Tax Court in Brief | Evert v. Commissioner | Extending Notice of Deficiency Deadline and Duress as an Affirmative Defense

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Tax Litigation:  The Week of May 9th, 2022, through May 13th, 2022

Evert v. Comm’r, T.C. Memo. 2022-48| May 9, 2022 | Marshall, A | Dkt. No. 12901-19

Opinion

Short Summary: Christian Evert timely filed her 2015 and 2016 tax returns, which were audited by the IRS. Evert sought an Appeals hearing to challenge the proposed adjustments. Through the proceeding, and as the applicable ASED (assessment statute expiration date) for 2015 was approaching, the Appeals officer gave Evert an option to consent to extend the limitations period for 2015, so he mailed to Evert a 2015 Form 872, Consent to Extend the Time to Assess Tax, along with Publication 1035. Publication 1035 explains various purposes for extending the ASED period. Evert signed and returned the Form 872, but thereafter she failed to present her positions and proof. Later, the IRS issued a Notice of Deficiency for 2015 and 2016. Evert timely sought judicial review of the Notice of Deficiency, alleging that she signed the Form 872 for 2015 under duress, that the Form 872 was thus invalid, and that the IRS failed to timely mail the Notice of Deficiency before the ASED for 2015 expired. At trial, Evert’s and the Appeals officer’s testimony conflicted as to the Form 872 matter.

Key Issues:

Primary Holdings:

Key Points of Law:

Assessment Statute of Limitations

ASED is Affirmative Defense

What is and isn’t Duress

Insights:  This case contains a useful analysis of how to prove, or counter, an affirmative defense raised in a petition. It also serves as a warning to taxpayers contemplating a Tax Court challenge to IRS determinations. The Tax Court considers but has little regard for self-serving testimony without any corroboration.