Page 484 - TaxAdviser_2022

TAX TRENDS

an OIC was submitted, an SO might between 2011 and 2014. Chavis signed
be motivated to issue a notice before a postal form acknowledging receipt of Chavis signed
every issue raised by a taxpayer was the Letter 1153 but did not appeal the
resolved, in order to avoid having the assessment. In November 2015 the IRS a postal form
OIC be deemed accepted. Doing this assessed the TFRP against her. acknowledging
would risk reversal and remand of the In 2019, the IRS issued Chavis a
IRS’s determination, prolonging the case Notice of Federal Tax Lien (NFTL), receipt of the
even further, which in the court’s view, showing an unpaid balance of $126,919 Letter 1153 but
would be “defying logic and undermining on account of Oasys’s payroll tax did not appeal the
Congress’ intent.” liability. Chavis timely requested a CDP
hearing, stating in her request she could assessment.
Reflections not pay the balance of the NFTL and
The Tax Court, in a footnote, stated was entitled to innocent-spouse relief.
that adopting Brown’s theory could also She also requested a withdrawal of financial information. Chavis did so, and
invite “gamesmanship and abuse” by the NFTL. She claimed that her now the SO referred it to an IRS collection
a taxpayer, who could submit an OIC ex-husband was responsible for the specialist for analysis.
at the outset of a CDP case and then payroll taxes and that she had received Based on this information, the
engage in delaying tactics to try to extend no prior notice regarding them. collection specialist determined that
the proceeding beyond the 24th month. Two months later, Chavis filed Form Chavis could pay $2,831 per month
According to the court, “It is obvious that 8857, Request for Innocent Spouse Relief, toward her TFRP liability and thus
Congress did not wish to encourage this claiming she was entitled to relief because did not qualify for CNC status. Chavis
type of behavior.” she “had no dealings with Oasys.” She disputed this amount with the SO, who
Brown, 158 T.C. No. 9 (2022) also requested relief on the basis of her recomputed the amount, taking into
inability to pay. An IRS settlement officer account her mortgage expenses. The SO
No relief for trust fund (SO) submitted the innocent-spouse determined that with these included,
recovery penalty relief request to the Cincinnati Chavis could pay $1,685 per month
A taxpayer was not entitled to challenge Centralized Innocent Spouse Operation and therefore was still not entitled to
her underlying Sec. 6672 trust fund (CCISO). After reviewing her case, CNC status. The SO also considered
recovery penalty (TFRP) in a Collection CCISO informed her that she did not Chavis’s request for lien withdrawal and
Due Process (CDP) hearing or in meet the basic eligibility requirements determined that she did not meet the
Tax Court and was not entitled to for Sec. 6015 relief because her request criteria for lien withdrawal under Sec.
innocent-spouse relief under Sec. 6015 related to payroll tax liabilities rather than 6323(j).
for the penalties. The court also found a jointly filed income tax return. Having concluded that Chavis was
the IRS did not abuse its discretion in Chavis’s CDP case was then assigned not entitled to relief, the IRS issued a
rejecting her collection alternatives. to an SO in the IRS Appeals Office. notice of determination sustaining the
The SO again explained that Chavis lien filing. Chavis petitioned the Tax
Background was not entitled to Sec. 6015 relief. She Court to review the IRS’s determination.
Angela M. Chavis was secretary of record, also explained that Chavis could not In Tax Court, the IRS moved for
and her then-husband was president, of challenge her liability for the TFRP in summary judgment, contending that
Oasys Information Systems Inc., which the CDP hearing because she had had a Chavis’s underlying liability was
withheld payroll taxes from its employees’ prior opportunity to challenge the TFRP not properly before the court, that
wages but did not remit them to the liability but had not done so. innocent-spouse relief did not apply to
government. In July 2015, the IRS issued The SO and Chavis also discussed the tax liability at issue, and that the SO
the couple a Letter 1153, Notice of Trust collection alternatives, including did not abuse her discretion in sustaining
Fund Recovery Penalty. Attached to it having her account placed in the collection action.
was Form 2751, Proposed Assessment of currently-not-collectible (CNC) status.
Trust Fund Recovery Penalty, advising To pursue CNC status, the SO told The Tax Court’s decision
the couple of its proposed assessment Chavis she needed to complete Form The Tax Court granted the IRS’s
of a TFRP against each of them for 433-A, Collection Information Statement motion for summary judgment, holding
the unpaid payroll taxes, which totaled for Wage Earners and Self-Employed that Chavis could not challenge
$146,682 over nine calendar quarters Individuals, together with supporting the underlying TFRP liability, that

44 September 2022 The Tax Adviser