holding that no bona fide interest would be served in remanding a CDP case for the AO to verify assessment records where records that the Commissioner provided the taxpayer after the CDP hearing showed that the assessments were proper
How later courts described this case
- holding that no bona fide interest would be served in remanding a CDP case for the AO to verify assessment records where records that the Commissioner provided the taxpayer after the CDP hearing showed that the assessments were proper
- holding that the computer-generated certificate of assessment satisfied the regulatory requirements
- holding that the Secretary or his delegate may issue a notice of deficiency pursuant to sections 6212(a) and 7701(a)(11)(B) and (12)(A)(i)
- holding that “the reviewing court shall disregard procedural errors unless the complaining party was prejudiced thereby”
Written by the judges who cited it.
The opinion
Laro, J., concurring in result: The majority holds that “respondent’s determination to proceed with collection of the tax liabilities assessed against petitioner for those [1992-97] years was not an abuse of discretion.” Maj. op. p. 167-168. On the basis of this Court’s opinion in Lunsford v. Commissioner, 117 T.C. 183 (2001) (Lunsford II), a decision with which I dissented and continue to disagree, but for which I shall respectfully follow as the view of this Court, I agree with the majority’s holding. 1 As was true in Lunsford II, petitioner has failed to advance in this proceeding any bona- fide argument that makes it “either necessary or productive to remand this case to IRS Appeals to consider”. Id. at 189 . A holding for respondent is therefore appropriate.
I also write to clarify my understanding of the Court’s rejection of petitioner’s argument that the Appeals officer failed to verify that the requirements of any applicable law or administrative procedures had been met. Maj. op. p. 166. As was true here, and as was true in Davis v. Commissioner, 115 T.C. 35, 41 (2000), the case upon which the majority relies to reject that argument, the Court did not hold that an Appeals officer’s reliance on Form 4340, Certificate of Assessments and Payments, was sufficient to meet section 6330(c)(l)’s requirement that “The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.” In Davis v. Commissioner, supra at 40-41 , and as was true here, majority op. p. 166, the narrow holding of the Court was that an Appeals officer may at the hearing rely on Form 4340 to verify that the taxes in question were assessed.
The fact that Form 4340 is insufficient compliance with section 6330(c)(1) in its entirety is seen by a plain reading of the relevant legislative history. The Senate Finance Committee report provides that
During the hearing, the IRS is required to verify that all statutory, regulatory, and administrative requirements for the proposed collection action have been met. IRS verifications are expected to include (but not be limited to) showings that:
(1) the revenue officer recommending the collection action has verified the taxpayer’s liability;
(2) the estimated expenses of levy and sale will not exceed the value of the property to be seized;
(3) the revenue officer has determined that there is sufficient equity in the property to be seized to yield net proceeds from sale to apply to the unpaid tax liabilities; and
(4) with respect to the seizure of the assets of a going business, the revenue officer recommending the collection action has thoroughly considered the facts of the case, including the availability of alternative collection methods, before recommending the collection action.
[S. Rept. 105-174, at 68 (1998), 1998- 3 C.B. 537 , 604. 2 ]
Form 4340 simply does not meet each of these verification requirements. Form 4340 was sufficient both here and in Davis because the only irregularity alleged as to the verification requirement concerned the proper assessment.
Vasquez and Gale, JJ., agree with this concurring in result opinion. I note in passing, however, that Lunsford II appears to have been sapped of some of its vitality by the Treasury Department’s recent release of final regulations under sec. 6330. The majority in Lunsford II did not require the Office of Appeals (Appeals) to conduct a face-to-face collection due process (CDP) hearing with the taxpayers even though the taxpayers had alleged in their petition that they wanted such a face-to-face hearing and that the absence of a face-to-face hearing deprived them of their right to present their case. Lunsford v. Commissioner, 117 T.C. 183, 191 (2001) (Laro, J., dissenting). Whereas the final regulations under sec. 6330 observe that a CDP hearing need not be held face-to-face, the regulations indicate that the taxpayer may demand that a CDP hearing be scheduled face-to-face. The regulations mandate that a taxpayer who requests a face-to-face CDP hearing “must be offered an opportunity for a hearing at the Appeals office closest to the taxpayer’s residence or, in the case of a business taxpayer, the taxpayer’s principal place of business.” Sec. 301.6330-l(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs.
The fact that this quoted text relates solely to the verification requirement of sec. 6330(c)(1) is seen not only by reading the quoted text but by reading the text that appears immediately thereafter. That text, which relates to sec. 6330(c)(2), provides:
The taxpayer (or affected third party) is allowed to raise any relevant issue at the hearing. Issues eligible to be raised include (but are not limited to):
(1) challenges to the underlying liability as to existence or amount;
(2) appropriate spousal defenses;
(3) challenges to the appropriateness of collection actions; and
(4) collection alternatives, which could include the posting of a bond, substitution of other assets, an installment agreement or an offer-in-compromise.
[S. Rept. 105-174, at 68 (1998), 1998- 3 C.B. 537 , 604.]