Tax Court ruled that IRS Appeals officers must verify that a proper assessment was made in a CDP hearing. Even if the taxpayer doesn’t raise the issue until he is in Tax Court, the IRS must verify the assessment.
This is the Case: Hoyle v. Commissioner, 131 T.C. No. 13 (12-3-2008)(2008-12-02)
SUMMARY: The Tax Court claimed jurisdiction over whether an assessment was properly made even though the taxpayer didn’t raise the issue at his CDP hearing. IRC 6330(c)(1) requires the IRS to show that an assessment was properly made even if the taxpayer doesn’t bring it up at the hearing.
Here is the IRC section: 6330. Notice and opportunity for hearing before le
EXPLANATION: The taxpayer properly applied for a Collections Due Process (CDP) hearing after he received Notice of Federal Tax Lien (NFTL). The taxpayer didn’t raise the issue of the validity of the assessment before or at the CDP hearing. He appealed his determination, which sustained the lien, to the Tax Court. In his Tax Court case he alleged that the IRS had never sent him a notice of deficiency for the assessed taxes.
The Tax Court said that according to IRC section 6330(c)(1) the IRS “is required by the statute to verify that all legal requirements have been followed . . . including the section 6213(a) requirement of a duly mailed notice of deficiency.” The Tax Court then concluded that the language of the statute causes the validity of the assessment to be “raised” at all CDP hearings even when the taxpayer fails to do so specifically. The Tax Court claimed jurisdiction over the assessment’s validity as being raised automatically by the statute.
This was fascinating. At the time it was written it seems that the Tax court had not yet ruled on it. Do youhave any info on the final ruling?
Thanks.
The Tax Court did indeed rule that the petitioner does not have to specifically raise the issue. Appeals is supposed to verify that all laws and procedures were followed, including a proper assessment.
Doesn’t a proper assessment include both lawfully filed Notice of Deficiency and Notice of Determination, which don’t exist or otherwise can’t be verified since they don’t, by law (statute/code), apply to “income” tax?
Some assessments need NODs and NODets, but by no means all. If you file a tax return showing a balance due, the IRS will go ahead and assess it. They only send Notices of Deficiency when they determine that there is a “tax deficiency.” And Notices of Determination issue out of Collection Due Process hearings. You won’t have one of those unless the IRS is attempting to collect an already assessed tax debt.