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TAX TRENDS

to request a CDP hearing with IRS in the supplemental determination that
Appeals. As part of the overall CDP she relied on IRS transcripts to ensure
hearing process, Sec. 6330(c)(1) requires Where a taxpayer that assessments were made and that a
the Appeals settlement officer to verify specifically alleges notice of the assessment had been sent
that the requirements of any applicable that he or she never to Pfetzer for each year in issue.
law or administrative procedure have
been met. One of the applicable laws is received a notice Second round in the Tax Court
Sec. 6213(a), under which, with limited of deficiency, the Pfetzer was no more accepting of the
exceptions, no deficiency may be as- supplemental determination than he had
sessed until after a notice of deficiency is settlement officer been of the original determination, and
cannot rely solely on
mailed to the taxpayer. Further, the IRS the case went back to Tax Court. There,
must wait 90 days after issuing a notice IRS tax transcripts he and the IRS filed a joint motion to
of deficiency before assessing a tax defi- submit the case to the Tax Court for
for verification.
ciency. If a deficiency assessment is not decision without a trial under Tax Court
preceded by a notice of deficiency, the Rule 122 and made a joint stipulation
assessment, as well as any lien based on of facts that included the following ex-
the assessment, is invalid. hibits: the lien filing notice, petitioner’s
The Tax Court has held that under supporting its motion by including hearing request, correspondence between
Sec. 6330(c)(1), as part of a review of copies of the notices of deficiency sent Pfetzer and Smith during the initial
an action to collect a federal tax (i.e., a to Pfetzer for 2009 through 2012 and administrative hearing and during re-
CDP hearing), a settlement officer must substitute U.S. Postal Service Forms mand, the notice of determination and
verify that the Sec. 6213(a) requirement 3877, Certified Mailing List, to prove supplemental notice of determination,
that a valid notice of deficiency was is- proper mailing of the notices. For the Smith’s case activity record, and the IRS
sued to the taxpayer has been met. The other years, the IRS relied on its tran- transcripts for Pfetzer for 2004 through
settlement officer is not required to re- scripts for proof the Service had issued 2012. Not included as stipulated exhibits
view a particular document to satisfy this Pfetzer the required notices. The Tax were the IRS’s complete administrative
requirement. In general, if the taxpayer Court found this a tad shy of the mark, record, any of the notices of deficiency,
received the notice of deficiency, an of- denied the request, and remanded the or any proofs of mailing to Pfetzer’s last
ficer can rely on a Form 4340, Certificate case to Appeals to clarify the record. known address.
of Assessments, Payments, and Other In order to ensure the IRS understood
Specified Matters, or a transcript with what it expected, the court in its re- The Tax Court’s decision
similar information. mand order pointed the IRS to its deci- The Tax Court held that Smith had
However, where a taxpayer specifi- sion in Hoyle. not fulfilled her Sec. 6330(c)(1) duty
cally alleges that he or she never received On remand of the case to Appeals, to verify that the requirements of any
a notice of deficiency, the settlement Smith continued to press Pfetzer for applicable law or administrative pro-
officer cannot rely solely on IRS tax more documentation, which Pfetzer cedure were met because she failed to
transcripts for verification. Instead, as continued to refuse to supply. He also verify that a notice of deficiency had
the Tax Court held in Hoyle, 131 T.C. continued to argue that he did not been mailed and sent to Pfetzer’s last
197, 205 n. 7 (2008), supplemented by receive the notices of deficiency for the known address.
136 T.C. 463 (2011), the settlement years at issue, and Smith continued to The IRS continued to attempt to de-
officer must also examine “underlying argue that he could not challenge his feat Pfetzer’s claim that Smith had failed
documents in addition to the transcripts, underlying liabilities. to verify that a notice of deficiency had
such as the taxpayer’s return, a copy of Eventually, after a few rounds of cor- been issued and sent to his last known
the notice of deficiency, and a certified respondence, Smith issued a Supplemen- address by asserting that the claim re-
mailing list, to verify the proper mailing tal Notice of Determination Concerning lated to Pfetzer’s underlying deficiency.
of the notice of deficiency under Sec. IRS Collection Actions under Internal However, again citing Hoyle, the Tax
6330(c)(1).” Revenue Code Sections 6320 or 6330 Court stated that “proper verification
(supplemental notice of determination) is not a challenge to the underlying li-
First round in the Tax Court sustaining the NFTL filing. Despite the ability; it is a stand-alone requirement
After Pfetzer’s case was set for trial, Tax Court’s request that the IRS follow in Sec. 6330(c)(1) and is independent of
the IRS moved for summary judgment, Hoyle on remand, Smith again stated the issues that may be considered under

60 March 2022 The Tax Adviser