Tax Court in Brief | Ezekwo v. Commissioner | Passport Revocation for Seriously Delinquent Tax Debt

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Tax Litigation:  The Week of May 30th, 2022, through June 3rd, 2022

Ezekwo v Commissioner, T.C. Memo. 2022-54 | May 31, 2022 | Lauber, J.| Dkt. No. 15454-21P

Opinion

Short Summary: This case involves revocation of a taxpayer’s passport due to a seriously delinquent tax debt. Ifeoma Ezekwo filed tax returns for 2003, 2004, 2005, 2006, and 2010, but she did not pay the full amounts of tax reported as due. The IRS assessed the amounts reported, plus interest. To collect, the IRS sent various notices of intent to levy. Ezekwo untimely requested a collection due process (CDP) hearing concerning the levy notice covering tax years 2003 and 2004, but she was offered an equivalent hearing pursuant to Treas. Reg. § 301.6330-1(i). That matter resolved in 2007. Ezekwo did not request a CDP for any other matters for any other tax years in issue. On April 19, 2021, the IRS certified Ezekwo as an individual owing a seriously delinquent tax debt (roughly $90,201) arising from tax years 2003, 2005, 2005, 2006, and 2010, and the IRS sent a Notice CP508C, Notification of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department. Ezekwo satisfied through levies, her $17,346 tax liability for 2003, leaving a liability for the remaining four years in the amount of $72,855. In the Tax Court, Ezekwo argued (1) the IRS certification was erroneous because the funds were collected by the IRS by levy; and (2) the IRS harassed her and refused to give her accounting of how the money was applied. The IRS filed the Motion for Summary Judgement on those issues.

Key Issues:

Primary Holdings:

Key Points of Law:

Insights:  This case involves the passport-related consequences of not providing proper support documentation to evidence that any taxes and interest owed were duly paid by the taxpayer. For additional information on these section 7345 issues, please see Freeman Law attorney, Greg Mitchell’s blog on Passport Revocations Under Section 7345 (April 10, 2022). Additionally for Ezekwo, no CDP was requested on time by the taxpayer, which, created a higher tax contingency for the latter. Individuals are subject to duly pay taxes and comply with requirements of the Code and Treasury Regulations on time. Without proper documentation supporting any allegation asserted against the IRS’s position, the “empty” arguments will not be considered as proper evidence against the IRS. It is advisable to request any legal means on time and to provide, in admissible form, all the support documentation to avoid a higher tax contingency before the IRS, including potential revocation of passport privilege.