Tax Court Had Jurisdiction over Misaddressed Determination Notice (First Rock Baptist Church Child Development Center, TC)

CCH Tax Day Report

The Tax Court had jurisdiction over a child care center’s petition for review of a Collection Due Process (CDP) determination. The Notice of Federal Tax Lien (NFTL) contained the taxpayer’s proper EIN and address; however, the notice was addressed to a related entity. Within 30 days of receiving the notice both the taxpayer and its related entity requested a CDP hearing, at which the settlement officer (SO) withdrew the lien but determined that the taxpayer was not entitled to a collection alternative because it was not current on its filing obligations.

The court had jurisdiction to review the SO’s determination to the extent he denied relief to the child care center; that taxpayer received a written notice of determination that was properly mailed to the taxpayer’s last known address. The notice correctly specified the tax period, liabilities, and the collection action to which it related. Therefore, the taxpayer was the subject of an IRS collection action. However, the court did not have jurisdiction over the related entity named in the notice because it was not the subject of the IRS’s collection action and it did not receive a valid notice of determination.

Moreover, the case was not moot. Although the IRS ultimately decided the lien issue in the center’s favor, it decided the collection alternative issue against the center. Therefore, there remained a live case or controversy between the child care center and the IRS concerning the correctness of the SO’s determination not to allow a collection alternative. Further, the court could not consider the childcare center’s challenge to its underlying tax liabilities because it did not raise that challenge at the original or supplemental CDP hearing. When reviewing a CDP determination, the court may only consider issues the taxpayer properly raised during the CDP hearing. Finally, the SO did not abuse his discretion in denying the childcare center’s request for an installment agreement. Although the center alleged that it was in full compliance at the time it filed its case, the center was not in full compliance with its tax obligations when the supplemental notice of determination was issued.

First Rock Baptist Church Child Development Center, 148 TC —, No. 17, Dec. 60,900

Other References:

Code Sec. 6320

CCH Reference – 2017FED ¶38,134.021

Code Sec. 6330

CCH Reference – 2017FED ¶38,184.12

CCH Reference – 2017FED ¶38,184.60

Tax Research Consultant

CCH Reference – TRC LITIG: 6,136.25

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CCHTaxGroup

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