Starcher v. Commissioner
T.C. Memo. 2021-144

On December 30, 2021, the Tax Court issued a Memorandum Opinion in the case of Starcher v. Commissioner (T.C. Memo. 2021-144). The primary issue presented in Starcher was whether the IRS abused its discretion in upholding the filing of a notice of intent to levy.

Held: Discretion sound—no abuse here.


The petitioner did not file an income tax return for 2014, so the IRS prepared a substitute for return (SFR) for her pursuant to IRC § 6020(b). On the basis of the SFR, on April 22, 2019, the IRS sent petitioner a notice of deficiency. Petitioner did not petition this Court for redetermination within the prescribed time limit under IRC § 6213(a), and the IRS thereafter assessed these amounts. Soon thereafter, the IRS sent a Notice of Intent to Levy to the petitioner, who timely requested a CDP hearing indicating she could not pay the balance and that she “need[ed] to file 2014 taxes/reasonable expenses exceeding income.”

A CDP hearing was scheduled, and Appeals instructed the petitioner that if she wanted a collection alternative, she must prepare and transmit a Form 433-A (financial statement) prior to the hearing.

Starcher v. CommissionerNaturally, she did not do so.

The petitioner attended the CDP hearing by telephone, instructing Appeals that she wished to submit a delinquent return for 2014 that would replace the SFR and reduce her tax liability. The SO explained that she could not dispute her underlying liability at the CDP hearing because she had failed to petition this Court in response to the notice of deficiency; nevertheless, the SO threw the petitioner a bone and offered to look at the return if she also submitted a Form 433-A.

Naturally, she did not do so.

The settlement officer never received any financial information necessary for considering a collection alternative. Ultimately, the petitioner did (untimely) send the settlement officer a delinquent 2014 tax return, but only after a notice of determination was issued. The petitioner timely petitioned the Tax Court for review, contending that the settlement officer should have accepted her delinquent 2014 return for filing and reduced her tax liability accordingly.

Underlying Liability

The petitioner’s underlying tax liability was not properly at issue before the settlement officer. A taxpayer may challenge her underlying liability at a CDP hearing only if she “did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute” it.[1] The petitioner did not deny that she received a notice of deficiency for 2014. Thus, failing to act on the notice of deficiency, the petitioner had a prior opportunity and failed to take it.

Abuse of Discretion

Because the petitioner was not entitled to challenge her underlying liability at the CDP hearing, the settlement officer’s unwillingness to accept the delinquent 2014 return for filing was not an abuse of discretion.

Starcher No Abuse
Turns out, it’s not.

(T.C. Memo. 2021-144) Starcher v. Commissioner

  1. IRC § 6330(c)(2)(B).
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