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Federal Tax

Tax Court: IRS’ Delinquent Tax Debt Designation to State Not Erroneous

Thomson Reuters Tax & Accounting  

· 1 minute read

Thomson Reuters Tax & Accounting  

· 1 minute read

The Tax Court has held that a taxpayer’s tax liabilities constituted a “seriously delinquent tax debt” under Code Sec. 7345, and the IRS’ certification to the Secretary of State was not erroneous. (Meduty, (5/23/2023) 160 TC No 13)

Both the IRS and the taxpayer agreed that the taxpayer owed over $100,000 in unpaid, legally enforceable federal income tax liabilities and frivolous return penalties relating to eight tax years. The IRS determined that that was a seriously delinquent tax debt and certified that to the Secretary of State.

The taxpayer asked the Tax Court to review the certification, alleging that the IRS failed to make a levy pursuant to Code Sec. 6331, as requried under Code Sec. 7345(b)(1)(C)(ii).

To demonstrate levies pursuant to Code Sec. 6331, the IRS relied mainly on Forms 4340 (Certificate of Assessments and Payments).

The Court pointed out that the Forms 4340 for each of the periods and tax liabilities at issue reflected that the IRS (1) issued a notice of intent to levy via certified mail, (2) received a signed return receipt from the taxpayer, and (3) made an initial levy five years ago.

The Court held that the IRS satisfied the requirement that the levy be made pursuant to Code Sec. 6331.

For more information about the levy requirement, see Checkpoint’s Federal Tax Coordinator V-3507.


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