The IRS Loves Ambiguity, Designated Orders May 4-8 and June 1-5, 2020

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The orders designated during my weeks in May and June didn’t address anything we haven’t covered before, with the exception of an order (here) referencing the Tax Court’s opinion in Lacey v. Commissioner, 153 T.C. No. 8 (2019). I started digging into the opinion to include it as part of my post, but Patrick Thomas had the same idea and did an excellent job covering it (here).

The Lacey opinion reflects the Court’s displeasure with the IRS’s use of boilerplate, ambiguous correspondence. The IRS’s use of standardized notices in many cases is understandable, however, there are times when the IRS owes a taxpayer more than a vague list of possible reasons for why it is disregarding an issue.

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The Court takes issue with IRS’s use of “and/or” in whistleblower determinations in Lacey and in CDP Notices of Determination in Alber v. Commissioner, T.C. Memo. 2020-20. I have also seen vague boilerplate responses sent in other cases (identity theft and offer in compromise examples come to mind) at a preliminary stage when IRS has decided the matter isn’t worth looking into further.

Not all cases are eligible for Tax Court review, but all taxpayers deserve to know why the IRS is not continuing to work on their case.

The IRS loves the “efficiency” of ambiguous correspondence. This is exemplified in its plan to send out notices with incorrect dates as a result of the Covid-19 shutdown (which Keith covered here). The IRS benefits from the confusion created by ambiguous correspondence because it delays or prevents taxpayers from responding in a timely or appropriate way.

The recent orders and decisions reflecting the Court’s view of ambiguous correspondence could prompt a change in IRS practices. We are at a time when everyone is imagining the ways things could be, looking at new and improved ways to operate, and resetting their expectations. The IRS desperately needs to upgrade its technology in response to Covid-19, and more generally, to finally join the rest of us in today’s world. As part of any upgrades or improvements, the IRS should consider ways that it can communicate more clearly in the responses it sends to taxpayers.

Other orders designated in May:

  • Docket No. 17614-13 and 17603-13 , Vincent J. Fumo v. CIR. Orders (here and here) granting the IRS’s motion in limine to preclude testimony from an Assistant U.S. Attorney and two revenue agents regarding the ‘manner and motives’ behind examination of petitioner’s income and excise tax liabilities.
  • Docket No. 9946-19L, Linnea Hall McManus & John McManus v. CIR. Order and decision (here) granting the IRS’s motion for summary judgement in a CDP case where petitioners did not provide requested information.

Other orders designated in June:

  • Docket No. 16492-18, Vishal Mishra and Ritu Mishra v. CIR. Order (here) granting the IRS’s motion for entry of decision in its favor, because petitioners are disputing already-conceded accuracy related penalties.
  • Docket No. 11152-18 L, Xavier Pittmon v. CIR. Order and decision (here) granting the IRS’s motion to dismiss, because the petitioner cannot contest his liability in his CDP case.  
Samantha Galvin About Samantha Galvin

Samantha Galvin is a Clinical Professor of Law and the Director of the Federal Tax Clinic at Loyola University Chicago. She previously taught and directed the LITC at the University of Denver for more than nine years. Professor Galvin has taught tax controversy representation, individual income tax, and tax research and writing. In the FTC, she teaches, supervises and assists students representing low income taxpayers with controversy and collection issues.


  1. Like Ms. Galvin and [I assume] most other practitioners, I wish all communications from the IRS were clear and understandable to taxpayers without their need to consult practitioners or other “experts.” It’s clear that the Service still has a lot of work to do to reach this ideal. My practice involved much less direct representation of taxpayers before the IRS than Ms. Galvin’s work at an LITC. Even so, I’ve I encountered plenty of ambiguity in IRS notices and other kinds of IRS guidance [and in the Code itself]. But I don’t remember any matter or matters I handled before the IRS that would lead me to conclude that the IRS as an organization or any individual IRS employee “loves ambiguity” – either in IRS notices to taxpayers or in other IRS guidance. I also don’t remember a situation where a taxpayer’s payment of more tax than was due or a taxpayer’s failure to receive what I thought was a full and fair opportunity to understand and defend against an asserted tax liability seemed to give pleasure or satisfaction to any IRS representative. Having never worked for the IRS, I don’t have knowledge of what IRS employees say to one another about situations where taxpayers haven’t gotten what I’d consider a fair shake. But from my dealings over the years with IRS employees at all levels within the organization, I’ve concluded that a large majority of them are like me, in the sense that they’re doing their job the best way they know how, and they’d like to help the person they’re dealing with if they can. That doesn’t mean I haven’t encountered too many IRS employees who have a predisposition to disbelieve the taxpayers they’re interacting with or to characterize them as being in a class of taxpayers who aren’t honest with the Government. I don’t know if this is because of their actual experience in real cases or because of what they’ve been led to expect from co-workers. But I’d be interested in learning whether Ms. Galvin’s conclusion that “the IRS” as an organization “loves ambiguity” is based on something more than the fact that there are too many instances where taxpayers are disadvantaged in various ways by systemic ambiguities. In any event, I hope that these ambiguities have been brought to the attention of the IRS “Taxpayers First Act” team, Stakeholder Liaison representatives, TAS Systemic Advocacy, and to Congressional committees in the hope that the situation can be improved sooner rather than later.

  2. Carl Smith says

    The IRS has always made tickets to the Tax Court as general as possible. For example, when disallowing a deduction or credit in a notice of deficiency. Why? So that if an IRS attorney later figure out a particular argument, the attorney can contend that the argument is a sub-argument of the general disallowance wording in the notice, so the argument is not new matter on which the IRS would bear the burden of proof under Tax Court rules.

    The same incentive to be vague applies on the flip side: When a taxpayer files a claim for refund, the instinct on his or her attorney in drafting it is to be as general as possible as to the ground for the claim. Why? So, if the taxpayer’s attorney later litigates the case and discovers a particular argument, the attorney can contend that the argument is not at substantial variance with the reason stated in the claim.

    The courts have to police this vagueness, but usually let the lawyers on either side get away with the vagueness.

  3. Samantha Galvin says

    I appreciate your comments, Ronald and Carl. Ronald, I agree that in matters of liability disputes the IRS does a decent job of being clear in its efforts to get to the right number. I also agree with Carl that ambiguity isn’t necessarily a bad thing for either side in certain cases. When I say the IRS loves ambiguity I’m not meaning to suggest that individual employees seek pleasure from confusing taxpayers, although in an organization of over 70,000 employees there may be some that do. I think the IRS’s use of boilerplate correspondence when responding to detailed and specific information provided by taxpayers suggests an organization-wide preference (or exaggeratedly, “love”) for ambiguity. Ambiguity is most prevalent and problematic in cases that involve a discretionary determinations by the IRS, such as innocent spouse relief, offers in compromise, and as reflected in the Lacey opinion, whistleblower determinations. Over the years, I’ve received correspondence from the IRS which does not clearly articulate reasons for what should be an individualized determination, including correspondence that contains boilerplate language that doesn’t even apply to my client’s situation – this is frustrating to my clients and my students. It is even more problematic for unrepresented taxpayers. Some of these cases can be appealed to Tax Court, and I agree with Carl that the Court plays an important role in policing such ambiguity. I also raise these matters to people with the power to fix them (mostly to TAS, or in SAMs submissions) whenever I encounter them.

    • Ronald WIener says

      Samantha – Thanks for the clarification. I assume everyone who follows this Blog is seriously interested in making the tax system work better for all, especially those who don’t have the resources to hire competent advisors to help them navigate troubled waters. I’m hopeful that the present leadership of the Service – because of their long experience in working with it – will be successful in implementing some of the improvements in tax administration that are needed to make the organization both fairer inits treatment of taxpayers and more effective in raising some the revenue that has usually slipped through the Tax Gap. I think we’ll get a good idea as to whether these hopes are going to be addressed when we see the reports required by the Taxpayer First Act. One necessary element for getting the improvement we want is for the Service to get a fully modernized computer system after more than 30 years of talking about it. Maybe we’ll see these and some other efficiencies in operations [merging LB&I with SB/SE?] that will allow moving more funding to taxpayer service/problem solving. Measuring employee and group performance based on the number of cases cleared from inventory isn’t a good idea unless those cleared cases are resolved fairly, in timely manner, with adequate explanations of the reasons for the Service’s action in the case, and with a reasonable [and affordable] opportunity to appeal. And if there’s perceived unfairness in certain aspects of IRS operations and controversy resolution protocols – of the kind that Nina Olson and other TAS personnel have been identifying for so many years – let’s get on with the business of working through them over the next couple of years. But words matter, and personally I still don’t think it advances our common goal to say that the IRS loves ambiguity.

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