Questions About 1099

26 U.S.C. § 6330(e) contains a provision that is little celebrated and underutilized by persons dealing with an Internal Revenue Service levy of their bank account or paycheck. That subsection provides in pertinent part:

The suspension of collection activities by timely requesting a Collection Due Process Hearing (CDPH) is a highly successful method to bring to a halt an Internal Revenue Service levy on a financial institution such as a bank or credit union or paycheck. I’ve employed this provision to bring to a standstill an IRS  levy in as little as two days. I recently put a statement in my shopping cart that even a dancing bear could end an Internal Revenue Service  levy by a well-timed request for a CDPH hearing as made available in 26 U.S.C. § 6330(b)(1).

Then again, a dancing bear would not be able to keep Internal Revenue Service collection activity suspended and most likely neither would most of us. In spite of all the delays while appeals are pending; and in spite of being able to retrieve whatever funds you had in the bank when the Notice of Levy showed up from the IRS; and despite the fact of receiving full paychecks during those delays; in due course, the end of the line will arrive and the  Internal Revenue Service will resume collection activities as they were before the hearing was asked for. At the point this happens the majority of people will be right back where they began; staring down collection activity by the IRS. It is because of this harsh actuality that I put up nine, no-cost videos, 4-10 minutes in length at www.irsterminator.com talking about strategies I have arrived at that make keeping IRS (Internal Revenue Service) collection activities suspended indefinitely a very real prospect.

There are two aspects to winning a CDPH hearing: 1) Taking affirmative strategies pointed at prevailing in the hearing as I talk about in the videos referred to above; 2) Avoiding bringing up issues that would serve as grounds for you losing the hearing. Staying away from losing questions is a matter of doing a little study and reviewing what issues have been raised in the past that lost.

Rohner v. U.S., 2003.NOH.0000145 (N.D.Ohio 2003) is the case that I will address in part in this article. Rohner lost his Collection Due Process hearing and appealed to the Federal District Court. I was able to find his case by searching the District Court data base at www.versuslaw.com. I made an hour and forty minute video about how to use Versuslaw to do research and that video is available for you to learn to do online legal research too at www.bearscart.com in the “law study” category.

In the section of the Court’s decision entitled “Factual and Procedural Background” the Court recounted:

“Although Plaintiff submitted Forms 1040 to the Internal Revenue Service (IRS) along with copies of Forms W-2 indicating his wage income for the years 1996 and 1998, he reported no income on the returns and attached statements containing frivolous arguments as to why he was not liable for an income tax for those two years…With regards to the 1998 tax return, the IRS then sent Plaintiff a letter dated May 24, 1999, advising him that a frivolous return penalty of $500 under 26 U.S.C. § 6702 would be assessed against him unless he corrected his position within 30 days…Plaintiff failed to correct the Form 1040 and the IRS assessed § 6702 penalty against him on September 13, 1999, with respect to the 1998 Form 1040…The IRS also accessed Plaintiff a § 6702 penalty on November 13, 2000, with respect to the 1996 Form 1040, because he submitted a Form 1040 for tax year 1996 showing no income with an attached statement containing frivolous arguments on July 21, 2000.”

So, part of what Rohner was trying to do was use the hearing to get out of paying frivolous return penalties. The IRS sent Rohner a Notice of Intent to Levy that informed him of his right to a CDPH hearing and he requested the hearing. After losing in the CDPH hearing, Rohner lost on appeal to the Federal District Court:

1) Rohner’s contention  that he didn’t get  a notice of deficiency respecting the § 6702 frivolous return penalty was declined as being unjustified for the reason that there is no condition that a notice of deficiency be issued with respect to these penalties. The Court held that deficiency procedures do not apply to the assessment or collection of frivolous tax return penalties.

2) Rohner’s argument that he did not obtain a just hearing because the Internal Revenue Service neglected to comply with his requests for records was refused by the Court as without foundation. The Court held that Section 6330 did not grant permission for production of documents or other exploratory demands in connection with a CDP hearing.

Rohner raised further unfruitful topics on appeal which will serve as the basis of a different article. The Court ended up deciding that the Internal Revenue Service’s administrative determination would stand as decided. Decisions such as this one have continually served me as an motivation and not as a impediment. At least a instance like this aids as a forewarning respecting strategies to be used in the future. To provide yourself the greatest probability of triumphing review the nine video recordings at www.irsterminator.com.

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