The Fifth Circuit Court of Appeals recently held that the Tax Court’s ruling upholding an IRS Appeals Board decision to deny a face-to-face hearing before enforcing levies against a taxpayer was not an abuse of the Tax Court’s discretion.
In Muir v. Commissioner, No. 18-60336 (5th Cir. Feb 15, 2019), Muir failed to pay income taxes, for which the IRS issued an unchallenged Notice of Deficiency. Later, the IRS sent Muir a Notice of Intent to Levy. See 26 U.S.C. § 6330(a)(requiring IRS to provide notice). In response to the notice, Muir requested a hearing to raise an alternative to levy, but he did not suggest any alternative means of collection or include any supporting information.
The IRS’ Appeals Office subsequently sent Muir a letter, confirming Muir’s request for a hearing and asking that Muir get in touch to discuss his request. As noted by the Fifth Circuit, this letter notified Muir that if he failed to respond to the letter, the requested hearing would rest solely on the information the Appeals Board already possessed. Muir failed to respond to the letter, and without any evidence of an alternative means to collect, the Appeals Office issued its Notice of Determination sustaining the levy without a face-to-face hearing. Muir petition the Tax Court, which concluded that the Appeals Office did not abuse its discretion when it sustained the levy without a face-to-face hearing.
Muir appealed the Tax Court’s ruling to the Fifth Circuit, which recognized that while Muir was entitled to a hearing, he was not entitled to a face-to-face hearing. See C.F.R. § 301.6330-1(d)(2). The Fifth Circuit noted that the Appeals Board denied Muir a face-to-face hearing because he failed to provide enough information to justify one – both in his initial request for a hearing and in his subsequent failure to respond to the Appeals Board. Without any additional information of an alternative means of collection, the Appeals Board could only sustain the proposed levy, the Fifth Circuit held.
The Muir opinion provides a good reminder to taxpayers of the importance of diligently responding to the IRS when information is requested. If a taxpayer fails to respond to such a request, the taxpayer, like Muir, may not be afforded the opportunity to provide information supporting her position at a later date.
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