Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.
Service Collection Abuse of Discretion: What is the Appropriate Standard of Review and Scope of the Record in Collection Due Process Appeals?
Nick A Zotos*
In 1998, Congress significantly altered the landscape of Service collection practices by enacting legislation instituting additional due process safeguards that must be followed before the Service may seize property. Collectively referred to as collection due process (CDP), sections 6320 and 6330 of the Code grant taxpayers the right to notice and a hearing before the Service may seize property to satisfy a tax debt.
This Article begins with an overview of CDP procedures under sections 6320 and 6330. Second, it discusses the differing views of courts and commentators on the appropriate standard of review for CDP determinations and the proper scope of the appellate record. Third, it summarizes Tax Court decisions and summary opinions to identify trends as to what constitutes abuse of discretion. Finally, it explains why taxpayers are losing the vast majority of CDP appeals and evaluates the appropriateness of abuse of discretion review.
*Nick A. Zotos is an associate at the New York law firm of Satterlee Stephens Burke & Burke, where he specializes in federal, state, and local income taxation. Mr. Zotos earned an LL.M. in Taxation from New York University School of Law, his law degree magna cum laude from Michigan State University College of Law, and his undergraduate degree from the University of Illinois.