Adam Sowards

United States Tax Court

T.C. Memo. 2023-99

ADAM SOWARDS,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 2133-17L. Filed August 3, 2023.

—————

Christopher L. Bourell, Grace Borell (student), and Ariel Berger

(student), for petitioner.

Emly B. Berndt, John D. Davis, and Nancy P. Klingshirn, for

respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

GALE, Judge: Pursuant to sections 6320(c) 1 and 6330(d)(1),

petitioner seeks review of the determination of the Internal Revenue

Service (IRS) Office of Appeals 2 sustaining a proposed levy and the filing

of a notice of federal tax lien (NFTL) to collect federal income tax due for

the 2008, 2009, and 2010 taxable years (years at issue). The issues for

decision are whether (1) respondent properly disallowed certain credits

that petitioner claimed on his original and amended federal income tax

1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the

Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and

Rule references are to the Tax Court Rules of Practice and Procedure.

2 On July 1, 2019, the Office of Appeals was renamed the Independent Office

of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, § 1001, 133 Stat. 981, 983

(2019). We will use the name in effect at the times relevant to this case, i.e., the Office

of Appeals or Appeals.

Served 08/03/23

2

[*2] returns for each of the years at issue; (2) respondent should be

equitably estopped from maintaining that petitioner is not entitled to

those credits; (3) respondent’s disallowance of the credits on the basis of

a statutory amendment postdating the filing of petitioner’s original

income tax returns deprives petitioner of his right to due process under

the Fifth Amendment to the Constitution; and (4) petitioner’s

conscientious objection to participation in the Social Security system

excuses him from providing Social Security numbers (SSNs) to

substantiate his claims for credits.

FINDINGS OF FACT 3

Some of the facts are stipulated and are so found. The

Stipulations of Facts and the Exhibits attached thereto are incorporated

herein by this reference. Petitioner resided in Michigan when he timely

filed his Petition.

In October 2011, sometime before the 15th of that month,

petitioner and his spouse jointly filed federal income tax returns for the

years at issue. Petitioner claimed four children as his dependents for

each of those years. In addition, the 2008 return claimed the additional

child tax credit (ACTC) with respect to petitioner’s four children, along

with the earned income tax credit (EITC) and the recovery rebate credit.

The 2009 return claimed the ACTC with respect to petitioner’s four

children, along with the EITC. The 2010 return claimed the child tax

3 Respondent objects to the proposed findings of fact set forth in petitioner’s

Opening Brief on the ground that they do not comply with Rule 151(e)(3). Under Rule

151(e)(3), a party’s opening brief must include proposed findings of fact in the form of

numbered statements referring to the pages of the transcript, exhibits, or other sources

relied upon to support the statements, which may not consist of recitals of testimony,

nor of discussion or argument relating to the evidence or the law. We agree that

petitioner’s proposed findings of fact fail to comply with Rule 151(e)(3), and we have

accordingly not relied on them in making our own findings except to the extent

respondent has expressly declined to object to certain of petitioner’s proposals. See,

e.g., Ashkouri v. Commissioner, T.C. Memo. 2019-95, at *23–24.

In addition, because petitioner’s Answering Brief does not set forth any

objections to respondent’s proposed findings of fact, we conclude that petitioner

concedes the correctness of respondent’s proposals except to the extent that they are

clearly inconsistent with his own. See Jonson v. Commissioner, 118 T.C. 106, 108 n.4

(2002), aff’d, 353 F.3d 1181 (10th Cir. 2003). Our findings of fact are accordingly based

on our examination of the parties’ Stipulations of Facts, the stipulated Exhibits, the

trial transcript, those portions of respondent’s proposed findings of fact that we have

determined to be consistent therewith, and those portions of petitioner’s proposed

findings of fact to which respondent does not expressly object.

3

[*3] credit (CTC) with respect to petitioner’s four children. 4 The returns

did not provide SSNs for petitioner’s children or his spouse, none of

whom had SSNs when the returns were filed.

Petitioner’s spouse (whom he married in 2003) did not have an

SSN because she was not a citizen of the United States. Petitioner also

had not obtained SSNs for his children because he had intended

(consistent with his religious beliefs, which include conscientious

objection to public insurance and reliance on government benefits) to

allow his children to decide at an appropriate age whether they wished

to participate in the Social Security system. To obtain taxpayer

identification numbers other than SSNs for his children, petitioner

mailed requests for individual taxpayer identification numbers (ITINs) 5

to respondent along with his 2010 return. Respondent never formally

acted on petitioner’s requests for ITINs.

Shortly after petitioner filed his returns, respondent notified him

that his claims for the CTC, the ACTC, and the EITC for the years at

issue would be disallowed as mathematical or clerical errors. See

§ 6213(b)(1), (g)(2). Respondent thereafter assessed the adjusted tax

due, statutory interest, and additions to tax for failure to timely pay the

tax due for each year at issue. Respondent also assessed additions to

4 The parties’ stipulations concerning the credits claimed for each of the years

at issue on petitioner’s original returns do not accurately reflect the claims made on

those returns. Although petitioner’s returns for 2008 and 2009 included claims for

only the ACTC, the parties’ stipulations state that petitioner claimed the CTC for 2008

and both the CTC and the ACTC for 2009. Also, for 2009, the parties have stipulated

that petitioner claimed credits on his original return in amounts that do not match

those shown on the return.

These discrepancies are immaterial. As discussed infra Part II.A, under the

circumstances of this case petitioner’s eligibility for either the CTC or the ACTC (which

is the refundable portion of the CTC) is determined by the same statutory provisions

relating to taxpayer identification numbers. Because we conclude herein that all of

petitioner’s claims for the CTC, the ACTC, and the EITC are disallowed, the precise

amounts of those credits claimed on his returns (as originally filed or as later amended)

do not affect the outcome of this case. To the extent that petitioner’s returns and the

parties’ stipulations refer to the credits at issue by different names, we will use the

names reflected on petitioner’s returns.

5 An ITIN is a taxpayer identification number issued by the IRS to an

individual who is not a citizen or national of the United States. Treas. Reg.

§ 301.6109-1(d)(3)(i). The IRS will not issue an ITIN to an individual who has, or is

entitled to have, an SSN. Id. subpara. (4)(i).

4

[*4] tax for failure to timely file returns for 2008 and 2009, 6 as well as

an addition to tax for failure to pay estimated tax due for 2010.

During the years following the disallowance of petitioner’s claims

for credits, petitioner and respondent continued to communicate about

his returns and his requests for ITINs. In 2013 respondent sent

petitioner a letter in connection with an inquiry he had made in 2012

concerning the status of his ITIN requests, which stated that respondent

had made a correction relating to an SSN on petitioner’s 2008 return.

Respondent subsequently stopped collection activity and placed

petitioner’s accounts for the years at issue in currently not collectible

status (although petitioner had not requested that respondent do so).

Eventually, in 2016, respondent resumed collection activity by sending

petitioner and his spouse a notice of intent to levy (levy notice) and a

notice of NFTL filing (lien notice) to collect petitioner’s outstanding tax

liabilities for the years at issue. After receiving the levy notice and the

lien notice, petitioner timely requested a collection due process (CDP)

hearing pursuant to sections 6320 and 6330. 7

An Appeals settlement officer conducted the CDP hearing.

During the hearing the settlement officer informed petitioner that his

claims for the disallowed credits were required by statute to include

SSNs. Petitioner accordingly applied for and obtained SSNs for each of

his children. Before petitioner provided the SSNs to respondent,

however, Appeals issued him a notice of determination. The notice of

determination sustained the proposed levy and the filing of the NFTL,

noting that petitioner had not submitted the SSNs or the necessary

information for consideration of a collection alternative.

Petitioner timely petitioned for review of Appeals’

determination. 8 Petitioner thereafter in 2017 submitted amended

returns to respondent for each of the years at issue, which listed his

6 Petitioner’s account transcript for 2010 does not include an assessment of a

late-filing addition to tax for that year but instead indicates that petitioner had

obtained an extension of time until October 15, 2011, to file that return.

7 Petitioner’s spouse was not named on, and did not sign, the request for a CDP

hearing.

8 Both petitioner and his spouse signed the Petition; but because petitioner’s

spouse had not requested a CDP hearing and consequently had not received a notice

of determination, we dismissed this case for lack of jurisdiction to the extent that the

Petition purported to seek review of a determination concerning petitioner’s spouse.

5

[*5] children’s SSNs. 9 After a partial trial, respondent moved the Court

to remand the case to Appeals for a supplemental CDP hearing to give

further consideration to petitioner’s underlying tax liabilities. The

Motion was granted. 10

In connection with the supplemental hearing, petitioner’s

underlying liabilities for the years at issue were considered by Appeals,

in consultation with the Examination Division. An Appeals officer

concluded that petitioner was entitled to dependency exemptions with

respect to his children but not to the EITC or recovery rebate credit

because no valid taxpayer identification number for his spouse had been

provided, as required by sections 32(m) and 6428, respectively. The

Appeals officer further concluded that petitioner was not eligible for the

CTC and the ACTC because section 24(e), as amended and in effect when

petitioner filed his amended returns, disallowed any claim for such

credits with respect to a child whose taxpayer identification number had

not been issued before the due date for filing the relevant return.

Finally, the Appeals officer concluded that petitioner had not

demonstrated that he was entitled to abatement of the assessed

statutory interest or additions to tax for any of the years at issue.

Another Appeals officer considered the collection issues besides

the underlying liabilities and concluded that (1) all requirements of

applicable law and administrative procedure had been satisfied;

(2) petitioner had not provided any information necessary for

consideration of a collection alternative, and his counsel had expressly

declined during the supplemental hearing to request a collection

alternative or provide financial information; and (3) in the absence of a

collection alternative, the collection actions at issue appropriately

balanced the need for efficient tax collection against the intrusiveness of

the collection actions. Also adopting the conclusions of the other Appeals

officers concerning petitioner’s underlying liabilities, the Appeals officer

9 Petitioner’s amended returns for 2008 and 2009, like his original returns for

those years, claimed the ACTC and the EITC (although the amended return for 2009

slightly increased the amount of his claim for the EITC compared to the original

return). Petitioner’s amended return for 2010 reduced the amount reported as his

adjusted gross income for that year, reduced the amount of his claim for the CTC, and

added a claim for the ACTC. The amended return for 2010 also adjusted petitioner’s

claims for dependency exemptions.

10 Respondent conceded at the partial trial that petitioner was entitled to

contest the underlying liabilities. Respondent’s position is correct. See Triola v.

Commissioner, T.C. Memo. 2014-166; Internal Revenue Manual 21.5.4.2(9) (Sept. 6,

2017); see also Perkins v. Commissioner, 129 T.C. 58, 65 n.8 (2007).

6

[*6] issued a supplemental notice of determination reflecting the

foregoing and sustaining the proposed levy and the filing of the NFTL. 11

OPINION

I. Administrative Hearing and Judicial Review

Section 6321 imposes a lien in favor of the United States on all

property and rights to property of a taxpayer after a demand for

payment of tax has been made and the taxpayer has failed to pay. The

lien arises when the tax is assessed. § 6322. The Secretary generally

must file an NFTL with certain state or local authorities where a

taxpayer’s property is situated for the lien to be valid against certain

categories of third parties. § 6323(a), (f); Behling v. Commissioner, 118

T.C. 572, 575 (2002). The Secretary is required to notify the taxpayer in

writing of the filing of an NFTL and of the taxpayer’s right to a hearing

concerning the NFTL filing. § 6320(a)(1), (3).

Section 6331(a) authorizes the Secretary to levy upon property

and property rights of a taxpayer who fails to pay the tax within 10 days

after notice and demand for payment is made. Before doing so, however,

the Secretary must give the taxpayer written notice of his or her right

to a prelevy hearing. § 6330(a)(1), (b)(1).

During a CDP hearing a taxpayer may raise “any relevant issue,”

such as a challenge to the appropriateness of the collection action and

the possibility of collection alternatives. §§ 6320(c), 6330(c)(2)(A). A

taxpayer may also challenge the existence of the underlying tax liability,

but only if the taxpayer did not receive a notice of deficiency with respect

to the liability or otherwise have an opportunity to dispute it. §§ 6320(c),

6330(c)(2)(B). The Appeals officer who conducts the hearing must then

determine whether to uphold the collection action, taking into

consideration (1) whether the requirements of applicable law and

administrative procedure have been met, (2) any relevant issues raised

by the taxpayer, and (3) whether the proposed collection action

appropriately balances the need for efficient collection of taxes with the

taxpayer’s legitimate concerns that the collection action be no more

intrusive than necessary. § 6330(c)(3).

11 The supplemental notice of determination indicates that because petitioner’s

claims for dependency exemptions had been allowed, respondent had partially abated

petitioner’s assessed liabilities for 2008 and 2009, and that his assessed liability for

2010 would also be partially abated.

7

[*7] Pursuant to sections 6320(c) and 6330(d)(1), this Court has

jurisdiction to review the Appeals officer’s determination. When this

Court remands a case to the Appeals Office and there is a supplemental

determination, we review the supplemental determination. Hoyle

v. Commissioner, 136 T.C. 463, 468 (2011), supplementing 131 T.C. 197

(2008). If the validity of the underlying tax liability is properly at issue,

we review the liability determination de novo. Goza v. Commissioner,

114 T.C. 176, 181–82 (2000). We review the administrative

determination concerning a proposed collection action for abuse of

discretion. Id. at 182. An abuse of discretion occurs if an Appeals officer

issues a determination “arbitrarily, capriciously, or without sound basis

in fact or law.” Woodral v. Commissioner, 112 T.C. 19, 23 (1999).

II. Underlying Tax Liabilities

On brief petitioner disputes Appeals’ determination only to the

extent that he contends Appeals erroneously disallowed his claims for

the CTC, the ACTC, and the EITC. He has abandoned all other issues,

including any challenge to the underlying liabilities relating to his claim

for the recovery rebate credit or his liability for statutory interest and

additions to tax (to the extent that Appeals determined that the

assessments of those items should not be abated), and any claim that

Appeals’ resolution of nonliability issues constitutes an abuse of

discretion. See Rule 151(e)(4) and (5).

Credits are a matter of legislative grace, and a taxpayer must

prove entitlement to the credits claimed. 12 INDOPCO, Inc.

v. Commissioner, 503 U.S. 79, 84 (1992); see also Rule 142(a).

A. CTC and ACTC

A taxpayer may claim the CTC for an individual who is a

“qualifying child” as defined in section 152(c) and who has not attained

age 17 during the taxable year. § 24(a), (c). A portion of that credit

(commonly referred to as the ACTC) is refundable. § 24(d). Petitioner

claimed the ACTC for 2008 and 2009, as well as the CTC (and later, also

the ACTC) for 2010.

In 2011 when petitioner filed his original returns for the years at

issue, section 24(e) provided: “No credit shall be allowed under this

section to a taxpayer with respect to any qualifying child unless the

12 Petitioner does not contend that the burden of proof with respect to factual

issues should shift to respondent under section 7491(a).

8

[*8] taxpayer includes the name and taxpayer identification number of

such qualifying child on the return of tax for the taxable year.” Because

petitioner’s original returns did not include taxpayer identification

numbers for his children, he did not initially make an allowable claim

for the CTC or the ACTC for any of the years at issue.

Petitioner attempted to rectify the omission of the taxpayer

identification numbers by obtaining SSNs for his children and then

submitting amended returns including the SSNs. By the time he

submitted the amended returns to respondent in 2017, Congress had

amended section 24(e) to impose additional identification requirements.

See Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, div. Q,

§ 205(a) and (b), 129 Stat. 2242, 3081 (2015). As amended, section 24(e)

provided as follows:

Sec. 24(e). Identification requirements.—

(1) Qualifying child identification requirement.—No

credit shall be allowed under this section to a taxpayer with

respect to any qualifying child unless the taxpayer includes

the name and taxpayer identification number of such

qualifying child on the return of tax for the taxable year

and such taxpayer identification number was issued on or

before the due date for filing such return.

(2) Taxpayer identification requirement.—No credit

shall be allowed under this section if the identifying[13]

number of the taxpayer was issued after the due date for

filing the return for the taxable year.

Division Q, the Protecting Americans from Tax Hikes Act of 2015

(PATH Act), made the additional identification requirements applicable

to “any return of tax, and any amendment or supplement to any return

of tax, which is filed after the date of the enactment of this Act,” which

was December 18, 2015. PATH Act § 205(c)(1), 129 Stat. at 3081. 14 We

13 Congress later replaced the word “identifying” with the words “taxpayer

identification.” See Consolidated Appropriations Act, 2018, Pub. L. No. 115-141,

div. U, § 101(i)(1), 132 Stat. 348, 1162. The version of section 24(e) as amended by the

PATH Act otherwise remains in effect (although a special SSN requirement applies for

taxable years 2018 through 2025). See § 24(h)(7).

14 Congress later amended section 205(c) of the PATH Act to eliminate an

exception for timely filed returns for the 2015 taxable year. See Consolidated

Appropriations Act, 2018, § 101(i)(2), 132 Stat. at 1162. That amendment has no

impact on returns (or amendments or supplements thereto) for the taxable years at

issue in this case.

9

[*9] have previously noted that “[a]fter the due date of the original

return, an amended return constitutes a supplement or amendment to

the original [return].” Clayton v. Commissioner, T.C. Memo. 1997-327,

74 T.C.M. (CCH) 146, 150 (citing Zellerbach Paper Co. v. Helvering, 293

U.S. 172 (1934)), aff’d, 181 F.3d 79 (1st Cir. 1998).

Petitioner did not submit the amended returns listing SSNs for

his children until 2017, well after the date of the PATH Act’s 2015

enactment. 15 The amended returns are consequently subject to the

additional identification requirements imposed by the PATH Act.

Because petitioner’s children did not yet have taxpayer

identification numbers in 2011—when he filed his original returns for

2008, 2009, and 2010—and petitioner did not obtain SSNs for them until

after respondent began collection activity in 2016, it follows that the

children’s SSNs were not issued until after the due dates for filing

income tax returns for the years at issue. See § 6072(a) (providing that

a calendar year taxpayer’s income tax return is generally due on April

15 of the following year); § 6081(a) (providing that the time for filing a

return generally may not be extended by more than six months). The

15 To the extent that petitioner can be understood to contend that the

additional identification requirements should not apply to his claims for credits

because he filed his original returns before the effective date of the PATH Act, we

interpret that contention not as an argument that the amended returns are something

other than amendments or supplements to the original returns, but rather as an

argument that the amendments should relate back to the filing of the original returns.

That argument is not persuasive. Although the general rule is that an amendment or

supplement to a return relates back to the filing of the original return, see Zellerbach

Paper Co. v. Helvering, 293 U.S. at 180, that rule does not apply for all purposes. For

example, an amendment to a return is not effective to avoid the application of a longer

assessment limitations period resulting from fraud or a substantial understatement

on the original return, or to prevent the accrual of interest on an underpayment. See

Badaracco v. Commissioner, 464 U.S. 386, 393–94 (1984). The PATH Act’s

amendments to section 24(e) can thus be understood as effectively limiting the general

rule that an amendment relates back to the filing of an original return in cases where

the amendment corrects the omission of a taxpayer identification number.

We are also unmoved by petitioner’s claim that he did not “change or amend

any material information such as income earned, number of dependents, or the amount

of credits claimed.” The materiality of a particular item is not dispositive of whether

an amended return or other document constitutes an amendment or supplement to an

original return. See, e.g., Friedman v. Commissioner, 97 T.C. 606, 610 (1991) (focusing

analysis of a document’s relationship to the original return on whether it was “intended

to modify” the return). In any event the taxpayer identification numbers involved here

are material to petitioner’s claims for credits in that they are required by statute for

allowance of the credits.

10

[*10] SSNs provided by petitioner’s amended returns do not satisfy the

section 24(e)(1) identification number requirements in effect when he

submitted them, and therefore his claims for the CTC and the ACTC are

disallowed.

B. EITC

Section 32(a)(1) allows an eligible individual to claim the EITC to

offset that individual’s tax liability, subject to a phaseout explained in

section 32(a)(2). As we have noted, petitioner claimed the EITC for both

2008 and 2009. At all times relevant to this case, section 32 imposed the

following identification number requirement with respect to individuals

otherwise eligible to claim the EITC:

Sec. 32(c). Definitions and special rules.—For

purposes of this section—

(1) Eligible individual.—

....

(E) Identification number

requirement.—No credit shall be allowed

under this section to an eligible individual

who does not include on the return of tax for

the taxable year—

(i) such individual’s taxpayer

identification number, and

(ii) if the individual is married

(within the meaning of section

7703),[16] the taxpayer identification

number of such individual’s spouse.

The only type of taxpayer identification number that satisfies this

requirement is an SSN. § 32(m). 17 It is undisputed that petitioner was

married throughout 2008 and 2009. It is also undisputed that

16 After petitioner filed his original and amended returns, Congress amended

section 32 by deleting “(within the meaning of section 7703)” from section 32(c)(1)(E)(ii)

and inserting rules for determining marital status in section 32(d). See American

Rescue Plan Act of 2021, Pub. L. No. 117-2, § 9623(a) and (b), 135 Stat. 4, 153–54. The

section 32(c)(1)(E) identification number requirement otherwise remains in effect.

17 The PATH Act amended section 32(m) to require that the SSN must have

been issued on or before the due date for filing the relevant return. See PATH Act

§ 204(a), 129 Stat. at 3081. That amendment does not affect the outcome of this case

because petitioner’s spouse did not have an SSN before or after the due dates of

petitioner’s 2008 and 2009 returns.

11

[*11] petitioner’s spouse did not have an SSN and was not eligible to

obtain one when petitioner filed his original and amended returns for

2008 and 2009. Those returns, as originally filed or as amended, thus

could not have included the required identification number for

petitioner’s spouse. Petitioner’s claims for the EITC therefore must be

disallowed.

C. Petitioner’s Equitable Estoppel, Due Process, and

Conscientious Objection Arguments

Petitioner contends that the additional identification

requirements imposed by the PATH Act should not bar his claims for

the CTC and the ACTC 18 because respondent should be equitably

estopped from applying the PATH Act’s additional identification

requirements. Petitioner also contends retroactively disallowing his

claims for credits on the basis of the PATH Act’s modification of section

24(e) is a deprivation of his right to due process under the Fifth

Amendment. Alternatively, petitioner suggests that the identification

number requirements applicable to the CTC, the ACTC, and the EITC

may burden impermissibly the free exercise of his religious beliefs in

view of his conscientious objection to participation in the Social Security

system. Petitioner’s contentions are unpersuasive.

1. Equitable Estoppel

To avoid disallowance of his claims for the CTC and the ACTC in

accordance with the PATH Act’s amendments to section 24(e), petitioner

argues that respondent should be equitably estopped from applying the

amended version of section 24(e) to his claims for credits. In support of

that argument, petitioner contends that respondent improperly delayed

the resolution of his claims for credits by failing to act on his requests

for ITINs during the four-year period between the submission of those

requests and the enactment of the PATH Act, and by unilaterally

postponing collection activity (and the corresponding opportunity for

judicial review) until after the PATH Act was enacted.

Equitable estoppel is applied against the Commissioner only

“with utmost caution and restraint.” Estate of Emerson

18 Petitioner makes similar arguments with respect to the EITC. As we pointed

out supra note 17, however, the PATH Act’s amendment of section 32(m) does not affect

petitioner’s eligibility for the EITC under the circumstances of this case. We

accordingly do not address petitioner’s arguments concerning the PATH Act in relation

to the EITC.

12

[*12] v. Commissioner, 67 T.C. 612, 617 (1977). For estoppel to apply

against the Commissioner, we have held that a taxpayer must establish

the following elements:

(1) [a] false representation or wrongful, misleading silence

by the party against whom the estoppel is claimed; (2) an

error in a statement of fact and not in an opinion or

statement of law; (3) the taxpayer’s ignorance of the truth;

(4) the taxpayer’s reasonable reliance on the acts or

statements of the one against whom estoppel is claimed;

and (5) adverse effects suffered by the taxpayer from the

acts or statements of the one against whom estoppel is

claimed.

Wilkins v. Commissioner, 120 T.C. 109, 112 (2003); see also Estate of

Emerson, 67 T.C. at 617–18.

The U.S. Court of Appeals for the Sixth Circuit, to which any

appeal in this case presumptively lies, see § 7482(b)(1)(G)(i), requires a

party invoking estoppel against the government to establish similar

elements, and additionally requires that the party “must demonstrate

some ‘affirmative misconduct’ by the government in addition to the other

estoppel elements,” Mich. Express, Inc. v. United States, 374 F.3d 424,

427 (6th Cir. 2004) (quoting Fisher v. Peters, 249 F.3d 433, 444 (6th Cir.

2001)); see also United States v. Guy, 978 F.2d 934, 937 (6th Cir. 1992).

The Sixth Circuit has explained that affirmative misconduct in

this context means “more than mere negligence,” in that the party

asserting estoppel must show “an act by the government that either

intentionally or recklessly misleads the claimant.” Mich. Express, 374

F.3d at 427. Consequently, “[t]he party asserting estoppel against the

government bears the burden of proving an intentional act by an agent

of the government and the agent’s requisite intent.” Id.

There is no dispute that when petitioner filed his original returns

in 2011, he also requested that the IRS issue ITINs for his children. 19

19 Although petitioner testified that he requested an ITIN (rendered as “I-10”

in the transcript) for his spouse, in addition to requesting ITINs for his children, we

need not address any request relating to petitioner’s spouse. As we have discussed,

petitioner’s claims for the CTC and the ACTC must be disallowed because his

children’s SSNs were issued after the due dates of the returns for the years at issue,

and his claims for the EITC must be disallowed because his spouse did not have an

13

[*13] Petitioner credibly testified that although he did not communicate

with the IRS in writing about his ITIN requests, he confirmed with the

IRS by telephone that those requests had been received. 20 He further

testified that he understood from his conversations with IRS personnel

that ITINs would be issued for his dependents once his requests had

been properly investigated. But petitioner was unable to identify any

specific IRS employee with whom he discussed his ITIN requests before

discussing them with the settlement officer at the original CDP hearing,

and the record is otherwise devoid of evidence concerning petitioner’s

prehearing communications with the IRS and the IRS’s handling of his

ITIN requests.

This evidence does not establish the traditional elements of

estoppel, nor does it establish that respondent or his employees have

engaged in affirmative misconduct. At most, the evidence suggests the

possibility that an IRS employee could have indicated to petitioner that

ITINs might be issued for his children if warranted by the results of the

IRS’s investigation. But the parties have since stipulated, consistent

with Treasury Regulation § 301.6109-1(d)(4)(i), that petitioner’s

children were not eligible to receive ITINs because, as citizens of the

United States, they were eligible to obtain SSNs. Any suggestion by an

IRS employee to the effect that respondent might (or even affirmatively

would) issue ITINs for petitioner’s children would thus amount to

nothing more than a misstatement of the law, which cannot give rise to

an estoppel. See, e.g., Trugman v. Commissioner, 138 T.C. 390, 394

(2012) (“We have recognized . . . that incorrect legal advice from an IRS

employee does not have the force of law and cannot bind the

Commissioner or this Court.”).

Nor can an estoppel result from respondent’s failure to act on

petitioner’s ITIN requests before the enactment of the PATH Act.

Petitioner has not identified any specific government agent who

communicated with him concerning the ITIN requests or who was

otherwise responsible for reviewing them. The record is consequently

devoid of evidence concerning any such agent’s intent in providing

advice to petitioner or in failing to act upon his ITIN requests. Absent

SSN, which is the only type of taxpayer identification number permitted under section

32(m). Accordingly, none of the credits at issue could have been allowed even if

respondent had issued an ITIN to petitioner’s spouse.

20 This testimony is corroborated by the IRS’s 2013 letter to petitioner, which

the parties have stipulated was issued in connection with an inquiry that petitioner

made about the status of his ITIN requests.

14

[*14] such evidence, we cannot conclude that the delay in acting on

those requests amounted to anything more than mere negligence (at

worst), which does not rise to the level of affirmative misconduct

necessary to establish an estoppel.

For similar reasons, no estoppel can result from petitioner’s claim

that respondent improperly delayed the commencement of collection

activity. Although the evidence does indicate that respondent deferred

the commencement of collection activity, even though petitioner did not

request that he do so, there is no evidence (and petitioner does not

contend) that any IRS employee misled him with respect to the

commencement of collection activity in any way that could establish the

basic elements of estoppel. Moreover, there is no evidence that such

deferral resulted from affirmative misconduct on the part of any specific

IRS employee. Petitioner has accordingly failed to demonstrate that

estoppel should apply against respondent in this case.

2. Due Process

Petitioner also argues that the PATH Act retroactively disallows

his claims for the CTC and the ACTC, without notice, in violation of the

Due Process Clause of the Fifth Amendment to the Constitution.

We reject petitioner’s view that the PATH Act’s amendments to

section 24(e) have retroactive effect as applied here. “[T]o operate

retroactively, a statute must actually ‘attach[] new legal consequences’

to completed, past conduct.” Polone v. Commissioner, 505 F.3d 966, 972

(9th Cir. 2007) (second alteration in original) (quoting Landgraf v. USI

Film Prods., 511 U.S. 244, 270 (1994)), aff’g T.C. Memo. 2003-339. A

statute does not have retroactive effect, however, if it merely “‘is applied

in a case arising from conduct antedating the statute’s enactment,’ or

. . . ‘upsets expectations based in prior law.’” Id. (quoting Landgraf, 511

U.S. at 269–70); see also Patel v. Gonzales, 432 F.3d 685, 690 (6th Cir.

2005).

As we have already discussed, the PATH Act’s amendments to the

section 24(e) identification number requirements expressly apply to

returns, and amendments and supplements to returns, filed after the

date of its enactment. See PATH Act § 205(c)(1), 129 Stat. at 3081.

Thus, by its terms, the amended version of section 24(e) applies only

prospectively, to documents (like petitioner’s amended returns) filed

after enactment of the PATH Act. “Although it is possible for a statute

with a seemingly prospective application to apply retroactively in some

15

[*15] circumstances,” see Polone v. Commissioner, 505 F.3d at 972, the

amended version of section 24(e) does not do so because it does not

change the legal consequences of petitioner’s original returns, which

were filed before the PATH Act’s enactment.

As filed, those returns did not include sufficient information to

make allowable claims for the CTC or the ACTC under section 24. And

because petitioner cannot satisfy the post-PATH Act section 24(e)

identification number requirements, he in effect cannot now correct his

legally insufficient prior claims. 21 The result, under the circumstances

of this case, is that the amended version of section 24(e) merely locks in

the preexisting (and expected) legal consequences of the original

returns. Petitioner’s contention that the PATH Act operates

retroactively is consequently without merit.

We accordingly conclude that the application of section 24(e), as

amended by the PATH Act, to petitioner’s amended returns does not

deprive him of his right to due process under the Fifth Amendment.

3. Conscientious Objection

Finally, petitioner notes on brief his conscientious objection to

participation in the Social Security system, which we understand as a

suggestion that the taxpayer identification number requirements at

issue in this case may impermissibly burden the free exercise of his

religious beliefs. A taxpayer’s religious or moral beliefs do not excuse a

failure to comply with identification number requirements established

by statute and regulation. See Miller v. Commissioner, 114 T.C. 511,

516–18 (2000).

Accordingly, because petitioner’s claims for credits fail to satisfy

the applicable statutory provisions concerning taxpayer identification

numbers, they must be disallowed notwithstanding his conscientious

objection to participation in the Social Security system.

III. Conclusion

We reject petitioner’s challenges to his underlying tax liabilities

for the years at issue. Since he has otherwise abandoned any challenge

21 As we observed supra note 15, the PATH Act can be understood to modify

the general rule that an amendment or supplement relates back to the filing of the

original return in cases where the amendment consists of a taxpayer identification

number.

16

[*16] to Appeals’ determination to sustain the collection actions, we will

sustain that determination, as supplemented.

To reflect the foregoing,

Decision will be entered for respondent.