Legal Memorandum: Investigation Requirement in a CDP

Issue: As part of a collection due process (CDP), is an Appeals Settlement Officer (ASO) obligated to obtain verification from the Internal Revenue Service (IRS) that all applicable administrative procedures have been met?

Area of Law: Administrative Law, Administrative Law & Regulation (Federal and State), Litigation & Procedure, Tax Law
Keywords: Collection due process (CDP); Obtain verification; Appeals Settlement Officer (ASO)
Jurisdiction: Federal
Cited Cases: None
Cited Statutes: 26 U.S.C. § 6330(c)(1), (3)(A)
Date: 03/01/2013

In the collection due process (CDP), the Appeals Settlement Officer (ASO) must obtain verification from the IRS that the requirements of any applicable administrative procedures have been met and must consider that verification, or lack thereof, in reaching a decision.  26 U.S.C. § 6330(c)(1) TA s "26 U.S.C. § 6330(c)(1)" , (3)(A TA s "26 U.S.C. § 6330(c)(1), (3)(A)" ).  As explained in the concurring opinion in Trout, that includes verification that appropriate notices have been sent.  Trout v. Commissioner, 131 T.C. 239, 260 (2008) (Marvel, J., concurring) (stating that “I remain concerned, however, about how the Appeals Office articulates . . . its obligations under section 6330 in a case involving the termination of an OIC where the IRS does not attempt to notify a taxpayer of an alleged failure to satisfy the OIC’s compliance provision or to provide the taxpayer with a reasonable opportunity to cure an alleged breach of that provision . . . .”). 

Judge Marvel’s concurring opinion in Trout emphasizes that § 6330(c)(1) “specifically requires that the Appeals officer at the section 6330 hearing shall obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met,” and that “the determination by an Appeals officer under section 6330(c) shall take into consideration the verification presented under section 6330(c)(1).”  Id. TA s "Trout v. Commissioner, 131 T.C. 239 (2008)"  (emphasis in original).

Judge Marvel continued:

When the IRS takes the very serious step of terminating an OIC and reinstating a taxpayer’s original tax liability, the Appeals Office […]


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