Images in Motion of El Paso, Inc. - Page 13

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          dated October 25, 2002, to file a formal protest since “your                
          protest has not been completed in accordance with the guidelines            
          outlined in the enclosed Publication 5.”  Petitioner did not                
          comply with this request.                                                   
               Because the amounts of tax used in the 30-day letter,                  
          Publication 5, and IRM part 8.6.1.1.4 are inconsistent with                 
          section 601.105(d)(2), Statement of Procedural Rules, we must               
          decide whether petitioner’s compliance with the 30-day letter and           
          Publication 5 satisfies the statutory requirement to have                   
          exhausted all administrative remedies.  We note that the IRS has            
          no duty to comply with section 601.105, Statement of Procedural             
          Rules, or any other rules that do not have the force and effect             
          of law.  See Luhring v. Glotzbach, 304 F.2d 560, 563 (4th Cir.              
          1962) (finding section 601.105, Statement of Procedural Rules,              
          does not have the force and effect of law); see also Ward v.                
          Commissioner, 784 F.2d 1424, 1430-1431 (9th Cir. 1986) (holding             
          the IRS has no duty to comply with section 601.601(d), Statement            
          of Procedural Rules, because it does not have the force and                 
          effect of law), affg. T.C. Memo. 1984-570.                                  
               With this background in mind, we note respondent did issue a           
          30-day letter, and section 601.105(c)(2)(i), Statement of                   
          Procedural Rules, requires a 30-day letter to provide a detailed            
          explanation of the available alternatives including consideration           
          of the case by an Appeals Office.  Similarly, section                       






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