CDPH Hearing Issues Gone Bad #1
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CDPH Hearing Issues Gone Bad #1
26 U.S.C. § 6330(e) contains a provision that is little known and underutilized by people facing an IRS levy of their bank account or paycheck. That subsection provides in pertinent part:
"(e) Suspension of collections and statute of limitations
"(1) In general
" if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing shall be suspended for the period during which such hearing, and appeals therein, are pending "
The suspension of collection activities by timely requesting a Collection Due Process Hearing (CDPH) is a highly effective way to stop an IRS levy on a bank account or paycheck. I have used this provision to stop an IRS levy in as little as two days. I recently put a comment in my shopping cart that even a dancing bear could stop an IRS levy by timely requesting a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1).
However, a dancing bear would not be able to keep IRS collection activity suspended and most likely neither would most of us. In spite of all the delays while appeals are pending; and in spite of being able to retrieve whatever money you had in the bank when the Notice of Levy showed up from the IRS; and in spite of receiving full paychecks during those delays; eventually, the end of the line will come and the IRS will move forward with collection activities as they were before the hearing was requested. At that point the majority of people will be right back where they started; facing collection activity by the IRS. It is because of this harsh reality that I posted nine, no obligation videos, 4-10 minutes in length at www.irsterminator.com discussing strategies I have come up with that make keeping IRS collection activities suspended indefinitely a very real possibility.
There are two aspects to winning a CDPH hearing: 1) Taking affirmative strategic action designed to prevail in the hearing as I discuss in the videos mentioned above; 2) Avoiding raising issues that would cause you to lose the hearing. Avoiding losing issues is a matter of doing a little research and reviewing what issues have been raised in the past that lost.
Rohner v. U.S., 2003.NOH.0000145< http://www.versuslaw.com> (N.D.Ohio 2003) is the case that I will address in part in this article. Rohner lost his Collection Due Process hearing and appealed to the Federal District Court. I was able to find his case by searching the District Court data base at www.versuslaw.com. I made an hour and forty minute video about how to use Versuslaw to do research and that video is available here.
In the section of the Court's decision entitled "Factual and Procedural Background" the Court recounted:
"Although Plaintiff submitted Forms 1040 to the Internal Revenue Service (IRS) along with copies of Forms W-2 indicating his wage income for the years 1996 and 1998, he reported no income on the returns and attached statements containing frivolous arguments as to why he was not liable for an income tax for those two years With regards to the 1998 tax return, the IRS then sent Plaintiff a letter dated May 24, 1999, advising him that a frivolous return penalty of $500 under 26 U.S.C. § 6702 would be assessed against him unless he corrected his position within 30 days Plaintiff failed to correct the Form 1040 and the IRS assessed § 6702 penalty against him on September 13, 1999, with respect to the 1998 Form 1040 The IRS also accessed Plaintiff a § 6702 penalty on November 13, 2000, with respect to the 1996 Form 1040, because he submitted a Form 1040 for tax year 1996 showing no income with an attached statement containing frivolous arguments on July 21, 2000."
So, part of what Rohner was trying to do was use the hearing to get out of paying frivolous return penalties. The IRS sent Rohner a Notice of Intent to Levy that informed him of his right to a CDPH hearing and he requested the hearing. After losing in the CDPH hearing, Rohner lost on appeal to the Federal District Court:
1) Rohner's argument that he did not receive a notice of deficiency with respect to the § 6702 frivolous return penalties was rejected as being without merit because there is no requirement that a notice of deficiency be issued with respect to these penalties. The Court held that deficiency procedures do not apply to the assessment or collection of frivolous tax return penalties.
2) Rohner's argument that he did not receive a fair hearing because the IRS failed to comply with his requests for documents was rejected by the Court as baseless. The Court held that Section 6330 did not provide authorization for production of documents or other investigative demands in connection with a collections due process hearing.
Rohner raised other unsuccessful issues on appeal which will serve as the basis of another article. The Court ended up holding that the Internal Revenue Service's administrative determination was to be upheld. Decisions such as this one have always served me as an inspiration and not as a discouragement. At least a case like this serves as a forewarning respecting future strategies. To give yourself the best chance of success check out the nine videos at www.irsterminator.com.
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