Robert S. Schriebman | A Professional Law Corporation | EDD Audit Representation

Call to schedule an appointment
Local: 310-997-0342
Toll-Free: 877-824-1563

Call: 310-997-0342

This office does not handle:

  • Unemployment Insurance Benefits (UI)
  • State Disability Issues (SDI)
  • Worker Compensation Issues
  • EDD Overpayments

Over 50 Years In Practice
Over 500 Articles

  1. Home
    2.  » 
  2. Articles
    3.  » ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – YOU MUST BE PROACTIVE IF YOU WANT HELP FROM THE IRS, THE FTB, OR THE EDD

ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – YOU MUST BE PROACTIVE IF YOU WANT HELP FROM THE IRS, THE FTB, OR THE EDD

By Robert S. Schriebman

2024

Introduction

If you want help in resolving your tax debts to the IRS, FTB and EDD, you must be proactive. You must also cooperate in the resolution process. The IRS has the Collection Due Process (CDP) system in place for resolving tax disputes. It is a wonderful and workable system. I ought to know because I am its author!

Richard Shaw learned this lesson the hard way. This article will discuss Richard’s case and why the workable system in place could not work for him.

The Case of Richard Shaw

Richard A. Shaw, Jr. v. Commissioner, US Tax Court, CCH TC Memo 2024-48, April 22, 2024

Richard owed the IRS over $85,000 for the tax year 2014. In an effort to collect the liability, and work things out for him, the IRS sent him a Notice of Intent to Levy and Your Right to a Hearing. A competent and caring IRS Settlement Officer (SO) informed Richard that according to IRS records, he had not filed his federal income tax returns for the years 2015-2021. The SO explained that, in order to consider a collection alternative, such as an Installment Agreement or offer in compromise, Richard needed to come into filing compliance by submitting these returns. The SO also requested that Richard prepare a completed financial statement with supporting documentation.

Richard submitted no delinquent returns, and no financial information of any kind. The SO refused to grant Richard an installment payment arrangement or any other type of payment resolution.

Richard decided to file a petition with the US Tax Court to challenge the SO’s refusal. In order to seek a review in the Tax Court, a petition must be filed within 30 days from the SO’s decision. Richard filed his petition 110 days late.

Here is a recap of Richard’s non-action:

  • He failed to file his 2015-2021 late income tax returns.
  • He failed to provide any financial information and supporting documentation to the SO.
  • He filed for Tax Court relief 110 days too late.
  • He offered the Tax Court no valid excuse or reason for being late.

When Richard filed his Tax Court petition, he acknowledged that he had “missed the 30-day petition period.” But he offered no explanation for his late filing and alleged no facts that accounted for it.

In a CDP matter the 30-day Tax Court filing deadline is not set in stone. It is subject to “equitable tolling.” This means that if one has a valid reason for being late, more time may be granted to deem the petition timely filed. Boechler, P.C. v. Commissioner, 142 S. Ct. 1493 (2022).

Some grounds that establish a reasonable cause for late filing may be the following:

  • Death
  • Serious illness.
  • Unavoidable absence.
  • Fire, casualty, natural disaster, or other disturbance.
  • Inability to obtain necessary records.

Conclusion

In Richard’s case, the Tax Court judge was left with no alternative but to deny Richard any relief potentially afforded by the Court.

It’s rare when one comes across a published case where the taxpayer did absolutely nothing to make an effort to help himself. If you owe the IRS or the EDD, and you wish to resolve the matter by making restitution or by attempting to settle your debt at a lower amount, there are procedures in place that take you by the hand and tell you what needs to be done. Richard reminds me of the old saying about taking a horse to water. You can lead the horse to the fountain, but you can’t make the horse drink.

***

Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 50 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD, and he is not employed by the EDD or any other agency of the State of California.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.

Web Site Article 800