113 T.C.M. 4050
Tax Ct.2017Background
- First Rock Baptist Church Child Development Center (the Center) incurred unpaid employment taxes for 10 quarters (2007–2010) totaling assessed liabilities of $438,381; Center TIN ends in 8326.
- IRS mailed a Notice of Federal Tax Lien (NFTL) and Form 668 to the Center at its correct address, but the addressee field listed the affiliated First Rock Baptist Church (the Church) instead of the Center.
- The Center (and Church) timely requested a CDP hearing; SO1 sustained the lien and rejected the Center’s proposed installment agreement. Petition filed in Tax Court.
- Case was remanded; on remand SO2 concluded the NFTL documentation was ambiguous, ordered withdrawal of the NFTL, but again denied the Center’s installment agreement because the Center was not current on Form 990 filings. Supplemental determination mailed to Center.
- Center later paid some quarters, filed Forms 941-X and Forms 843 seeking adjustments/abatements, and claimed it now is in compliance; it nonetheless challenges the denial of the installment agreement and certain underlying liabilities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tax Court has CDP jurisdiction over the Center | Center: IRS sent notice to Center (correct address and TIN); timely petition | IRS: case partly moot after lien withdrawal but Court retains jurisdiction over remaining disputes | Held: Court has jurisdiction over the Center for remaining issues (withdrawal granted but IA denial remains live) |
| Whether Tax Court has jurisdiction over the Church | Center/Church joined as petitioners seeking lien withdrawal and relief | IRS: Church never was subject of collection action; no valid notice of determination issued to Church | Held: No jurisdiction as to the Church; claims dismissed for lack of jurisdiction |
| Mootness of case after NFTL withdrawal | Center: still disputes remaining liabilities and IA denial; asserts refund/abatement claims | IRS: principal relief (lien withdrawal) granted so case moot | Held: Not moot; withdrawal moots only lien issue—dispute over IA and remaining liabilities keeps case live under I.R.C. §6330(d)(1) |
| Whether Center may challenge underlying tax liability now | Center: asserts Form 941 double-reporting error and filed 941-X/843s after initial CDP hearing | IRS: issues not raised during CDP hearing or in petition; therefore not properly before Court | Held: Court refuses to consider underlying-liability challenges not raised at CDP hearing or in petition; those claims are barred here |
| Whether denial of installment agreement was an abuse of discretion | Center: offered $2,283/mo and now says it has filed delinquent Forms 990 and is compliant | IRS: SO2 properly denied IA because Center was not in compliance with ongoing filing obligations at time of determination | Held: No abuse of discretion—IA denial sustained because Center was not in compliance at time of SO2's determination; Center may reapply if it becomes compliant |
Key Cases Cited
- Estate of Young, 81 T.C. 879 (Tax Ct.) (jurisdictional inquiry for Tax Court)
- Lunsford v. Commissioner, 117 T.C. 159 (Tax Ct.) (requirements for CDP jurisdiction and timely petition)
- LG Kendrick, LLC v. Commissioner, 146 T.C. 17 (Tax Ct.) (validity of notices of determination and sufficiency of information)
- Giamelli v. Commissioner, 129 T.C. 107 (Tax Ct.) (limits on raising issues in CDP proceedings)
- Pough v. Commissioner, 135 T.C. 344 (Tax Ct.) (taxpayer must present evidence at Appeals to preserve issue)
- Orum v. Commissioner, 123 T.C. 1 (Tax Ct.) (notice requirement to confer Tax Court jurisdiction)