Duty of consistency precludes taxpayers' argument.

Author:Beavers, James A.

A district court, based on the duty of consistency, rejected the taxpayers' argument that the IRS was barred from bringing a collection suit against the taxpayers by the 10-year statute of limitation under Sec. 6502.


In 1998, after auditing the estate of Shirley H. Bernhardt, the IRS issued a notice of deficiency to the estate for additional estate taxes. The estate contested the deficiency determination in Tax Court, and in a stipulated decision the Tax Court held that the estate owed a deficiency of $215,265 plus statutory interest. On July 16,2004, the IRS reassessed the estate a deficiency of $223,309 and added interest in the amount of $108,704. The tax assessment amount differed from the amount ordered by the Tax Court due to a computational error by the IRS. On Sept. 15, 2004, the estate, through Kevin Holmes (a CPA and tax lawyer, as well as the husband of the estate's executrix, Barbara Holmes), responded to the assessment, stating its belief that it was inaccurate and requesting a second determination.

On Dec. 27, 2004, the IRS placed the estate's case in the revenue officer queue for collection, but the case was not assigned to a revenue officer until April 22, 2013. Subsequently, on Aug. 19, 2013, the IRS filed Notices of Federal Tax Liens in connection with the estate's unpaid taxes. On Sept. 27,2013, the IRS sent the estate a final Notice of Intent to Levy and Notice of Right to a Hearing by certified mail. In the notice, the IRS advised the estate of its right to seek a collection due process or equivalent hearing (collectively, a CDP hearing). On Oct. 5,2013, Mr. Holmes responded to the notice, by certified mail, with a Form 12153, Request for a Collection Due Process or Equivalent Hearing, along with a Form 2848, Power of Attorney and Declaration of Representative, properly executed by Barbara Holmes, authorizing Mr. Holmes to represent the estate in the hearing.

The IRS claimed that part of the estate's Oct. 5,2013, package--specifically, the CDP hearing request--was misplaced due to the federal government shutdown from Oct. 1,2013, to Oct. 16, 2013. As a result, the IRS was unable to locate the original Form 12153. However, the IRS was able to locate and process the Form 2848 that accompanied the request.

A dispute later arose regarding the timeliness of the estate's CDP hearing request. On May 2, 2014, Mr. Holmes mailed a letter containing a copy of the Oct. 5,2013, CDP hearing request, stating that the...

To continue reading