SCOTUS Reports

Tag: Weiss v. Comm’r

  • Weiss v. Comm’r, 147 T.C. 179 (2016): Timeliness of Collection Due Process Hearing Requests

    Weiss v. Commissioner of Internal Revenue, 147 T. C. 179 (U. S. Tax Court 2016)

    In Weiss v. Commissioner, the U. S. Tax Court clarified that the 30-day period for requesting a Collection Due Process (CDP) hearing starts from the mailing date of the IRS levy notice, not the date printed on the notice. This ruling ensures that taxpayers have the full 30 days to request a hearing, impacting how the IRS and taxpayers manage collection actions and the suspension of the collection statute of limitations.

    Parties

    Charles J. Weiss, the petitioner, filed a petition against the Commissioner of Internal Revenue, the respondent, in the U. S. Tax Court. Weiss sought review of the IRS’s determination to uphold a notice of intent to levy against him for unpaid federal income tax liabilities for the tax years 1986 through 1991.

    Facts

    Charles J. Weiss owed over $550,000 in federal income tax liabilities for the years 1986 to 1991. In an effort to collect these liabilities, the IRS prepared a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (levy notice) dated February 11, 2009. An IRS Revenue Officer (RO) attempted to hand-deliver the notice on February 11 but was prevented by Weiss’s dog. The RO then mailed the notice on February 13, 2009, using the original February 11-dated notice. Weiss’s wife received the notice on February 17, 2009. Weiss filed a request for a CDP hearing on either March 13 or 14, 2009, which was received by the IRS on March 16, 2009. Weiss argued that he intentionally filed the request late to receive an equivalent hearing, which would not suspend the collection statute of limitations.

    Procedural History

    The IRS issued a notice of determination on May 6, 2011, sustaining the proposed levy. Weiss timely petitioned the U. S. Tax Court for review. The Tax Court reviewed the IRS’s determination for abuse of discretion, focusing on whether the CDP hearing request was timely filed based on the mailing date of the levy notice.

    Issue(s)

    Whether the 30-day period for requesting a CDP hearing under I. R. C. § 6330(a)(3)(B) begins on the date the levy notice is mailed or the date printed on the notice when these dates differ?

    Rule(s) of Law

    The Internal Revenue Code section 6330(a)(3)(B) provides that a taxpayer may request a CDP hearing within 30 days of receiving a notice of intent to levy. The regulations under 26 C. F. R. § 301. 6330-1(b)(1) and (c)(1) state that the 30-day period commences the day after the date of the CDP Notice. The Tax Court has established that the mailing date of the notice controls when it is later than the date on the notice itself.

    Holding

    The U. S. Tax Court held that the 30-day period for requesting a CDP hearing under I. R. C. § 6330(a)(3)(B) is calculated from the date the levy notice is mailed, not the date printed on the notice. Therefore, Weiss’s request for a CDP hearing, filed within 30 days of the mailing date, was timely.

    Reasoning

    The court reasoned that when the date on a levy notice is earlier than the mailing date, the mailing date governs the start of the 30-day period. This principle ensures that taxpayers have the full 30 days to request a hearing, consistent with the court’s prior rulings on notices of deficiency and notices of determination in CDP cases. The court cited Bongam v. Commissioner to support its reasoning, emphasizing a broad, practical construction of jurisdictional provisions to favor taxpayer rights. The court rejected Weiss’s argument that the mismatch between the notice’s date and mailing date should invalidate the notice, as such mismatches have not historically led to invalidation. Additionally, the court found no merit in Weiss’s claim of prejudice or estoppel, noting his implausible testimony and the fact that he sought to avoid collection action.

    Disposition

    The U. S. Tax Court upheld the IRS’s determination to sustain the proposed levy action against Weiss.

    Significance/Impact

    Weiss v. Commissioner clarifies the starting point for the 30-day period to request a CDP hearing, ensuring that taxpayers have the full period to respond based on the mailing date of the levy notice. This ruling impacts IRS collection procedures and taxpayer rights, reinforcing the importance of the mailing date in determining the timeliness of CDP hearing requests. Subsequent courts have followed this precedent, affecting how the IRS administers collection actions and how taxpayers engage with the CDP process.

  • Weiss v. Comm’r, 129 T.C. 175 (2007): Inclusion of Qualified Dividends in Alternative Minimum Taxable Income

    Weiss v. Commissioner, 129 T. C. 175, 2007 U. S. Tax Ct. LEXIS 37, 129 T. C. No. 18 (2007)

    In Weiss v. Commissioner, the U. S. Tax Court ruled that qualified dividends must be included in the calculation of alternative minimum taxable income (AMTI) for the purpose of determining alternative minimum tax (AMT). The decision clarifies that while qualified dividends receive special tax treatment under certain circumstances, they cannot be entirely excluded from AMTI. This ruling ensures consistent application of tax laws and reinforces the importance of statutory interpretation over tax form ambiguities.

    Parties

    Tobias Weiss and Gertrude O. Weiss, as petitioners, filed against the Commissioner of Internal Revenue, as respondent, in the United States Tax Court.

    Facts

    Tobias and Gertrude Weiss, residents of Connecticut, filed their 2005 Form 1040, reporting $24,376 in qualified dividends on line 9b. They calculated tax on these dividends at a 15% rate, reporting it separately on line 45 of the form, which is designated for alternative minimum tax. The Weisses did not include the qualified dividends in their taxable income of $265,408, which they used to compute their regular tax of $68,609. The Commissioner treated the omission of qualified dividends from taxable income as a math error and reassessed the Weisses’ taxable income at $315,532, leading to a summary assessment of additional tax under section 6213(b). The Commissioner also issued a statutory notice of deficiency for $6,073, based on the recomputation of their alternative minimum tax.

    Procedural History

    The Weisses petitioned the U. S. Tax Court after receiving the statutory notice of deficiency from the Commissioner. The court had jurisdiction over the deficiency determination but not the summary assessment made under section 6213(b). The parties stipulated all relevant facts, and the case proceeded to trial where the Weisses conceded other math errors related to their Schedule E expenses and Social Security income calculations.

    Issue(s)

    Whether qualified dividends must be included in the calculation of alternative minimum taxable income (AMTI) for the purpose of determining alternative minimum tax (AMT).

    Rule(s) of Law

    Alternative minimum tax is imposed in addition to other taxes upon a taxpayer’s alternative minimum taxable income (AMTI), as defined in section 55(a) of the Internal Revenue Code. AMTI is calculated as the taxpayer’s taxable income with adjustments and increased by items of tax preference as provided in sections 56, 57, and 58. Taxable income is defined as gross income minus allowable deductions per section 63(a), and gross income includes dividends under section 61(a)(7).

    Holding

    The U. S. Tax Court held that qualified dividends must be included in the calculation of alternative minimum taxable income for determining alternative minimum tax, as they are part of the taxpayer’s gross income.

    Reasoning

    The court’s reasoning centered on the statutory definitions and the structure of the Internal Revenue Code. The court emphasized that alternative minimum tax is calculated on alternative minimum taxable income, which is derived from taxable income, and that taxable income includes gross income, of which dividends are a part. The court rejected the Weisses’ argument that qualified dividends could be omitted from AMTI because they receive special treatment under certain tax provisions. The court clarified that the special treatment of qualified dividends relates to the rate at which they are taxed under section 1(h) and does not exclude them from AMTI. The court also noted that any ambiguity in the tax forms or instructions cannot override the clear language of the tax statutes. The court referenced prior cases such as Allen v. Commissioner and Merlo v. Commissioner to support its interpretation of AMTI and the inclusion of dividends therein.

    Disposition

    The U. S. Tax Court entered a decision in favor of the Commissioner, affirming the inclusion of qualified dividends in the calculation of alternative minimum taxable income and the resulting deficiency determination.

    Significance/Impact

    The Weiss case is significant for its clarification of the treatment of qualified dividends in the calculation of alternative minimum taxable income. It reinforces the principle that statutory language governs tax obligations, regardless of any perceived ambiguity in tax forms or instructions. The decision has practical implications for taxpayers, ensuring that qualified dividends are consistently included in AMTI calculations, which may affect the incidence of alternative minimum tax liability. Subsequent courts have followed this precedent, and it remains relevant for tax practitioners advising clients on AMT calculations and planning.