Federal Tax Day - Current, J.3, IRS Did Not Abuse Discretion in Sustaining Levy; Additions to Tax Not Subject to Challenge (Tellock, TCM) , (Jul 21, 2026)

The IRS did not abuse its discretion in sustaining a proposed levy because an individual taxpayer failed to satisfy the filing requirements necessary for consideration of collection alternatives. The record showed that the taxpayer failed to file required returns and provide requested financial information despite multiple opportunities. Further, the taxpayer was precluded from challenging the underlying liabilities because notices of deficiency had previously been issued.

The collection action was challenged through a collection due process proceeding under Code Sec. 6330. It was contended that the IRS improperly refused to consider an offer-in-compromise or installment agreement. However, the IRS declined to consider those collection alternatives because the taxpayer failed to provide the required tax returns and requested financial information.

Further, the underlying liabilities included previously assessed additions to tax under Code Secs. 6651(a)(1), 6651(a)(2), and 6654(a). The taxpayer remained noncompliant with filing obligations despite repeated requests and additional opportunities to submit the required returns and financial information. The record showed that filing compliance was a prerequisite to consideration of collection alternatives. Thus, the IRS properly sustained the proposed levy.

D.M. Tellock, TC Memo. 2026-59, Dec. 62,869(M)