Actor Charlie Sheen succeeded in having his Tax Court collection due process case remanded to IRS Appeals so that he can again pitch his $3.1 million offer in compromise to settle tax debts for three tax years.
“This case is remanded to respondent’s Office of Appeals for the purpose of affording petitioner an administrative hearing pursuant to I.R.C. section 6320 and/or 6330,” the court wrote in a January 24 order in Sheen v. Commissioner.
Sheen filed a Tax Court petition in November 2021 to protest an IRS Appeals notice of determination rejecting his $3.1 million OIC, which would cover his tax liabilities for 2015, 2017, and 2018.
According to the petition, the parties had engaged in extensive negotiations over collection alternatives, with an Appeals settlement officer and others in the chain of command ultimately agreeing that the OIC was legally sufficient. But the Los Angeles area director for IRS Appeals overruled that decision and rejected the OIC on the grounds that Sheen could fully pay his tax liability.
The petition argued that the area director abused his discretion by rejecting the OIC without providing any reasoning or offering an opportunity for Sheen to address his concerns. It asked the Tax Court to remand the matter to an IRS Appeals office outside the jurisdiction of the Los Angeles area director.
After the IRS filed its answer in late December 2021, the parties filed a joint motion January 18 to have the case remanded to IRS Appeals. The court’s January 24 order granted that motion and instructed the IRS to offer an Appeals administrative hearing to Sheen by April 1.
“I’m delighted that IRS counsel reached out and offered this motion to remand,” Sheen’s representative, Steven L. Jager of Fineman West & Co., told Tax Notes. “We were able to get what I asked for in the petition — reconsideration of the offer in compromise.”
The hearing will be held at an Appeals office outside Los Angeles, Jager said.
The case is Sheen v. Commissioner, Tax Ct. Dkt. No. 29680-21L.