Bob Kamman returns with a tale of woe that will hopefully be short-lived. I trust the matter will be resolved promptly once Bob is able to communicate with the Chief Counsel attorney assigned to the case. The situation shows the importance of the Answer telling the petitioner or representative who they can call to resolve their case. Too frequently it seems that IRS correspondence exam jumps the gun and issues an unnecessary notice of deficiency. Like Bob, my practice is to file a petition in these cases without waiting the full 90 days. I have not had any luck asking the IRS to rescind a notice of deficiency under section 6212(d) on the basis that exams reviewed and accepted my client’s substantiation after issuing the SNOD, so I may as well get the petition done early. A streamlined rescission process for cases like these would avoid unnecessary petitions filed by us cautious and pessimistic lawyers. Christine
I’m the Rodney Dangerfield of tax practitioners. I get no respect. At least from IRS, in Tax Court.
Other lawyers who blog or comment here: They file a Tax Court petition, IRS files an answer. When I file a petition? It’s ignored.
See Docket No. 19789-19. Filed November 1, served on IRS November 6. Tax Court Rule 36 grants IRS a generous 60 days to file an answer. That time expired January 6 (because January 5 was a Sunday).
Compare that to Docket No. 19787-19P , filed a few days after my case and served the same day as mine. The petitioner there is represented by Keith Fogg, who gets respect. IRS filed an answer in that case on December 20, even though they had to send it to Kentucky for a lawyer who handles passport cases.
You might notice that I requested Washington, D.C., as the place of trial. I thought that would expedite settlement. Maybe IRS has less respect for practitioners who seem to be forum shopping. I knew there was no way this case would go to trial, because it would be easy to settle once I could talk to a real person. The disputed tax with interest involves about $2,000, enough that a 3% filing fee was not out of line.
It’s not like an IRS answer reflects more than a cursory look at the petition. Most answers consist of a couple pages denying everything for lack of sufficient knowledge or information, up to but usually not including that the sun sets in the west. But at least they provide the name of the attorney assigned to the case.
The lack of respect, however, did not begin with IRS ignoring my Tax Court petition. Its notice of deficiency was issued because my response to an IRS notice was ignored. I had explained the mistake on Schedule D was due to some missing Form 1099-B stock sales.
IRS sent its infamous CP-2000 on July 22, 2019, proposing a tax increase of $4,761. (Being less than $5,000, it was not quite enough to slap on the computer-generated Section 6662 penalty of another 20%.)
My letter to IRS on August 6 provided correct information. It included copies of the relevant Forms 1099-B; and a 1040 (marked “Information Only, Do Not File”) showing the tax computation and a balance due of $2,847.
On September 20, IRS mailed my clients a notice acknowledging they received my letter on August 12 and informing them that it would need another 60 days to respond. But perhaps not coincidentally, the federal government fiscal year was ending soon. Did Ogden Service Center managers exert pressure to close cases so year-end statistics would shine? Not that they would admit.
Whatever the reason, a notice of deficiency dated October 15 was issued, showing the same adjustments as those on the original CP-2000. It completely ignored the explanation I gave two months earlier. Obviously, I get no respect.
Hoping to move this case closer to settlement before the busiest days of the 2020 tax season, I filed the Tax Court petition a couple weeks later. At some other time, in some other case, I would just wait and see how long it would take for IRS or the Tax Court to discover I had fallen through the cracks. But my clients want to be done with the matter, and have already made an advance payment (Code Section 6603, Rev. Proc. 2005-18) of what they actually owe.
(No, they are not paying me a fee, other than what I have received from them and their family in the last three decades as clients. I could try to pursue IRS for fees, but life is too short for such bureaucratic ordeals.)
And filing the petition did get us some attention from IRS. On November 18 – two weeks after Chief Counsel received the petition – IRS in Ogden mailed a revised CP-2000 proposing tax of only $3,057. The $210 difference from our figures was due to keeping the tuition tax credit instead of changing it to a deduction, which saved money at the higher AGI.
The November 18 notice tells us, toward the bottom of Page 6, that “to recalculate your tax, we used . . .the new information you provided.”
Respectfully, may I ask anyone in charge at IRS (if that label is not an oxymoron): Why do you issue a notice of deficiency first, then look at the information provided? Would it not be more efficient to do it the other way around?
The word “respect” does not appear in the part of the Taxpayer Bill of Rights (as explained in Publication 1) under “The Right To Quality Service.” It does promise, “Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS.”
Oddly enough, “respect” appears later, in this context:
Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections, and will provide, where applicable, a collection due process hearing.
The heading for that paragraph is “Right To Privacy.” Tax Court proceedings offer little privacy. Well, there is that thing about redacting SSN’s.
I did some research on Tax Court procedures when IRS files a late answer. The issue does not appear often, if at all. I think it is safe to say: File a petition late, and the Court will dismiss the case for jurisdictional reasons. File an answer late, and the Court will excuse IRS on equitable grounds.