Designated Orders: One-Two Punch for Respondent in CDP Disputes before Judge Gustafson

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This week Patrick Thomas who teaches and runs the low income taxpayer clinic at Notre Dame Law School brings us the designated orders. I have written before about the lessons in making motions for summary judgment that Judge Gustafson provides to Chief Counsel attorneys. Like the wonderful blog series written by Bryan Camp entitled Lessons from the Tax Court (samples here and here), Judge Gustafson provides his own lessons from the Tax Court to the attorneys in Chief Counsel’s Office who file summary judgment motions with him without carefully preparing their motions. At some point we hope the Chief Counsel attorneys will read our blog posts (not to mention his prior orders) and realize that they need to spend some time with these motions and especially when they know the motion will go to Judge Gustafson’s chambers. Professor Thomas writes about the Judge’s most recent lessons below. Keith 

Designated Orders: 9/17 – 9/21/2018

There were only three orders this week, two of which will be discussed here. Not discussed is a routine scheduling order from Judge Jacobs. The two others are both from Judge Gustafson and involve an IRS motion for summary judgment in collection due process cases. Judge Gustafson denies both motions—the first because material facts remained in dispute, and the second because the motion mischaracterized facts elsewhere in the record (and omitted other facts that might have saved the motion). More below.


Docket No. 26438-17L, Schumacher v. C.I.R. (Order Here)

This CDP case stems from a Notice of Federal Tax Lien filed against Mr. Schumacher for multiple tax years. After Petitioner timely requesting a hearing, the Settlement Officer (SO) sent an initial contact letter to Petitioner and his authorized representative—at least, to what the IRS computers thought was his authorized representative. On the hearing date, the SO called petitioner; the order states “[Petitioner] was not available and his telephone message stated that he did not accept blocked calls.” I’m assuming that the SO was therefore unable to leave a message on Petitioner’s voicemail.

Undeterred, the SO attempted to call the authorized representative on file with the IRS CAF Unit. The representative’s office informed the SO that they no longer represented Petitioner. The SO called the next listed authorized representative and left a message, but didn’t receive a response.

So, on that day, the SO sent a letter to Petitioner, noting these attempts. It further stated that if Petitioner didn’t contact the SO within 14 days, she would issue a Notice of Determination sustaining the lien. 14 days came and went, and the SO did just that.

In the motion, Respondent argues that the SO was justified in issuing the NOD, because neither Petitioner nor his authorized representative responded during the CDP hearing. In opposition, the Petitioner notes that (1) he didn’t receive any phone calls from the IRS and (2) he didn’t have any authorized IRS representative at that time. Judge Gustafson finds the latter plausible, given there’s no indication on the Form 12153 that Petitioner had representation. Good for Petitioner, as the Tax Court will ordinarily sustain a NOD if a truly authorized representative fails to respond.

Judge Gustafson denies the motion because, in his view, there appears to be a dispute as to whether Petitioner had a reasonable opportunity to challenge the NFTL. Specifically, Judge Gustafson finds troubling that there were no attempts to phone Petitioner a second time and no attempt to “unblock” the SO’s phone, such that Petitioner could receive its calls or a message. Further, he takes issue with the language in the 14-day letter sent to Petitioner; it included language noting that “your account has been closed” and might reasonably suggest to a taxpayer without CDP experience that the SO had already made her decision. Accordingly, Judge Gustafson denies the motion and sets the case for trial in Baltimore on November 5.

Takeaways: First, at the end of representation, practitioners should remember to withdraw their Forms 2848. Some portion of the confusion could have been avoided here.

Second, I didn’t know there was a mechanism that could block voicemails or calls from blocked numbers. To the extent our clients have such a mechanism, I might advise them to disable this feature until their tax controversy is resolved. As an aside, to the extent this seeks to reduce spam calls, it appears ill suited to the task. From my own experience, I don’t think I’ve ever received a spam call from a blocked number; rather, it’s usually an IRS employee calling. The spam calls tend instead to come from unblocked numbers.

Docket No. 1117-18L, Northside Carting, Inc. v. C.I.R. (Order Here)

This combined NFTL and levy case involves Petitioner’s unpaid employment taxes. Here, Petitioner does itself no favors in not responding to the motion for summary judgment. Nonetheless, Judge Gustafson finds that Respondent fails to carry own their burden on the motion because of other record evidence.

Respondent argues that Petitioner asked for an OIC or installment agreement in the CDP request, failed to provide the information and documentation necessary to consider an installment agreement. Specifically, Respondent notes that when Petitioner’s authorized representative informed the SO on July 13, 2017 of their desire to renegotiate a collection alternative, the SO asked for additional documentation. That documentation not being forthcoming, the motion states, the SO justifiably upheld the levy and NFTL filing.

Not so fast, says Judge Gustafson. The administrative record shows that the representative submitted some portion of the requested information on two occasions after July 13. Ultimately, the SO still wanted more; after a final deadline of November 16, the SO issued the Notice of Determination.

Judge Gustafson finds the motion’s failure to recite this information problematic. It doesn’t say what was requested or given—only that the SO requested something, part of which was provided and part of which was not. This is a material difference; if the SO receives no information at all, and issues a NOD on that basis, that’s understandable. But here the Court must at least understand the information that was provided; perhaps the SO required a piece of meaningless or trivial information, and on that basis upheld the NFTL and levy. Probably not, but without the specific information, the Court is left without any idea.

The motion could probably have been saved for another reason: when the NOD was issued, Petitioner wasn’t in filing compliance, a necessary requirement for any collection alternative. While the declaration underlying the motion mentions this, the motion itself fails to do so. Judge Gustafson seems unwilling to entertain an argument not presented to the Court, and so ultimately denies the motion, setting the case for trial in Boston on October 15. He suggests that an ultimate outcome may be remand to Appeals for further development of the record, or simply that the NFTL cannot be sustained.

So, good news for Petitioner. Hopefully Petitioner realizes its good fortune, and begins to participate in this case.


Patrick Thomas About Patrick Thomas

Patrick W. Thomas is the founding director of Notre Dame Law School’s Tax Clinic, in which he trains and supervises law students representing low-income clients in disputes with the Internal Revenue Service. Prior to joining the law school faculty in 2016, he received an ABA Tax Section Public Service Fellowship to work as a staff attorney for the LITC at the Neighborhood Christian Legal Clinic in Indianapolis.


  1. There are instructions online for blocking and unblocking calls — there may be different rules for land lines and mobile phones, or for different carriers. When an IRS employee calls me, the number appears on my caller ID, but it is often misleading. For example, someone in Phoenix may have an Ogden, Utah, phone number. Maybe that’s where IRS pays the bill. As for spammers, they can make whatever number they want appear on caller ID. The latest trick is to make the area code and first three numbers match that of the number being called, so the target thinks it may be a neighbor.

    My guess is that what happened here is that the Settlement Officer is working from home. IRS has a liberal policy on telecommuting, but it requires the employee to use her own phone. In one CDP hearing, there were dogs barking in the background. I think they were Yorkies. The SO and I had an interesting chat about them.

  2. Here is what the Internal Revenue Manual says about “telework” phones:

    6.800. (02-07-2018)
    Equipment and Furniture Requests

    …2. Employees approved for Frequent telework will be provided the following equipment (subject to funding availability):

    a. A lockable file cabinet provided by the employer when requested. Managers should follow FMSS SOP-16-004-01, Furniture Acquisition Procedures for Approved Telework – Home as POD Arrangements, to request a file cabinet.

    b. A cell phone or the capability to make outgoing and receive incoming calls (Office Communicator Server (e.g., OCS) or other technology as available).

    c. An IRS-owned computer that was provided to them before being approved for Frequent Telework. If the personal computer is a desktop, it will be equipped with ERAP or more advanced technology for remote network access, or employees will be provided with alternative technology with capabilities supporting telework. Reference IRM 6.800.2.6.1, Computers and IRS Owned Equipment, for additional details.

    d. A second telephone line IF the employee has not been provided with the capability to make outgoing and receive incoming calls and can demonstrate that his/her personal telephone line is otherwise not available (e.g., used for other business by a family member). Once approved, the employee will be reimbursed by the Employer for the costs of the telephone line.

    e. Equipment/technology to afford the capability to print, scan and/or copy if needed for the employee to perform his/her job duties and approved by the manager.

    3. Employees on Recurring telework (if requested and related to their job duties):

    a. Will be provided with equipment to afford the capability to send and receive voice calls and messages to assist in their communication needs with management and customers.

    b. Will be provided equipment consistent for Frequent Teleworkers IF the employee works Frequent or Recurring Telework, and regularly performs a combination of Telework and field-based assignments (e.g., mobile workers) for eighty (80) or more hours each month.

  3. Norman Diamond says

    “The motion could probably have been saved for another reason: when the NOD was issued, Petitioner wasn’t in filing compliance, a necessary requirement for any collection alternative.”

    Did the petitioner admit to not being in filing compliance? If not, how would they know? 1985 isn’t the only time the IRS has destroyed tax returns. Though if the petitioner properly mailed a paper return and the IRS didn’t file it, maybe it’s true that the petitioner was, unknowingly, not in filing compliance.

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