Taxable Talk

What happens when you don’t file your tax return, the IRS sends you notices to two different addresses (but you’ve moved), and then the IRS tries to put a lien on you? Today, the Tax Court ruled on such a case.

The petitioner last filed a tax return in 1997. Based on paperwork that the IRS received, the IRS believed that the petitioner owed taxes, mainly from a capital gain. The IRS sent out notices to the petitioner, but he had moved. The IRS then assessed the tax that they thought was owed. After still not being able to reach the petitioner, they put a lien on some of his assets.

The petitioner, in early 1994, finally contacted the IRS. He had never received any of the notices. He requested a hearing with the IRS, and then went to Tax Court. The questions the Tax Court faced were, (1) Since the taxpayer did not notify the IRS of his move, could the taxpayer dispute the tax and lien; (2) If he could, then did the taxpayer owe tax?

The Tax Court ruled that the taxpayer could indeed dispute the lien and tax, because he never received the documents. The taxpayer was also able to prove that he actually had a capital loss rather than a capital gain and did not owe tax.

There’s a caution here, though. It’s much, much easier to file your taxes on time and not go through the hassles that this taxpayer went through. It’s cheaper, too.

Case: Sherer v. Commissioner, T.C. Memo 2006-29

This entry was posted on Tuesday, February 21st, 2006 at 7:10 pm and is filed under IRS, Tax Court. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.