Tax Court: IRS Not Immune from Using Common Sense

Side note before starting: You might be interested in my write up on my tax blogging experience posted over at Going Concern.

The honor for best tax quote of the day goes to Justice William O’Kelley in court case Music v. U.S.: “this statutory and regulatory framework does not immunize the IRS from using common sense.” Oh, if only so many others, both inside and outside the IRS, would heed that advice.

In the court case at hand, the awesomely named Laurie L. Music got into a bit of a tiff with the IRS. At some point in the ’90’s, she decided that paying taxes wasn’t for her, and stopped filing. She argued that her ‘wages’ shouldn’t be considered ‘income,’ but the court ruled that her position was “patently frivolous.”

GI Joe Collection

Which I believe were the exact words my wife used about my GI Joe collection

Where things went awry was the IRS’s attempt to try to contact Ms. Music. Between the time when she stopped paying taxes and when the IRS decided they wanted to reach deep into her checkbook, she moved two times. The IRS, however, kept sending letters to the address where she had last filed her return.

They should have known better, though. The IRS, when the first notices went undelivered, were able to track her down to her new address. Apparently the NSA wasn’t even needed to intercept her text messages. But by the time they decided to unceremoniously garnish her wages, the IRS decided to fall back on an outdated, 10 year old address for all communications. Even after four letters to this old address went undelivered.

I know we’ve all been there. It’s hard to find information in a two year old client file, especially if the address is saved under some obscure title like “How to face the Music.” It seems like it’d be a nice act of due diligence, though, to look through them thoroughly before taking someone’s money.

The judge agreed. He said that, while the IRS can technically use the last tax return filed to obtain an address if the taxpayer doesn’t give notice of a move, the agents on the case were also endowed with common sense and encouraged to use it.

To those hoping to use this as a way to avoid the IRS, the judge agreed with the IRS that a person constantly moving address to avoid the IRS would not give the taxpayer a reasonable basis to not file taxes. Ms. Music just wasn’t that person.

And unfortunately for Ms. Music, she’ll still have to pay up to Big Brother. But, on the plus side, she got her $350 court fees back.


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Picture from The Community

Side note: are the pictures no longer appearing in the “related content” boxes below for anyone else, or is that just me?