extended due date (though it’s not clear whether his return was actually on extension), which was bad enough, but he also failed to remit any payment with the return. The IRS assessed the tax a month later, and four months after the assessment, the IRS issued a Notice of Intent to Levy and Notice of Right to Hearing with respect to the petitioner’s 2006, 2007, 2008, 2009, 2010, 2011, and 2015 tax years. (2012 was also not a good year for the petitioner, but that year was subject to a separate notice of intent to levy.)
The petitioner timely filed a Form 12153 (Request for CDP or Equivalent Hearing) for tax years 2006-2015, though the petition only pertains to the petitioner’s 2015 liability. On the Form 12153, the petitioner argued that he was not liable for the underlying liability for the tax assessed. Appeals issued the petitioner a letter with respect to his 2015 liability, acknowledging the timely CDP request and acknowledging that the case was being forwarded to the New York office of Appeals.*
*Author’s Note: I dated a girl from New York once. That is a mistake that I never made again and that I have proactively (and without solicitation) informed anyone who has an inkling to walk down that path of desolation to avoid, like the plague that it is. I am also a dyed-in-the-wool Red Sox fan. My opinions on the utter ineptitude of the New York office of appeals may, therefore, be a skosh colored.
So, the New York appeals office assigns one of their top-tier settlement officers to the case. Sure, she had been a mail clerk just days earlier, but she was a really good mail clerk, and the New York office had seen some attrition in the previous month due to “rumblings” of corruption, racketeering, etc. – nothing too out of the ordinary for New Yorkers, but apparently “hot buttons” for the D.C. office. (See author’s note, supra, re: color of my opinion and possible, albeit slight-if-at-all, hyperbole.)
In every correspondence to the petitioner, SO Big Apple fails to mention his 2015 liability. After “scheduling” a telephonic hearing with the petitioner’s representative (which, if the Tax Court opinion is to be believed, consisted of SO Inteligensia “leaving him a voicemail asking him to return her call”), she called the representative, and when he did not immediately answer, she considered this to be the penultimate act of collection “due process.”
She sent the petitioner a “last chance” letter, giving him 14 days to provide her any information that he wanted her to consider before making a determination with regard to 2012 only. Ultimately, the Tax Court concluded that SO Airhead, “forgot” to schedule petitioner’s CDP hearing with respect to tax year 2015. Notwithstanding that, SO Dingbat issued a Notice of Determination sustaining the proposed collection action for 2015.
In his timely filed petition, the petitioner argued that he was not given proper notice with respect to his CDP hearing for 2015 and that his July 24, 2017, telephone conversation with SO Tweedle-Dum “led [him] to believe that [he] would receive further communication regarding the [CDP] hearing.”
Jurisdiction of Tax Court in Collection Due Process (CDP) Cases
The Tax Court has limited jurisdiction to hear cases, even when such cases involve the New York offices of the IRS (which, I would argue, should give it plenary jurisdiction, but that’s just one embittered man’s opinion). IRC § 7442; Estate of Young v. Commissioner, 81 T.C. 879, 881 (1983). In a CDP case, the Tax Court’s jurisdiction depends on the issuance of a notice of determination following a timely request for a CDP hearing and the filing of a timely petition for review. IRC § 6330(d)(1); Orum v. Commissioner, 123 T.C. 1, 8, 11-12 (2004), aff’d, 412 F.3d 819 (7th Cir. 2005).
Consideration of Underlying Liability – Presentation of Evidence to Appeals Necessary
Although a taxpayer may request consideration of his underlying tax liability in his CDP hearing request, merely requesting consideration of an issue in the request for a CDP proceeding is not enough to preserve the issue for judicial review. See Treas. Reg. § 301.6330-1(f)(2), Q&A-F3. The taxpayer must also present Appeals with “evidence with respect to that issue after being given a reasonable opportunity” to do so. Id.Add to favorites