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Background

TaxGate: best approach to IRS
Great Summary of Background Info against IRS
Here's our IRS info page
must be published in Federal Register
IMF file deciphering
Letters fron an enrolled agent: Liability for Income Tax, on Levies , on Jurisdiction

We must prove that the Determination is wrong

Definition of Deficiency

In Scar v. CIR (IRS) 814 F.2d 1363:(lawyer):
It was ruled that although a determination of deficiency does not have to meet any criteria for adequacy of procedures, it does have to show that it is based on data applying to the Taxpayer. The IRS used the wrong data in this case.

1) "We agree with the Tax Court that no particular form is required for a valid notice of deficiency, Abrams v. Commissioner, 787 F.2d 939, 941 (4th Cir.), cert. denied, 479 U.S. 882, 107 S. Ct. 271, 93 L. Ed. 2d 248 (1986); Benzvi v. Commissioner, 787 F.2d 1541, 1542 (11th Cir.), cert. denied, 479 U.S. 883, 107 S. Ct. 273, 93 L. Ed. 2d 250 (1986), and the Commissioner need not explain how the deficiencies were determined. Barnes v. Commissioner, 408 F.2d 65, 68 (7th Cir.) (citing Commissioner v. Stewart, 186 F.2d 239, 242 (6th Cir. 1951)), cert. denied, 396 U.S. 836, 90 S. Ct. 94, 24 L. Ed. 2d 86 (1969). The notice must, however, "meet certain substantial requirements." Abrams, 787 F.2d at 941. "The notice must at a minimum indicate that the IRS has determined the amount of the deficiency." Benzvi, 787 F.2d at 1542. The question confronting us is whether a form letter that asserts that a deficiency has been determined, which letter and its attachments make it patently obvious that no determination has in fact been made, satisfies the statutory mandate."
2)"The Tax Court asserts that it is following long-established policy not to look behind a deficiency notice to question the Commissioner's motives and procedures leading to a determination. See, e.g., Riland v. Commissioner, 79 T.C. 185, 201 (1982) (notice valid, even though IRS agents violated procedures set forth in internal manual and failed to forward relevant documents to agents handling the case); Estate of Brimm v. Commissioner, 70 T.C. 15, 23 (1978) (notice valid despite taxpayer's argument that procedures followed were not valid, the amount of time spent evaluating a case and the extent to which review functions were perfunctorily performed are irrelevant; even if Commissioner's procedures are flawed, the proper remedy would not be dismissal); Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324, 327 (1974) (court will not look behind notice to examine whether Commissioner discriminatorily selected taxpayer for audit; even if his actions are discriminatory, notice not void). We agree that courts should avoid oversight of the Commissioner's internal operations and the adequacy of procedures employed. This does not mean, however, that the courts cannot or should not decide the validity of a notice that can be determined solely by references to applicable statutes and review of the notice itself. In this case, we need not look behind the notice sent to the taxpayers to determine its invalidity. The Commissioner acknowledges in the notice that the deficiency is not based on a determination of deficiency of tax reported on the taxpayers' return and that it refers to a tax shelter the Commissioner concedes has no connection to the taxpayers or their return. "
3) These cases inform our judgment here. They support the view that the "determination" requirement of section 6212(a) has substantive content. n10 The Commissioner's and the dissent's contention that the issuance of a formally proper notice of deficiency n11 of itself establishes that the Commissioner has determined a deficiency must be rejected. To hold otherwise, would read the determination requirement out of section 6212(a). n12 Finally, the Commissioner asserts that the proper remedy in this case is to eliminate the presumption of correctness that normally attaches to deficiency determinations, see, e.g., Dix v. Commissioner, 392 F.2d 313 (4th Cir. 1968), not to dismiss for lack of jurisdiction. He relies, however, on cases that challenge the correctness of the determination, and not its existence. The Commissioner's belated willingness to assume the burden of proof before the Tax Court cannot cure his failure to determine a deficiency before imposing on taxpayers the obligation to defend themselves in potentially costly litigation in Tax Court. Jurisdiction is at issue here. Failure to comply with statutory requirements renders the deficiency notice null and void and leaves nothing on which Tax Court jurisdiction can rest. See Sanderling Inc. v. Commissioner, 571 F.2d 174, 176 (3d Cir. 1978) ("The Tax Court has held that it has no jurisdiction where the deficiency notice does not cover a proper taxable period.") (citing Columbia River Orchards, Inc. v. Commissioner, 15 T.C. 253 (1950)); McConkey v. Commissioner, 199 F.2d 892 (4th Cir. 1952), cert. denied, 345 U.S. 924, 73 S. Ct. 782, 97 L. Ed. 1355 (1953) (where taxpayer paid alleged deficiency before notice of deficiency was mailed, Tax Court lacked jurisdiction as there was no deficiency on which the court's jurisdiction could operate); United States v. Lehigh, 201 F.Supp. 224 (W.D. Ark. 1961) (statement of "Income Tax Due" was invalid deficiency notice where it was not labeled as a deficiency notice, incorrectly stated the tax year involved, and was confusing in that it did not provide certain figures that the terms of the statement said were provided). Cf. Mall v. Kelly, 564 F. Supp. 371 (D. Wyo. 1983) (deficiency assessments void where IRS had failed to meet requirement of reasonably and diligently determining and mailing sufficient notice to taxpayers' last known address). Section 6212(a) of the Internal Revenue Code requires the Commissioner to determine that a deficiency exists before issuing a notice of deficiency. Because the Commissioner's purported notice of deficiency revealed on its face that no determination of tax deficiency had been made in respect to the Scars for the 1978 tax year, it did not meet the requirements of section 6212(a). Accordingly, the Tax Court should have dismissed the action for want of jurisdiction. n13
Petition for review granted.

In Arford v. US 934 F.2d 229, a "levy" is subject to procedural requirements governing transfers by lien and levy (26 USCA 6331).

Prerequisited for establishing waiver of sovereign immunity under wrongful levy statute are:
1) person must not be on "against whom is assessed the tax";
2) person must claim a legally cognizable "interest" in the property;
3) and property must have been "wrongfully levied upon" 26 USCA 2410

In United Sand and Gravel Contractors v. US 624 F.2d 733:
(at the end) "26USC7426 is the exclusive remedy against the US for parties "other than taxpayers" complaining that their property has been wrongfully levied upon"

The following case lost, because they didn't prove that the determination was arbitrary. The IRS got the benefit of the doubt.
In Palmer v. IRS: 9th Circuit Case#No. 9535297(1995)
1) "A showing by the taxpayer that a determination is arbitrary, excessive or without foundation shifts the burden of proof back to the IRS.
Helvering v. Taylor, 293 U.S. 507, 515 -516 (1935);
Adamson v. Commissioner, 745 F.2d 541, 547 (9th Cir. 1984)."

2) "The district court granted the government summary judgment because the Palmers failed to rebut the presumption of correctness that normally attaches to IRS assessments.
U.S. v. Stonehill, 702 F.2d 1288, 1293 (9th Cir. 1983),
cert. denied, 465 U.S. 1079 (1984).
On appeal, the Palmers argue that summary judgment was inappropriate because alleged IRS errors prevented the presumption of correctness from attaching and because of alleged procedural defects. These contentions will be addressed in turn."

3) "...we must consider the Palmers' arguments that the district court lacked subject matter jurisdiction over the government's counterclaim and third party complaint. The Palmers argue that the record fails to establish that the IRS complied with the procedural requirements for bringing a civil action under 26 U.S.C. SS 7401 and 7403."
"Sections 7401 and 7403 of the Internal Revenue Code require that civil actions for the collection of taxes and enforcement of liens be instituted at the direction of delegates of the Attorney General and the Secretary of the Treasury. The government has produced redacted copies of two letters, which taken together, show that the government complied with these statutory requirements. Furthermore, the Palmers have failed to produce any evidence that would counter the normal presumption of regularity that attaches to the actions of public officers. See United States v. Chemical Foundation, 272 U.S. 1, 14 -15 (1926). Therefore, the district court prop- erly concluded that the IRS had complied with the applicable procedural requirements and that the court had jurisdiction over the government's claims."
In Helvering v. Taylor 293 US 507
"We find nothing in the statutes, the rules of the Board or our decisions that gives any support to the idea that the Commissioner's determination shown to be without rational foundation and excessive will be enforced unless the taxpayer proves he owes nothing or, if liable at all, shows the correct amount. While decisions of the lower courts may not be harmonious, our attention has not [293 U.S. 507, 515] been called to any that persuasively supports the rule for which the Commissioner here contends. 4
Unquestionably the burden of proof is on the taxpayer to show that the Commissioner's determination is invalid. Lucas v. Structural Steel Co., 281 U.S. 264, 271, 50 S.Ct. 263; Wickwire v. Reinecke, 275 U.S. 101, 105, 48 S.Ct. 43; Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8
Frequently, if not quite generally, evidence adequate to overthrow the Commissioner's finding is also sufficient to show the correct amount, if any, that is due. See, e.g., Darcy v. Commissioner (C.C.A.) 66 F. (2d) 581, 585. But, where as in this case, the taxpayer's evidence shows the Commissioner's determination to be arbitrary and excessive, it may not reasonably be held that he is bound to pay a tax that confessedly he does not owe, unless his evidence was sufficient also to establish the correct amount that lawfully might be charged against him. On the facts shown by the taxpayer in this case, the Board should have held the apportionment arbitrary and the Commissioner's determination invalid. Then, upon [293 U.S. 507, 516] appropriate application that further hearing be had, it should have heard evidence to show whether a fair apportionment might be made and, if so, the correct amount of the tax. The rule for which the Commissioner here contends is not consonant with the great remedial purposes of the legislation creating the Board of Tax Appeals. 5 The Circuit Court of Appeals rightly reversed and remanded the case for further proceedings in accordance with its opinion.
AFFIRMED."
Footnotes:
Footnote 4] The Commissioner cites: Hubinger v. Commissioner (C.C.A.) 36 F.(2d) 724; Sanderson v. Commissioner (C.C.A.) 42 F.(2d) 160; Autosales Corp. v. Commissioner (C.C.A.) 43 F.(2d) 931; Onondaga Co. v. Commissioner (C.C.A.) 50 F.(2d) 397; Darcy v. Commissioner (C.C.A.) 66 F.(2d) 581, 585. Saxman Coal & Coke Co. v. Commissioner (C.C.A.) 43 F.(2d) 556; Williams v. Commissioner (C.C.A.) 45 F.(2d) 61; Alexander Sprunt & Son v. Commissioner ( C.C.A. 64 F.(2d) 424; Atlantic Bank & Trust Co. v. Commissioner (C.C.A.) 59 F.(2d) 363; Lightsey v. Commissioner (C.C.A.) 63 F.(2d) 254; Matern v. Commissioner (C.C.A.) 61 F. (2d) 663; Atlanta Casket Co. v. Rose (C.C.A.) 22 F.(2d) 800; Becker v. United States (C.C.A.) 21 F.(2d) 1003. Cf. Collin v. Commissioner (C.C.A.) 32 F.(2d) 753; Citrus Soap Co. of California v. Lucas (C.C.A.) 42 F.(2d) 372; Russell v. Commissioner (C.C.A .) 45 F.(2d) 100, 103; Strother v. Commissioner (C.C.A.) 55 F.(2d) 626, 632. And see, involving deduction, Underwood v. Commissioner (C.C.A.) 56 F.( 2d) 67, 72.
[Footnote 5] House Report No. 179, p. 7; Senate Report No. 398, pp. 8-9, 68th Congress, 1st Session. Warren Mfg. Co. v. Tait (D.C.) 60 F.(2d) 982, 984; Old Colony Tr. Co. v. Com'r of Int. Rev., 279 U.S. 716, 731, 49 S.Ct. 499.
Brushaber v. Union Pacific RR Summary 240 US 1 (1916) :
In Portillo v. CIR (IRS) 932 F.2d 1128: Ramon Portillo appeals from the Tax Court's rejection of his challenge to a notice of deficiency from the Internal Revenue Service (the "I.R.S."). Portillo initially argues that the simple computerized matching of Portillo's employer's Form 1099 with Portillo's Form 1040 was not a "determination" as required by section 6212(a) of the Internal Revenue Code (the "Code"). We reject this argument, finding that the I.R.S. adequately linked Portillo to the alleged deficiency. We do agree with Portillo, however, that the notice of deficiency was arbitrary and erroneous because the I.R.S. failed to substantiate in any way its claim that Portillo received unreported income.

Martin v. Rubel (interesting case where IRS auctioned Martin's house to Rubel, and Martin sued: Martin won, IRS won, Rubel lost = remanded)