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Tax Litigation: The Week of December 26, 2021 – January 1, 2022

Ahmed v. Comm’r, T.C. Memo. 2021-142 |December 28, 2021 | Thornton, J. | Dkt. No. 12876-18L

Opinion

Short Summary. The IRS filed a notice of federal tax lien against Mr. Ahmed with respect to his 2013, 2014, 2015, and 2016 Forms 1040 tax years and certain trust fund recovery penalties assessed against him under section 6672 of the Code (TFRPs). Mr. Ahmed later paid the 2013, 2014, 2015, and 2016 Forms 1040 taxes—and the Tax Court granted the IRS’s motion to dismiss these years as moot, leaving only the TFRPs. After Mr. Ahmed received a supplemental Appeals hearing, he sent a check to the IRS in the amount of $625,000 with a letter that stated that the $625,000 was a “cash bond deposit” under Rev. Proc. 2005-18. The IRS received the payment and applied it against the outstanding TFRPs. The IRS then moved to dismiss the remainder of the case in Tax Court on grounds of mootness.

Key Issues: Whether a taxpayer’s CDP case becomes moot when the taxpayer submits a “cash bond deposit” for TFRPs while the case is pending in the Tax Court.

Primary Holdings: A taxpayer’s case becomes moot when a taxpayer makes full payment of the liabilities at...

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