§6502 — Collection after assessment

6502. But because Rosenbloom' s waiver was given .in 1997, that limitation does not apply.

Petitioner entered into agreements to extend the periods of limitations on assessment under section 6501, not on collection under section 6502 . Thus, the Restructuring Act rule does not apply to petitioner' s case .

MEMORANDUM FINDINGS OF FACT AND OPINION FOLEY, Judge: The issue for decision is whether respondent is permitted, pursuant to section 6502, to collect petitioner's 1998 tax liability.¹ ¹Unless otherwise indicated, all section references are to the Internal Revenue Code in effect at all relevant times.

Code Section 6502 provides that "[w]here the assessment ofany tax imposed by this titlehas been made within the period oflimitationproperly applicable thereto, such tax may be collected by levy or by a proceeding in court, but only ifthe levy is made or the proceeding begun--(1) within 10 years afterthe assessment ofthe tax"

Generally, action on the proposed levy and the running of the section 6502 period of limitations on collection are both suspended during the pendency of the administrative review hearing and any judicial review proceeding.

11 Section 6502 generally requires the IRS to collect a tax liability, if at all, within ten years after the liability’s assessment. I.R.C. § 6502(a)(1). Interest that accrues on an unpaid tax liability must be assessed and collected within the same period. I.R.C. § 6601(g); Treas. Reg. § 301.6601-1(f)(1); see also Fisher v. United States, 80 F.3d 157

Consequently, section 6502 did not bar the IRS from collecting Mr.

ution,” noting that petitioner had received prior correspondence the IRS directed to him at this address. In any event, the SO rejected the argument that the penalties were barred by limitations. The 10-year period of limitations on collection, see sec. 6502, had not expired as of 2017, and petitioner did not identify any relevant period of limitations on assessment. Finally, the SO concluded that no collection alternative could be considered because petitioner refused to submit financial inform

Finally, and most critically, a proper assessment opens up the § 6502 collection period, which gives the IRS a whopping ten years to collect the tax administratively.

ue is whether the 'Unless otherwise indicated, section references are Internal Revenue Code, as in effect for the years-at is s SERVED Aug 25 2008 -2- filing-of a notice of Federal tax lien is barred by the period of limitations on collection under section 6502 . FINDINGS OF FACT Petitioner resided in California at the time her petition was filed . Petitioner filed Federal income tax returns for the years a t issue but failed to pay the balances shown as due on the returns . On September 5, 1997

- 4 - Discussion Period of Limitations As stated, on June 1, 1998, respondent timely assessed petitioner's taxes for 1984, 1985, and 1986, and as of the time of filing of this action on September 12, 2007, the 10-year collection period of limitations under section 6502 (running from the date of assessment) had not expired .

A hearing request under section 6330 will suspend the running of the period of limitations described in section 6502 during the period that “such hearing, and appeals therein, are pending.” Sec.

Under section 6502, a tax liability may be collected by levy or proceedings begun within 10 years after the assessment. The Taxpayer Advocate, therefore, was correct in - 13 - determining that the 1987 collection period did not expire until July 8, 2001. Accordingly, using the 1997 overpayment as an offset to satisfy petitioner’s 1987 tax liability was

Respondent is also not time barred under section 6502 from collecting taxes due from petitioner for 1988-89.

Petitioners further contend that respondent may not collect petitioners’ 1982 and 1983 tax liabilities because the period for collection, pursuant to section 6502, expired.

Section 6502 provides that where the assessment of tax has been made within the period of limitations properly applicable thereto (which here it has been2), 2 Sec. 6501(a) requires that the tax must be assessed within 3 years of the date the tax return was filed. In the instant case, the estate tax return was filed on June 4, 1979, and the executor

Section 6330(g) provides that if the IRS determines that any portion of a hearing request is based on a position that the IRS has officially identified as frivolous or otherwise reflects a desire to delay or 6 impede the administration of federal tax law, see I.R.C.

(2) Limitation.—A request for equitable relief under this subsection may be made with respect to any portion of any liability that— (A) has not been paid, provided that such request is made before the expiration of the applicable period of limitation under section 6502, or (B) has been paid, provided that such request is made during the period in which the individual could submit a timely claim for refund or credit of such payment.

years 2014 and 2015 only under section 6015(f). See supra Part III.B and C. Third, Ms. Freman timely filed her claim for relief before the expiration of the 10-year periods of limitation for collection. See Rev. Proc. 2013-34, § 4.01(3)(a); see also § 6502. Fourth, there are no allegations of asset transfers made pursuant to a fraudulent scheme. Fifth, there are no allegations of any disqualified asset transfers. Sixth, there are no facts to suggest that Ms. Freman knowingly participated in fili

at she may qualify for now or in the future, including without limitation, the right to relief under IRC §6015 (innocent spouse), §6159 (installment agreement), §7122 (offer in compromise), §6343 (release of levy), §7811 (taxpayer assistance order), §6502 (statute of limitations on collection), §6325 (release of lien), collection due process, collection appeals program, currently non-collectible status, bankruptcy, and any other current or future law that may serve to reduce the amount 1 Unless

In addition, a timely request for a CDP hearing suspends the running of certain limitations periods (e.g., the section 6502 limitations period on collection of assessed taxes) while the hearing and any subsequent appeals are pending, see sec.

The TFRP assessments all occurred on July 4, 2011, well within the 10-year period of limitations on collection after assessment under section 6502.5 We have acknowledged that our precedent contains some ambiguity as to whether the expiration ofthe period oflimitations on collection is properly considered a challenge to the underlying tax liability (and therefore subject to de novo review).

Captioned "Limita- tion," it provides: A request for equitable reliefunder this subsection may be made with respect to any portion ofa liability that-- (A) has not been paid, provided that such request is made before the expiration ofthe applicable period oflimitation under section 6502, or (B) has been paid, provided that such request is made during the period in which the individual could submit a timely claim for refund or credit ofsuch payment.

cause this is petitioner's first appearance before this Court, we decline to impose a section 6673 penalty; 4 Petitioner argued in his petition that his tax liabilities for 2003-06 were uncollectible because the collection period oflimitations under sec. 6502 had expired. Because petitioner did not develop this argument at trial or on brief, we deem the issue abandoned. See Thiessen v. Commissioner, 146 T.C. 100, 106 (2016) ("[I]ssues and arguments not advanced on briefare considered to be aband

hetherthe amount offered reflects the reasonable collection potential (RCP)." "RCP is generally calculated by multiplying a taxpayer's monthly income available to pay taxes by the number ofmonths remaining in the statutory period for collection, see sec. 6502, and adding to that product the realizable net equity in the taxpayer's assets." Ramdas v. Commissioner, at *25. Additionally, IRM pt. 5.8.4.3(3) prescribes that, absent special circumstances, an offer-in-compromise on the grounds ofdoubt a

§ 6502, which contained the same tax-protesterarguments he had made in his previous documents and correspondence, and he claimed that respondent could not collect his 2005 tax liability because the period oflimitations had expired. On November 30, 2016, SO Dunnington replied by letter acknowledging that petitioner requested to have his CDP hearing

ry 27, 2011, the Melaskys walked into an IRS office with a check for $18,000. They asked to apply it to their 2009 tax ¹ Taxpayers often prefer to pay more recent tax debts first, because there is a ten-year statute oflimitations for most tax debts, sec. 6502; see also sec. 6503, and because tax debts older than three years generally can be discharged in bankruptcy, 11 U.S.C. sec. 523(a)(1)(A) (2012); see 11 U.S.C. sec. 507(a)(8) (2012); Severo v. Commissioner, 129 T.C. 160, 165 (2007), M, 586 F

What about a taxpayerwho argues simply that it's too late to collect a tax instead of saying that the statute oflimitations on collection under section 6502(a) has expired?

Consequently, according to the ChiefCounsel's representative, subsection (a) ofsection 6502, titled "Collection After Assessment", governs the period within which the IRS is entitled to collect from petitioner any portion ofhis assessed 2006 total tax that remains unpaid as well as any unpaid additions to tax and interest as provided by law for his taxable year 2006.

However, section 6330(e)(1) pro- vides: "[I]fa hearing is requested under subsection (a)(3)(B), * * * the running of any period oflimitations under section 6502 (relating to collection after assess- ment) * * * shall be suspended for the period during which such hearing, and ap- peals therein, are pending." The SO determined that the collection period oflimitations remained open because petitioner had timely requested a CDP hearing.

is provision was deemed necessary because it would be "impractical to name the IRS as the holder ofthe NIBs". Because they needed to make payments over a 15-year period, petitioners offered to consent to an extension ofthe period oflimitations under section 6502. The document stated that this "arrangement would be treated as an installment agreement for purposes ofthe limitation on the late payment penalty in IRC § 6661(h)". Petitioners also wanted the IRS to agree that it would take no enforced

e taxpayer. Sec. 6015(c)(3)(B).8 A taxpayer seeking equitable reliefunder subsection (f) must do so before the expiration ofthe applicable period oflimitations, either on collection ifhe or she is claiming relieffrom a liability (generally 10 years, sec. 6502), or on a refund claim (generally 3 years after he or she has filed the 8The Internal Revenue Service has defined "collection activities" as the issuance of"a section 6330 notice; an offset ofan overpayment ofthe requesting spouse against a

Therefore, even ifone ignores any tolling, the Commissioner could've collected the tax until 2019 at the earliest. At the time ofthe offer in 2011, there was more than 60 months left in the collection period, so the settlement officer should've multiplied the monthly income by 60 months. This error, though, is completely harmless. For ex

ts the taxpayer's RCP. Rev. Proc. 2003-71, sec. 4.02(2), 2003-2 C.B. 517, 517. RCP is generally calculated by multiplying a taxpayer's monthly income available to pay taxes by the number ofmonths remaining in the statutory period for collection, see sec. 6502, and adding to that product the realizable net equity in the taxpayer's assets. An Appeals Officer does not abuse his discretion when he rejects an OIC because the taxpayer's ability to pay is greater than the amount he proposes to pay unde

tion. See Hall v. Commissioner, 135 T.C. 374 (2010). In Notice 2011-70, 2011-32 I.R.B. 135, the IRS changed its position and will now consider requests for equitable reliefunder sec. 6015(f) ifthe period oflimitation on collection of tax provided by sec. 6502 or the period oflimitation on credits or refunds provided in sec. 6511 remains open for the tax years at issue. 14 On briefrespondent argues that halfofthe income from Willow Creek Dental for 2002 through 2005 should be attributed to petiti

tion. See Hall v. Commissioner, 135 T.C. 374 (2010). In Notice 2011-70, 2011-32 I.R.B. 135, the IRS changed its position and will now consider requests for equitable reliefunder sec. 6015(f) ifthe period oflimitation on collection of tax provided by sec. 6502 or the period oflimitation on credits or refunds provided in sec. 6511 remains open for the tax years at issue. 14 On briefrespondent argues that halfofthe income from Willow Creek Dental for 2002 through 2005 should be attributed to petiti

15-5(b)(1), Income Tax Regs., is invalid. Notice 2012-8,"2012-4 I.R.B. 309, 312, proposes to elimingte the two-year déadline and replace it with a requirement that the request for reliefbe filed within the applicable period oflimitations provided by sec. 6502 (relating to collections) or sec. 6511 (relating to claims for credit or refund). - 17 - [*17] attributable to Mr. Rozell, she has satisfied the seventh condition. Petitioner contends, however, that she also qualifies for relief, under the

at 210; see also Rule 142(a).

h iEcome from his medical practice.9 Although petitioner does not explicitly claim 8Notice 2012-8, sec. 3.01, 2012-4 I.R.B. at 311, eliminates the two-year deadline to request equitable reliefand replaces it with the period oflimitations provided by sec. 6502 (relating to collection) or sec. 6511 (relating to filing a claim for credit or refund). Our analysis is unchanged by this revision given the parties' stipulation that petitioner's request was timely. 'As discussed infra p. 23, petitioneras

the requesting spouse is applying for relieffrom a liability or a portion ofa liability that remains unpaid, the request for reliefmust be made before the expiration of the period oflimitation on collection ofthe income tax liability, as provided in section 6502. Generally, thatperiod expires 10 years after the assessment oftax:" Respondent does not contend that petitioner failed to satisfythe threshold requirementKofRev. Proc. 2003-61, sec. 4.01(3), 2003-2 C.B. at 297. - 31 - (4) No assets were

tion. See Hall v. Commissioner, 135 T.C. 374 (2010). In Notice 2011-70, 2011-32 I.R.B. 135, the IRS changed its position and will now consider requests for equitable reliefunder sec. 6015(f) ifthe period oflimitation on collection of tax provided by sec. 6502 or the period oflimitation on credits or refunds provided in sec. 6511 remains open for the tax years at issue. - 16 - [*16] Petitioner contends in his opening briefthat he meets all ofthe safe harbor provisions ofRev. Proc. 2003-61, sec. 4

The new requirement would provide that a requesting spouse must file a claim for equitable reliefbefore the expiration of the period oflimitations for collection under section 6502 or the period of limitations for credit or refund under section 6511, ifapplicable.

According to the notice, the IRS will consider requests for equitable relief under section 6015(f) if the period of limitation on collection of taxes under section 6502 remains open for the years at issue." In the notice the IRS states that the Department of·Treasury and "Subject to a number of exceptions, see, e.g., sec.

ion potential" (RCP). Re9. Proc. 2003-71, sec. 4.02(2), 2003-2 C.B. 517, 517. RCP is generally calculated by multiplying a taxpayer's monthly income available to pay taxes by the number of months remaining in the statutory period for collection, see sec. 6502, and adding to that product the realizable net equity r in the taxpayer's assets. - Both parties appear to agree that Mr. Johnson's RCP is substantially less than his tax liability, which stood at approximately $2.5 million as of January 28

"Generally, the amount to be collected from future income is calculated by taking the projected gross monthly income less allowable expenses and multiplying the difference times the number of months - remaining on the, statutory period for collection." IRM pt. 5.8.5.5.5(1) (Sept. 1, 2005). As a result, Mr. Tucker's future income subject

In Notice 2011-70, supra, the IRS stated that effective July 25, 2011, it would consider requests for equitable relief under section 6015(f) if the period of limitations on collection provided by section 6502 remained open.

pursuant to which petitioners would make monthly payments to the IRS of $4,429 over 10 years, producing total payments of $531,480 . As part of the counteroffer, petitioners agreed to sign a waiver extending the period of limitations as provided in section 6502 . The settlement officer refused petitioners' counteroffer . The settlement officer's proposal was based on national and . local standards issued by the Secretary ; petitioners' counteroffer was based on their actual living expenses. 'It

At the-time .of the,, - initial assessment`in this case, section 6502 provided a 6-_year period-for collection by levy .

c . 6502(a)(1) ; Severo v . Commissioner , 129 T .C. 160, 168 (2007) . The taxes for the years at issue were assessed during 20 .06, and the collection notices were sent to petitioner in 2007, well within the 10-year period of limitations found in .section 6502 . B. Forms 434 0 Federal tax assessments are formally recorded on a record of assessment . Sec . 6203 . The summary record of assessment must "provide identification of the taxpayer, the character of the liability assessed, the taxable pe

Statute of Limitations.-- (1) In general.--Except as provided in paragraph (2), if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), or section 6532 (relating to other suits) shall be suspended for the period during which such hearing, and appeals therein, are pending.

tute of Limitations .-- (1) In general .-- Except as provided in paragraph (2), if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), or section 6532 (relating to other suits) shall be suspended for the period during which such hearing, and appeals therein, are pending .

See also United States v.

18(...continued) examined. * * * Congress did not intend that taxpayers be prohibited from seeking innocent spouse relief until after an assessment has been made; Congress intended the proper time to raise and have the IRS consider a claim to be at the same point where a deficiency is being considered and asserted by the IRS. This is the

Although the Eighth Circuit in Bartman interchangeably used terms that are not synonymous in the Federal tax law, after a careful reading of the Eighth Circuit’s opinion in Bartman (and its opinion in Sjodin that relied on Bartman), I believe that the Eighth Circuit in Bartman (and in Sjodin) construed the language “a deficiency has been

A hearing request under section 6330 will suspend the running of the period of limitations described in section 6502 during the period that "such hearing, and appeals therein, are pending." Sec.

Section 6502, Collection After Assessment, provides that where an assessment has been timely made, the tax may be collected by levy or proceeding that is begun “within 10 years after the assessment of the tax”. The Forms 4340 show that the stipulated deficiencies entered by the Court’s decision of February 7, 1994, were assessed by the IRS 92 days

sec. 6015(b) and (c). See Butler v. Commissioner, 114 T.C. 276, 278 n.2 (2000). Respondent concedes that the issue of relief with respect to the unpaid tax liability for 1992 is moot, because the period of limitations on collection has expired under sec. 6502 and was not tolled during the pendency of the bankruptcy proceeding described infra. - 3 - resided in Middletown, Pennsylvania, when she filed the petition herein. During the years in issue, petitioner was married to James S. Vuxta. Mr. Vux

statute of limitations.-- (1) In general.-–Except as provided in paragraph (2), if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under sec. 6502 (relating to collection after assessment), sec. 6531 (relating to criminal prosecutions), or sec. 6532 (relating to other suits) shall be suspended for the period during which such hearing, and appeals therein, are pending. In no event shal

g with respondent's Appeals Office." Magana v. Commissioner, supra at 489 (emphasis added). In the taxpayer's request for a collection hearing and at the hearing, the only issue raised was whether the period of limitations had expired - 28 - under section 6502. The taxpayer did not raise the issue of hardship. See & at 490, 491. In his petition to the Court, the taxpayer "for the first time, raised hardship as an objection to respondent's lien filings (namely, petitioner's physical illness nd th

Respondent's rejection of the proposed installment agreement on the grounds that it would not satisfy petitioners' liability within the period of limitations on collection after assessment contained in section 6502, plus allowable extensions, is not an abuse of discretion.

If a hearing is requested under section 6330(a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 are suspended for the - 5 - period during which the hearing and appeals thereof are pending.

A hearing request under section 6330 will suspend the running of the period of limitations described in section 6502 during the period that “such hearing, and appeals therein, are pending.” Sec.

* * * * * * * (e) Suspension of Collections and Statute of Limitations.-- (1) In general.--* * * if a hearing is requested * * *, the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), or section 6532 (relating to the suits) shall be suspended for the period during which such hearing, and appeals therein, are pending.

In October of 1990, the statute of limitations on collection under section 6502 was amended to provide a 10-year period from the date of assessment for the collection of Federal taxes (extended from 6 years).

Maier’s claim for relief from joint and several liability for the taxable year 1990 was not considered because the period of limitations with regard to collection under section 6502 expired as to Ms.

Maier’s claim for relief from joint and several liability for the taxable year 1990 was not considered because the period of limitations with regard to collection under section 6502 expired as to Ms.

Except as provided in paragraph (2), if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), or section 6532 (relating to other suits) shall be suspended for the period during which such hearing, and appeals therein, are pending.

6502(a)(1).4 If the taxpayer requests a hearing under section 6330(a)(3)(B), the levy actions that are the subject of the requested hearing and the running of the period of limitations set forth in section 6502 "shall be suspended for the period during which such hearing, and appeals therein, are pending." Sec.

Though the statutory period of limitations had run under section 6502, the IRS still levied upon Mr.