1 5 4 T.C. No . 1 3

UNITED STATES TAX COURT

V IVIAN RUESCH, Pet it i on er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 6 1 8 8-1 9P. Fi l edJ u n e 2 5 , 2 0 2 0
.
P fai l edt o p ay

as ses s edp en al t i es u n der I.R.C. s ec. 6 0 3 8 t o t al
i n g $ 1 6 0,0 0 0 . R cert i fi edP’ s l i ab i l i ty fo r t h os e p en al t ies t o the Secret ary o f St at e as a “ s eri o u s l y

d el in qu en tt ax d eb t ” wi th in th e m ean i n g o f I.R.C. s ec. 7 3 4 5 (b ). P fi l eda p et i ti o n ch al l en gi n g the co rrect n es s o f R’ s cert i fi cat i o n as wel l as h er u n d erl y in g l i ab i l i ty fo r t h e p en al t i es . R s ub s equ en t l y

d is co v eredth atP h adt i m el y req u es t eda co l
l ect i on du e p ro ces s h eari n g wi th res p ectt o th e I.R.C. s ec. 6 0 3 8 p en al
t i es . Th atreq u es t s u sp en d ed co l l ect i on o f h er t ax d eb ts o th ati twas n o l o n g er “ s eri o u s l y

d el i n qu en t .” See I.R.C. s ec. 7 3 4 5 (b )(2 )(B)(i ). R acco rd i n g l y

rev ers edh i s cert i fi cat i on as erro n eo u s an ds o n o t ifi edth e Secret ary o f St at e. R fi l eda m o t i o n t o d i s m is s fo r l acko f ju ri s d i ct i o n i n s ofar as P s eek s t o ch al len g e i n thi s cas e h er u n d erl y i n g l i ab il i ty fo r t h e p en al
t i es . Becau s e t h e cert i fi cat i o n th atP d i s pu t edh as b een rev ers ed , R fi leda s ep arat e m o t i o n t o d i s m i s s o n th e g ro u ndo f m o o tn es s . P o b
ject edt o th e g ran t i n g o f b o th m o ti on s .- 2
- Hel d : W e d o n ot h av e juri s d ict i on , u nd er I.R.C. s ec. 7 3 4 5 o r o th erwi se, t o co n s i d er i n th i s cas e p et i t i o ner’ s ch al l en g e t o h er u n d erl y i n g l iab i l i ty

fo r t h e p en al t ies
. Hel d , fu rt h er, we h av e ju ri sd i ct i o n t o rev i ew P’ s ch al l en g e t o R’ s cert i fi cat i o n o f h er l iab i l i t i es as “ seri o u s l y d el i n qu en t . ” See I.R.C. s ec. 7 3 4 5 (e). Ho wev er, b ecau s e R h as rev ers edthatcert i fi
cat i o n as erro n eo u s an d s o n o t i fi edth e Secret ary o f St at e, P’ s ch al
l en g e i n th at res p ecti s m o o t . Hel d , fu rt h er, b ecau s e t h ere rem ai n s n o l i v e co n tro v ers y b etween P an d R o v er wh ich we h av e ju ri s d i ct i o n , th i s cas e i s m o o t .

Fran kAg os t in o, Ph i l li p J . Co l as an t o , an d An drew D. Len dru m , fo r p et i t i o n er. Ch ri st i n a L. Ho l l an d , Do u g l as S. Po l s ky , an dCh ri s to p h er D. Dav i s , fo r
res p o n d en t.

OPINION LAUBER, J u d g e: Th i s p as s p o rtcas e i s b efo re t h e Co urto n d i sp o si t i v e m o t i on s fi l edb y

th e In t ern al Rev en u e Serv i ce (IRS o r res po n den t ). Sect i o n 7 3 4 5 , en act edi n 2 0 1 5 , i s cap t i o n ed“ Rev o cat i o n o r Den i al o f Pas s p o rti n Cas e o f Cert ai n- 3
-

Tax Del i nqu en ci es . ” 1 Itp ro v i d es th at , i f t h e Co m m i s s i o n er cert i fi es thatan i n d i
v i du al h as a “ s eri o u s l y d el i nqu en t t ax d eb t ,” t h e Secret ary o f t h e Treas u ry

“ s h al l tran s m i ts u ch cert i fi cat i on t o th e Secret ary o f St at e fo r act i o n wi th res p ectt o d en i
al , rev o cat i o n , o r l i m i t at i o n o f a p as s p o rt .” Sec. 7 3 4 5 (a). A t ax pay er ag g ri ev edb y
s u ch act i o n m ay

p et i t i on th is Co u rt“ t o d et erm i ne wh et h er th e cert i fi cat i o n was
erro neo u s o r wh et h er t h e Co m m i s s i o n er h as fai l edt o rev ers e t h e cert i fi cat i o n .” Sec. 7 3 45 (e)(1 ). If t hi s Co u rt“ d et erm i n es th at s uch cert ifi cat i o n was erro n eo u s , th en th e [C] o u rtm ay

o rd er t h e Secret ary

t o n ot i fy th e Secret ary

o f St at e t h ats u ch cert ifi cat i o n was erro n eo u s .” Sec. 7 3 4 5(e)(2 ). Th e IRS as s es sed $ 1 6 0,0 0 0 o f p en al ti es ag ai ns tp et i t i o n er u n d er s ect i o n 6 0 3 8 , an ds h e d i dn o tp ay thatl i ab i l i ty

up on n o t i ce an d d em an d
. Th e Co m m i s s i on er s ub s equ en t l y

cert i fi edthatp et i t i on er was an i n d i vi du al o wi n g a “ seri o u s l y d el i n qu en tt ax d eb t . ” See s ec. 7 3 4 5 (b ). Pet i t i o n er fi leda p et i t io n s eek i ng th ree fo rm s o f rel i ef: (1 ) red et erm i n at i o n o f t h e p en al t ies as s es s ed ag ai ns th er, wh i ch
s h e co nt en d s were i l l eg al l y as ses s ed ; (2 ) a d et erm i n at i o n th atth e Co m m i s si o n er erred i n cert i fy i n g h er as a p ers o n h av i n g a s eri o us l y d el i n qu en t t ax d eb t ; an d(3 ) a d et erm i n at i o n th atth e Co m m i s s i o ner erred i n fai l i n g t o rev ers e h i s cert i fi cat i o n .

1 Al l s t atut o ry

referen ces are t o th e In t ern al Rev en u e Co de (Co d e) i n effect at al l rel ev an tt i m es . W e ro u n dal l m o n et ary am o un t s t o th e n eares td o l l ar.- 4
-

Th e IRS t h ereaft er d i s co v eredth atp et i t i o n er h adt i m el y req u es t eda co l l ect i on du e p ro ces s (CDP) h eari n g . Her req u es tfo r a CDP h eari ng s u s p en d edco l
l ect io n o f h er t ax d eb t , s o thati twas n o l o n g er “ s eri o u s l y d el i nqu en t .” See s ec. 7 3 4 5 (b )(2 )(B)(i ). Th e IRS acco rd i n g l y rev ers edi t s cert ifi cat io n as erro n eo u s an d
s o n o t i fi edth e Secret ary

o f St at e. See s ec. 7 3 4 5(c)(1 ), (2 )(D). Res p o n d en th as fi l eda m o t i o n t o d is m is s fo r l acko f ju ri sd i ct i o n an d a m o t i on t o d i s m i s s o n g ro u n d s o f m o o tn es s . Res p on d en tco n t en d s th at we l ackjuri s d i ct i o n t o d eci d e, i n th i s p as s p ortcas e, p et i t i o n er’ s u n d erl y i n g l i ab i l i ty fo r th e p en al t i es . W it h res p ect t o th e p as s p o rtcl ai m s o v er wh i ch we d o h av e juri s d i ct i o n , res p o n d en t co nt en d s thatp et it i o n er h as al read y recei v edal l o f t h e rel i ef t h ats h e req u es t edi n h er p et i ti o n , th atth i s Co urtcan p ro v i d e n o fu rt h er rel i ef atth i s jun ctu re, an dth atth e cas e i s th erefo re m o o t . W e ag ree wi th res p o n d en t i n b o th res p ect s an dacco rd i n g l y

wi l l g ran tb o th o f h i s m ot i o ns .

Back gro u n d Th e fo l l o w i n g fact s are d eri vedfro m th e p l ead i n g s , th e p art i es ’ m o t i o n p ap ers , an dth e ex h i bi ts at t ach edth eret o. Pet i t io n er res i d edi n New Yo rk wh en
s h e p et i t i o n edth i s Co u rt . OnFeb ru ary 1 2 , 2 0 1 8, the IRS as s es s edag ai n s tp et i t i o n er $ 1 6 0 ,0 0 0 i n p en al t i es u n d er s ect io n 6 0 3 8 fo r fai l i n g t o fi l e i n fo rm at io n retu rn s wi th res p ectt o fo r-- 5
-

ei g n co rp o rat i on s fo r t ax y ears 2 0 0 5 -2 0 1 0 . On Ap ri l 1 6 , 2 0 18 , th e IRS i s s u edp et i ti o n er a No t i ce CP5 0 4 , No t i ce o f In t en tt o Sei ze (Lev y ) Yo u r Pro p ert y o r Ri g h t s t o Pro p ert y , n o t i fy i n g h er o f i t s i n t en tt o l ev y o n a St at e i n co m e t ax refu n d . Inres p o n se t o th atn o t ice p et i t i o n er s ubm i t t ed , o n M ay 1 5 , 2 0 1 8 , an ap p eal u n d er t h e IRS Co l l ect i on Ap p eal s Pro g ram (CAP ap p eal ). Becau s e o f a co m p u t er co d i n g erro r, th e IRS m i s cl as s ifi edp et it i o n er’ s CAP ap peal as a req u es t fo r a CDP h eari n g . 2 In Sep tem

b er 2 01 8 t h e IRS fi l eda n o t i ce o f Fed eral t ax l i en (NFTL) wi th
res p ectt o p et i t i o n er’ s p en al ty l i ab i l i ty , an do n Sep tem

ber 2 0, 2 0 1 8 , i ts en th er a No t ice o f Fed eral Tax Li en Fi l i n g an dYo u r Ri g htt o a Heari ng (l i en n o t ice). On Oct o b er 1 1 , 2 0 1 8 , p et i t i o n er t i m el y s ub m i t teda Fo rm 1 2 1 5 3 , Reques tfo r a Co l l ect i on Du e Pro ces s o r Equ i v al en tHeari n g , wi th res p ectt o th e l i en n o t i ce. Th e IRS d i dn o t p ro p erl y

reco rdp et it i on er’ s h eari n g req u es t an d d i d n o ti m m ed i at el y affo rd h er a CDP h eari ng . OnDecem

b er 1 7, 2 01 8 , th e IRS s en tp et i t i o ner a No t ice CP5 0 8 C, No t i ce o f Cert i fi cat i o n o f Yo ur Seri o us l y Del i n qu en tFed eral Tax Deb tt o t h e St at e Dep art 2 Th e No t i ce CP5 04 i n s tru ct edp et i t i o n er th ats h e co u l d s ub m i tan ap p eal b y fi li n g a Fo rm

9 4 23 , Co l l ect i o n Ap peal Req u es t . Pet i t i o ner ap pears t o h av e res p o n d ed b y s en d i n g a Fo rm

9 4 2 3 an dco n cu rren t l y

req u es t in g a CDP h eari n g. See In
t ern al Rev en u e M an ual (IRM ) p t . 8 .2 4 .1 .2 (Sep t . 3 , 2 0 19 ) (d i s t i n gu i s h i n g b et ween CAP an d CDP ap p eal ri gh t s ); s ee al so i d . p t . 5 .1 .9 .2 (Au g . 3 0 , 2 0 1 8 ). Pet i t i o n er’ s s ub m i s si o n o f b ot h fo rm s s eem s t o h av e tri g g eredth e co d i n g erro r.- 6
-

m en t . Th i s n o ti ce ad v i s edp et i t i o n er t h atth e IRS h ad cert i fi edt o t h e St at e Dep art m en tth ats h e was a p ers o n o wi n g a “ s eri o u sl y d el i n quen tt ax d eb t ,” n am el y , h er l i ab i l i ty fo r t h e s ect i o n 6 0 38 p en al t i es p l u s i n t eres tth ereo n. 3 On Ap ri l 8 , 2 0 1 9 , p et i t i o n er fi l eda p et i t i o n wi th th i s Co u rt . In h er p et i t i o n s h e ch al l en g edth e co rrect nes s o f t h e Co m

m i s si o ner’ s cert ifi cat i o n, as wel l as h er u n d erl y in g l i ab i l i ty fo r th e p en al t i es . A “ s eri o u sl y

d el i n qu en t t ax d eb t ” i s d efi nedt o ex cl u d e a d eb twi th res p ect t o wh ich a CDP h eari n g h as b een req u es t edo r i s p en d i n g . Sec. 7 3 4 5(b )(2 )(B)(i ). OnM ay 1 3 , 2 0 1 9 , rel y in g o n i t s erro n eo u s co d i n g o f p et i t i o ner’ s CAP ap p eal as a CDP h eari n g req u es t , th e IRS rev ers edi ts cert i fi cat io n o f p et i t i o n er’ s t ax d eb tas

“ s eri o u sl y

d el i n qu en t .” Th e IRS d i s co v eredi t s co d i n g erro r s ev eral d ay s l at er. On M ay 2 0 , 2 0 1 9 , th e IRS ag ai n cert i fi edp et i t i o n er t o th e St at e Dep art m en tas a p ers o n o wi n g a s eri o us l y

d el in qu en tt ax d eb tan di ss u eda n ew n o t i ce o f s u ch cert i fi
cat i on t o p et i ti o n er.

3 Sect i o n 7 3 4 5 o u t li n es a t wo -s t ep p ro cedu re wh ereb y th e Co m m i s s i o n er s en d s cert i fi cat i o n t o th e Secret ary o f t h e Treas u ry , wh o th en tran s m i t s the cert ifi cat i o n t o th e Secret ary o f St at e. In p ract i ce, t h e IRS fo l l o ws a o n e-s t ep p ro cedure wh ereb y th e Co m m i s s io n er, as the Secret ary ’ s d el eg at e, t ran sm i t s th e cert ifi cat i o n d irect l y

t o th e St at e Dep art m en t . See s ec. 7 7 01 (a)(1 1 ); IRM p t . 5 .1
. 12 .2 7 .1 , 6 , 8 (Dec. 2 0 , 2 0 1 7 ).- 7
-

OnM ay 2 4 , 2 0 1 9 , res p o n d en tfi leda m o ti o n t o d i sm i s s th i s cas e fo r l acko f juri s d i ct i o n i n s o far as p et i t io ner s eek s red et erm i n at io n o f h er u n d erl y i n g l i ab i l i t y fo r t h e p en al t i es . Res p o n d en tn o t edp et i t i o n er’ s al l eg at i o n, s etfo rth i n h er p et i
t i on , th ats h e h adreq ues teda CDP h eari n g wi th res p ect t o th e l i enn o t i ce. Res p o n den trep res en t edth at th e IRS was i n v es t i g at i n g wh et h er i th ad actu al l yrecei v eds u ch a req u es t. If t h e an s wer t o th atques t i o n was y es , res p o n d en trep res en t edth atth e IRS “ wi l l rev ers e t h e cert i fi cat i o n o f t hes e l i ab i l i t i es as s eri o u s l y d el i n qu en tFed eral t ax d eb t s t o th e St at e Dep art m en tan d m o v e t o d i s m i s s th e rem ai n i n g cl ai m s as m o o t . ” OnSep t em

b er 2 6 , 2 0 1 9 , res p on d en t fi l eda m o ti o n t o d i sm i s s o n g ro u n d s o f
m o ot n es s . He rep res en t edth atIRS reco rd s “ d idn o t refl ectrecei p to f * * * [p et i
t i on er’ s ] CDP h eari n g req u es t ” reg ard i n g t h e l i enn o t i ce wh ens h e i n i ti al l y s ub m i tt edth atreq u es to n Oct o b er 1 1 , 2 0 1 8. Ho wev er, th e IRS s ubs equ en t l y d et erm i n ed th at“ th e CDP h eari n g req u es t was i n factt i m el y ,” t h atth e IRS h adrecei v edi to n Oct o b er 1 2 , 2 0 1 8 , an dthatthe IRS h ad“p ro ces s edi tacco rd i n g l y .” Res p o n d en t rep res en t s th at p et i ti o n er h as n o w b een o ffered th e CDP h eari ng th at s he req u es t ed
an d th ath er u n d erl y i n g l i ab i li ty cl ai m s are cu rren t l y

p en d i n g b efo re a s et t l em en t
o ffi cer wi th th e IRS Ap peal s Offi ce i n New Yo rk Ci ty .- 8
-

Gi v en th e p en den cy

o f t h e CDP p ro ceed i ng , th e IRS rev ers ed , o n Sep t em b er 2 , 2 01 9 , i t s cert i fi cat i o n o f p et it i o n er as a p ers o n o w i n g a “ seri o us l y d el i n qu en tt ax d eb t.” Res p on d en t rep res en t s t h at“ th e Secret ary o f St at e h as b een acco rd i n g l y
n o t i fi ed
. ” Urg i n g thatp et i t i o n er h as recei v ed wi th res p ect t o h er p as s p ortcl ai m s th e rel ief s he req u es t edi n h er p et i t i o n, an dth atth i s Co u rtcan affo rdh er n o fu rt h er rel i ef, res p on d en t co n t en d s th atth i s cas e h as b eco m e m o o t . Pet i t i o ner o p p os edb o th o f res p o nd en t ’ s m o t i o n s , as sert i n g th ath er u n d erl y i n g l i ab i l i ty

cl ai m s m ay

p ro p erl y b e co n s i dered i n t h i s p as s po rtp ro ceed i ng an d th atth e rev ers al o f t he cert i fi cat i o n d o es n o t m o o th er cas e. W e h el da h eari n g o n th e m o t i o n s du ri n g th e Co u rt ’ s tri al s es s io n i n New Yo rkCi ty o n J an u ary

1 3 , 2 0 2 0 . Pet i t i o n er h as n o t d i s p u t ed , i n h er wri t t en s ub m i s s i o n s o r i n o ral arg u m en t , th atth e IRS h as rev ers edi t s cert i fi cat i o n , th atth e IRS h as n o t i fi ed th e St at e Dep art m en to f t h atrev ers al , o r t h ath er u n d erl y in g l i ab i l i ty cl ai m s wi th res p ectt o th e p en al t i es are cu rren t l y

p en d i ng b efo re t he IRS Ap p eal s Offi ce.

Di s cu ss i o n A. Sect io n 7 3 4 5 Ov erv iew Sect io n 7 3 4 5 (a) p ro v i d es th at , i f t he IRS cert i fi es th ata t ax p ay er h as “ a s eri
o u s l y d el i n quen tt ax d eb t ,” t h atcert i fi cat i o n s h al l b e t ran s m i t t ed“ t o th e Secret ary
o f St at e fo r act i on wi th res p ectt o d en i al , rev o cat i o n , o r l i m i t at i o n o f t h e t ax p ay er’ s- 9
-

p as s p o rt .” Th e IRS i s res p o n s i b l e fo r n ot i fy i n g th e t ax p ay er co n tem po ran eo u s l y wi th th e m ak i n g o f s uch cert ifi cat i o n . Sec. 7 34 5 (d ). A “ s eri o u sl y

d el i n qu en t t ax d eb t ” i s a Fed eral t ax l i ab i l i ty th ath as b een as s es s ed , ex ceed s $ 50 ,0 0 0 (ad ju s t edfo r i n fl at i o n), i s u np ai dan dl eg al l y en fo rceab l e,
an d wi th res p ectt o wh i ch a l i en n o t i ce h as b een fi l edo r l ev y m ad e. Sec. 7 3 4 5 (b )(1 ), (f). Ho w ev er, a s eri o u s l y d el i n quen tt ax d eb tex cl u d es “ a d eb twi t h
res p ectt o wh i ch co l l ect i o n i s s u s p en d ed* * * b ecau s e a du e p ro ces s h eari n g u n d er
s ect i on 6 3 3 0 i s req u es t edo r p en d i n g .” Id . s ub s ec. (b )(2 )(B)(i ). If a cert i fi cat i o n

“ i s fo u n dt o b e erro n eo u s o r i f t h e d eb twi th res p ectt o s u ch cert i fi cat i o n * * *
ceas es t o b e a s eri o u sl y

d el i n quen tt ax d eb t b y

reas o n o f s ub sect i o n (b )(2 ),” t h e IRS m u s trev ers e i t s cert i fi cat i o n an dn o ti fy th e Secret ary

o f St at e an d t h e t ax p ay er. Id . s ub s ecs . (c)(1 ), (d ). “ Inth e cas e o f a cert ifi cat i o n fo u n dt o b e erro neo u s , s u ch no t i fi cat i on s h al l b e m ad e as s o o n as p ract i cab l e aft er s u ch fi n d i ng .” Id
. s ub s ec. (c)(2 )(D). Sect io n 7 3 4 5 (e)(1 ) p erm i t s a t ax p ay er wh o h as b een cert i fi edas h av in g a
s eri ou s l y d el i n qu en tt ax d eb tt o p et i t i o n th i s Co u rt t o d et erm in e “ wh et h er t h e cert i
fi cat i o n was erro n eo us o r wh et h er t h e * * * [IRS] h as fai l edt o rev ers e t h e cert i fi
cat i on .” If we fi n d th ata cert i fi cat i o n was erro n eo u s , we “ m ay o rd er t he Secret ary [o f t h e Treas u ry ] t o n o t i fy th e Secret ary

o f St at e th ats u ch cert i fi cat i o n was erro n -- 1 0 -

eo u s.” Sec. 7 3 4 5 (e)(2 ). Th e s t atu te s p eci fi es n o o th er fo rm o f rel i ef th atwe m ay g ran t . B. J u ri s d i ct i o n Th e Tax Co u rt i s a co u rto f l i m i t ed juri sd i ct i o n an dm ay ex erci s e juri s d i ct i on o n l y t o th e ex t en t au th ori zedb y Co n gres s . See s ec. 7 4 42 ; Wri gh tv . Co m m i s s i on er, 5 7 1 F.3 d2 1 5 , 2 1 9 (2 d Ci r. 2 0 0 9); Es t at e o f Yo u n g v . Co m m is si o n er, 8 1 T.C. 8 7 9 , 8 8 1 (1 9 8 3 ). W e are “ wi th o u tau th o ri ty t o en l arg e up o n t h ats t atu t o ry g ran t .” Kas p er v . Co m

m i s s i on er, 1 3 7 T.C. 3 7 , 4 0 (2 0 1 1). Res po n den t’ s m o t i o n t o d i s m i s s fo r l acko f ju ri s d i ct i o n req u i res th atwe d et erm i n e wh et h er we h av e ju ri s d i ct i o n , i n th i s cas e, t o ad dres s p et i t i o n er’ s ch al l en g e t o h er u n d erl y i n g l i ab i l i ty fo r th e s ect i o n 6 0 3 8 p en al t i es . Ou r ju ri s d i ct i o n o v er p as s p o rtcas es i s d efi n edb y s ect i o n 7 3 4 5(e), cap t i o n ed

“ J u d i ci al rev i ew o f cert i fi cat io n .” Itp ro v i des th ata t ax p ay er wh o h as recei v eda
n o t i fi cat i o n u n d er s ect io n 7 3 45 (d ) “ m ay b ri n g a ci v i l act i o n ag ai n s t th e Un i t ed St at es i n a [Fed eral ] d i s tri ctco u rt* * * o r ag ai n s tth e Co m m i s s i o n er i n th e Tax Co u rt .” Sec. 7 3 4 5 (e)(1 ). Th e s t atu t e s p eci fi es n o t i m e l i m i tfo r t h e co m m en cem en to f s u ch a ci v i l act i o n . Cf. s ec. 6 2 13 (a) (req u iri n g th ata p et i t io n i n a d efi ci
en cy cas e b e fi l edwi thi n 9 0 d ay s o f t h e m ai l in g o f a n o t ice o f d efi ci en cy ). Pet i
t i on er fi l edh er p et i t i on o n Ap ri l 8 , 2 01 9 , wh i ch was 1 1 2 d ay s aft er th e No ti ce- 1 1 -

CP5 0 8 C was s en t t o h er. Sect i o n 7 3 4 5 (e)(1 ) s up pl i es n o b as i s fo r fi n di n g h er p et i t i o n u n t i m el y . Sect io n 7 3 4 5 (e)(1 ) ci rcu m s cri b es qu i t e n arro wl y o u r ju ri s di ct i o n i n p as s po rt
cas es . Th e o n ly

d et erm in at i o n we are au th o ri zedt o m ak e i s wh et h er t h e Co m m i s s i on er’ s cert ifi cat io n o f a t ax pay er as a p ers o n h av i n g a s eri ou s ly d el i n qu en tt ax d eb t (o r h i s fai l u re t o rev ers e a cert i fi cat i o n ) “ was erro n eo u s .” Sec. 7 3 4 5 (e)(1 ). An dthe o n l y

rel ief we are au th o ri zedt o g ran ti s t o o rd er res p o n d en t“ t o n ot i fy th e Secret ary o f St at e t hats u ch cert i fi cat io n was erro n eo us .” Sec. 7 3 4 5(e)(2 ). Th e s t atu te’ s l eg i sl at i v e h i s t o ry em ph as i zes th e n arro ws co p e o f o u r ju ri s d i ct i o n i n s u ch cas es . Th e co n feren ce rep o rts t at edth ats ect i o n 7 3 45 p ro vi d es

“ l i m i t edju di ci al rev i ew o f t h e cert i fi cat i o n o r a fai l u re t o rev ers e a cert ifi cat i o n .” H.R. Co n f. Rep t . No . 1 1 4 -3 5 7 , at5 3 2 (2 0 1 5 ). Th e J o i n t Co m m i t t ee o n Tax at i o n
s i m i l arl y d es cri b edthe s t atu t e as “ al l o w[i n g] l i m i tedju d i ci al rev i ew o f a wro n g fu l cert ifi cat i o n (o r fai l u re t o d ecert i fy ).” St aff o f J . Co m m . o n Tax at i o n , Gen eral Ex p lan at i o n o f Tax Leg i s l at io n En act edi n 2 0 1 5 , at 9 3 (J . Co m m . Pri nt2 0 1 6 ). It
ex p lai n edth at th e Co u rt , up o n d et erm i n i n g th ata cert i fi cat i on was erro n eo u s ,

“ m ay o rd er t h e Secret ary

o f t h e Treas u ry

t o n o ti fy th e Secret ary

o f St at e o f t h e
erro r. No o th er rel ief i s au th ori zed .” Ib id
.- 1 2 -

In s h o rt , s ect i o n 7 3 4 5 (e) l i m i ts o u r ju ri s d i ct i o n t o d et erm i ni n g wh et h er t h e Co m m i s s i o n er erred i n cert ify in g (o r i n fai l in g t o rev ers e a cert i fi cat i o n ) t h ata t ax p ay er o wes a “ s eri o u s l y

d el i n qu en tt ax d eb t ” as d efi n edi n s ect i o n 7 3 4 5 (b ). W e are t h us au th ori zedt o co n si d er (fo r ex am p le) wh et h er th e t ax pay er’ s as s es sed Fed eral t ax l i ab i l i ty

ex ceed s $ 50 ,0 0 0 (as ad

ju st edfo r i n fl at i o n), wh eth er t he IRS h as co m m en cedco ll ect i o n act io n wi th res p ectt o th atl i ab i l i ty , wh et h er co l l ect i o n
o f t h e t ax d eb t i s s u s pen d edb ecau s e a CDP h eari n g i s p en d i n g , o r wh et h er t h e t ax p ay er i s p ay i n g th e t ax d eb ti n a t i m el y m an n er u n der a co l l ect i o n al tern at i v e. See s ec. 7 3 4 5 (b ). W e are al s o au th o ri zedt o co ns i d er wh et h er t h e t ax d eb t“ h as b een fu l l y

s at i s fi ed o r h as b eco m e l eg al l y u n en fo rceab l e.” Sec. 7 34 5 (c)(2 )(A). Th e l at t er wo u l db e t ru e wh ere t h e co ll ect i o n p eri o do f l i m i t at i o n s h adex pi red
. See s ec. 6 5 0 2 (a). 4 Th ere i s n o th i n g i n t h e t ex to f s ect i o n 7 3 4 5 thatau tho ri zes u s t o red et erm i n e p et i t i o n er’ s u n derl y i n g l i ab i l it y fo r t h e p en al ti es th e IRS h as as s es s ed
. Wh ere Co n g res s h as au th o ri zedu s t o co n si d er a t ax p ay er’ s u nd erl y i n g l iab i l i ty fo r an

4 Cf. s ec. 6 3 2 5 (a)(1 ) (cro s s -referen cedi n s ec. 7 3 4 5 (c)(2 )(A)) (p ro v i d i n g th at th e Secret ary

s h al l rel eas e a t ax l i en i f “ th e l i ab i l i ty fo r t h e am o un tas s es s ed* * * h as b een fu l l y

s at i s fi edo r h as b eco m e l eg al l y u n en fo rceab le”); s ec. 6 4 0 2 (e)(5 )(B) (d efi ni n g a “ p as t -du e, l eg al ly en fo rceab l e St at e i n co m e t ax o b l i gat i o n ,” fo r p u rp o s es o f au th o ri zi n g i n t ercep to f a t ax p ay er’ s Fed eral i n co m e t ax refu n d , t o i n cl u d e an as s es s edt ax “ wh i ch h as n o tb een d el i n quen tfo r m o re t han 1 0 y ears ”).- 1 3 -

as s es s edt ax wh enrev iewi n g IRS ad m i n i s trat i v e act i o n i n o th er co n t ex t s --fo r ex am pl e, i n CDP cas es --Co n g res s h as m ad e t hi s cl ear i n th e s tatu te’ s t ex t . See s ec. 6 3 3 0 (c)(2 )(B) (au th o ri zi n g rev i ew o f “ ch al l en g es t o th e ex i s ten ce o r am o u n to f t h e
u n d erl y i n g t ax l iab i l i ty ” i n s p eci fi edci rcu m s t an ces ). Co n g res s i n cl u d edn o s u ch
au th o ri zat i o n i n s ect i o n 7 34 5
. 5 No r h as p et i t i on er ci t ed an y o th er Co de p ro v i si o n th atg ran t s u s juri s d i ct i o n t o d et erm i n e, at th i s jun cture, h er u n d erl y i n g l i ab i li ty fo r t h e s ect i o n 6 0 3 8 p en al
t i es . Aft er th e IRS m ai l s a t ax p ay er a t i m el y n o t i ce o f d efi ci en cy , th i s Co u rth as juri s d i ct i o n t o red et erm in e d efi ci en ci es i n i n co m e, es t at e, an dg i ftt ax es “ im p o s ed b y s ub t i t l e A o r B” an d d efi ci en ci es i n cert ai n ex ci s e t ax es i m p o s edb y “ ch ap t er 4 1 , 4 2 , 4 3 , o r 4 4 .” Secs . 6 2 1 2 (a), 6 2 1 3 (a). Th e s ect i o n 6 0 3 8 p en al ti es as s es s ed ag ai n s tp et i t i o n er are i m

p o s edb y s ub t i t l e F, ch ap t er 6 1 , an dth u s l i e o u t s i d e o u r d efi ci en cy

juri s d i ct io n . Pet i t i on er d o es n o tco n t en dth ats h e recei v eda n ot i ce o f

5 Pet i t i on er u rg es th at th e s t atu t e au tho ri zes u s t o ex erci s e d e n ov o rev i ew t o co n si d er “ th e l aw an dev i d en ce n eces saryt o d et erm i n e wh et h er t h e u n d erl y i n g as s es s m en tm ad e i s l eg al l y

en fo rceab l e” wi th in the m ean i n g o f s ect io n 7 34 5 (b )(1 ). Pet i t io n er ci t es n o au th o ri ty fo r t h e p ro p o s i t i o n th atthi s Co urtwo u l dex erci s e d e n o v o rev i ew o f t h e Secret ary ’ s cert ifi cat i on (o r refu s al t o rev ers e a cert i fi cat i o n ). Th e s tatu t e i s s i l en to n thatp oi n t , an dth i s Co u rth as n o ty etd eci d edth e p ro p er s t an d ardo r s co p e o f rev i ew i n p as s p o rtcas es . In an y ev en t , o u r rev i ew wo u l dex t en do nl y t o co n s i d eri n g wh et h er an as s es s edt ax “ h as b een fu l l y s at i s fi edo r h as b eco m e l eg al l y

u n en fo rceab l e,” s ec. 7 3 4 5 (c)(2 )(A) (em p h as is ad d ed ), e.g ., b y ex p irat i o n o f t h e co l l ect io n p eri o d o f l i m i t at io n s . No th i n g i n the s t atu t e au th o ri zes u s t o red et erm i n e t h e t ax p ay er’ s u n d erl y i n g l i ab i li ty fo r t he t ax th atwas as s es s ed
.- 1 4 -

d efi ci en cy

wi th res p ectt o thes e p en al t i es . Th e n o t i ce s he recei v ed , up o n wh i ch th i s cas e i s b as ed , was the No t i ce CP5 08 C. In CDP cas es we h av e ju ri s d i ct i o n t o co n s id er a t ax pay er’ s ch al l en ge “ t o th e
ex i s t en ce o r am o u n to f t h e u n d erl y i n g t ax l i ab i l it y * * * i f t h e p ers on d i d n o trecei v e an y s t atu t o ry n o ti ce o f d efi ci en cy

fo r s u ch t ax l i ab i l it y

o r d i dn o to th erwi s e h av e ano p po rtu ni ty to d i sp u te [i t ] .” Sec. 6 3 3 0 (c)(2 )(B), (d )(1 ). Bu t o ur ju ri s d i ct i on t o co n s i d er s u ch a ch al l en ge i s co n d it i o n edo n th e IRS’ i s s u an ce o f a n o t i ce o f d et erm i n at i o n fo l l o wi n g co m p l et i o n o f a CDP h eari n g an dth e t ax p ay er’ s t i m el y p et i t i o n i n res p o n s e t o th atn o t i ce. See s ec. 6 3 3 0 (d )(1 ); W eb er v . Co m m is s i o n er, 1 2 2 T.C. 2 5 8 , 2 6 1 (2 0 0 4 ); Sarrel l v . Co m m i s s i on er, 1 1 7 T.C. 1 2 2 , 1 2 5 (2 0 0 1 ). Pet i ti o n er d o es n o tco n t en d (n o r d o es th e reco rdes t ab l i sh ) t h ats h e h as recei veda
n o t i ce o f d et erm i n at i on reject i n g a ch al l en g e t o the s ect io n 6 03 8 p en al t i es . Qu i t e th e co n trary --a CDP h eari n g i s cu rren tl y p en d i n g b efo re th e IRS Ap p eal s Offi ce at wh i ch s h e i s m ak i n g th atv ery arg u m en t . W e acco rd i n g l y co ncl u d e t h atn ei th er s ect i o n 7 3 4 5 n o r an y o th er Co d e p ro v i s i o n g ran t s u s juri s di ct i o n t o co n s i d er, atth i s t i m e an di n th i s cas e, p et i t i o n er’ s
co n ten t i o n th atth e s ect i o n 60 3 8 p en al t i es were “ i l leg al l y as s es s ed .” Pet i t io n er
m ay h av e a p rep aym en tfo ru m i n th i s Co u rtfo r co n t es ti n g th o s e p en al t i es up o n h er recei p t o f a n o t i ce o f d et erm i nat i o n fo l l o w in g co m p l et i on o f h er CDP p ro ceed i n g .- 1 5 -

See Fl u m e v . Co m

m is s i o n er, T.C. M em o. 2 0 1 7 -2 1 (rev i ewi n g an u n d erl y in g l i ab i
l i ty ch al l en g e t o s ect io n 6 03 8 p en al t i es i n CDP cas e wh ere t ax p ay er p ro p erl y rai s edth ati s s u e duri ng th e CDP h eari n g ). Otherwi s e h er rem ed y i s t o p ay th e l i ab i l i ty , fi le a cl ai m

fo r refu nd , an dfi l e a refu n ds u i ti n Fed eral Di s tri ct Co u rto r th e U.S. Co u rto f Fed eral Cl ai m s . See Bed ro s ian v . Un i t edSt at es , 9 1 2 F.3 d1 4 4 , 1 4 9 n .1 (3 dCi r. 2 0 18 ) (“ [C] l ai m s b ro u g htb y t ax p ay ers t o reco v er p en al t i es as s es s edu nd er s ect i o n 6 0 38 (b ) * * * are b ro u g h tu nd er t h e t ax refu n d s tatu t e[.] ”); Dewees v . Un it edSt at es , 2 7 2 F. Sup p . 3 d9 6 , 1 0 2 (D.D.C. 2 0 1 7 ) (“ Fu l l p aym en t
o f t h e am o u nto w edfo l l o wedb y a l aws u i ti n a d is tri ctco u rts eek i ng a refu n di s a p ro p er p ro cedu re fo r ch al l en g i ng p en al t i es as s es s edu n d er § 6 0 3 8
. ”), aff’ d , 7 6 7 F. Ap p ’ x 4 (D.C. Ci r. 2 01 9 ). 6

6 Th i s cas e rep res en t s p et i t i o n er’ s s eco n d p rem ature at t em p tt o ch al l en g e t h e s ect i on 6 0 3 8 p en al t i es i n t h i s Co u rt . InRu es ch v . Co m m i s s i o ner, T.C. Dk t . No
. 2 1 7 7 -1 8 L, aff’ d b y o rd er, 8 0 5 F. Ap p ’ x 1 2 (2 dCi r. 2 0 2 0 ), p et i t i o n er s o u gh tt o ch al l en g e t h es e p en al t ies i n a CDP cas e i n vo l v i n g co ll ect i o n act i o n fo r h er 2 0 1 0 t ax y ear. W e h el dthatwe l ack edjuri s d i ct i o n t o ad dres s h er p en al ty ch al l en g e, n o t i n g th atth e IRS Ap p eal s Offi ce h adas y etm ad e “ no d et erm i n at i o n wi th res p ect t o the s ect i o n 6 0 3 8 (b ) p en al ty .” Id . (o rd er d at edJ an . 3 0 , 2 0 1 9 ). Th e U.S. Co u rto f Ap p eal s fo r t h e Seco n dCi rcu i taffi rm ed , s t at i n g : “ [T] h e Tax Co u rtl ack edjuri s d i ct i o n o v er t h e § 6 03 8 (b ) p en al t y an d th erefo re p ro p erl y

d i s m i s sedth e cas e. Of co u rs e, * * * [M rs . Ru es ch ] m ay co n t i n u e t o ch al l en g e t h e § 6 0 3 8(b ) p en al ty at an o th er CDP h eari n g * * * . Iti s i n th atp ro ceed in g , n o th ere, t h at * * * [s h e] s h o u ldp res s h er arg u m en t * * * [ag ai n s t ] th e § 6 03 8 (b ) p en al ty .” Ru es ch , 8 0 5 F. Ap p ’ x at 1 4
.- 1 6 -

C. M o o tn es s Pet i t i o ner p ro p erl y i n v o k edo ur ju ri s di ct i o n t o d et erm i ne wh et h er t h e IRS erred i n cert i fy i n g th at s he was a p ers on o wi n g a s eri ou s ly d el i n qu en tt ax d eb t . See s ec. 7 3 4 5 (e). J u ri s d i ct io n, o n ce p ro p erl y i n v o ked , g en eral l y rem ai n s wi th th e Co u rtu n t i l we d i s p o se o f t h e co n tro v ers y . See Naft el v . Co m m i s si on er, 8 5 T.C. 5 2 7 , 5 3 0 (1 9 8 5); Do rl v . Co m m i s s io n er, 5 7 T.C. 7 2 0 , 7 2 2 (1 9 7 2 ), aff’ d , 5 0 7 F.2 d 4 0 6 (2 d Ci r. 1 97 4 ). Res p o n den tco n t en d s th atth ere rem ai ns n o ju s t i ci ab l e cas e o r
co n tro v ers y

b et w een th e p art i es wi th res p ectt o p et i t i o ner’ s p as s p ortcl ai m s b ecau s e t h e IRS h as rev ers edi t s cert ifi cat i o n an ds o i nfo rm edth e Secret ary o f St at e. W e ag ree. Al th ou g h the Tax Co u rt i s an Art i cl e I co u rt , th e “ cas e o r co nt ro v ers y ” requ i rem en tu n d er Art icl e III ap p l i es t o th e ex erci s e o f o u r ju di ci al p o wer. See Bat t atv . Co m

m i s si o ner, 1 4 8 T.C. 3 2 , 4 6 (2 01 7 ) (ci t i n g cas es ); An th o ny v . Co m m i s s i o n er, 6 6 T.C. 3 6 7, 3 7 0 (1 9 7 6 ) (“ W i th o u ta ‘ cas e’ o r ‘ co n tro v ers y ’ b efo re u s , we wo u ldb e ex erci si n g n o nju di ci al p o wers , an do ur o p i n io n s wo u l dn o tb e rev i ewab le[.] ” (fn . ref. o m i t ted )), aff’ dwi th o u tp ub l i s h edo p in i o n , 5 6 6 F.2 d1 1 6 8 (3 dCi r. 1 9 7 7). Acco rd i n g ly , we wi l l d i s m i s s a cas e as m o o t i f t h e p art i es ’ s ub sequ en t act i o n s h av e p ro duced a s i tu at i on i n wh ich n ei th er p art y ret ai n s an y

“ l eg al l y
co g ni zab l e i n t eres ti n th e o u tco m e.” Ci ty o f Eri e v . Pap ’ s A.M
. , 5 2 9 U.S. 2 7 7 , 2 8 7- 1 7 -

(2 0 0 0) (q u o ti n g Ct y . o f Lo s An g el es v . Dav i s , 4 40 U.S. 6 2 5, 6 3 1 (1 9 7 9)). A cas e b eco m es m o o t wh en “ th e co u rtcan p ro v i d e n o effect i v e rem ed y b ecau s e a p art y h as al read y

‘ o b tai nedal l th e rel i ef t h at [i th as ] s o u g ht .’ ” Co n s erv at i o n Fo rce, In c.
v . J ewel l , 7 3 3 F.3 d1 2 0 0 , 1 2 04 (D.C. Ci r. 2 0 1 3 ) (al terat i o n i n o ri g in al ) (qu o t i n g M o n zi l l o v . Bi l l er, 7 3 5 F.2 d1 4 5 6 , 1 4 5 9 (D.C. Ci r. 1 9 8 4 )). In th e cas e ath an d , th e IRS cert i fi edp et it i on er as a p ers o n o w i n g a s eri o u sl y d el i n qu en tt ax d eb t . Pet it i o n er, b el i ev i n g th atcert i fi cat i on t o b e erro n eo u s , p et i
t i on edth i s Co u rtfo r rev i ew. Th e rel i ef t hats h e s o ug h t--an d t h e rel i ef t h atth e s t atu t e au th o ri zes u s t o g ran t , i f we d et erm i n e a cert i fi cat i o n t o h av e b een i m p ro p er-- i s an o rd er d irect i ng res p o n d en tt o “ n o t i fy th e Secret ary o f St at e t h ats u ch cert i fi
cat i on was erro n eo u s .” Sec. 7 3 4 5 (e)(2 ). Here, t he IRS h as co n ced edth ati t s cert i
fi cat i o n was erro n eo us , h as rev ers edi ts cert i fi cat i on , an dh as s o n ot i fi edth e St at e Dep art m en t . Becau s e p et it io n er h as recei v edal l o f t h e rel i ef t h ats h e req u es t ed
an d th atwe co u l dg ran t , we are u n ab l e t o affo rdh er an y fu rt h er rel i ef wi th res p ect t o h er p as s po rtcl ai m s . As t o th o s e cl ai m s th i s cas e i s th erefo re m o o t . D. Pet i t i o ner’ s Arg um en t s Pet i t i o ner ad v an ces s ev eral arg u m en t s i n s up p o rto f a co n traryco n cl u s i o n. Her p ri n ci p al co n t en t i on i s th atth i s cas e wi ll n o tb eco m e m o otu n l es s an du n t i l th e- 1 8 -

IRS “ u nco nd it i o n al l y

ab at es th e [p ] en al t i es an dwi th draws th e * * * [NFTL fi l i n g] wi th p reju d i ce.” W e ad dres s h er arg u m en t s i n tu rn . 1
. “ Vo l un t ary

Ces s at i o n ” Pet i t i o ner rel i es o n th e g en eral p ri n ci pl e t h atv o lu nt ary ces s at io n o f an act i
v i ty b y an o ffen di n g p art y

d o es n o tn eces sari l y

ren d er a cas e m o ot . See Dav i s , 4 4 0 U.S. at6 31 . Th e rat i o n al e s up p o rt i n g “ v o l u nt ary ces s at i o n as an ex cep t i o n t o
m o ot n es s i s th at , wh i l e t h e d efen d an t ’ s u ni l at eral ces s at i o n o f t h e ch al l en g edco n du ctm ay g ran tth e p l ai n t i ff rel i ef, t h e d efen d an t i s ‘ free t o retu rn t o [i t s ] o l dway s’ --t h ereb y s ub ject i n g th e p lai n t i ff t o th e s am e h arm b u t , atthe s am e t im e, av o i d i n g ju d i ci al rev i ew.” Qas s i m v . Bu s h , 4 6 6 F.3 d 1 0 7 3 , 1 0 7 5 (D.C. Ci r. 2 0 0 6 ) (al t erat i o n i n o ri g i n al ). To i n v es t i gat e t h i s qu es t io n we n o rm al l y as k(1 ) wh et h er t h ere i s n o reas o nab l e ex p ect at i o n t h atth e al l eg ed v i o l at i o n wi l l recu r an d(2 ) wh et h er i n t eri m rel i ef o r ev en t s h av e co m p l et el y erad icat edth e effect s o f t h e al l eg edv i o l at i on . Dav i s , 4 4 0 U.S. at6 3 1 . “ Wh en b o th co n d i t i o n s are s at i s fi edi tm ay b e s ai d th atth e cas e i s m oo tb ecau s e n ei th er p art y h as a l eg al l y

co gn i zab le i n t eres ti n th e fi nal det erm i n at io n o f t h e u n derl y i n g qu es ti o ns o f fact an dl aw.” Ib i d
. Bo th co nd i t i o n s are s at i s fi edh ere. Two i nt erv en i n g ev en t s --t h e Co m m i s s i on er’ s rev ers al o f h i s cert i fi cat i o n an d h is n o t i fi cat io n t o th e Secret ary o f St at e th atth e cert i fi cat i o n was erro n eo u s--h av e affo rd edp et it i o n er al l o f t h e rel i ef th at- 1 9 -

s h e req u es t edwi th res p ectt o h er p as s p o rtcl ai m s . Th o s e act i on s b y res p o n d en t h av e co m p l et el y erad i cat edthe effect o f th e erro n eo us cert i fi cat i o n , wh ich i s th e
v i o l at i o n th atp et i t io ner al l eg edwi th res pect t o th es e cl ai m s . No r i s there an y reas on ab l e ex p ect at i o n th atth e al l eg ed v i o l at i o n wi l l recu r. Pet i t io n er’ s ch al l en g e t o h er l i ab i l i ty fo r t h e p en al t i es i s n o w p en d i n g i n th e IRS Ap p eal s Offi ce. Un d er s ect i o n 7 3 4 5 (b )(2 )(B), t he IRS i s b arred fro m recert i fy i n g p et i t i o n er as a p ers o n wi th a s eri o us l y d el i n qu en tt ax d eb tdu ri n g th e p en d en cy o f th atCDP p ro ceed i n g . If p et i t i o n er i n t h atp ro ceed i ng i s d et erm i n edt o h av e n o l i ab i l i ty fo r t h e p en al t i es , there i s n o reas o n t o b el i ev e t h atth e IRS wo u ldd efy th e l aw b y recert i fy in g h er an yway . An di f s h e i s u l t i m at el y d et erm i n edt o b e l i ab l e fo r t h e p en al t i es , a cert i fi cat io n b y th e IRS at th atp o i n two u ldn o tb e a “ v i o l at i o n ,”
as s u m in g th atth e o th er req u i rem en ts fo r a “ s eri o us l y d el i n qu en t t ax d eb t ” are t h en
m et . See s ec. 7 3 4 5 (b ). If p et i t i o n er b el i ev edth atth o s e o th er req u i rem en t s were
n o tm et , s h e wo u l d b e free t o s eekrev i ew o f t hatfu ture cert i fi cat i o n i n th i s Co u rt atthat ti m e. An y fu tu re v i o l at i o n , s h o u l di t o ccu r, wi l l n o tes cap e ju d i ci al rev i ew. Pet i t i o ner errs i n rel y i ng o n Vi g o n v . Co m m i s s i o ner, 1 4 9 T.C. 9 7 (2 0 1 7 ), a CDP cas e, t o s up p o rth er co n t en t i o n th atth i s cas e i s n o t m o o t . Th e IRS i n th at
cas e as s es s edp en al t i es u n d er s ect i o n 6 7 0 2 an d fi ledan NFTL; the t ax p ay er requ es teda CDP h eari n g an d ch al l en g edh is u n d erl y i n g l i ab i l i ty . Id . at9 8 -9 9 . Th e- 2 0 -

IRS s ub s equ en t l y

ab at edth e p en al ti es , rel eas edth e l i en , an dfi l ed a m o t i o n t o d i s m i s s the cas e as m o o t. Id . at1 00 -1 0 1. W e h el dth atth e cas e was n o tm o o t b ecau s e th e IRS, reg ard in g the p en al t i es as s ub jectt o n o p eri odo f l i m i t at i o n s , res erv edth e ri g h t t o reas s es s tho s e s am e p en al t i es atan y t i m e. Id . at1 0 8 , 1 1 1
. Th i s cas e d iffers fro m

Vi g o n i n two res p ect s . Fi rs t , s ect i o n 6 3 30 (b )(2 ) p ro v i d es th ata t ax p ay er “ s h al l b e en t i t l ed t o o n l y o n e [CDP] h eari n g * * * wi th res p ectt o t h e t ax ab l e p eri o d .” Th i s p ro v i s i o n creat eda ri s k t h at , i f we d is m i s s edth e CDP cas e an d th e IRS l at er reas s es s edth e p en al ti es , th e t ax p ay er wo u l dn o tb e en t i tl edt o a s eco ndCDP h eari n g an dwo u l dth u s h av e n o p rep aym en tfo ru m i n wh i ch t o d is p u t e t he p en al ty l i ab i l i ty . See Vi g on , 1 49 T.C. at1 0 9 n .6 . Th i s i d i o s yn cracy o f CDP l i t i g at io n d o es n o tex i s th ere: Pet it i o n er wi ll b e p erfect l y free t o
s eekju d i ci al rev i ew o f an y fu tu re cert i fi cat i o n i f an dwh en i ts h o u l d o ccu r. Seco n d , th ere i s n o reas o n ab l e ex p ect at i on h ere t h atth e al l eg edv i o l at i o n wi l l recu r. Th e IRS rev ers edi t s fi rs tcert i fi cat io n , du e t o a co m p u t er co d in g erro r. Hav in g d i s co v eredth aterro r, i trecert ifi edp et i t i on er o n e weekl at er, ata t i m e wh en h er CDP h eari n g req u es t wi th res p ectt o t h e l i enn o t i ce was n otp ro p erl yreco rd ed
. On ce t h e IRS d is co v eredth atp et it i on er h ad fi l eda t i m el y CDP h eari n g req u es t , i tp ro m

pt l y rev ers edi t s cert i fi cat i o n a s eco ndt i m e.- 2 1 -

Th i s trackreco rd s ug g es t s s om e d efi ci en ci es i n res p on d en t ’ s co m pu t eri zed
reco rd k eep i n g s y s t em s . Bu twe s ee n o i nd i cat i o n th atth e IRS i s i nt en t io n al l y
s eek i n g “ t o retu rn t o [i t s ] o l dway s ” b y s ub ject i n g p et i t i o n er “ t o t h e s am e h arm b u t , atth e s am e t i m e, av oi d i n g ju d i ci al rev iew.” Qas s i m , 4 6 6 F.3 dat1 07 5 . In
rev ers i ng i t s cert i fi cat i o n o f p et i t io n er--t h e fi rs tt i m e b ecau s e o f a co d i n g erro r, th e
s eco n dt i m e aft er d i s co v eri n g p et i ti o n er’ s CDP h eari n g req u es t --an dthen n o t i fy i n g th e St at e Dep art m en t , th e IRS co m p l i ed wi th i ts o b l i g at io n s u n d er s ect i o n 7 3 4 5
. Co n g res s req u iredth at th e Secret ary o f St at e m

u s t b e n o t i fi ed“ i f s u ch cert i fi cat i o n i s fo u n dt o b e erro n eo us .” Sec. 7 3 4 5 (c)(1 ). An dCo n g res s req ui redth at , “ [i ] n th e
cas e o f a cert ifi cat i o n fo u ndt o b e erro n eo u s , s u ch n o t i fi cat i o n s hal l b e m ad e as
s o o n as p ract i cab l e aft er s u ch fi n d i n g . ” Sec. 7 3 45 (c)(2 )(D). In b o th i n st an ces th e IRS s ou g h tt o co m

p l y wi th i t s s t atu t o ry

o b l i g at i o ns as i t(p erh ap s i m p erfect l y )
u n d ers t o o dth em . Th ere i s n o th i n g t o s u g g es tth at the IRS i s l y i n g i n wai t , i n t en d
i n g t o p o u n ce o n p et i t io ner i m p ro p erl y . Pet i t i o ner’ s ch al l en g e t o h er u n d erl y i n g l i ab i l i ty fo r t h e p en al t i es wi l l b e ad
dres s eddu ri n g th e CDP p ro ceed i n g , an di ti s reas o n ab l e t o ex p ect th atan y fu tu re IRS act i o n reg ard in g cert ifi cat io n wi l l b e co n s i s t en t wi th the o u tco m e o f t h atp ro ceed i n g . If t h e IRS ag ai n cert i fi es p et i t i o ner fo l l o wi n g th e co n cl u si o n o f t h atp ro -- 2 2 -

ceed i n g , an di f s h e b el i ev es thats u ch cert ifi cat i o n i s erro n eo u s , s h e wi l l b e free t o
s eekju d i ci al rev i ew b y

co m m en ci n g a n ew p as s p o rt act i o n atth at t im e. 7 2
. Oth er Arg u m en t s Pet i t i o ner co n ten d s th ata “ s eri ou s l y d el i n qu en tt ax d eb t ” can b e cert i fi ed
an d ch al len g edo n l y

o nce, an dth atres ju d i cat a wo u ldp rev en t a t ax p ay er fro m
co n tes t i ng a s eco n dcert i fi cat i on i f o n e were m ad e. Pet i ti o n er ci tes n o au th o ri t y fo r t h i s p ro p o s i t io n , wh i ch m ak es n o s en s e t o u s . A cert i fi cat io n th ata t ax p ay er h as a s eri o us ly

d el i n quen tt ax d eb ti s m ad e ata p art i cu l ar t i m e. If t h e IRS rev ers es
an i n i t ial cert i fi cat i on an ds ub s equ en t l y m ak es a s eco n dcert i fi cat io n , th e co rrect n es s o f th e l at t er wo u l dd ep en d o n th e fact s ex is ti n g atth att i m e, e.g ., wh et h er t h e d eb t ex ceed ed th e $ 5 0 ,0 0 0 l i ab i l i ty th res h ol d(as ad

ju st edfo r i n fl at i o n ), wh et h er

7 Pet i t i on er rel i es o n t wo o t h er cas es th atwe l i kewi s e fi n d i n ap p o s i t e. In Fi rs t Ro ckBap t is tCh u rch Ch i l dDev . Ct r. v . Co m m i ss i o n er, 1 4 8 T.C. 3 8 0 (2 0 1 7), th e Co u rth el dth atwi thd rawal o f an NFTL fi l i n g d i d n o t b y i t s el f m o otth e en t i re CDP cas e, b ecau se o th er d et erm i n at i o n s rem ai nedb efo re t h e Co u rt . See i d . at 3 8 8 . Here, t h e o n ly

i s s u e o ver wh i ch we h av e ju ri s d i ct io n i s th e cert ifi cat i o n o f p et i t i o n er; th atcert ifi cat i o n h as b een rev ers ed , th e Secret ary o f St at e h as b een s o n o t i fi ed , an dn o o th er i s su e rem ai n s s ub jectt o o u r rev i ew. In Dri l l i n g v . Co m m i s s i on er, T.C. M em o . 2 0 1 6-1 03 , 1 1 1 T.C.M . (CCH) 1 4 4 5 , we h el dth atthe cas e was n o tm o o t b ecau s e, ev enth o u g h p arto f t h e l i ab i l it y h adb een p ai d, the i s s u e o f l i en wi th drawal rem ai n edb efo re t h e Co u rt . Id . at1 4 62 . Here, t h ere i s n o th i n g l eftfo r th e Co u rtt o rev i ew an d n o fu rt h er rel i ef can b e g ran t ed . See W i l l s o n v . Co m m i s s i on er, 8 0 5 F.3 d3 1 6 , 3 2 0 -3 2 1 (D.C. Ci r. 2 0 15 ) (d i s m i s s in g a cas e as m o o tn o t wi th s t an d i n g a rem ai n i n g d i sp u t e b et ween th e IRS an dth e t ax pay er o v er wh i ch th e co u rtd i dn o th av e ju ri s d i ct i o n ).- 2 3 -

th e t ax p ay er was m ak i n g p aym en t s p u rs u an t t o a co l lect i o n al t ern at iv e, o r wh et h er
an o th er s t atu t o ry

ex cep t i o n ap p l i ed . See s ec. 7 3 4 5 (b ). Si n ce t h e co rrect n es s o f each cert ifi cat i o n wo u ldd ep en do n th e fact s ex i s t i n g at the t im e i twas m ad e, res ju d i cat a wo u ldn o tp rev en t a t ax p ay er fro m ch al l en g in g a l at er cert ifi cat i o n i n th i s Co u rt . See M cCl es k ey

v . Zan t, 4 9 9 U.S. 4 6 7 , 4 8 0 (1 9 9 1 ) (n o t i ng th at res ju d i cat a d o es no tap p l y

“ wh en s ub s equ en to ccu rri n g ev en t s h av e ch an g ed th e s i tuat i o n o f th e p et i t i o n er s o as i n factt o p res en ta n ew cas e fo r co n si d erat io n ” (q u ot i n g Ex p art e Cu dd y , 4 0 F. 6 2 , 6 6 (C.C.S.D. Cal . 1 8 89 ))). Pet i t i o ner as k s th at we ex erci s e “ ju d i ci al d i s cret i o n ” t o i s s u e a ru l in g th at d et erm i n es h er u n derl y i n g t ax l i ab i li ty n o w, rat h er t h an awai tth e o ut co m e o f t h e CDP l i t i g at i on . Becau s e we cu rren tl y l ack juri s d i ct i o n o v er h er u n d erl y i n g l i ab i
l i ty ch al l en g e, we m

u s t d em ur t o th is req u es t . Th ere cl earl y rem ai ns a d i s p u t e b etween p et i t i o n er an d t h e IRS ab o utth e p en al ti es , b u tth atd i s pu t e d o es n o t g i v e ri s e t o a ju s ti ci ab le co nt ro v ers y i n th i s cas e. “ [I] f a cas e rai s es a qu es t io n wi th i n th e juri s d i ct i o n al p u rv i ew o f t h e [T] ax [C] o urt , an d t h atqu es t i on i s s ub s equ en tl yres o l v ed , th e cas e i s m o o tn o twi th s t an d in g th e ex i s t en ce o f o th er l i v e co n tro v ers i es b et ween th e t ax p ay er an dthe IRS” t hatcu rren t l y l i e o u t s i d e t h is Co u rt ’ s juri s d i ct i on . W i ll s o n v . Co m

m i s s i o n er, 8 0 5 F.3 d3 1 6 , 3 2 0 (D.C. Ci r. 2 0 1 5 ).- 2 4 -

Res o l u t i o n o f p et i t io ner’ s d i s p u t e wi th th e IRS o v er t h e p en al t i es wo u l d h av e n o effect wh at ev er o n th e d i s p o s i t i o n o f t hi s p as sp o rtl i t i g at i o n. Th e cert i fi
cat i on p et i t i o n er ch al l en g edh as al read y b een d et erm i nedt o b e erro n eo u s --al b ei t
o n a d i fferen tg ro un dthan the ab s en ce o f a t ax d eb t --an dth e IRS h as n o ti fi edth e St at e Dep art m en tth atth e cert i fi cat i o n was erro n eo us . Th es e act io n s h av e affo rd
edp et i t i o n er 1 0 0% o f th e rel i ef t h ats h e req u es t edan dth atwe co u l dg i v e. “ Fo r u s t o u n d ert ak e t o res o l ve i s s u es th at wo u l dn otaffect the d i s p o s i t i o n o f t h i s cas e
wo u l d , atb es t , am o u n t t o ren deri n g an ad v i s o ry o pi n i o n . Th i s we d ecl i n e t o d o .” Green e-Th ap ed i v . Co m

m i s s i o ner, 1 2 6 T.C. 1 , 1 3 (2 0 0 6 ) (ci t i n g LTV Co rp . v . Co m m i s s i o n er, 6 4 T.C. 5 89 , 5 9 5 (1 9 7 5 )). Fi n al l y , p et i t i o n er co n t en d s th atd i s m i s s in g th i s cas e wi l l res u l ti n fi n an ci al h ard s h i p . W e are aware o f n o “ fi n an ci al h ard s h ip ” ex cep t i o n t o th e m o o tn es s d o ctri n e. A cl ai m

o f fi nan ci al h ard s h i p m ay ap p ro p ri at el y b e ad v an cedata CDP h eari n g . See, e.g ., s ec. 6 32 3 (j) (p ro v i d i ng g ro u n d s fo r l i enwi th drawal ). Pet i t i o n er’ s
v ag ue cl ai m

o f h ard s h ip s t emm i n g fro m th e co l l ect i o n act i o n d o es n o ten t i t l e h er t o an y rel i ef i n th i s cas e b ey on d rev ers al o f t h e erro n eo u s cert i fi cat i on , rel ief t h at
s h e h as al read y

recei v ed
.- 2 5 -

In co n s i derat i o n o f t h e fo reg o i n g , Ano rd er an do rd er o f d i s m i s s al fo r l acko f ju ri s d i ct io n wi l l b e en t ered
.