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Lashua v. Commissioner (T.C. Memo. 2020-151)

On November 9, 2020, the Tax Court issued a Memorandum Opinion in the case Lashua v. Commissioner (T.C. Memo. 2020-151). The primary issues before the court in Lashua were whether the petitioner had unreported retirement income, whether the petitioner was liable for additional tax under IRC § 72(t), and whether the petitioner received a valid notice of deficiency.  A further issue was whether the petitioner was completely full of shit.  Judge Marvel – 1, petitioner – 0.

Background

In 2016 petitioner had an individual retirement account, from which he received a distribution of $7,800. The petitioner timely filed a Form 1040, U.S. Individual Income Tax Return, for 2016, but he failed to report the IRA distribution and the additional tax under IRC § 72(t). At the time of the IRA distribution, petitioner had not yet reached 59-1/2 years of age, and no portion of the distribution was deposited in another IRA or other retirement account. None of the facts necessary to establish an exception under IRC § 72(t)(2) existed at the time of petitioner’s distribution. The IRS issued a statutory notice of deficiency; however the SNOD was not signed by any IRS employee.

The petitioner argued that he is not liable for any tax on his IRA distribution because the notice of deficiency he received was not signed by an authorized IRS official and, therefore, was not valid. Accordingly, petitioner contends that this Court lacks jurisdiction.

The Form of the SNOD

A statutory notice of deficiency need not take any particular form to be valid. Campbell v. Commissioner, 90 T.C. 110, 115 (1988). A statutory notice of deficiency must advise the taxpayer that the IRS has determined a deficiency with respect to the taxpayer and must specify the year and amount. Id. It does not require a signature. Commissioner v. Oswego Falls Corp., 71 F.2d 673 (2d Cir. 1934), aff’g 26 B.T.A. 60 (1932); see also Perlmutter v. Commissioner, 44 T.C. 382, 399-400 (1965), aff’d, 373 F.2d 45 (10th Cir. 1967).

The petitioner nonetheless argues that IRC § 6212 requires all statutory notices of deficiency to be signed by the Secretary of the Treasury or his delegate. Petitioner’s argument is without merit. Neither IRC § 6212 nor any other provision of the Code includes such a requirement. The notice petitioner received complied with the requirements of IRC § 6212, identified petitioner, and notified him that respondent had determined a deficiency for 2016. The notice of deficiency petitioner received was valid.

Frivolity

The Tax Court did not deign to entertain any of the petitioner’s further arguments, finding that they were frivolous and warranted no further discussion.  Succinctly, the Tax Court cited Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984), and stated that there was “no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit.”  That’s about as much of a burn as you’ll get from Judge Marvel, so we’ll just leave that here.

(T.C. Memo. 2020-151) Lashua v. Commissioner

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