Petitioner is the chairman of the board for Accurate Communications Corporation and did not pay income and employee taxes regarding Forms 941. Petitioner also jointly filed taxes with his wife for their 2010 tax return, but failed to pay his 2010 tax liability by the return date of October 15, 2011. Petitioner arranged for an installment agreement for the 2010 taxes with the IRS. Trust fund recovery penalties were assessed against him for the Accurate taxes. The IRS subsequently terminated the installment agreement and stated he owed over $160,000 in trust fund recovery penalties. The IRS intended to levy in order to collect these taxes. Petitioner tried to pay off the amounts in different ways and the officer did not accept them.

The United States Tax Court held that the settlement officer did not abuse her discretion in sustaining the levy. The test applied to this proceeding was whether the officer’s determination was “arbitrary, capricious, or without sound basis in fact or law.” Using this test, the court held for the respondent.

See Kirkpatrick v. Commissioner of Internal Revenue, T.C. Memo. 2014-234

Posted by Aryane Garansi, Associate Editor, Wealth Strategies Journal