Update on the Issue of the Prior Opportunity to Dispute a Liability in a Collection Due Process Case

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On February 28, 2017, I wrote about the Keller Tank case in which the 10th Circuit followed prior Tax Court precedent and the language of the collection due process (CDP) regulations in denying a taxpayer the opportunity to raise the merits of underlying liability in a CDP case where the taxpayer had the administrative, but not judicial, opportunity to raise the issue prior to the CDP case.  In that post, I noted that Lavar Taylor argued three cases in different circuits with this identical issue in a very short time span.  On March 7, 2017, the 4th Circuit issued its opinion in Iames v. Commissioner, No. 16-1154, the second of those three cases.  The 4th Circuit reached the same conclusion as the 10th Circuit validating the regulation as a reasonable interpretation of the statute.  You can hear the oral argument here.  Judge Wilkinson wrote a strong opinion explaining the basis for his decision.  He not only supported the position of the IRS based on IRC 6330(c)(2) but also bought the government’s secondary argument under IRC 6330 (c)(4) which the 10th Circuit did not reach.  This leaves taxpayers hoping for relief through the CDP process with only one circuit remaining to change the course of the discussion at least in this round of attacks on the governing regulation.  The 4th Circuit had no discomfort creating a distinction between taxpayers with deficiency procedure taxes versus those whose liabilities do not use those procedures.  For those interested in a full blown discussion of this issue, come to the Pro Bono and Tax Clinics Committee meeting on Saturday May 13 at the ABA Tax Section meeting in DC or order the recording of the discussion.


  1. I’ve seen this issue several times in the last few years and legally, I’m fine with it. But try to explain it to a taxpayer who did not understand that his one chance to “meaningfully” dispute a liability has already passed? Not easy.

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