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Thursday, February 13, 2003


Calvin L. Eubanks is contesting his underlying tax liability in a collections case. This is usually not allowed, but it is if you were never given a notice of deficiency or other opportunity to contest liability before the contested collection activity began. Here, the IRS prepared the tax return for Mr. Eubanks six years late, and he apparently signed it. An installment agreement was worked out at the time of filing of $100.00 per month. After Eubanks had paid a couple thousand, IRS issued a lien, and Eubanks filed this action. Clearly, there was no notice of deficiency issued, but did the IRS fail to provide him with an opportunity to dispute the underlying tax liability? Well, that�s kind of tricky, so in a footnote Tax Court declined to consider this jurisdictional matter. They just assumed jurisdiction and ruled on the underlying liability anyway.

State Farm insurance had issued a 1099 to Eubanks in the amount of a check it gave him written in his name �DBA WHY Construction�. Eubanks claimed to have turned over the check to WHY construction, which he claimed to have been an employee of, but never received a salary from. WHY had been dissolved the year before the tax year in question by the Secretary of State of Tennessee for failing to file a report required by Tennessee�s laws. Eubanks lost.

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