This is from Freeman Law: Tax Court In Brief
Crim v. Comm’r, T.C. Memo. 2021-117 | October 4, 2021 | Lauber, J. | Dkt. No. 16574-17L
Short Summary: During tax years 1999 through 2003, Mr. John Crim promoted a tax shelter scheme involving domestic and offshore trusts. In 2008, Mr. Crim was convicted of certain crimes (conspiracy to defraud the United States and a corrupt endeavor to interfere with the administration of the internal revenue laws) and imprisoned until 2014.
The Internal Revenue Service notified Mr. Crim that it proposed to assess penalties under Section 6700(a) by letter dated June 16, 2010. On July 26, 2010, the Internal Revenue Service assessed the proposed penalties. On November 18, 2011, the Internal Revenue Service filed a notice of federal tax lien. On March 8, 2017, the Internal Revenue Service sent Mr. Crim a Letter 1058, Notice of Intent to Levy.
Mr. Crim’s representative timely filed a request for CDP hearing. At the hearing, Mr. Crim’s representative made various legal arguments, including that the penalties had been assessed and/or collected after the relevant period of limitations had expired. The Internal Revenue Service sustained the collection action. On August 4, 2017, Mr. Crim timely filed his petition with the Tax Court. On November 14, 2019, the Internal Revenue Service filed a motion for summary judgment.
- (1) Whether the Internal Revenue Services’ determination to sustain the collection action (notice of intent to levy) was proper as a matter of law.
- (1) The Internal Revenue Services’ determination to sustain the collection alternative (notice of intent to levy) was proper as a matter of law.
Key Points of Law:
- The Tax Court may grant summary judgment when there is no genuine dispute of material fact and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Comm’r, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965 (7th Cir. 1994).
- A taxpayer’s underlying liability is properly at issue in a CDP case only “if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute” it. I.R.C. § 6330(c)(2)(B); Sego v. Comm’r, 114 T.C. 604, 609 (2000).
- “The Commissioner has generally prevailed in foreclosing challenges to the underlying liability under section 6330(c)(2)(B) where he establishes that a notice . . . was mailed to the taxpayer’s last known address.” Kamps v. Comm’r, T.C. Memo. 2011-287, 102 T.C.M. (CCH) 580, 582.
- Section 6502(a)(1) provides that a tax that has been properly assessed may be collected if the levy or other collection action is begun “within 10 years after the assessment.”
- Section 6501(a) imposes no period of limitations on the assessment of penalties under Section 6700.
Insight: Crim highlights the fact that the Tax Court reviews a settlement officer’s determination for abuse of discretion. Taxpayers should be prudent in contesting tax and penalty assessments at the appropriate time. Further, taxpayers should be cognizant of the applicability of periods of limitation to certain types of penalties, including Section 6700 penalties. Finally, taxpayers should be wary of bombarding the Tax Court with multiple filings/”mountains of paper” that lacks certain critical support, such as personal affidavits from the taxpayer.
Have a question? Contact Jason Freeman, Freeman Law, Texas.
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