Tax Court in Brief | Bunton v. Comm’r | Collection Due Process and “Last Known Address”

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The Tax Court in Brief – March 7th – March 11th, 2022

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

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Tax Litigation:  The Week of March 7, 2022, through March 11, 2022

Bunton v. Comm’r, T.C. Memo. 2022-20| March 10, 2022 | Morrison, E. | Dkt. No. 5770-19L

Short Summary: For tax years 2013, 2014, 2015, and 2016, the Buntons timely filed applicable Form 1040s and in them, reported gross income of zero and tax of zero and claimed significant refunds. In each instance, the IRS paid the refund. Then, in 2016, the IRS issued a notice of deficiency for tax years 2013 and 2014, mailed to the Buntons by certified mail. In 2017, the IRS did the same for tax year 2015. With respect to either notice, the Buntons did not file a petition with the Tax Court disputing the liability. The Buntons timely submitted a request for hearing but did not select a basis for disagreement or position to the intent to levy. Instead, the Buntons disputed the taxes owed, requested verification that the IRS followed all applicable rules, and requested a face-to-face hearing. The IRS informed the Buntons that the proposed levy was proper, all requirements for the levy had been met, and that a face-to-face hearing would not be allowed. The Buntons petitioned the Tax Court challenging the liability and the other determinations of the Office of Appeals.

Primary Holdings:

Key Points of Law:

Insights:  This case reminds us that the Tax Court is a court of limited jurisdiction. If a determination of tax liability is not properly and timely contested at the collection due process hearing stage, a taxpayer will likely be barred from challenging that liability. If a taxpayer disputes receiving a notice of deficiency or other notice from the IRS, the taxpayer must be prepared to show, with credible evidence, that the IRS’s mailing of the notice was in error or should be set aside.