Tracking IRS Violations of Fair Tax Collection Practices

On September 14, 2016, the Treasury Inspector General for Tax Administration (TIGTA) issued a report on the way the IRS tracks violations of Fair Tax Collection Practices (FTCP) found in IRC 6304.  We have written about Section 6304 previously here, here and here.  This code section came into the Code in 1998 along with many other collection changes.  It brings into the Code a concept previously codified to stop abusive collection practices by private debt collection agencies.  Almost no litigation has occurred regarding Section 6304; however, a fair amount of litigation has occurred with respect to the provision upon which Congress modeled Section 6304.  As with many other provisions of the Restructuring and Reform Act of 1998, TIGTA was tasked with doing annual, and in some cases semi-annual, reports to describe IRS compliance with the now 18 year old provisions.  The requirement that TIGTA perform these annual reports has no sunset provision, so each year they dutifully prepare another report.  Many of these reports provide interesting insights into the collection function of the IRS even though some of the reports or some parts of the reports have taken on a routine aspect.

I found the recent report on FTCP interesting because of the extremely low number of complaints. My thought that the number of complaints was too low does not come from a belief that IRS collection division employees behave badly as a routine matter.  Quite the contrary, I may disagree with decisions they make but very rarely encounter bad behavior and almost never behavior which rises to level of wanting to complain about the behavior as opposed to the underlying decision.  My surprise concerning the low number results from the fact that one of the actions that can drive a complaint due to a violation of FTCP stems from the failure of the IRS to notify an authorized representative.  While this failure may on occasion result from purposeful behavior, I believe that it almost always results from a system or individual failure not driven by a desire to cut out the representative.  Whether by design or not, however, the failure to properly notify a representative, as require by the FTCP, happens quite a lot and regularly has bad consequences for the taxpayer.  I expected more complaining about this than 12 cases in a year.  This extremely low number results from the failure of representatives to complain in a manner that makes it onto the IRS system.  Representatives may bear responsibility for their own failure to complain about violations of FTCP and the report indicates that the IRS may also bear some of the responsibility for that failure.


The TIGTA report suggests that complaints about 6304 violations all focus on Revenue Officers. Complaining about the actions of a Revenue Officer (RO) can happen easily because of the ability to readily identify the RO and the RO’s group manager.  ROs handle only a small portion of collection cases and, I suspect, commit only a tiny fraction of the 6304 violations.  Most of the problems I encounter with the failure of the IRS to alert me when it takes some action concerning my client happen when a more automated segment of the IRS handles the case.  When this happens the representative does not have a specific person to complain about and does not know who to whom to direct the complaint.  The TIGTA report talks about the failure of the IRS to have a good system of capturing in its records the 6304 complaints lodged against ROs but that seems a minuscule part of the problem.  Instead of a problem that happens 12 times a year, this problem occurs thousands of times a year and has significant consequences for taxpayers.

The failure to timely and properly notify a representative of collection action can cause the taxpayer to miss a deadline to request a Collection Due Process (CDP) hearing, to request a Trust Fund Recovery Penalty (TFRP) hearing, to correct a missed Installment Agreement payment, or many other actions that must occur in responding to the collection of past due taxes. To capture the many times that the IRS violates 6304 by not notifying a representative, the IRS needs to have a system that allows representatives to easily report the violation.  Such a system would allow the IRS to identify the system problems that may create barriers to properly notifying representatives.  The data TIGTA collects does not identify system problems, but rather identifies problems with individual employees in one small part of the collection system – an important part but one that grows smaller with each passing year.  IRM broadly discusses FTCP but does not provide a basis for reporting violations.

TIGTA should take on the responsibility of requiring the IRS to build a system that identifies all of the violations of 6304 and not just the violations by the dwindling cadre of ROs who have the best training and may be the least likely group to violate 6304. The problem may lie with the CAF unit or interfaces between the CAF unit and other systems at the IRS.  It routinely manifests itself in correspondence, some of which is correspondence regarding a fundamental right that once passed cannot be recovered.  A RO might, on rare occasion, bypass a representative inappropriately but the matter on which the bypass occurs generally does not involve a fundamental right such as the right to request a CDP or TFRP hearing.  The loss of these fundamental rights must have concerned Congress when it required TIGTA to look at this area each year and yet TIGTA has focused its review on the system the IRS has developed rather than the system it should have developed.  To meaningfully capture the failures of the IRS to properly inform representatives, TIGTA should make recommendations requiring the IRS to establish a system making it easy for representatives to report a failure in notification.  Such a system may not identify specific individuals who failed but would make it much easier to identify systems that failed and capture a much truer number of the scope of the problem.

Fair Tax Collection Practices – How Does 6304 Impact the Timing of Letters to Taxpayers and Their Representatives?

Usually, we write about cases or other tax procedure items we see reported elsewhere.  Today, I write about a notice I received on a case in the clinic.  The timing of the correspondence sending the notice to me bothers me from a couple of perspectives.  In a post about Godfrey v. Commissioner, I discussed the impact of sending a represented taxpayer a notice of intent to levy and not sending a copy of that notice to the representative as required by IRS administrative rules in the manual and by IRC 6304 which sets out the Fair Tax Collection Practices provisions.

In the recent case in my office the IRS action involved a twist on the circumstances in Godfrey.  The IRS did send a copy of the Notice of Federal Tax Lien Filing to me as the representative but sent that letter nine days after sending the letter to my client giving notice of the filing.  In the context of the need to exercise Collection Due Process (CDP) rights with 30 days, nine days is a significant number.  That number is magnified by the number of days it takes for mail delivery.  I received the letter fifteen days after the date on the letter to my client.  I realize that the date on the letter to my client does not mean that the IRS actually mailed the letter on that date.  The date on IRS correspondence and the date of mailing do not always match.  Still, getting the letter fifteen days after the date of the letter to my client for a letter that has a short fuse puts undo pressure on getting the CDP request filed timely.  As a student run clinic, our ability to move quickly may not equal the ability of offices where the workers are full time which makes the delay one that concerns me more than it may concern others.


What is the duty of the IRS in collection cases to inform representatives?  The pertinent part of the statute is 6304(a)(2) which provides that if the IRS “may not communicate with a taxpayer in connection with the collection of any unpaid tax… if [it]knows the taxpayer is represented [by a person authorized to do so].”  The sending of the notice of filing a federal tax lien which triggers CDP rights seems like it is communication in connection with the collection of unpaid taxes.  The IRS in its regulations concerning the trigger for the innocent spouse time to request relief takes the position that filing the notice of federal tax lien is not collection activity; however, I do not think that transforms the CDP notice here into something other than a communication in connection with collection.   If the CDP notice is a communication in connection with collection, how does the IRS justify sending out the notice to the representative later than it sends the notice to the taxpayer?

Because of the requirement of the statute to give the taxpayer the CDP notice, I understand sending the taxpayer the CDP notice and do not intend to suggest that the language of IRC 6304 removes the requirement to do so.  At the same time, I think that language requires that the notice to the representative not occur later and certainly not nine days later than the notice to the represented party regarding a process that only lasts 30 days.  The right that IRC 6304 seeks to protect requires that the representative have the opportunity to protect the client to the fullest extent.  That right loses force where the time within which the representative can operate is less than the time provided by the statute.  The IRS should send the notice to the representative at the same time it sends the notice to the taxpayer and should afford both the opportunity to fully participate in the CDP process.  Failing to send the notice, as in Godfrey, or delaying significantly in sending the notice, as happened to me, denies or severely impinges on this right.  If the notice sent to me represents the normal time frame for sending out a notice to a representative in the notice of federal tax lien CDP context, the IRS should adjust its practices to conform to a practice that I think IRC 6304 requires.  If the delay in sending me the notice represents an aberration, then perhaps my concerns are overstated.  I have not observed the same problem in CDP notices concerning levy but will watch closer after this experience.

The one bright spot here is that we submitted an offer in compromise shortly before the IRS filed the filed the notice of federal tax lien.  The CDP notice will allow us to proceed on the offer in the context of a CDP case.  I much prefer to make offers in the CDP context because of the opportunity for Tax Court review in the event of rejection of the offer.  That aspect of the case is a positive development despite the timing of the sending of the CDP notice to me as a representative.


Godfrey v. Comm’r Part II: If the Failure to Serve a Notice of Intention to Levy on Taxpayer’s POA Violates Section 6304(a)(2), What Are the Possible Remedies?

We continue with our three part series on Godfrey. Parts II and III are written by frequent guest blogger Carl Smith.  Carl has updated his post to address some of the comments made on Part I.  I suggest going to the comments if you want to see the full discussion.  Keith

In a prior post on Godfrey v. Commissioner, Keith explained how the IRS’ actions in that case might have violated section 6304(a)(2). With only a few exceptions (none, I believe, relevant in Godfrey), section 6304(a)(2) prohibits the IRS from communicating directly with a taxpayer in connection with collection where the taxpayer is represented by a holder of a power of attorney on file with the IRS.  In Godfrey, the IRS sent a notice of intention to levy (“NOIL”) directly to the taxpayer at the taxpayer’s last known address, but she did not actually receive the NOIL.  The NOIL was returned unclaimed.  The IRS did not send a copy of the notice to the taxpayer’s POA holder.  By the time the taxpayer and her attorney realized that an NOIL had been issued, over a year had passed.  The next day, the POA filed with the IRS a Form 12153 requesting a CDP hearing. The IRS then sent a letter denying any CDP hearing because the Form 12153 was filed too late – beyond the 30-day period provided in section 6330(a)(2) and (3)(B) for requesting a hearing.  Within 30 days of that letter, the taxpayer petitioned the Tax Court.  Without discussing section 6304(a)(2) (which the taxpayer had not raised in the case), in its order, the Tax Court dismissed the case for lack of jurisdiction, in part, on the ground that no copy of the NOIL need have been sent to the POA to make the NOIL valid.  In making this holding, the court drew an analogy to well-settled case law holding that no copy of a notice of deficiency need be sent to a POA to make a notice of deficiency valid.

The taxpayer in Godfrey has moved to vacate the dismissal order, citing the violation of section 6304(a)(2) as one of two grounds.  Section 6304(a)(2) (which only applies to collection communications, not notices of deficiency) renders the court’s analogy inapt.  Leaving aside for the moment the problem of the section 6304(a)(2) argument being raised belatedly, what if a taxpayer who was in a similar situation (i.e., NOIL sent to last known address, NOIL not received, POA not served, so no Form 12153 filing in the 30-day period, and filing in the Tax Court within 30 days of IRS letter refusing to give a CDP hearing) had raised the section 6304(a)(2) violation in her petition, so the court would have to address it?  Assuming that the Tax Court found a violation of section 6304(a)(2), what remedy should be given?  This post explores the possible remedies.  Disclosure note:  Because I feel so strongly about the problem of lack of notice to counsel, in Godfrey I just entered a co-appearance with her current counsel, John Genova, Esq., and assisted in preparing and filing the motion.


One remedy is obvious: Section 6304(c) states:  “For civil action for violation of this section, see section 7433.”  Section 7433 allows a suit in district court for actual damages sustained by a taxpayer for wrongful collection actions taken by IRS employees intentionally, recklessly, or negligetntly.  However, clearly, the Tax Court has no authority to issue damages judgments under section 7433. Further, there has never been a reported section 7433 district court suit involving an alleged violation of section 6304(a)(2), so we have no idea how actual damages would be calculated if such a suit were brought.

Frequent commentator Jason T. has posted a comment on the Godfrey I post taking issue with Keith and my belief that section 6304(a)(2) applies to an NOIL.  He cites three district court opinions or orders saying that section 7433, which applies “in connection with any collection of . . . tax”, cannot provide damages with respect to NOIL procedure violations, since an NOIL is not a collection action, but precedes collection.  By analogy, he thinks that section 6304(a)(2), which provides that the “Secretary may not communicate with a taxpayer in connection with the collection of any unpaid tax” should be read in pari materia with the somewhat similar language in section 7433 that these courts cited in holding that NOILs are not collection actions.  I am not sure I agree with the district courts about section 7433, and in none of the three cases had the IRS yet started collection, whereas in Ms. Godfrey’s case, the IRS eventually started levying (arguably as a result of the section 6304(a)(2) violation).  I also think that the better analogy to interpreting the words “the Secretary may not communicate with a taxpayer in connection with the collection of any unpaid tax” is to the words in the Fair Debt Collection Practices Act, 15 U.S.C. section 1692c(a)(2), that “a debt collector may not communicate with a consumer in connection with the collection of any debt” – the source of section 6304(a)(2)’s language. As noted by Keith there are court opinions saying notices, such as dunning letters, are communications in connection with the collection of any debt under that Act. For the purposes of the rest of this post, I ask the reader to just assume for now that the court would find a section 6304(a)(2) violation in a Godfrey-type case. The point of this post is only to explore what remedies there might be. Even if section 7433 might not be available, that is not the only possible remedy.


For example, does the Tax Court have any equitable remedies that it might apply that could put the taxpayer into the situation that she should have been in, but for the violation – i.e., having a CDP hearing?


There is actually precedent for the Tax Court to provide specific equitable remedies to violations of the Internal Revenue Code in CDP matters before the Court. In Zapara v. Commissioner, 124 T.C. 223 (2005), and 126 T.C. 215 (2006), aff’d 652 F.3d 1042 (9th Cir. 2011), in the course of a CDP hearing, the taxpayer asked that the Appeals Officer arrange for the sale of certain stock that had been subject to a jeopardy levy. Despite being obligated to honor the request within 60 days under section 6335(f), the IRS did not sell the stock, and the stock declined in value considerably.  In the CDP appeal in the Tax Court, the taxpayers successfully persuaded the court to direct the IRS to credit their account with the value of the stock on the date that the stock should have been sold under section 6335(f) (60 days after the request), and the court remanded the case to Appeals for a finding as to the appropriate credit.  124 T.C., at 238-243.  When the case returned from Appeals to the Tax Court, the IRS argued that the court had, in effect, granted damages to the taxpayers under section 7433 for unauthorized collection actions, even though the court lacked jurisdiction to make rulings under that section.  The court agreed with the IRS that it lacked jurisdiction to issue damages judgments under section 7433, but the court held that it possessed the inherent power to provide a specific equitable remedy to the taxpayer that would place the taxpayer back into the position the taxpayer would have been in, but for the violation.

If the Zapara holding were applied in the Godfrey-type situation, the IRS’ direct communication with the taxpayer without also communicating with counsel could be repaired by holding the period open to file a CDP hearing until counsel was served with the NOIL.  If that were to be done in the Godfrey-type case, the Form 12153 filing would have been timely.  If the letter denying the CDP hearing in response to the Form 12153 filed in Godfrey-type case were to be treated as a notice of determination, then the taxpayer in such a case – having filed in the Tax Court within 30 days of the letter’s issuance – should be entitled to Tax Court review of that failure to be given a CDP hearing.  Note that the Tax Court has held that the IRS’ erroneous letter treating an Appeals hearing as an “equivalent hearing”, when the Form 12153 had been timely filed to request a CDP hearing, should be treated as a notice of determination that can form the basis of Tax Court jurisdiction.  Craig v. Commissioner, 119 T.C. 252 (2002). And so the Tax Court, in the Godfrey-type situation, could remand the matter to Appeals to afford a CDP hearing, while retaining jurisdiction in the Tax Court to review any such “supplemental” notice of determination issued after the hearing.

This particular equitable remedy is similar to one that is afforded in New York state courts and administrative agencies. There, it is held that the time to file a petition in a court or agency is tolled until counsel is sent a notice by the agency where the agency had sent a notice directly to a person that the agency knew was represented by counsel, but had not at the same time sent the notice to the counsel.  Matter of Bianca v. Frank, 43 N.Y.2d 168 (1977) (30-day period with respect to notice proposing to dismiss police officer); Matter of Multi Trucking, Inc., TSB-D-88(8)C, 1988 N.Y. Tax LEXIS 331 (N.Y. Tax Appeals Tribunal 1988) (90-day period to contest franchise tax notices of deficiency); Matter of Hyatt Equities LLC, 2008 N.Y. Tax LEXIS 94 (N.Y. Tax Appeals Tribunal 2008) (90-day period to contest conciliation order denying sales tax refund claim).

The only issue I see about affording this specific equitable remedy (i.e., tolling the 30-day period to file for a CDP hearing until counsel is served with the NOIL) is whether the 30-day period is jurisdictional or otherwise not subject to equitable tolling. If the period is (1) jurisdictional or (2) non-jurisdictional, but otherwise not subject to equitable tolling, this remedy cannot be afforded.  This gets us into recent non-tax Supreme Court case law that I have discussed in posts within the last year on Volpicelli v. United States, 777 F.3d 1042 (9th Cir. 2015), and Lippolis v. Commissioner, 143 T.C. No. 20 (Nov. 20, 2014).

Under current non-tax Supreme Court case law that was applied in those two lower-court tax opinions, time limits are quintessential “claims processing rules” that are no longer to be treated as jurisdictional, unless Congress provides a “clear indication” that it wants a time period to be jurisdictional. Henderson v. Shinseki, 131 S. Ct. 1197, 1203 (2011) (120-day period to file a petition in the Article I Court of Appeals for Veterans Claims held not jurisdictional). The separation of a time period from the actual jurisdictional grant, however slight, provides a strong indication that Congress did not want a time period to be jurisdictional. Id. at 1204-1205. See Gonzalez v. Thaler, 132 S. Ct. 641, 651 (2012) (“[m]ere proximity will not turn a rule that speaks in nonjurisdictional terms into a jurisdictional hurdle”); cf. Lippolis v. Commissioner, supra (holding that the $2 million disputed liability amount threshold at section 7623(b)(5)(B) in connection with a Tax Court whistleblower award suit under section 7623(b)(4) is not jurisdictional when the threshold is not contained within the jurisdictional grant paragraph – even though it is in the same subsection of the Code).

The provision giving Appeals jurisdiction to hold CDP hearings (even though the provision doesn’t use the word “jurisdiction”) is at section 6330(b)(1), which states: “If the person requests a hearing in writing under subsection (a)(3)(B) and states the ground for the requested hearing, such hearing shall be held by the Internal Revenue Service Office of Appeals.”  By contrast, the 30-day period to file for a CDP hearing is set out at section 6330(a)(2) and (3)(B) (twice), but that is in a different subsection from the jurisdictional grant.  Further, the jurisdictional grant does not contain any limiting language that the CDP hearing request be timely filed – something Congress could have included to give a “clear indication” that it intended the 30-day period to be jurisdictional. Compare Pollock v. Commissioner, 132 T.C. 21, 30 (2009) (holding 90-day period in which to file a stand-alone innocent spouse petition at section 6015(e)(1) is jurisdictional; “The most important point to notice is that the Code here actually uses the word ‘jurisdiction’ — giving us ‘jurisdiction’ if someone files her petition within the 90-day time limit. Statutes granting a court ‘jurisdiction’ if  [20] a case is filed by a stated deadline look more like jurisdictional time limits.”). So, it seems pretty clear that the 30-day period to request a CDP hearing is not jurisdictional.

It is also likely that the 30-day period is subject to equitable tolling. The 30-day period is much more like the simple one-year statute of limitations for filing for habeas relief in federal district court in death penalty cases discussed in Holland v. Florida, 560 U.S. 631 (2010) (Court found the one-year period subject to equitable tolling), than the complex periods under section 6511 to file a tax refund claim (already containing other numerous exceptions, including one, unusually, limiting the amount of the claim) that the Court held was not subject to equitable tolling in United States v. Brockamp, 519 U.S. 347 (1997). See Volpicelli v. United States, supra (relying on Holland and distinguishing Brockamp in finding that the simple 9-month period in which to file a wrongful levy suit is subject to equitable tolling).

Further, as will be discussed in the final post on Godfrey, there is legislative history that seems to provide that an NOIL that is not received in the 30-day time period can still belatedly give rise to a CDP hearing, even when the request is made outside the 30-day period. This is even broader than equitable tolling – strongly suggesting that Congress would have wanted the 30-day period to be subject to equitable tolling generally.

In sum, I see no reason why the Tax Court could not give the specific, tailored equitable relief for a section 6304(a)(2) violation that I noted above.

The third and final post on Godfrey will discuss whether an NOIL that is properly mailed to the taxpayer’s last known address, but that is not actually received by the taxpayer, can give rise to a CDP hearing when the request for such hearing is filed late. A regulation on which the Godfrey court relies says “no”, but I think that regulation is invalid. This is another argument that was belatedly made in the motion to vacate in the Godfrey case.


Godfrey v. Comm’r Part I: Does the Failure to Serve a Notice of Intention to Levy on Taxpayer’s POA Create a Basis for the IRS and Tax Court to Accept an Otherwise Late filed CDP Request

On March 24 the Tax Court issued an Order of Dismissal for Lack of Jurisdiction in the Godfrey case.  Ms. Godfrey filed her request for CDP relief more than 30 days after the IRS sent her a notice of intent to levy (NOIL).  She argues that her late submission of the CDP request resulted from the failure of the IRS to send a copy of the CDP notice to her authorized representative as well as from her failure to receive the notice mailed to her last known address.  This post will focus on the effect of the failure of the IRS to send the NOIL to her authorized representative whose power of attorney was on file with the IRS at the time of the sending of the NOIL.  I draw from the petitioner’s motion in drafting this post and also thank Carl Smith for his comments.

This is the first of three posts on the case highlighting different procedural aspects raised by the facts. Carl Smith has written the last two posts which will follow in coming days.



Ms. Godfrey’s lawyer first became aware of the issuance of the NOIL (covering income taxes for three years) a few days beyond a year after the NOIL was sent, when he happened to look at IRS transcripts of account for the taxpayer that contained entries indicating that NOILs had been issued for the three relevant years on the same date. The very next day, he mailed to the IRS a Form 12153 requesting a CDP hearing with respect to the NOIL.  Appeals treated the request as one which did not merit any hearing and sent Ms. Godfrey a letter denying her (1) a CDP hearing or (2) an “equivalent hearing” (since requests for equivalent hearings, under Reg. sec. 301.6330-1(i), must be filed within 1 year of the NOIL’s issuance).  She filed a petition in Tax Court within 30 days of receiving the letter denying her any hearings.  The Tax Court issued the order dismissing the case for lack of jurisdiction, finding (1) that the taxpayer did not timely request a CDP hearing and (2) the IRS letter denying her any hearing could not be treated as a notice of determination after a CDP hearing (such a notice of determination being a predicate of the Tax Court’s jurisdiction to review under sec. 6330(d)(1)).

Petitioner now seeks to vacate the order of dismissal which brings with it a steep uphill climb to successfully pursue a Tax Court Rule 162 motion. I will not address the Rule 162 issues (where the Tax Court usually relies on interpretations applicable to similar FRCP Rule 60 motions to vacate in district court) but they may play a part in the outcome of this case.  I am, however, drawing from a motion to vacate the order of dismissal that petitioner filed in this case on April 6.  The underlying arguments deserve attention and perhaps will occur in a different procedural posture in a future case in which the IRS fails to send a CDP notice to the authorized representative.

Section 6304

Section 6304, entitled Fair Tax Collection Practices Act, seeks to import concepts from the Fair Debt Collection Practices Act by incorporating these provisions into the Internal Revenue Code.” [S. Rep. 105-174, 105th Cong., 2d Sess. (Apr. 22, 1998) at 93, 1998-3 C.B. 537, 629]. It restricts the timing and the type of communication on collection matters.  It specifically provides in 6304(a)(2) that the IRS “may not communicate with a taxpayer in connection with the collection of any unpaid tax if the Secretary knos the taxpayer is represented by any person authorized to practice before the Internal Revenue Service with respect to such unpaid tax and has knowledge of or can readily ascertain, such person’s name and address, unless such person fails to respond within a reasonable perod of time to a communication from the Secretary or unless such person consents to direct communication with the taxpayer.”

Section 6330(a)(2) requires the IRS to communicate directly with the taxpayer by issuing the NOIL to her personally.  To this date, seventeen years after passage of the statute, the IRS has issued no regulations. under 6304. If it did issue regulations, the statutory language suggests such regulations should provide that the IRS must always send to a POA a copy of any notice regarding collection that by statute has to be sent directly to the taxpayer (like an NOIL or NFTL) — whether or not the box is checked on the POA to send copies of notices to the POA.  That’s the only way that the purposes of both 6304(a)(2) and 6330(a)(2) can be reconciled and harmonized. The box on the current POA form merely says under the names of two POAs “Check if to be sent copies of notices and communications”.  There are two exceptions to 6304(a)(2) that might apply:  One is if the taxpayer consents to direct communication.  Another is if the POA consents to direct communication.  Checking or not checking the box does not appear to provide sufficient direction for either authorization by the taxpayer or authorization by the POA for direct communication with the taxpayer on collection issues; however, the IRS took a contrary position in SCA 200113004 (Jan. 30, 2001)–when the POA form was different and did not have the current boxes or language to check.  In footnote 7 of that SCA, Counsel wrote:

I.R.C. § 6304, relating to communications with taxpayers and their representatives, does not apply when a CDP notice under either I.RC. §§ 6320 or 6330 is sent to the taxpayer, because these notices are statutorily required to be sent to the taxpayer. Moreover, where a taxpayer and his or her representative have executed a Power of Attorney form, Form 2848, sending to the taxpayer other collection notices or communications entitling him or her to a CAP hearing does not violate section 6304(a)(2). Section 6304(a) provides in relevant part that “without prior consent of the taxpayer … the Secretary may not communicate with the taxpayer in connection with the collection of any unpaid tax … (2) if the Secretary knows such person is represented by any person authorized to practice before the [IRS] … unless such person consents to direct communication with the taxpayer.” (Emphasis added). The execution of Form 2848, constitutes “prior consent of the taxpayer” to direct receipt of either the original or a copy of all written communications, including written communications in connection with the collection of an unpaid tax. By executing such form, the taxpayer’s representative is also consenting to such direct contact.

Given the current language of the POA form, the position taken in the SCA seems wrong.  Indeed, to agree with the IRS that all Forms 2848 — the only form by which the IRS lets one appoint a POA — constitute a waiver of the 6304(a)(2) protections is to say that the IRS can require all taxpayer always to waive the protections of 6304(a)(2).  So, the IRS position in Godfrey may be that signing the POA form waived the right for the representative to receive notice even though the IRS would not have recognized the representative had he not signed the POA.

Tax Court Decision on the Case

The Tax Court treated this case as it would treat a deficiency case in which the authorized representative did not receive the appropriate notice from the IRS. Longstanding precedent in the Tax Court holds that the failure of the IRS to provide the appropriate notice to the authorized representative does not extend the period within which a taxpayer may timely file a Tax Court petition:

In the context of deficiency cases under section 6213(a), we have held that copies of correspondence sent pursuant to a request in a power of attorney are a matter of courtesy and in no way affect the mailing requirements of section 6212. See McDonald v. Commissioner [76 T.C. 750].  It is established law that ‘the failure of the respondent to send a copy of the notice of deficiency to the taxpayer’s counsel, pursuant to a request contained in a power of attorney filed with the respondent, does not affect notice of deficiency has been sent to the taxpayer by… [certified] mail to his last known address’ Allen v. Commissioner [29 T.C. 113]; see also Houghton v. Commissioner [48 TC 656}.

The same rationale applies in the context of a petition for review of the lien or levy action under sections 6320 and 6330. Regardless of whether Mr. Genova should have received copies of IRS correspondence, respondent mailed the levy notice to petitioner at her last known address.”

In citing the deficiency cases as the basis for denying relief where the IRS failed to properly notify an authorized representative, the Tax Court did not address the difference between deficiency cases and CDP cases created by IRC 6304, a provision added to the Code in 1998 at the same time CDP relief was created.

Did the IRS Violate 6304(a)(2)

In Ms. Godfrey’s case the IRS appears to have violated section 6304(a)(2) because it sent a communication directly to her “in connection with the collection of any unpaid tax” by sending her the notice of the filing of the NOIL without sending the notice to her representative which it knew from the Form 2848 he had filed with it. There are four exceptions to 6304(a)(2); however, none of the four exceptions appear to apply to this case.  Although the Tax Court does not appear to have ruled on the issue of whether the sending of the CDP notice of filing of the NOIL is a “communicat[ion] with a taxpayer in connection with the collection of any unpaid tax”, it appears clear that such a notice does fit within the definition of such a communication.  The location of the two statutes, 6304 and 6330, within the same subpart, Subchapter D, of Chapter 64 of the Internal Revenue Code provides further support for that conclusion.  The IRS has not issued regulations concerning IRC 6304 in the 17 years following passage of this provision so no guidance on this issue exists in the form of regulations just as no case law guidance exists.

Although tax law provides little guidance on what to do when the IRS fails to follow the law in this area, guidance does exist in case law developed under the Fair Debt Collection Practices Act found in 15 U.S.C. 1692c.  Communication covered by section 1692c(a)(2) includes written documents and letters.                [Stagikas v. Saxon, 795 F.Supp.2d 129 and Herbert v. Monterey Fin Servs, 863 F. Supp. 75]  While it could be argued that the failure of the IRS to send a copy of the NOIL to petitioner’s representative should play out in an IRC 7433 case for damages rather than in a fight over the jurisdiction of Appeals and the Tax Court to hear the CDP case, the existence of section 6304 puts the whole issue of notice to the representative in a different posture than exists in deficiency cases.  It may seem harsh to allow the IRS to fail to send a taxpayer’s representative a notice of deficiency and then close the door to the court house to that taxpayer because of a late filed petition; however, in that context a specific statutory provision directing the IRS to provide notice to the representative does not exist.  In collection cases section 6304 puts the case in a very different posture.  Here, the IRS has a statutory duty to notify the authorized representative.  To close the court house door on a taxpayer in a situation in which the IRS has violated the statute goes beyond merely rewarding it for failing to something it should have done under its procedures but was not directed by Congress to do.


The order dismissing Ms. Godfrey’s case does not address the differences between CDP cases (collection cases) and deficiency cases. The section 6304 argument was not made to the Tax Court prior to entry of the order so it is quite understandable that the court did not address it.  The Tax Court may now have the opportunity to address this issue and to put the IRS on notice that Congress meant what it said about notice to representatives in collection cases.  Doing so will require addressing arguments concerning jurisdiction and equitable tolling that go beyond this post.  This post serves notice that 6304 should have meaning.  We will explore that meaning in the context of jurisdiction in a second post on this case addressing the remedy for a section 6304 violation.

There will also be a third post on this case discussing whether the Tax Court was right to rely on a regulation providing that an NOIL — if mailed to the last known address, but not received — validly starts, from the date of its mailing, the 30-day period to request a CDP hearing.  There is some legislative history that casts doubt on the validity of that regulation.  Unfortunately, a challenge to the validity of the regulation on this ground will come belatedly in the motion to vacate, not earlier.