CCH Quotes Mark Allison: Tax Court Finds Deficiency Notice Ambiguous But Taxpayer Not Misled

CCH Standard Federal Tax Reports

A divided Tax Court has found that although a deficiency notice was ambiguous, the IRS established that it had determined a deficiency --which was enough to establish jurisdiction. Further, the taxpayer was not misled by the ambiguous notice.

CCH Take Away

"The court’s split opinions reflect the difficulties that arise from the unfortunate but not uncommon situations where the Commissioner’s notice is not clear as to the determination or the amount of the deficiency," Mark D. Allison, member, Caplin & Drysdale, Chartered, New York, told Wolters Kluwer. "It is troubling that a taxpayer could bear the responsibility or consequences of failing to understand what is meant by such a notice or the circumstances in which the Commissioner could demonstrate that it should have been understood by the taxpayer."

CCH Comments

"Referencing the taxpayer’s state of mind as a basis for jurisdiction is a recipe for disaster; as certain of the judges argued, the solution of a less than clear notice of deficiency should either be a lack of jurisdiction or a shift of the burden of proof to the Commissioner," Allison said. "The former may require an act of Congress, however, and the latter may not always provide the appropriate cure in some circumstances."

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Excerpt taken from the article "Tax Court Finds Deficiency Notice Ambiguous But Taxpayer Not Misled” in the Vol. 104, Issue No. 6, Report 6 of the CCH Standard Federal Tax Reports.


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