Category 9 Cases the Taxpayer Advocate Service Will Accept

In TAS-13-0521-0005: Interim Guidance on Accepting Cases Under TAS Case Criteria 9, Public Policy (05/06/2021) the National Taxpayer Advocate (NTA) put out guidance on the public policy cases Taxpayer Advocate Service (TAS) will accept.  The guidance regarding case acceptance expires on May 5, 2023. Under Code Sec. 7803(c)(2)(C)(ii), Congress listed several types of cases in which TAS will assist taxpayer and gave the NTA the authority to determine additional matters in which TAS will assist taxpayers.

TAS wants to assist taxpayers in situations in which it can provide meaningful assistance but does not want to waste time where it cannot help.  A good example of a place where it cannot help has occurred because of the pandemic.  Many taxpayers want to know what has happened to their refund or other correspondence.  TAS cannot provide much assistance because in a high percentage of these cases the correspondence sits in a tractor trailer waiting for someone at the IRS to process the mail.  Until the case gets into the IRS system in a meaningful way, the situation ties the hands of TAS, making those missing or delayed correspondence cases ones where TAS cannot really provide assistance. TAS divides the criteria it uses to decide when it will assist taxpayers (“case acceptance criteria”) into nine categories. (Internal Revenue Manual (IRM) 13.1.7.2)

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Category 9, sometimes known as the public policy assistance category, provides that TAS will assist taxpayers with cases that: 

  1. The NTA determines warrant TAS assistance due to a compelling public policy, and 
  2. Don’t meet the case acceptance criteria for any of the other eight case acceptance categories. (IRM 13.1.7.2.4)

In the recent memo the NTA shares her determination that the TAS will accept the following four issues in its public policy category.  Some of these carry over from prior determinations: 

  1. Cases involving the automatic revocation of an organization’s tax-exempt status for failure to file an annual return or notice for three consecutive years.  This one goes back for several years when the IRS first came out with his plan for purging exempt organizations that seemed to no longer exist or, at least, no longer communicate with the IRS; 
  2. Cases involving any tax account-related issue referred to TAS from a Congressional office.  Going to a Congressional office as your entrée into the IRS generally greases the skids.  TAS is especially responsive to Congressional correspondence and makes regular visits to local and national Congressional offices.  Note that even though TAS wants to do everything it can to please the Congressional offices, it creates exceptions here to reflect its utter inability to accomplish certain tasks where the IRS has not processed correspondence: 
    1. Cases involving Economic Impact Payment (EIP) issues, and 
    2. Cases involving the exclusion from income of unemployment compensation received during tax year 2020 under Section 9042 of the American Rescue Plan Act of 2021 (ARPA, ARP Act; PL 117-2), where the taxpayer who filed their tax year 2020 return before ARPA was enacted; 
  3. Cases involving revocation, limitation, or denial of a passport because, under Code Sec. 7345, the taxpayer has a seriously delinquent tax liability (i.e. a tax liability of more than $50,000, adjusted for inflation).  It added this one when the legislation because effective.  You can find blog posts by the NTA through this link even though the title of our post indicates a discussion of private debt collection.  It can make a big difference to have TAS advocating for you on this issue if you need a fix in a hurry.  Keep in mind that TAS cannot perform magic here.  The taxpayer needs to be able to show that a seriously delinquent tax liability does not exist or that the taxpayer has made the necessary payment to resolve the liability; and 
  4. Cases that have been referred to a Private Collection Agency for collection of a federal tax debt under Code Sec. 6306.  This one has been around since private debt collection returned.  Nina Olson did not like private debt collection.  She is not alone.  See here and here.  She pushed to eliminate it the first time it came into existence.  She created this exception when Congress resurrected private debt collection and it has remained on the list.

The changes to the list are really changes to criteria 2. to reflect TAS’ inability to fix something.  Keeping up with the public policy list allows you to know when you can successfully obtain the assistance of TAS to advocate for a position within the IRS.  Of course, knowing the criteria other than Number 9 can also be quite helpful.  For those needing a reminder, here is a list of the other bases for seeking TAS assistance:

Economic Burden. Economic burden cases are those involving a financial difficulty to the taxpayer: an IRS action or inaction has caused or will cause negative financial consequences or have a long-term adverse impact on the taxpayer. 

  • Criteria 1: The taxpayer is experiencing economic harm or is about to suffer economic harm.
  • Criteria 2: The taxpayer is facing an immediate threat of adverse action.
  • Criteria 3: The taxpayer will incur significant costs if relief is not granted (including fees for professional representation).
  • Criteria 4: The taxpayer will suffer irreparable injury or long-term adverse impact if relief is not granted.

Systemic Burden. Systemic burden cases are those in which an IRS process, system, or procedure has failed to operate as intended, and as a result the IRS has failed to timely respond to or resolve a taxpayer issue.

  • Criteria 5: The taxpayer has experienced a delay of more than 30 days to resolve a tax account problem.
  • Criteria 6: The taxpayer has not received a response or resolution to the problem or inquiry by the date promised.
  • Criteria 7: A system or procedure has either failed to operate as intended, or failed to resolve the taxpayer’s problem or dispute within the IRS.

Best Interest of the Taxpayer. TAS acceptance of these cases will help ensure that taxpayers receive fair and equitable treatment and that their rights as taxpayers are protected.

  • Criteria 8: The manner in which the tax laws are being administered raises considerations of equity, or has impaired or will impair the taxpayer’s rights.

A Motivating Reminder

Nina Olson identified a need, which created a movement and changed the landscape of America’s tax system forever. She started the Community Tax Law Project in 1992 and the Revenue Restructuring Act, (“RRA”), which ushered in a new era for taxpayer advocacy (including the Taxpayer Advocate Service and the role of National Taxpayer Advocate (“NTA”)) was passed in 1998.

The Pittsburgh Tax Review’s Fall 2020 publication focuses on different facets of Nina’s life and career. It features articles from Nina’s esteemed colleagues and friends, including Keith and Les. It is an incredibly inspiring symposium, especially during this time when it’s easy to feel overwhelmed and burnt out. I touch on some of highlights, but each of the articles are worth reading in full- especially if you are an LITC practitioner. The entire publication is available here.

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There were many times reading through the publication that I could envision the energy of the moments. There are gems throughout (even in the footnotes): the car rides shared by Nina and Keith, their remarkable and supportive friendship, the discussions by the Senate Finance Committee about the role of the Taxpayer Advocate in the Department of Treasury’s hierarchy, the growing pains of transforming TAS into what it is today, and the ripple effects Nina has created with her work.

The tribute is an insight into the way that Nina thinks, works, and approaches challenges and it is incredible. Stories about Nina’s profound impact on people (tax practitioners and taxpayers, alike) are interwoven with stories of her profound impact on policies and procedures.

Many of the stories allowed me to revisit the period in my life when I stumbled upon the LITC world and the excitement I felt after learning that I could be the type of lawyer that I had always wanted to be. I could practice tax law, truly help people, and hopefully have a positive impact on the world.

Nina ran a tax preparation and accounting business for nearly as long as she was the NTA, and then went on to graduate from law school only ten years before becoming the NTA.

In an article written by Nina, she reflects on the opportunity to become the NTA and how it aligned with her plans and passion to continue advocating for taxpayers after ensuring that the Community Tax Law Project was well-established and self-sufficient. She acknowledges the work of the teams of people that made her successes possible. She also humbly states that the intention of her article is merely to recount her experience and her thoughts. It is, of course, much more than that- and it is a rare and exciting look at the life experience of a zealous leader.

Nina testified before Congress, before she ever imagined being the NTA, about the role the NTA should play and the need for strong leadership, without realizing that she was describing herself – a self-fulfilling prophecy of sorts. She states, “Little did I know then that I would have that responsibility one day […] the furthest thing from my mind was to become the National Taxpayer Advocate. In 1998, my sole focus was building The Community Tax Law Project.”

Things that many practitioners now take for granted were so hard fought, won, and paved the way for the ability of TAS and LITCs to advocate for taxpayer rights. Any difficulties Nina encountered were transformed into opportunities to learn and improve

The stories contained in the tribute demonstrate Nina’s relentless passion for advocacy, her ability to call the IRS out on its absurdities and remain steadfast to TAS’s purpose and mission, which she helped develop.

Nina recognizes that conventional wisdom typically states to “choose your battles wisely” but that is not possible when it comes to taxpayer rights and being too selective about battles only makes it harder to get things accomplished later.

Some of the stories highlight how Nina’s quick wit is one of her best weapons. For example, Nina reflected on the frustration she felt at the underutilization of Taxpayer Assistance Orders early in her time as NTA. She recalled that, at a TAS training symposium, “A member of the audience approached the microphone and said that many of them had good relationships with IRS employees and issuing a TAO would harm those relationships going forward.”[Nina] was silent for a minute, and then said, “If issuing a TAO will harm that relationship, then you don’t have a ‘relationship’—you have unrequited love.”

And there was the time when an IRS Operating Division advisor had asked her to look at things from his perspective. She countered that it is her job and she is required by law, to look at things from the taxpayer’s perspective, the rest of the IRS can look at it from the IRS’s perspective.

Everything boils down to the impact Nina has had on the lives of America’s taxpayers, which includes all of us. As Caroline Ciraolo writes, “[b}ehind every legal issue is a taxpayer, a family, or a community that will benefit from our efforts,” as Prof. Lipman writes, “the federal income tax system exists for people,” and as Prof. Cords writes, “taxpayer rights are human rights.”

The pandemic has shown us that we are all interconnected, and not caring for the most vulnerable of our population can leave us all more vulnerable. Nina’s work advocating for low-income taxpayer, for credits that help lift children and families out of poverty, and for the Taxpayer Bill of Rights, among other things, helps the most vulnerable and positively impacts us all.

The fight for taxpayer rights never ends and resistance by the powers that be- in the name of cost and efficiency- never wanes, but Nina and what she has created, and continues to create, empowers tax practitioners to feel like we can effectuate real and meaningful change. The tribute to her in the Pittsburgh Tax Review was wonderful and motivational reminder of that.

More Trouble with Notices and More Discussion of Offsets

We have written about the two rounds of misstated notices the IRS has sent out because of delays resulting from the pandemic.  You can find those posts, here and here.  In both instances, the National Taxpayer Advocate through her blog provided the alert or at least the alert that we noticed.  Another problem with notices has occurred and again the NTA has blogged on the problem, providing a window into IRS action not otherwise available.  The latest correspondence problem does not implicate statutory time frames the way the earlier misdated notices did.  Instead, this problem simply involves the IRS sending 109,000 taxpayers a notice with wrong information.  The notice not only wrongly tells the taxpayer of action the IRS did not take but contains a typographical error that will compound confusion.

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According to the NTA, the IRS sent Notice CP21C informing taxpayers that the IRS was offsetting their Economic Impact Payment (EIP) to satisfy outstanding debt.  Here is the critical language from the notice as recounted in the NTA blog post:

We applied a credit to your 2007 [that is not a typographical error!] tax account due to new legislation. We used (offset) all or part of your economic stimulus payment to pay your federal tax as the law allows … As a result, you don’t owe us any money, nor are you due a refund.

The IRS did not offset their EIP and tax year 2007 has nothing to do with the issue. 

The people receiving this notice appear to be people who did not have a 2018 return on file and who filed their 2019 return too late for the IRS to process their EIP before the end of 2020.  For these individuals, the ability to obtain an EIP turned into an ability to receive a Recovery Rebate Credit (RRC) upon the filing of their 2020 return.  If these individuals only need to file a 2020 return in order to claim the RRC, they may be sufficiently confused by the notice to forego the opportunity to file a 2020 return to obtain the recovery check Congress intended for them to receive. The letter directs them to the IRS phone number to call with questions; however, as the NTA points out in her blog post, they may have as much luck getting through to that number as they will getting through to CVS to try to schedule a vaccine (well she doesn’t exactly put it that way but you get the idea.)

According to the NTA’s post

The IRS added Questions and Answers(Q/A) to its coronavirus tax relief site on January 28 which explains that the notices were issued in error. The Q/A says the notice was intended to inform taxpayers that the IRS must mail or issue EIP1 by December 31, 2020, and that the IRS was unable to process their 2019 tax return in time to issue EIP1.

Of course, not everyone goes to the IRS website or reads an NTA post.  The NTA indicates she is negotiating with the IRS to send a second letter to these individuals alerting them to ignore the first letter.  Even assuming the IRS has the bandwidth to do that during the filing season, the second letter may cause even more confusion.

The NTA also notes that for those among the 109,000 who do file a 2020 return claiming the RRC, the general pass on offset (except for past due child support) that existed for EIP does not exist for payments made as RRC.  So, for individuals pushed into obtaining the recovery through their 2020 return, outstanding federal taxes from other years (even possibly including 2007), as well as other debts subject to offset under the Treasury Offset Program (TOP), will cause the taxpayer to miss out on actual receipt of the payment as it is applied to the outstanding debt.

The NTA went on to mention that she is pushing to convince the IRS to voluntarily waive offset of RRC payments.  The IRS has that authority under IRC 6402.  It could make a decision on a blanket basis to let refunds based on RRC go out to taxpayers without being offset to outstanding federal tax debt.  That would be a good thing and create consistency for taxpayers receiving their recovery payment this year.  It would line up with one of the suggestions made by the ABA Tax Section in its recent comments to the IRS concerning how to administer taxes in a time of pandemic.  (You can find a link to the report in a recent post by Nina.)  It would not prevent the offset of the RRC against debts other than federal taxes, because IRC 6402 only gives the IRS discretion to waive offset against federal taxes and not all of the other debts to which TOP applies.

In other potentially encouraging offset news, it was reported yesterday that IRS Deputy Commissioner Sunita Lough stated that the IRS was considering how it will administer the offset bypass refund (OBR) program.  She talked about consistency in application of the program, which was a criticism of the program in a recent Treasury Inspector General for Tax Administration (TIGTA) report discussed here by Les.  OBRs were also the subject of the recent comment from the ABA Tax Section to the IRS in which Les and I participated, which is linked above through Nina’s post.

Offset has received much attention in the past year.  Not only did Congress acknowledge the important role that offset plays by giving taxpayers a pass on almost all offset provisions in the CARES Act, but a portal snafu by the IRS with respect to injured spouses created the most commented upon blog posts we have had during the existence of this blog.  Look at the hundreds of comments, still coming in, from this one post last spring by Caleb.

Getting correspondence right is a critical function of the IRS.  The latest NTA blog post recounts yet another, and perhaps the least excusable, of the IRS mass correspondence problems during the past year.  Administering the tax laws requires giving taxpayers accurate information.  When specific correspondence gives wrong information, it creates a real problem of trust in the system.  Let’s hope that the IRS can avoid future correspondence problems of this type.  Let’s also hope that one of the positive developments of the pandemic is a new way to look at offsets.  Michael Waalkes and I have an article on offset I intend to post soon.  This is a silent but important collection tool in the IRS collection arsenal that comes with many policy issues deserving consideration in the manner of its implementation.

Misdated Notices Continue

Last summer the National Taxpayer Advocate reported that the IRS was sending out millions of notices to taxpayers with dates that bore no relationship to the date of actual mailing.  I wrote a post about it here criticizing the decision to send out these notices, not only because they would confuse many recipients but also because the IRS database shows the date of the notice generation rather than the date of mailing.  I updated the information in an October post after gaining more information.  This type of broad based improper recordkeeping will have the effect of casting doubt on the accuracy of IRS records that could have lasting impact for the IRS when it tries to prove some event occurs and relies on a certified transcript.

In the last section of the post I will mention a disturbing recent interaction with the IRS regarding the collection statute of limitations and request anyone with a similar interaction to provide comments.

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The original batch of wrongly dated notices resulted from the closure of the IRS Service Centers due to the pandemic.  As bad as sending out the wrongly dated notices is for taxpayers and for the IRS, at the time the story first broke it appeared to be a once and done as a result of the pandemic lockdown.  Last month, the National Taxpayer Advocate issued a second blog describing a second round of misdated or backdated notices the IRS starting sending out this fall and continuing into January.  The IRS announced this second round of back dated notices here.  So, now we learn that instead of sending out bad notices in one batch because of the shutdown, the problem continues and may occur again in the future creating ongoing confusion for taxpayers and an even greater threat to the integrity of the IRS database system.

Extended Dates to Respond to Misdated Notices

If you have not already read the NTA’s second post on this issue you should do so as the issues created by the second round of bad notices are still playing out.  The NTA notes that once again the IRS is placing into the envelope with the misdated notice a stuffer providing additional information and additional time.  Here are the three types of misdated notices in which a stuffer will be placed:

The notices scheduled to include the Notice 1052-D insert are:

  • IRC § 6303 Notice and Demands that informs taxpayers of tax due and demands payment;
  • IRC § 7524 Annual Reminder Notices that remind the taxpayer of an existing balance due; or
  • IRC § 6213(b) Math Error Notices that inform taxpayers of a change to their return.

The insert provides the taxpayer a new due date, January 29, 2021, to make a payment to avoid additional interest, and additional failure-to-pay penalties, if applicable. The insert also provides taxpayers with math error adjustments until March 9, 2021, to contact the IRS and request the math error be reversed.

The annual reminder notices, while required by statute, do not create the same type of issues as the notice and demand letter or the math error notices.  I discussed the consequences of delayed math error notices in my original post on this issue.  The stuffer provides the taxpayer with additional time to pay until January 29, 2021, which means that there is additional time before the federal tax lien comes into existence.  The stuffer provided in the math error notices give taxpayers until March 9, 2021, to object to the assessment based on math error and trigger the sending of a notice of deficiency (or convince the IRS the original return position was correct.)

The NTA post alerts taxpayers that the notices the IRS sends out in the collection stream may arrive out of order because of the failure to send out the notices timely during November.  For individual taxpayers this should not create a significant problem as the second notice in the collection stream is not statutorily required.  The result may be different for business taxpayers if they received the notice of intent to levy before receipt of notice and demand.

Prior Misdated Notices

The NTA circles back at the end of her post to talk about the prior round of misdated notices:

During the spring and summer of 2020, the IRS digitally created approximately 31.2 million notices that it was unable to mail on the dates planned. Of these, the IRS purged approximately 12.3 million notices as they were not statutorily required. Of the remaining late notices, only a small percentage included an insert notifying the taxpayer of additional time to act. Originally, the IRS identified 1.8 million notices requiring an insert providing an extension of time for the taxpayer to act. Unfortunately, some notices containing statutory deadlines didn’t include the necessary insert. Once identified, the IRS sent supplemental letters to taxpayers informing them of additional extensions. For example, taxpayers who originally did not receive an insert providing additional time to request a Collection Due Process hearing received another letter providing more time. Similarly, taxpayers receiving late-mailed notices of refund disallowance were subsequently sent a supplemental letter clarifying the two-year period to challenge the refund disallowance in court. Although the IRS made efforts to provide additional time for taxpayers to respond, it created much confusion for taxpayers and practitioners. After all of the challenges the IRS and taxpayers faced during the previous backlog, it is difficult to understand how the IRS finds itself in the same position. Let’s hope this backlog mailing goes more smoothly.

It is surprising that the NTA does not understand how the second round of misdated notices occurred.  TIGTA or GAO needs to take a hard look at what has happened here leading to the inability to send out notices on dates that match the date on the statutorily required notice and the decision making for knowingly sending out these notices rather than stopping the process and getting it right.  Someone at the IRS should be able to explain why this has happened again; how many more time we might expect it to happen; and when the system might be fixed to prevent it from happening.

At the Mid-Winter ABA Tax Section meeting there will be a panel discussing the late issued notices on Thursday January 28 from 3-4:00 ET.

TIGTA Report Criticizes TAS’s Approach to Offset Bypass Refunds

Last month TIGTA released a report reviewing the Taxpayer Advocate Service’s role when taxpayers request an offset bypass refund. In the report TIGTA found 1) that TAS offices inconsistently treated taxpayers seeking OBRs, 2) some TAS failures to honor requests as to how taxpayers wished to receive their refunds (paper check, direct deposit to the taxpayer’s account, or direct deposit to a third-party financial institution), 3) some TAS actions that exceeded its delegated authority, especially when a taxpayer seeking an OBR had an open matter with another IRS function, and 4) TAS failed to record fully its processed OBRs. 

In this post I will focus on the first item relating to TIGTA’s findings concerning inconsistencies in the process and standards used to evaluate OBR requests.

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Offset bypass refunds allow taxpayers to receive a refund when the IRS would otherwise apply an overpayment to past due tax liabilities. TAS case advocates are delegated authority to generate an OBR for a taxpayer if the taxpayer has no other debt subject to mandatory offset under Section 6402 and the taxpayer establishes that she is unable to pay reasonable living expenses if the IRS were to offset the overpayment against a past due tax debt.

We have discussed OBRs a few times, including one of our most viewed posts all time, a 2015 post Keith wrote discussing the OBR process. In one of our recent posts on OBRs from this past April, Barbara Heggie discusses challenges that taxpayers face securing the needed documents to prove the financial hardship necessary to get an OBR. In her post, Barbara refers to TAS guidance that allows TAS employees to dispense with third-party documentation: 

Many taxpayers seeking an Offset Bypass Refund will not have access or the ability to secure hardship documentation such as eviction notices, late bills, etc. Determine whether the taxpayer can validate the hardship circumstances through oral testimony or a third-party contact. If so, discuss the case with your LTA to determine if a written statement signed by the LTA confirming that the hardship was validated is appropriate.

The TAS guidance reflects experience that sometimes taxpayers facing hardship have a difficult time providing a full set of documents or record that would prove the hardship.  

In its report, TIGTA found that TAS’s flexibility led to inconsistencies across TAS offices in how TAS case advocates reviewed and decided on OBR requests:

We determined that most OBR cases did not include an analysis of the taxpayer’s income and expenses before an OBR was issued. In addition, we identified cases in which OBRs were provided to taxpayers based on supporting documentation that was not current orreasonable. However, in other cases, TAS case advocatesrequired a full review of the taxpayer’s income and expenses, as well as applied stricter supporting documentation criteria, before determining whether the taxpayer should be issued an OBR. 

The TIGTA report noted specific inconsistencies, including how one office created a detailed processing form to review compliance history and prior OBR requests, while other offices did not consider those factors, and how some offices did not verify supporting documentation. To be sure, TIGTA used only a judgmental sampling approach, which is a non-probability sampling technique, but its auditor observed a pattern of inconsistencies across offices (the report does not discuss why TIGTA did not do a deeper dive). Despite the limits in auditing technique, in TIGTA’s view, the inconsistencies stemmed from a lack of detailed centralized guidance, which led to inconsistent treatment of similarly situated taxpayers. This leads to an increased “risk of abuse by individuals seeking to avoid payment of their outstanding tax liabilities.” 

The report includes are other specific examples of inconsistencies, some of which reflect a lack of use of financial hardship criteria or processes associated with assessing reasonable collection potential that IRS generally requires when considering alternatives to enforced collection. TIGTA makes a number of recommendations, including floating the idea that TAS should create OBR specialists who would have more experience. It also contrasts the TAS OBR process with other more centralized review functions, such as the innocent spouse unit.

TAS’s response to the report reflects a different perspective on its role. In addition to noting that the TIGTA observations only reflected “just a few cases” it noted that centralization could create additional taxpayer burdens. In addition, the lack of detailed process, in TAS view, was by design, and it worried that a too detailed approach in the IRM on OBRs is “unnecessary and that more specific IRM guidance will lead to employees failing to think critically.”

Conclusion

The report reflects very differing perspectives on the OBR process and on tax administration generally.  It reminds me of Gina Ahn’s recent guest post Proving Your Client’s Marital Status, Not as Simple as It Appears but Crucial for EITC where she contrasted Social Security and IRS employees in how they evaluate marital status.  SSA’s perspective is based on ensuring that people receive the maximum benefits they are entitled to receive whereas the IRS perspective is more enforcement based, with a concern that taxpayers may be gaming marital status to generate an improper refund.  TIGTA, consistent with its mission, is primarily concerned with reducing fraud and waste. TAS, consistent with its mission, is attempting to help taxpayers, especially for taxpayers who may be facing financial hardship.

In addition, TAS has offices nationwide. Unlike the post RRA 98 IRS, its employees are meant to work with and assist taxpayers who live and work in the same region as TAS employees.  The lack of centralization within TAS is by design. TAS’s decentralized structure helps ensure that its employees are more likely familiar with the circumstances of people it is charged to assist. 

To be sure, finding the right balance between uniformity and flexibility is a challenge.  Providing relief from an offset or collection action is also a challenge, as we generally accept that while IRS should have extraordinary collection powers those powers should not render taxpayers unable to meet life’s necessities. Within this framework, OBRs exist in a shadowy world of tax procedure, and the report highlights that within the shadows there is a great likelihood of disparate treatment of similarly situated taxpayers. 

What could be done to address the issues TIGTA flagged, while at the same time possibly preserving a role for TAS? In discussing the issue with Keith he raises the important issue as to whether TAS should be the initial point of contact on OBRs. Instead, perhaps IRS could centralize administration of OBRs and local taxpayer advocates could issue a directive if the centralized IRS office failed to 1) take into account the appropriate weighing of a more definitive listing of factors or 2) address unique local circumstances that may create hardships for taxpayers that employees in a centralized location might miss.  Such an approach would take some filing season pressure off of TAS, create standardization, and leave TAS to be creative when needed.  This approach may make additional sense given that during the filing season the IRS typically has additional employees, while TAS typically does not hire up for the filing season and that period creates a lot of extra work for it.

A Sun Has Set: Reflections on the Honorable John Lewis

Over the next days, weeks, months, and years, there will be many tributes to Congressman John Lewis, who passed away on July 17, 2020.  Historians and advocates will assess his enormous contributions in the fields of human and civil rights.  Here, today, I just want to share how John Lewis affected my life and my work.

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I was seven years old when John Lewis boarded the bus south in the first wave of Freedom Riders, and I have no memories of hearing about them.  But even at that age I was acutely aware of racial prejudice; my mother had been raised in Mississippi and I could sense her fear and anxiety over racial matters.  I had personally experienced scorn and ridicule at school because of my family’s religious beliefs and practices, so I knew some measure of cruelty people could inflict because of perceived differences.  I also knew religious beliefs were a matter of free exercise, whereas skin color was not.  I was not sure what all that meant, but I was aware, from my own home environment, that people of color experienced discrimination in ways I did not.

But nothing prepared me, at the age of eleven, for the events shown on the news the night of March 7, 1965, when I watched peaceful human beings be bludgeoned and set upon by dogs, simply because they wanted to cross a bridge.  More astonishing to me, though, was the courage of those human beings, moving forward even as they knew they would face violence.  The conviction and strength of their beliefs affected me profoundly.  They showed they could speak truth to power and were willing to accept the consequences.  I took that lesson to heart, and it altered the trajectory of my life.

Fast forward several decades to 2011, the 50th anniversary of the Freedom Riders.  By that time, as National Taxpayer Advocate, I had testified before the Ways and Means Committee, and its Subcommittee on Oversight, about ten times, and had testified before Congress about forty times.  For much of that time Congressman Lewis was either chair or ranking member of the Oversight Subcommittee.  I had worked with his staff on numerous occasions on legislative proposals, many incorporating the recommendations in the National Taxpayer Advocate’s Annual Reports to Congress.  One of my most treasured possessions is a copy of the Taxpayer First Act signed by Chairman Neal and inscribed – yes, inscribed – by John Lewis.

Whenever I testified, regardless of which party was in control of the House or Senate, I was a bipartisan witness, asked to testify by both the Chair and the Ranking Member.  But for the hearing on May 25, 2011, for the first and only time in my career, I was a Democratic witness at a hearing on “Improper Payments in the Administration of Refundable Tax Credits”.  I was understandably nervous about the hearing; the subject of improper payments and the Earned Income Tax Credit is very politically charged and I was aware many people wanted more enforcement focus on the EITC. I knew I was going to have to present a persuasive case for a more nuanced approach, and I was going to have to do that even as the members of one party did not want me there.

As fortune would have it, the week before, on May 16, 2011, PBS aired the documentary Freedom Riders, a film by Stanley Nelson, based on Raymond Arsenault’s book, “Freedom Riders: 1961 and the struggle for Racial Justice.”  I had watched that film, curled up in fetal position through most of it.  It was with the memories of that film and those events fresh in my mind that I approached the hearing.  Also during that week, I had listened to radio and television interviews with Congressman Lewis, as he reflected on past and current times.  As I approached the hearing, I kept in my mind’s eye the deliberate courage and peaceful strength of those individuals who created a movement.  I knew, too, the steely determination and strategy it took to survive such events.  What I was facing was child’s play, but they were my role models.

The hearing went very well and respectfully.  After the hearing, Congressman Lewis came over to thank me.  The room was buzzing, with side conversations and people milling about.  Reporters were leaving the room, the court reporter was packing up.  I mumbled some thanks about the invitation, and then told the Congressman that I had seen his interviews and seen the film and that I was just so profoundly grateful for his work.  He took both my hands in his and looked me in the eyes and for the next five minutes or longer just spoke to me, never moving his eyes, talking about those events and the challenges today.  The world just stopped for me.  And apparently it did for others, too, because out of the corner of my eye I could see people stop moving and then slowly edge toward us, to listen in.

The moments ended, the Congressman had to move on, and so did I.  Well, almost.  Anyone who has felt the strength of those hands and of that gaze is not the same.  They impart compassion, yes,  but they urge you on and they do not accept excuses.

Occasionally, as a person in a position of some authority, I could use that authority to accomplish something that might not happen under normal circumstances.  Later in 2011, all of the Local Taxpayer Advocates (LTAs) were going to be in Washington DC for a leadership training meeting.  I had been frustrated how many of the LTAs seemed burned out and were not advocating as vigorously on various issues as I would like them to.  It kept coming to me that they needed more courage.

In the weeks leading up to the showing of the film Freedom Riders in the spring of 2011, there were posters on the Washington DC Metro promoting the film, with a picture of a bombed out bus, and the tagline, “Would you get on the bus?”  That line kept going through my mind all summer; it made it clear that societal and systemic change starts with individual acts of courage and conviction.  That is what the LTAs needed to understand – that despite all the roadblocks put in front of them by their colleagues at the IRS, it was their responsibility to stand fast, and they needed to muster their courage to do that.

Well.  I decided that we would show the Freedom Riders film mid-way through the leadership meeting.  My staff thought I was nuts, but I insisted: we would dedicate an entire afternoon to the film.  We printed up “tickets” that said, Would you get on the bus?  I asked three LTAs, who were African American and were over the TAS offices in the deep south, to be on a panel after the film.  I introduced the film by saying I just wanted people to watch it and think about the courage these people showed, what it took for them to do what they did, and how that would apply to them.  I could tell that everyone thought this was just another crazy NTA thing they had to go along with, and many of the African Americans in the room were suspicious; what was the subtext here?

After the film, there was absolute silence.  And then the three LTAs on the panel started speaking.  They shared their experiences, their families’ experiences, what they experienced to that day, in terms of racism.  They spoke about the quiet courage required every single day of their existence, to assert their humanity and go through life with dignity.  Then others in the audience stood up and spoke; people talked about how the film affected them, how it made them reflect on their own beliefs and actions, and also how it made them look at their work with renewed commitment.  People broke for the day and carried those conversations on at dinner and the next day.

There were no miracles after that – no all-of-a-sudden people showed more courage.  But some did.  It was a small step, and it mattered.

On March 7, 2019, I had my final hearing before Congressman Lewis as chair of the Ways and Means Oversight Subcommittee.  Seven days before, I had announced my pending retirement as National Taxpayer Advocate.  At the end of the hearing, I approached the dais to thank the Chairman.  Again, he took my both my hands, looked in my eyes, and said, “A sun is setting.”  We hugged.  (You can watch the hearing here.)

Hon. John Lewis and Nina Olson embrace following her testimony on March 7, 2019.
Screen shot of Hon. John Lewis and Nina Olson embracing following a Congressional hearing on March 7, 2019.

Over the course of John Lewis’ long life, he saw many a sun set.  But what John Lewis knew, and I learned from him, is after each sun has set, there is a new dawn.  It is up to each and every one of us to determine what the new dawn brings. To mix metaphors, will you get on that bus?

NTA Blog Post On “Protecting the Rights of Taxpayers Who Rely on FAQs” Is Timely and Welcome, But Doesn’t Go Far Enough

We welcome first time guest bloggers Alice G.  Abreu and Richard K. Greenstein, both Professors of Law at Temple’s Beasley School of Law in Philadelphia.  They offer their reactions to the recent blogpost in which the National Taxpayer Advocate, Erin Collins, addresses the issue of taxpayer reliance on frequently asked questions (FAQs) and makes several recommendations. The issue of taxpayer reliance on FAQs specifically, and subregulatory guidance more generally, is not new, but it has received increased attention given the accelerated pace of tax legislation in response to the COVID-19 pandemic and the IRS’s need to provide prompt guidance. Professors Abreu and Greenstein have spoken and are writing on the subject and here they not only offer their reactions to National Taxpayer Advocate’s recent post but also their own recommendations.

We have touched on this issue before here with an excellent post in May by Monte Jackel and PT Contributor Nina Olson blogged on this topic when she was the National Taxpayer Advocate.  Keith

Kudos to NTA Erin Collins for taking on the issue of taxpayer reliance on IRS written guidance.  Her blogpost, released on July 7, is spot-on in identifying an important problem.  We particularly liked that she began by framing the issue clearly and persuasively: she described the plight of a taxpayer who goes to the IRS website for guidance on the deductibility of a particular item, finds a Frequently Asked Question (FAQ) on point, and takes the deduction, only to be audited and denied the deduction because the IRS changed its position, and is subjected to the 20 percent accuracy related penalty to boot. To make matters worse, the taxpayer can no longer access the FAQ because the IRS has removed it from its website, and no archive of removed FAQs exists.

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We agree with NTA Collins that “[i]f the Taxpayer Bill of Rights is to be given meaning, this scenario violates ‘The Right to Informed’ and ‘The Right to a Fair and Just Tax System.’”  We also emphatically agree that “[i]t is neither fair nor reasonable for the government to impose a penalty against a taxpayer who follows information the government provides on its website.” But we think that by focusing on the penalty, NTA Collins understates the unfairness faced by the taxpayer in this scenario.  Of course it is unfair for a taxpayer to be penalized for doing what the IRS itself said she could do, in a document specifically intended to guide taxpayer actions. And it is also unfair for the IRS to take down the document so that the taxpayer cannot offer it in support of a claim that she had “reasonable cause” for the position that resulted in the alleged underpayment, as provided by IRC § 6664(c)(1), which should allow her to avoid the penalty without reaching the question of whether the FAQ constitutes substantial authority for the taxpayer’s position. Indeed, removing an FAQ from the IRS website after a taxpayer has relied on it may also violate the taxpayer’s “Right to Challenge the IRS’s Position and Be Heard” because the IRS is thereby interfering with the taxpayer’s ability to provide adequate documentation for her position.  We therefore heartily endorse the NTA’s recommendation that the IRS create and maintain an archive of all FAQs issued.

But the unfairness depicted in the opening scenario of the NTA’s blogpost is far deeper than the post acknowledges. The core unfairness is that by refusing to stand by the positions it takes in written guidance intended for the specific purpose of informing taxpayers, the IRS is disrespecting the taxpayer’s reasonable reliance. And respect for the reliance interest is at the core of justice. Outside of the tax law, respect for reliance has led to the development of entirely new theories of obligation, such as promissory estoppel.  As we have previously noted, by refusing to stand by its written statements the IRS is behaving like the Peanuts character Lucy:  Lucy tormented Charlie Brown by repeatedly offering to hold a football for him to kick, only to pull it away just as he was going to kick it, which sent him up in the air and caused him to end up lying flat on his back. The IRS should not behave like Lucy, and taxpayers deserve to be treated better than Charlie Brown.

We therefore believe that the IRS, which itself adopted the Taxpayer Bill of Rights even before Congress made it a part of IRC § 7803(a)(3) in 2015, should change its position and respect taxpayer reliance on written guidance, whether that guidance is included in the Internal Revenue Bulletin or in publications, instructions to forms, FAQs, or other written guidance.  Respecting reliance operationalizes the taxpayer’s right to be informed as well as the right to a fair and just tax system because respecting reliance is at the core of justice and due process.

We understand the IRS’s need for nimbleness in issuing guidance in the face of recently enacted and immediately effective legislation, and we agree with NTA Collins that “[b]ecause FAQ’s aren’t subject to thorough review, Treasury and the IRS may later decide some of them are wrong and change them.” Indeed, we believe that similar concerns apply to much subregulatory guidance, and we think it salutary for the IRS to remain open to alternative interpretations of legislative language and to change its position in light of further reflection and discussion. As Stanley Fish noted over three decades ago, “No text reads itself.” Stanley Fish, Consequences, 11 Critical Inquiry 433, 446 (1985) (“The semantic meaning of the text does not announce itself; it must be decided upon, that is, interpreted . . . . In short, no text reads itself . . . .”). The susceptibility of provisions of the Internal Revenue Code to reinterpretation is ongoing.

But neither the IRS’s need for nimbleness in issuing guidance nor its understandable desire for precision, which NTA Collins noted, require that it refuse to stand by the positions it takes in published documents it issues for the specific purpose of guiding taxpayer behavior. The IRS is entitled to change its position, but until it announces that it has done so it should stand by that position, and not assert a different position against taxpayers who have reasonably relied on its publicly issued written statement. While we agree with NTA Collins that FAQs and other written documents intended for taxpayer guidance should constitute substantial authority for penalty relief purposes, we don’t think her recommendation to classify FAQs as “’Internal Revenue Service information’” under Treasury Regulation § 1.6662-4(d)(3)(iii),” goes far enough. The IRS should stand by its all of its written, publicly announced, positions until it announces that it has changed positions, and it should do so for all purposes, not just for penalty protection. In other words, the IRS should apply the changed position prospectively only and not apply it to any taxpayer who has reasonably relied.

Moreover, the IRS’s inclusion of a non-reliance disclaimer in some FAQs, like many courts’ assertion that “[i]t is hornbook law that informal publications all the way up to revenue rulings are simply guides to taxpayers, and a taxpayer relies on them at his peril,” Caterpillar Tractor Co. v. United States, 218 Ct. Cl. 517 (1978) (citing, Carpenter v. United States, 495 F.2d 175 (5th Cir. 1974)), while arguably well intentioned, only serves to undermine the agency’s legitimacy.  As NTA Collins pithily observed, “Why should taxpayers even bother reading and following FAQs if they can’t rely on them and if the IRS can change its position at any time and assess both tax and penalties?” The same question can be asked with respect to publications and instructions to forms.

We publicly expressed our views on taxpayers’ right to rely on statements in IRS written guidance in May, 2019, at the 4th International Taxpayer Rights Conference in Minneapolis when we participated in a panel discussion at a session on “The Virtues of Tax Authority Advice.” A recording of that panel discussion is available here and archived materials from the Conference can be found here. (Information on future International Taxpayer Rights Conferences to be held in Pretoria, South Africa, and Athens Greece, can be found here.) Our Conference presentation is now a draft article which we expect to be able to post on SSRN in a few weeks; its working title is Stand by your Words: Operationalizing Taxpayer Right to be Informed. In addition to fleshing out the positions articulated here and explaining why the change in the IRS’s stance on taxpayer reliance should not result in weaponizing IRS written guidance, we also argue that if the IRS persists in behaving as depicted by the opening scenario of the NTA’s blog, courts should apply the doctrine of equitable estoppel to protect taxpayers from harm.  We recognize that asserting equitable estoppel against the government is extraordinarily difficult, but, again, we believe that enactment of the TBOR and its adoption by the IRS provide a basis for a change in the status quo.

Sending Notices with Bad Dates

On June 22, 2020 National Taxpayer Advocate Erin Collins issued a blog post advising readers to keep an eye out for notices with expired action dates.  The post notes that “during the shutdown, the IRS generated more than 20 million notices; however, these notices were not mailed.  As a result, the notices bear dates that now have passed, some by several months and some of the notices require taxpayers to respond by deadlines that have also passed.” I will repeat myself once or twice in this post but if I am reading it correctly the IRS is knowingly and intentionally creating a false entry on thousands, perhaps tens of thousands, of taxpayers’ official records of account.

The NTA describes as a silver lining the fact that the IRS is granting additional time to respond before interest or penalties apply and that the IRS is putting inserts with the letters to explain something about the mismatch in the date of mailing and the dates on the letters.  I will talk more about some of the letters the NTA mentions in her blog post.  I found myself wondering about several things that were not explained in the NTA’s blog post.  Why did the IRS print these notices?  Why doesn’t the IRS shred the notices and recycle the paper in order to issue new notices with the proper dates on the notices?  Why hasn’t the IRS issued a news release or Tax Tip about the notices to alert taxpayers and practitioners?  Prior to the NTA blog post, the IRS only released this information though its National Public Liaison (NPL), which, while helpful, does not reach a wide audience. And while many people read the NTA blog posts, I don’t think it has a readership on a par with broadly released statements from the IRS.

The IRS might think it has communicated to practitioners. It pushed this news out through the NPL on June 9. The stakeholder liaison is an inadequate way to disseminate important news. On the day of the stakeholder liaison email, IRS quietly updated the page on IRS operational status to include the information. It also posted this news as a “Statement on Balance Due Notices” here.  I do not want to detract from the important discussion of the decision itself, but it is also worth mentioning that the information the IRS has made public on this situation and the method and medium of making it public, fails to signal the importance of this action.

Yesterday the NTA released her 2021 Objectives Report to Congress, which confirms the information in her blog post. Kudos to the NTA for including the problem of outdated notices in the news release accompanying the report. This will help get the word out to practitioners.

In a letter to Commissioner Rettig, Representatives Neal and Lewis expressed their concern over the outdated notices and suggested that the IRS take steps to “ensure no taxpayers are penalized” for the IRS’s inability to timely process correspondence. For the reasons explained below, this will not be easy to do if the IRS moves forward with its plan to mail the outdated notices.

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The NTA states that several dozen kinds of IRS notices will be mailed in the next month or two.  Maybe there is still time for the IRS to reconsider its decision to send out-of-date notices.  I hope so.  Here, I will discuss a few of the notices she mentioned.  Before starting the specific discussion, I note that many of these notices are required by statute.  I draw a distinction between statutorily required notices and other types of IRS notices.  While the best practice would be to send out notices on the date listed on the notice for all notices, the purposeful mailing of misdated statutorily required notices creates a more serious problem.

No matter what an insert says, the taxpayer will receive a statutorily mandated notice triggering statutorily prescribed duties and response times with the wrong date on the notice and the wrong date(s) for responding.  In the last two sentences of her blog post the NTA mentions that the IRS computer system will show as the business record of the IRS the wrong date.  She says “[c]ompounding confusion surrounding notice dates, IRS transcripts for taxpayers’ accounts will also reflect incorrect dates for some of the notices.” 

This could have grave consequences for both taxpayers and the IRS if the dates on the letters compromise the IRS business records.  First, taxpayers who do not keep the envelope and the letter may have trouble proving that the dates on the letter did not reflect the actual mailing date when making a future challenge.  Second, if the IRS builds a business record which it knows contains inaccurate information it makes all of its records suspect.  Courts regularly rely on certified transcripts from the IRS for the accuracy of the date an action took place.  If the IRS knowingly puts the wrong dates into its system of records, that calls the entire system into question.  This could have consequences for the IRS far beyond the consequences of recycling these letters and making sure that its records accurately reflect actions taken.

Here you have the NTA saying that the IRS business record is inaccurate.  That could be powerful evidence in court to strike at many IRS actions taken that stem from 2020.  It also has the potential to support grounds for damages if certain collection actions occur after a wrongful assessment or wrongful filing of a notice of federal tax lien.  It may present the possibility that in a CDP case a taxpayer may wish to lean on a rights-based failure to inform argument as a grounds to invalidate the proposed collection action.

Notice and Demand

IRC 6303 requires that the IRS send out a notice and demand letter within 60 days of the making of an assessment.  Case law going back at least three decades holds that the failure to send the notice and demand letter within the 60-day period does not invalidate the assessment but there is some possibly contrary case law.  The failure impacts the timing of the creation of the federal tax lien.  IRC 6321 and 6322 provide that the federal tax lien arises upon assessment, notice and demand and failure to pay within the demand period.  Ordinarily, failure to pay within the demand period causes the federal tax lien to relate back to the date of assessment.  If the IRS sends out the notice and demand beyond the 60-day period, the FTL will only arise upon non-payment and will not relate back to assessment.

You might say “so what,” because who cares about the FTL.  Only after the IRS filed the notice of federal tax lien (NFTL) does the IRS create a perfected lien.  The unperfected FTL still, however, has meaning.  For example, it attaches to property transferred for less than full value.  If a fight arises regarding the attachment of the FTL, the actual date of the mailing of the notice and demand letter matters.  Because of the pandemic, the IRS could not avoid sending out many notice and demand letters after the 60-day period.  Sending them out beyond the time frame must occur due to no fault of the IRS but sending a significantly backdated letter will undoubtedly confuse many recipients and may cause some to even challenge the validity of a notice which on its face asks the taxpayer to do something impossible.  If the notice and demand letter is invalid, the IRS has real problems because it would not have created the FTL, which has many consequences, including but certainly not limited to violating disclosure of a taxpayer’s liability if the IRS records a notice of federal tax lien when no underlying lien exists.

There is also the problem of the address.  The IRS must mail the notice and demand letter to the taxpayer’s last known address.  The IRS must use the taxpayer’s address as shown on the taxpayers most recently filed and properly processed return, unless clear and concise notification of a different address is provided. See, e.g., Duplicki v. Comm’r, T.C. Summary Opinion 2012-117.If these notices have been sitting in the bowels of a service center for months during the filing season, it is quite possible that many taxpayers have filed returns between the time of the creation of the notice and demand letter and the mailing of that letter.  The NTA does not mention if the insert changes the address on the letter.  I imagine it does not.  While many paper returns filed in the past few months remain in the parking lots of the service centers to which they were sent, the vast majority of taxpayers filed electronically.  Many of those returns will have gone through processing, and the IRS will know the taxpayer’s new address before these musty notices get mailed.  Mailing the notice and demand letters to something other than the taxpayer’s last known address will create an invalid notice and demand letter creating the same problems described above.  Maybe these are all notice and demand letters based on returns filed with insufficient remittance and processed early in the filing season, so the notice on the letter is the address on the most recent return.  If these notices do not come from that source, the likelihood that a fair percentage will bear an address other than the last known address is reasonably high.  This means taxpayers should be prepared to challenge the notices on this basis, which is not often done.

Math Error Notices

As most readers know the name math error notice is a misnomer.  Subsection 6213(g)(2) provides the definition of math error notice.  Sixteen different actions trigger the sending of a math error notice only one of which is 1+1=3.  Earlier this year, Les updated Chapter 10 of the treatise “IRS Practice and Procedure” and adopted the practice of the Taxpayer Advocate Service of calling this notice the summary assessment authority notice.  For this post I will stick with the misleading language of the statute, but errors in math play a small role in these notices.

The math error notice provides an exception to the need for the IRS to send a notice of deficiency in order to make an assessment.  Instead of a 90-day letter offering the chance to go to Tax Court, the taxpayer receiving a math error notice has 60 days to write back to the IRS expressing disagreement or the IRS will make the assessment.  We have not written enough about math error notices but some of our prior posts on this topic exists here, here, here and here.  Nina Olson wrote often about these notices as the NTA.  Find some of her writings here, here, here and here

This notice cuts off rights.  Most taxpayers fail to respond giving the IRS a shorter, easier path to assessment than the notice of deficiency.  Math error notices confuse taxpayers in the best of times as discussed in some of the NTA annual reports.  If you couple the ordinary confusion of these notices with dates that make no sense, the likelihood of a failure to response undoubtedly goes up.

Note that the math error notice must be mailed to the taxpayer’s last known address and the discussion above concerning notices with something other than the last known address applies here.  If the math error notice goes to the wrong address but the IRS makes an assessment following a failure of the taxpayer to respond, then the IRS has a bad assessment and all of the things that flow from a bad assessment.  These “things” can take a lot of time and effort to unwind.  They can also cause the IRS to lose the right to assess if the unwinding occurs after the statute of limitations on assessment has passed.

On a smaller scale the government faced a similar problem in the government shutdowns of 2013 and 2018-2019.  The system seems to generate notices automatically at certain points in time.  The system does not understand when the government ceases to operate.  In the prior shutdowns it sent out notices of deficiency and collection due process notices while the government was closed, but those letters didn’t have the wrong date and the taxpayer could still file a Tax Court petition or CDP request in the right time frame.

Collection Due Process Notices  

I wrote a blog post in 2018 about a CDP case in which the Revenue Officer went to the taxpayer’s house to deliver the CDP notice but the taxpayer’s dog deterred the RO from making delivery.  He went back to his office and mailed the CDP notice to the taxpayer to avoid bodily injury; however, he mailed the notice two days later.  When he mailed the notice, it still bore the date of his canine-thwarted personal delivery effort.  The Tax Court concluded that the time to make a CDP request runs from the date of mailing (or delivery) and not the date on the CDP notice.

Now the IRS will throw into the system potentially thousands of wrongly dated CDP notices, causing the recipients confusion and filing dates that may or may not fall within 30 days of the actual date of mailing.  How many taxpayers will keep the letter and the envelope?  Will the IRS have the correct date of mailing in its database or the original date of mailing?  Remember that these mailings result not from a single RO working a case but from a mass-produced effort at the service centers.

Are CDP notices sent by the IRS with knowingly wrong dates valid CDP notices?  If invalid, it makes all downstream levy actions wrongful.  Will the CDP notices be sent to the taxpayer’s last known address or to some other address?  If sent to something other than the taxpayer’s last known address, the CDP notices are not good.

Conclusion

The IRS should throw away these letters.  (Recycle them please with appropriate taxpayer identification precautions.)  Send new letters in which the dates on the letters match the dates of mailing.  Yes, this will be expensive in cost of production of the letters and the time it takes to create the new letters.  But it may prove less expensive than the alternative.  It certainly will create less confusion among the taxpayers receiving the letters, the representatives trying to assist the letters, and the courts interpreting the IRS actions.