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IRS Warns About 23c assessment arguments

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  • Legalbears
    To be forewarned is to be forearmed. I found this amongst research I am doing on assessments and Form 4340s. Bear Part I Section 6203—Method of Assessment 26
    Message 1 of 3 , Jul 12, 2008

      To be forewarned is to be forearmed. I found this amongst research I am doing on assessments and Form 4340s. Bear

       

      Part I

      Section 6203—Method of Assessment

      26 CFR 301.6203-1: Method of assessment (Also: § 6330)

      Rev. Rul. 2007-21

      PURPOSE

      The Internal Revenue Service (Service) is aware that some taxpayers are claiming that, before the Service may collect overdue taxes, the Service must provide taxpayers with a summary record of assessment made on a Form 23C, “Assessment Certificate-Summary Record of Assessments,” that is signed by an authorized employee or officer. If a Form 23C is not provided, these taxpayers claim that the assessment is invalid, and, consequently, that the Service may not collect any taxes due.

      This revenue ruling emphasizes to taxpayers, promoters, and return preparers that, although an assessment is recorded on a summary record of assessment, such as the Form 23C or its computer-generated equivalent, the Revenue Accounting Control System (RACS) Report 006, there is no legal requirement that a summary record of


      assessment be provided to a taxpayer before the Service may proceed with collection activity. Further, if a taxpayer requests proof that an assessment was made, the Service is not required to provide any particular form or information in any particular format to the taxpayer so long as the Service provides the information required by Treasury Regulation § 301.6203-1 to the taxpayer. Any position to the contrary has no merit and is frivolous.

      The Service is committed to identifying taxpayers who attempt to avoid their federal tax obligations by taking frivolous positions. The Service will take vigorous enforcement action against these taxpayers and against promoters and return preparers who assist taxpayers in taking these frivolous positions. Frivolous returns and other similar documents submitted to the Service are processed through the Service’s Frivolous Return Program. As part of this program, the Service determines whether taxpayers who have taken frivolous positions have filed all required tax returns, computes the correct amount of tax and interest due, and determines whether civil or criminal penalties should apply. The Service also determines whether civil or criminal penalties should apply to return preparers, promoters, and others who assist taxpayers in taking frivolous positions, and recommends whether an injunction should be sought to halt these activities. Other information about frivolous tax positions is available on the Service’s website at www.irs.gov.

      ISSUE

      Whether the Service must provide a taxpayer with a summary record of assessment, such as a Form 23C, before collection may begin.


      FACTS

      Taxpayer A argues in a request for a collection due process hearing under section 6330 or 6320 of the Internal Revenue Code that, pursuant to section 6203 and Treasury Regulation § 301.6203-1, the Service must first provide the taxpayer with a summary record of assessment of taxes due before collection action may commence. Taxpayer A further argues that the record provided must include a Form 23C signed by an authorized Service official. In response, the Service provides Taxpayer A with a record of assessment on a Form 4340 (“Certificate of Assessments and Payments”), MFTRA-X (“Master File Transcript”), or other similar document. Taxpayer A asserts these forms do not meet the legal requirements and until the Service produces a valid summary record of assessment, the Service is prohibited from collecting the assessed liability. According to Taxpayer A, the Appeals Officer conducting the collection due process hearing, in verifying under section 6330(c)(1) that the Service has complied with applicable law and procedure, may not rely on anything other than the Form 23C to determine, for purposes of the section 6330(c)(1) requirement, that a valid assessment was made.

      LAW AND ANALYSIS

      Section 6203 states that an assessment of tax (including interest, additions to tax, and assessable penalties) "shall be made by recording the liability of the taxpayer in the office of the Secretary in accordance with rules or regulations prescribed by the Secretary." The section also states that, when requested by a taxpayer, “the Secretary shall furnish the taxpayer a copy of the record of assessment.” Treasury Regulation

      § 301.6203-1 specifies that an assessment is made "by an assessment officer signing the summary record of assessment," which “through supporting records” must include the "identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment." Under the regulation, if a taxpayer requests a copy of the record of assessment, the Service will give the taxpayer “a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.” The date of the assessment is the date the summary record is signed.

      There is no requirement in the statute or regulation that the assessment be recorded on a specific form or that the taxpayer be provided with a certain form as a record of assessment.

      Until its transition to computerized recordkeeping, the Service generally used Form 23C for the summary record of assessment, but it now uses, except in unusual circumstances, a computer-generated summary record of assessment known as the RACS Report 006. Both forms have been recognized as summary records of assessment within the meaning of section 6203. See March v. Internal Revenue  Service, 335 F.3d 1186, 1188 (10th Cir. 2003). In Roberts v. Commissioner, 329 F.3d 1224, 1228 (11th Cir. 2003), the taxpayer argued that an assessment was invalid because the Service did not use Form 23C but instead used RACS Report 006. The court held that there was nothing in the law to show that the use of the RACS report was not in compliance with the statute and the regulation. The RACS report and the


      Form 23C are both signed by an assessment officer. The RACS report, like the Form 23C, provides, when coupled with “supporting records,” the information set forth in Treasury Regulation § 301.6203-1.

      In response to a taxpayer's request under section 6203 and the regulation for “a copy of the record of assessment,” the Service is not required to provide any particular form or document and may choose among documents that contain the items of information listed in the regulation. Instead of a RACS report 006, which does not break out individual taxpayer information, the Service may provide Form 4340, “Certificate of Assessments and Payments,” or a MFTRA-X transcript (literal or plain-language transcript) of the taxpayer’s account, either of which sets forth all of the information required by the regulation, because each identifies the taxpayer, states the character of the liabilities assessed, the tax period giving rise to the assessment, the amount of the assessment, and the date of assessment. See Goodman v. United States, 185 Fed. Appx. 725, 728 (10th Cir. 2006); Roberts, 329 F.3d at 1228; Carillo v. Commissioner, T.C. Memo. 2005-290; Michael v. Commissioner, T.C. Memo. 2003-26. In addition, an Appeals Officer is not required to obtain a Form 23C or other particular document in a collection due process hearing and may rely on a Form 4340 or MFTRA-X transcript to verify the validity of the assessment for purposes of section 6330(c)(1). See Nestor v.  Commissioner, 118 T.C. 162 (2002); Perez v. Commissioner, T.C. Memo. 2002-274. HOLDING

      The Service is not required to provide Taxpayer A with a summary record of assessment before collecting any taxes due. An assessment is not invalid, and


      collection is not precluded, because the Service has not provided a summary record of assessment to the taxpayer.

      Additionally, Taxpayer A’s claim that the Service must produce a Form 23C or other record of assessment as proof of assessment is frivolous. If a taxpayer requests a copy of the record of assessment, the Service may produce the information in any form or format, provided the summary produced contains the information required by Treasury Regulation § 301.6203-1. Acceptable copies of the record of assessment include, but are not limited to, Forms 4340 and MFTRA-X transcripts. Further, the Form 4340, MFTRA-X transcript, or other similar documents may be used in a collection due process proceeding to verify the validity of an assessment under section 6330(c)(1).

      The Service will challenge the claims of individuals who improperly attempt to avoid or evade their federal tax liability.

      CIVIL AND CRIMINAL PENALTIES

      The position described above, that the Service must provide a taxpayer with a summary record of assessment, such as a Form 23C, before collection or must provide a Form 23C in any collection proceeding is a frivolous position under section 6702. The Service will challenge the claims of individuals who attempt to improperly avoid or evade their federal tax liability. In addition to liability for the tax due plus statutory interest, taxpayers who insist upon receiving a Form 23C before complying with their tax obligations face substantial civil and criminal penalties. Potentially applicable civil penalties include: (1) the section 6702(b) $5,000 penalty for submitting a “specified


      frivolous submission”; (2) the section 6651(a)(3) addition to tax for failure to pay the tax owed; and (3) the section 6673 penalty of up to $25,000 if the taxpayer makes frivolous arguments in the United States Tax Court.

      Taxpayers relying on this frivolous position also may face criminal prosecution under section 7201 for attempting to evade or defeat tax, the penalty for which is a significant fine and imprisonment for up to 5 years, or prosecution under other federal laws as applicable.

      DRAFTING INFORMATION

      This revenue ruling was authored by the Office of Associate Chief Counsel (Procedure & Administration), Administrative Provisions and Judicial Practice Division. For further information regarding this revenue ruling, contact that office at (202) 622- 7950 (not a toll-free call).

       

       

      Phones: 970-613-8866 (1st) 720-203-5142 c. (2nd) Skype: Legalbear

       

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      www.irs-armory.com www.irslevythumper.com www.irslienthumper.com www.judgeonaleash.com www.freedivorceforms.net

       

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    • BOB GREGORY
      The IRS twists facts and misdirects people in such revenue rulings. What the notice says is true in that a 23c is not required and proof of assessment is not
      Message 2 of 3 , Jul 13, 2008

        The IRS twists facts and misdirects people in such revenue rulings.  What the notice says is true in that a 23c is not required and proof of assessment is not required before collection activity may proceed.  It is true that assertion to the contrary is frivolous. 

        What the IRS acknowledges is,
        "
        301.6203-1 specifies that an assessment is made "by an assessment officer signing the summary record of assessment," which “through supporting records” must include the "identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment." Under the regulation, if a taxpayer requests a copy of the record of assessment, the Service will give the taxpayer “a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.” The date of the assessment is the date the summary record is signed."  But the IRS will almost never produce any document signed by an assessment officer or identify an assessment officer or show an assessment officer's appointment document.  So while the things the IRS says about providing assessment documents are true, the question arises as to what constitutes a valid assessment document.

        Why do you suppose this is?  How about because assessment officers are appointed by district directors?  Here is 26 CFR 301.6203-1.  Note the underlined portions.
        301.6203-1   Method of assessment.

        The district director and the director of the regional service center shall appoint one or more assessment officers. The district director shall also appoint assessment officers in a Service Center servicing his district. The assessment shall be made by an assessment officer signing the summary record of assessment. The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment. The amount of the assessment shall, in the case of tax shown on a return by the taxpayer, be the amount so shown, and in all other cases the amount of the assessment shall be the amount shown on the supporting list or record. The date of the assessment is the date the summary record is signed by an assessment officer. If the taxpayer requests a copy of the record of assessment, he shall be furnished a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.

        If there are no district directors, who, then, can appoint an assessment officer?  There have been no district directors since districts and regions were disestablished in March 2001 with the consequent loss of their Commissioners and Directors.

        Note that if someone submits a tax return, the amount of assessment is to be the amount of tax due shown on the return.

        Note also that the assessment date is the date an assessment officer signs the summary record.  This does not allow for the summary record to be signed by someone other than an assessment officer nor for the summary record to be unsigned.

        No tax is owed until an assessment is made.  Therefore no collection action may ever legally commence unless and until a real, properly-appointed assessment officer has signed a summary record of assessment which is supported by proper documentation for each "taxpayer" whose taxes are assessed.  These are the IRS's own rules.

        Adding to the legal problems the IRS has in accomplishing collection, even if it could produce a legal assessment, is the fact that the Federal Register Act and the Administrative Procedure Act require substantive regulations to give to laws general applicability and legal effect.  Substantive regulations under Title 26 of the United States Code are contained in 26 CFR 1,  31 and 50.  Regulations under 26 CFR 301 and 601 are not substantive regulations and do not have general applicability and legal effect, though they do govern the actions of government agencies themselves.  None of the collection sections of 26 USC is implemented by substantive regulations in 26 CFR (though all of them are implemented  in 27 CFR).  The IRS ignores this.  The DOJ says that regulations are "irrelevant."  And the courts turn a blind eye to the APA and FRA and go along.  The Supreme Court stands afar and refuses to hear any cases of this type, thus being part of the collusion.

        The problem, then, is much, much bigger than the question of whether one is owed a copy of an assessment if he requests it.  The law is very clearly on the side of the non-taxpayer.  However, the system is thoroughly corrupted and broken.  Unless and until the courts (not  juries) in large numbers issue valid judgments based on the actual law, we are screwed.  It does not matter what you can properly show in a memorandum of law.  It does not matter what Supreme Court rulings you can cite.  The judges are in cahoots with the DOJ.  If an occasional judge screws up and rules correctly according to the law, he will be straightened out and some other court will overrule him.  In Murphy v. The IRS, 460 F.3d 79 (D.C. Cir. 2006) rehearing 493 F.3d 170 (D.C. Cir. 2007), the appeals court first ruled properly for the appellant and then, upon being petitioned for re-hearing by the DOJ and without any new or different pleadings or evidence from the DOJ reversed itself into compliance with DOJ wishes.  Somebody put the word out to those judges.  This is the state of things as the judiciary relates to the laws of taxation.

        The IRS message in this and other revenue rulings is only one thing:  RESISTANCE IS FUTILE.

        ===============================



        Legalbears wrote:

        To be forewarned is to be forearmed. I found this amongst research I am doing on assessments and Form 4340s. Bear

         

        Part I

        Section 6203—Method of Assessment

        26 CFR 301.6203-1: Method of assessment (Also: § 6330)

        Rev. Rul. 2007-21

        PURPOSE

        The Internal Revenue Service (Service) is aware that some taxpayers are claiming that, before the Service may collect overdue taxes, the Service must provide taxpayers with a summary record of assessment made on a Form 23C, “Assessment Certificate- Summary Record of Assessments,” that is signed by an authorized employee or officer. If a Form 23C is not provided, these taxpayers claim that the assessment is invalid,


      • wm@greenes.us
        Enclosed is our “Application for Leave to Bring an Interlocutory Appeal of This Court s July 11, 2008 Order and Request for a Stay of Proceedings in the Name
        Message 3 of 3 , Jul 17, 2008

          Enclosed is our “Application for Leave to Bring an Interlocutory Appeal of This Court's July 11, 2008 Order and Request for a Stay of Proceedings in the Name of the United States as a Defendant and Memorandum in Support of Plaintiff's Motion for Refusal of Notice of Appearance and to Strike All Pleadings...In the Name of the United States Because the United States is Not a Defendant in the Captioned Case, and Grant Plaintiffs' Request for the Interlocutory Appeal Without Requiring Bond”

           

          The Court's July 11, 2008 Order would have effectually turned the case into a case against the government, so I applied for Leave to Bring an Interlocutory Appeal in the attempt to have the lower court’s decision overturned to allow the case to proceed where the United States is a Plaintiff along with us instead of what the Court is trying to do where the United States would be a Defendant. 

           

          The access to the evidence where the US Attorney(s) admitted that the IRS is not an Agency and a majority of the resources going into our "public interest suit" styled as a Qui Tam (i.e., Latin for "he who sues in this matter for the king as for himself") Action, in which the United States of America is also established as Plaintiff throughout the Jurisdictional and Venue statements came from the many works forwarded to us by Loma Wharton.

           

          The idea of using an Interlocutory Appeal/Review was LegalBear’s, and the $29.10 to mail Application For Leave To Bring And Interlocutory Appeal with Memorandum came from Bob and Judy Schulz. Bob and his wife also gave us the $455.00 for the filing fee we will need if the Court allows us to move forwards with the Interlocutory Appeal/Review.

           

          When we went to the post office to mail the Application there was a postal money order in one of the packages for another $50.00 from Karen and Frank Kowalik who saw one of my Motions posted on-line.  Along with money order, they sent a complimentary copy of Frank’s book, IRS Humbug. 

           

          Of course, this is a real blessing given that the IRS put us out of work back in January, and after the neighbors came to my wife complaining with a copy of the city ordnance limiting the number of yard sales to 6, our resources are, how shall I say, extremely limited, and none of this would be happening if it were not for so many very special people guiding/helping me and my wife along the way.

           

          Blessings,

          Bill

           

           

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