IRS Revisiting a Tax Court Decision

was that an error, or an agreed upon number to get the matter settled?

It's very unlikely that the IRS can change what they have already agreed to in this instance. The agreement was entered into in court, and is presumably part of a judgment. To change it the IRS would have to go to court and convince the court that, not only did they make a mistake, but it was a mistake that was so unreasonable as to undo a settlement.

By the way, I'm surprised that the lawyer didn't consult you and keep you in the loop. You are a valuable resource, and should have been treated that way.

It was an error in the original CP2000 which remained uncorrected throughout the process.

Ira Smilovitz

He did. I'm being a bit circumspect in my retelling of events.

Ira Smilovitz

I don't see anything in the tax court rules that treats a Stipulated Tax Court Decision any differently from a trial court decision when it comes to the appeal process. As far as I can tell, once the decision is entered, a 30 day clock started to run for the IRS to file a motion to vacate or revise the stipulated decision. A 90 day clock also started for the decision to become final. If no motion was filed or granted to revise or change the decision within that 30 day window, then the 90 day window continued to run for the IRS to appeal to the circuit court.

If I understand this correctly... say the original decision was entered on September 15 (not the actual date), the IRS would have until October 15 to file a motion with the Tax Court and until December 14 (ignoring for now if 30 or 90 days fell on a weekend/holiday) to appeal to the Circuit Court for a change to the agreement.

Ira Smilovitz

Yes, assuming I was right to begin with.

I should have added that a timely filed motion to vacate or revise would start a new 90 day period from the date of denial.

Can the IRS now come back and assess additional tax in the absence of any other change in the tax return? =============== Basically, no. Once the correct tax has been entered into the record (TC Rule 155 or otherwise), that's it.

The only way for the IRS to get around this would be to appeal the case to the appropriate Circuit Court of Appeals. However, as it was not the Tax Court's error, the IRS is SOL as to any appeal. If it's been beyond the period to appeal, it's final, even if wrong. (Within the first 30 days, one might move for reconsideration before the TC itself, but that usually is denied.)

I don't see how Rule 155 (including paragraph c) trumps the rules in Title XVI Posttrial Proceedings (the 30 day period) and Title XIX Appeals (the 90 day period). Rule 155 comes into play after a dispositive order on the issues (an opinion but not yet a decision). Having disposed of the issues, the parties have a 90 day window to either agree or disagree on the amount owed or the amount to be refunded). During this period, the parties are no longer allowed to bring up any issues disposed of or any new issues n making the determination of the amount. Once the Rule 155 period closes and there is a stipulated amount, the court issues its decision. The whole appeal process then starts. Either party can argue that an error was made in the computation based on the court's opinion on the issues.

In the situation I'm dealing with, the IRS proposed a tax liability and the taxpayer agreed. There was a negotiated reduction in the penalty. There is an error in the IRS's tax calculation which is in favor of the taxpayer. As far as I can tell from the documents, the Court has not inserted itself in the process other than to enter the agreement.

Ira Smilovitz

I don't see how Rule 155 (including paragraph c) trumps the rules in Title XVI Posttrial Proceedings (the 30 day period) and Title XIX Appeals (the 90 day period). Rule 155 comes into play after a dispositive order on the issues (an opinion but not yet a decision). Having disposed of the issues, the parties have a 90 day window to either agree or disagree on the amount owed or the amount to be refunded). During this period, the parties are no longer allowed to bring up any issues disposed of or any new issues n making the determination of the amount. Once the Rule 155 period closes and there is a stipulated amount, the court issues its decision. The whole appeal process then starts. Either party can argue that an error was made in the computation based on the court's opinion on the issues. ======== I didn't say it did. All Rule 155 does is it allows the Judge to decide the merits of the case without reducing it to a dollar amount (and make the parties do the math).