In Tax Court with a CDP hearing case? You will want to read this brief.
In 1998 the IRS’ collections actions had become so outrageously aggressive and lawless that even Congress realized that Americans were being abused. They passed a law that granted tax payers hearing rights before they had liens or levies executed against them. The hearings are called Collections Due Process or CDP hearings.
As it turns out, they have little to do with due process and, in the intervening years, have become increasingly meaningless rubber stamp charades.
The Tax Court has been a willing assistant to the IRS Appeals Office in confirming the meaninglessness of CDP hearings.
From the very first cases, the court chose to ignore key language in the hearing rights statutes in order to give Appeals Officers authority they never had, and to avoid any sworn testimony from any IRS employees. Cross-examination of IRS witnesses is avoided at all costs. Unsworn, anonymous statements are the preferred means of placing IRS allegations into evidence.
This alone — allowing unsworn anonymous statements into evidence — is a violation of the Rules of Evidence which governs every courtroom in the country.
The law concerning CDP hearings, however, expressly requires a verification from the Secretary that all laws and procedures were followed in making the determination and assessment the IRS is trying to collect by levy and lien. The section is short, here it is:
(c) Matters considered at hearing: In the case of any hearing conducted under this section
(1) Requirement of investigation
The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.
The word verification has a very specific meaning when used in a statute. It means a document or statement “sworn or affirmed to be true.” In the case of a person having a religious objection to swearing an oath, an affirmation of truth is made under penalty of perjury. Either way, the statutory meaning is the same: verified means legally sworn to be true.
The U.S. Tax Court has never made the IRS produce anything like a sworn statement that all laws were followed in determining a liability. Instead it has carved out a few presumptions and granted the IRS permission to use unsworn, anonymous “transcripts” from the IRS’ deeply unreliable record keeping system to meet the requirements of the statute. In doing so the Court has granted the IRS essentially an exemption from the clear requirements of the statute.
This brief explains the law concerning this issue with reference to dozens of controlling authorities. The IRS in its reply brief blew the whole section off with a single line of mumbo jumbo about “no such rigorous standard.”
Briefing on this case was completed in January. The filer is still awaiting a decision as of this posting. More to come. Enjoy.
If you have questions, topics or a situation you'd like to discuss, his phone and email are at the top of every page.
Lysander is not an attorney and it is not his intent to offer legal advice.
Latest posts by Lysander (see all)
- Tax Court Judges Channel Deceased Tax Protester Irwin Schiff - December 5, 2019
- A New Twist on a Social Security Scam - November 1, 2019
- Tax Court Rules IRS May Not Apply Penalties to Courtesy Copies of Returns - October 21, 2019