Thursday, July 28, 2022

No Equivalent Hearing When Taxpayer Timely Requests A Collection Due Process Hearing

The Tax Court in Ruhaak, (11/16/2021) 157 TC No. 9 has found that a taxpayer that timely requested a collection due process hearing could not also request an equivalent hearing.

The IRS sent taxpayer a Notice of Intent to Levy and Notice of Your Right to a Hearing (levy notice). The taxpayer requested a hearing regarding the proposed levy by submitting to the IRS Office of Appeals (Appeals) a Form 12153, Request for a Collection Due Process or Equivalent Hearing. The taxpayer mailed and Appeals received the Form 12153 before the expiration of the 30-day period following the mailing date of the levy notice, during which the taxpayer had a statutory right to request a collection due process (CDP) hearing. (Code Sec. 6330(a)(2) and Code Sec. 6330(a)(3).

The taxpayer had checked a box on the Form 12153 to request an equivalent hearing in the event that his request for a CDP hearing was untimely. Under the applicable regs, a taxpayer who fails to make a timely request for a CDP hearing may request an equivalent hearing instead, provided that the request for an equivalent hearing is made in writing within the one-year period commencing on the day after the date of the levy notice. (Reg §301.6330-1(i)(1) and Reg §301.6330-1(i)(2), Q&A I7)

Appeals Determined That The Taxpayer Timely
Requested A CDP Hearing And, Thus,
Was Not Entitled To An Equivalent Hearing.

Following the CDP hearing, Appeals issued to the taxpayer a notice of determination that sustained the proposed levy.

The taxpayer argued, however, that Appeals should have granted him an equivalent hearing because his Form 12153 constituted a written request for an equivalent hearing made within the one-year period provided for requesting an equivalent hearing.

The Tax Court Held That The Taxpayer's Request For A
Hearing Made Before The Expiration Of The 30-Day Period Following The Mailing Date Of The Levy Notice Necessarily Triggered A CDP Hearing And Not An Equivalent Hearing.

The Court looked to Reg §301.6330-1(i)(1), which provides in relevant part: "A taxpayer who fails to make a timely request for a CDP hearing is not entitled to a CDP hearing. Such a taxpayer may nevertheless request an administrative hearing with Appeals, which is referred to * * * as an 'equivalent hearing.'"

The phrase "[s]uch a taxpayer," the Court found, limits the class of taxpayers who may request an equivalent hearing to those described in the immediately preceding sentence, that is, those who "fail[] to make a timely request for a CDP hearing". In other words, the Court concluded, only those taxpayers who fail to timely request a CDP hearing are eligible to request an equivalent hearing.

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