Jack A. Upchurch - Page 10
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proposed collection actions because he claims that the notice of
deficiency and the subsequent assessment were invalid for his
gift tax liability for 1996.
The case before us presents the unique situation in this
Court where the taxpayer challenging the validity of the notice
of deficiency completely disregarded it and waited to break his
silence until the IRS proceeded with collection action almost 2
years after the date of said notice. Because of the unusual
context, the parties have spent a considerable amount of effort
arguing which standard of review, de novo or abuse of discretion,
applies to the issue of the validity of the notice of deficiency.
We have held that a determination to proceed with collection
of an assessment made without following proper deficiency
procedures is an error as a matter of law, and accordingly, an
abuse of discretion. Swanson v. Commissioner, 121 T.C. 111, 119
(2003); see also Freije v. Commissioner, 125 T.C. 14, 36 (2005).
In holding that respondent could not proceed with collection in
Freije v. Commissioner, supra at 36, we said that “The Appeals
officer’s verification that the requirements of applicable law
had been met was incorrect.” We therefore analyze the validity
of the notice of deficiency within this framework.
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Last modified: November 10, 2007