Free Motion to Stay - District Court of California - California

Case 3:07-cv-02289-DMS-WMC

Document 22-5

Filed 06/18/2008

Page 1 of 97

EXHIBIT B

Case 3:07-cv-02289-DMS-WMC

Document 22-5

Filed 06/18/2008

Page 2 of 97

EXHIBIT B:
Trial Brief

by Mr. Toothacre

JUN-17-2008 13: 52 From: IRS COUNSEL SD Case 3:07-cv-02289-DMS-WMC

5195575581 Document 22-5

To: 2023070054 Filed 06/18/2008 Page 3 of 97 P.5/40

Rodney M. Toothacre) In Pro Se 13742 Indian Peak Trail Poway, Calìfomia 92064 858-513-0217

UNITED STATES TAX COURT

RODNEY M. TOOTHACRE,
Petitioner,

)

COMMISSIONER OF INTERNAL REVEN
Respondent.

) ) )
) ) ) )

Docket No. 26357-06"L"

PETITIONER RODNEY M. TOOTHACRJS TRIAL BRIF

JUN-17-2008 13: 52 From: IRS COUNSEL SD Case 3:07-cv-02289-DMS-WMC

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TABLE OF CONTNTS

I. IN R 0 DU ClIO N ....... .... .......................... .......~.... .......... ............................... 1

II. STATEMENT OF F AClS............................................................................. i

III. ASSESSMEN' DATE FOR CSED PURPOSES CONCLUSIVLY ESTABLISHES THAT THE TAXES IN OUESTON ARE lSQ
LONGER CO LLECTmLEua__aa..____aa aauuua __a..a......... .......... ......aa.a... _____auu 9

iv. THE NOTICE OF FEDERA TAX LIEN EXPIRED BY ITS OWN T~RMS......._......._....................................a.................................... 13

v. THE INTERNAL REVENU SERVICE RELEASED THE

i.mN RENDERING THE TAXS UNCOLLEcrm.LE ................... 14

VI. THE INTERNAL REVENUE SERVICES ENGAGES IN

lMfRn ll:R ßX l' ARXE Ç()MMCA nONs............................. 20

VII CO N CL US ION............................................ ....... ........... ................. ............................. 23

Case 3:07-cv-02289-DMS-WMC JUN-17-2008 13:52 From: IRS COUNSEL SO

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PETITIONER RODNEY M. TOOTHACRE'S TRIAL BRIF

I. INTRODUCTIQN
Ths case arses out ofa ta dispute between Petitioner RODNEY M. TOOTHACRE and the

INTERNAL REVENUE SERVICE (IS). The IRS has fied varous liens agains Petitioner's
property wrongfully and maliciously resulting in both finacial damages and emotional daages as

described more fuly herein.

II. STATEMENT OF FACTS
(0 In December of 2005, Petitioner ha a :refiance escrow open in order to beme compliant wìthl undisputed taes and to do necessar repairs to his residence.

V On December 12, 2005, Attomey Joseph S. Canellno wrote a letter to Revenue Offcer
Martinez, advising her that he had been retaed by the Petitioner to tae legal action as necessa

to clear the varous liens that the IRS wa clai, and to seek compenstion for the dames tht
these wrongful fiings had caused hi clienL'VA copy of

tht letter is marked Exhbit "AU to Exhbit

#17 of

the Stipulation of

Facts, and made a par hereof

as though set fort here in fuL. Tiat letter

advised that the Notice of Federal Tax Lien for Rodney M- & Marcia L. Toothacre's 1040s for 1993

and 1994 had first been recorded with the San Diego County Recorder's Offce on Febru 4, 1997.
i.t further advised that those Notices of Federal Tax Liens acted as Certficates of Releae of

Liens

and thei-efoi-e the liens wei-e i-elcased on June 1, 2005 for tax year i 993 and July 6, 2005 for tax

year 1994~at letter demonstres that Revenue Offce Marinez intentionally and pursefully
interfered with a pending refinance escrow by deliverg to the escrow holder Notices of Federal
Taxes Due in the total amount of$488)367.37, knowing full well at the tie of

delivery to escrow
l(

by Revenue Offcer Marez tht some, ifnot most, ofthe taes alleged to be due were uncollectible
because the CSEDs (Collection Statute Ending Dates) had ll. One ofthe Notìces of

Federa Taxes

Due claimed taes for the year i 992 which had clearly self releaC)ed and had also ben releaed by

Certificate of Releae. 'Ãevenue Offcer Marinez took ths acon wilfully intentionally and with
malice.1ir. Carellno's December 12tb letter stted that Petitioner was willng to payout of

the

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escrow, taes for 1995, 1996,2003, 2004, and 2005.

(y In addition to the fact that the liens for 1993 and 1994 1040 taes due expired by their own
terms, there were also Certficates of Release of

Federal Tax Liens issued the IRS on August 8,
ths knowledge, Revenue

2005, and recorded with the San Diego County Recorder. In spite of

Officer Marinez, maliciously, fraudulently and falsely told the escrow offcer that the Certificates
of

Release of Federal Tax Liens were fied in error even though IRC § 63215(f) provides in par:
Except as provided in parphs (2) and (3), if a certficate is issued puruat to this section by the Secretary and is filed in the same offce as the notice oflien to which

it relates (if such notice of lien has been tiled) such certificate shall have the followig effect:
lien referred to in such cerificate is extinguished; (emphasis added)

(A) in the case of a certifica of releae, such certficate shal be conclusive that the

Attorney Canellno' s December 12th leter to Revenue Offcer Marnez demanded that she lae the
necessar steps to remove the i 993 and 1994 tax liens, reiterting that it was crucial tht his client's
rtfIance escrow close immediately.

~ On December 13, 2005, Attorney CamieUino wrote a follow up letter to Revenue Officer

M~ez advising her that he had been fushed a document entitled" 490 Activity Summary2 TOOT," which reflected that payments wer being levied out of petitioner's Social

Securty benefits and were being applied to 1040 Tax Period 1993/12 which was uncollectible

because the CSEDs had ru, Attorney Carellno again stated that the CSED had rw on that year
and that the benefits being levied were ilegal, unconscionable, and at the very least, that said levy
be applied to a collectible ta yea. TI docwnent also estalishes that the taes for 1040 ta period

i 993 were assessed on April 4J 1994. Revenue Offcer Marez, as well as Settlement Offcer
Chadwell, which wil be discussed below, deny that this 490 Activity Summar document is an IRS

documenL even though it was obtaed from the Internal Revenue Service. A copy of Attorney
CarelHno's Decembe.. 13, 2005 letter is marked Exhbit '.B"to Exhbit #11 of

the Stipulation of

Facts and made a par hereof as though set fort here in fulL.

.~ On DeccmbeJ' 20, 2005, Attorney Canellno wrote Revenue Offcer Marinez a letter

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proposing a compromise so tht Petitioner's refinance escrow could close with no fuer damage

being caused to Petitioner by the IRS. That letter stated:
The purse of

ths letter is to propose a compromise so that the Toothacre refinance

escrow can close with no fuer damages being caused by the Internal Revenue

Service.

We will agre that the escrow holder may pay to the Interal Revenue Services the
taes, interest and penaties which are due and payable in connecon with the tax years specified in my letter dated December 12,2005. 1 have not ha the co1.esy of

a reply to tht letter yet. Nor have you seen fit to return my telephone calls. To refresh your recllection our offer wa:
Kind of Tax.
1040 1040

T~ Ye!l
1995

Assessment Date

Amount at
$ 27,533.65
$ 12,684_56
$ 17,651.12 $ 16,476.45

November 24, 1997 November 24, 1997
November 8, 2004
May 30, 2005
December 9, 1996

1996

1040
1040
941

2003

2004
1996

$

14.00

Additionaly we would agre that the sum of $ 100,000.00 could be held in an
indepndent trust accowit pending resolution of ths dispute.

appeal the tiling of

(jAttmey Caello al advise Reene Offcecopy of Attorney Carellino'sintention 20, Marez of Pettioner's December to the liens for 1993 and 1994. A
the Stipulation of

200S, leter is maked Exhbit "C" to Exhbit # 17 of

Facts and made a par hereof

as though set fort here in full.
(( On Del:ember 22, 2005, Petitioner prepared and filed a Request for a Collection Du Process

Hearng. That Request was sent by Certified Mail, Retw Receipt Requested, to the Internal

Revenue Service on December 22J 200SJ and the ret reeipt was dated and signed on December

23, 2005. A tre and correct copy of that receipt is marked Exhbìt "DJJ to Exhibit # i 7 of the

Stipulation of Facts and made a par heref as though set fort here in full.

~e Request for the Collecon Due Pross Heag atted suppg exhibits and a legal
brief setting fort the tapayer's contentions:

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J. THE SUBJECT TAX WERE DISCHARGED BY BANKRUPTCY 2. THE NOTICE OF FEDERA TAX LIEN EXPIRD BY ITS OWN TERMS 3. THE INTERNAL REVENUE SERVICE RELEASED THE LIENS 4. THE IRS' ATTEMPT TO REFILE LIENS FAIS
5. THE STATUTE OF LIMIT A TIONS HAS RUN
A tre and correct copy of

6. THE INTERNAL REVENUE SERVICE HAS ACTED WITH MAICE
the Request for a Collection Due Procs Hea is marked Exhbit "E"
the Stipulation ofFacts~ along with al of

to Exhbit # 17 of

the exhibits, marked 1 though 6) and ar

made a par herf as thoug set fort here in fuL.

~ On January 3, 2006, Attorney Cannellno wrote to Revenue Offcer Martnez,
acknowledging a phone message left by her on his phone on December 22, 200SJ advising Attrney

Carellno that she would retu to her offce on January 3, 2006, afer her Chrstmas brea. He
cormented that in that phone messae she had sad tht Me Toothacre's offer to pay taes did not
cover aU of

the taes due. Attorney Canellino informed Ms- Marinez that the offer wa an offer

to pay, in full all. taes, interest and penalties whch were collectible by the IRS.
~ In that conversation, Attorney Cannellino renewed the offer with the qualification that the

offer no longer contemplated the witholding of $100,000_00 pending resoluton of any dispute.
That letter also advised Revenue Offcer Martinez that ìfMr. Toothacre's escrow did not close, that
it wa Petitioner)s intention to avail hiself of

the remedies provided by IRe § 7433_ Attorney

Canellno also advised Revenue Offcer Marinez that his client had "now recived from the IRS
a Final Notice Before Levy on Social Security Benefits." A copy of Attorney Carellno's letter of
January 3,2006, is marked as Exhbit ..F' to Exhibit 17 of the Stipulation of

Facts and made a par

hereof as though set fort here in full.
o The Notice of Levy stated tht it was an attempt to collect 1040 taes for ta yea 2004.
Attorney Canellno inormed Revenue Offcer Marinez tht Mr. Toothacre acknowledged those

taxes were due and owing. Attorney Carellino reminded Revenue Offcer Marinez that the IRS
had already levied on Mr- Toothacre's Social Securty Benefits and wrongfly applied them to ta
year 1993. Attorney CaielJ ino demanded tht the IRS reverse those collections and apply them to

tax year 2004. Attorney Carellino's letter to Ms. Marinez also pointed out that the effort by the
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IRS to renew the lien for the 1993 1:es had not followed the proceures set fort in the Interal

Revenue Code, citing Section 6325 (f) (2), 6325 (t) (2) (A) and 6325 (f) (2) (8). A tre and correct

copy of Attorney Camellno's letter dated January 3, 2006J is maked Exhibit uF" to Exhibit #17
ofthe Stipulation of Facts and made a part hereof as though set fort herein in fulL.

\7 On January 18,2006, Attorney Carellio wrote a letter to Revenue Offcer Marinez
requesting that his letter be appended to his client's appeal, previously fied though her offce. That
letter, among other things, stted:

Once again demand is made that the internal revenue service release the
purported notice of

federal ta.i liens for tbe years 104093, and 104094 filed on

Decembe(" 2, 2005. This is an opportnity for the Government to mitiate the

damages being incurred by Mr. Toothacre. (emphais added)
That lettr discussed at length the Internal Revenue Manua concerng the CQMS (Collection

Quaity Meaurements) providing tha the tapayer is entitled to fair and courteous treatment.
~iso, in that leter, Attorney Carellino reminded Revenue Offcer Marez that she had
told to hi that the filing of a bankrptcy caused six months to be taked on at the end of

the i O-yea

statute oflimitation period. Thus, it wa Revenue Offcer Marinez' position that the CSED had not
ru Attorney Cancllno cited Revenue Offcer Marinez

to Youngv. UnitedStates, 122 S.CL 1036,

wherein the United States Supreme Cour held tht it was impermissible to tack on the additional
six (6) months.
~ Revenue Offcer Marnez knew tlus was false as she was aware of the issuace of

Notice

CC-2002-023 by the Offce of

Chief

Counsel of

the Intern Revenue Servce notified all pesonnel.

Attorney Carellino advised her

tht "it is now settled law tlut a bankrptcy may toll the collection
for the jùll period of

statute of

limitations

the bankrptcy, but for no additional period" Notice CC-

2002-023 by the Offce of

Chief

Counsel of

the Internl Revenue Service states in par:

May 9) 2002
Tolling of Priority and Dischargeabilty Periods in Bankrptcy after Upon Incorporation Subject: Young v_ United States Cancellation Date: into CCDM

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PurQse
This notice clarfies that in tight of the rationale of Young v. United States, the
thee-yea lookback period ofRC. § 507(a)(8)(A)(I) should not be computed by

including an additional six month based on 1.R.C. § 6503(h).
Discussion

The Supreme Court, in Young v. UlUted States, 122 S. Ct. 1036 (2002), held thatthe

thee-year lookback period ofB. C. § 507(a)(8)(A)(I) is a limtations period subject
to equitable tollng- Equitable tollig automatically applies and is appropriate whenever the Internal Revenue Service ba been prevented by reaon of a prior
banptcy from collecting its clai, regardless of

was HIed in good faith. Therefore, in accordce with the Yowig holding, the

whether the banptcy petition

lookback period of B.c. § 507 is tolled during the pendency of a p'rior banptcy

priority or dischargeabilty of any ta debt uness a court ha issued a final order on the priority or dischageability of the debt and all applicable appeal periods have
expired.

petition. Furer. the automatic tollng nie adopted in Young will determine the

Before Young, cert cÌfcuits held that the thee-yea lookback period was tolled
during the period the Servce was prohibited from collecting the ta by reaon of the prior banptcy case. and, in reliance on B.C. § 1 08( c), for the additional six months provided in LKC- § 6S03(h)- See, e.g., In re We8t 5 r.3d 423 (9th Cir. 1993), cert.

denied, 5) I U.s- 1081(1994); In re Montoya, 965 F.2d 554 (7th Crr. 1992). In light
of the rationae of

should not be computed by includig an additiona six months, based on l-RC. §
6503(h).

Young, the theeyea lookback period orB.c. § 507(a)(8)(A)(I)

Any questions abut this notice should be dircted to Collection, Banruptcy &

Isf

Brach 2 at 622-3620.

Summonses,

DEBORA A. BUTLER Associate Chief Counsel

Procedure and Admstration

~ In the Intern Revenue Service Collection fwction (reS) cae histry pritout dated June

1, 2006, Exhbit 8 to loe Stipulation of Facts, the following sttements appe under acon date

05/05/2006, the next to last page.

Need to discuss the issue the TP brought up about IRS not being alowed to add 6 monthstotheCSED. POA states Youngv. United States, 122 S_Ct_ 1036 and Notice CC-20020023 issued by the Offce of Chief Counsel. Spoke with BK Advisor Johnson - the Young case does not address the extension on the CSED. Briefly- it
involves a lookback peod for determining dischargeabilty. Advisor Johnson also

indicated that Laguna Niguel counsel does not allow the 6 month extension on every BK ried by a TP and alo does not allow (0.- an ove.--Iapping of extensions
due to an oie fiing. (emphasis added)

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Attorney Canellino's letter also discussed the effect of R.R.A. §3461 and IRe §§ 6501(c) and

6502(a). He pointed out that "Any exenswn of the collections statute already in effect on
December 31,1999, expired on December 31.2002." Attorney Carellno pointed out that the
lierature makes it clear that the IRS routinely tries to collect taes after the sttute oflimtations has

expired, and that ths abuse had been addressed by Congrs. The tln paragaph of Attorney
Canellno's letter reads as follows:
The Internal Revenue Manua Section 5.12_6.5. i (i 0-0 1-2003) Cerificate of

provides at nwnber 7. Issue a certifcate of release if the colkctn statute has
exired, and the taxpayer requests a release. (Emphasis added) If it has not

Release

previously be made clea, Mr. Toothcre does hereby request that cerificates of release be issued immediatly for ta years 1040 93 and 1040 94.
A tre and correct copy of Attorney Carellno' s leter of January 18,2006, is marked Exhbit ..G"
to Exhibit #17 ofthe Stipulation of

Facts and made a par hereof as though set fort her in fulL.

~ On JAnUAry 19,2006, Attrney Camellio wrte . let to Reenue Offce Maez, in

which he advised her that in reviewig The San Diego Daily Traript he discovered tht, on

December ilJ 200S, the IRS caused to be recorded two Notices of Federa Tax Liens against
Toothacre & Pedestran. (Sic) a Parership. Neither Mr. Pederson nor Mr. Toothacre recived any

notice whatsoever of this action by the IRS- Ths event is, without doubt, the most convincing

evidence that Revenue Offcer Marinez abused her discretion and was intent on punishing
Petítioner. Revenue Offcer Marínez had previously been fushed the Certficates of Releae of

FedeTal Tax Liens by Petitioner. The last day for fuing either of those documents wa in 2002.
Attorney Carellno' s leter dated Janua 19, 2006, stted:
I am enclosing copies of those Certificates of Release of

2002. As you know tlus is 2006. The collection statute has ru. The Collecton Statute Expiration Date came and went over three yea,n ago. You must be rully aware of these facts.
Attorney Canellino's letter fuer stated:

inormation, although Mr. Tooth.cre provided these to you by his previous letter. As indicated on the face of these documents the last days for refilin (CSED) were in

Federa Tax Lien for your

It is patently obvious that the refiing of these liens is malicious and an obvious

attempt by the Service to bully my client and destroy his life. All of this in
your own Manual and the Taxpayer Bil of

violation of

Rights. M... ToothacJ:~

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is trying to pay those taxes which are due~ and collectible, and you are making
every effort to thwart his attempts. (emphasis added)

(ß A copy of Attorney Carellno' s letter dated Janua 19.2006, together with the newspaper

aricle and copies of the Cerificates of Releas of Lien ar attched as Exhbit H to Exhibit # 17 of
the Stipulation of Facts and made a part hereof as though set fort here in fuL. Actly) Revenue

Offcer Marinez caused three Notices of Federa Tax Liens purprtedly agaist the Toothacre &
Pederson Parnerhip to be recorded. Two were recorded on Decmber 22,2005 and the third was

recorded on Januar 3,2006. Al three of these recordings were done more than three years
after the previously recorded liens had self released and after aU prior liens bad been released
by the issuance of Certcates of Release of Liens. Attahed as Exhibit # 25 to Augmentation to

the Administrative Record are tre and correct copies of thee Notices of Federl Tax Liens, all
bearing recording information of

the San Diego County Recorder Offce. Two were recorded on

December 22, 2005, índicatig tht they had ben prepared by A. Marinez, Revenue Offcer at San

Diego, CA, on the 21st day of Dember, 2005. lñey both purrt to be against Toothacre &
Pederson, a parnership and both reflect that the yea of the date of assessment was 1992, more than
13 years prior to the date of recording. The third Notice of

Federa Tax Lien also purort to be

against Toothacre & Pederson, a parership and was recorded on Janua 3, 2006 at the San Diego
Recorders Offce. It indicates that it wa') prepared by Susa A. Hansen, SPF Advisor, on the 21 II day
of December, 2005. It also indicates that the date of

the year of assessment wa 1992.

~ On December 22, 2006, Petitioner filed a Request for a Collection Due Process Hearg
concerning the liens which were filed against the parership. By letter dated November 28, 2006

Petitioner received a Decision Letter Concerning Equivalent Hearg Under Section 6320 and/or

Section 6330 of the Interal Revenue Code. That letter stted:

The liability for the FonI 941 for the quarter ending December 31J 1991 is no longer legally enforceable because the collecton statute expired. The Notice of Federal Tax Lien wil be released by Compliance.
That letter wa signed by Kathleen A. Flatau, Appeas Team Manager.

'(! Revenue Offce Marnez never replied in wrting to any of Attrney Carellno's letters.
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IlL. ASSESSMENT DATE FOR CSED PURPOSES CONCLUSML Y EST ABLlSHES

TIiAT THE TAXS ir OUESTION AR NO LONGER CQJ.~EÇDBME
Petitíoner and the IRS have had a runnng dispute as to the date the assessment wa made and

the Collection Statute began to ron. Petitioner contends that the i 993 and i 994 rets were self

assessing tax rets and that the assessment dae was the date that the retu were reived by the
IRS. Ms. Chadwell, the AO, in her Cas Activity Record Print, on page one, stes: "93 is a late

fied joint self assessed return. " (first page of Case Activity Record Print)
Petitioner retained the expert services otVictoria Osborn Certfied Fraud Examiner, Public

Accuntat and Forensic AccountaL Ms. Osborn found that the i 993 and 1994 taes were
uncollectible_ Her letter is athed to the Stipulation of

Fact as paof:fbit #15 and made a par

hereof as though set fort here in full. In that letter Ms- Osborn states on page 2:

The master file is consistent with Ms- Chadwell's statement tht the "assessment dates for the J 993 and 1994 years are May 1, J 995 an June 5, 1995. " However the the statute oflimitations for self assess retu begi with the "ret recived date" wluch is March 27, 1995 (1993) and Apri15, 1995 (1994) and not the assessment date. See 26 use 6501.
runing of

Ms. Chadwell, the AO, in her Cas Activity Record Print on the las page in the entr dated

9/22/2005 refers to Ms. Osborn's Augut 17, 20061etter stating:
On second review of letter from TPS Accountat deterined it was premature to close CDP without addressing issues raised regarding statute. CPA quoted IRe on
what date is usd for cac of SOL but I don't believe it. (emphasis

added)(impariality?)

No one frm the IRS ever answered the question rased regaing the collections statute.
Petitioner's expert forensic accountat concluded that the Statue of

Limitations begins to

ru when the ta retu which is self

assessing, is filed with the IRS. The Internal Revenue Manual

(TM) provides in par as fol1ows:
4.7.3.3 (07-31-2000)

Approval Authority

3. Statute of limtation dates are ~reated when the tax return is ried with a
campus. This date is created on the Ma.'\er File and is the date creed on ERCS

from AIMS. Generly ther are thee reasons a statute would be updated on the
EReS system. (emphasis added)
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Section 6151(a) of

the Internal Revenue Code, 26 V.S.C. 6151, provides in relevant

par:

Except as otherwise provided in this subchapter. when a retu of ta is requied

mider ths title or regulations, the person requied to make such return shall, without
revenue offcer with whom the retu ís fied and shall pay such ta at the tie and

assessment or notice and demand from the Secreta, pay such ta to the internal

place fixed for filin the retur (determined without regar to any extension oftie for fiing the retu).
The folIowing discussion of

when the sttute oflimtations begins to run in connection with

the collection of

ta appear in The CPA Jour a publication by the New York State Society of

CPAs:

Determining the Sta.tute or Limitations in Federal Tu Case
By Robert H. Breakfield and Charles E. Alcvis
August 2006.
A tax preparer's knowledge of

the IRS ta collection statute ofHmitaons (the legal

bar to the collection of del inquent taxes) ca be of valuable assistance to the taxpayer

faced with a federa ta liability.
There ar tw basic statutes of limitation. First is the statute of limtations set fort
in IRe section 6501(a). which provides tht the IRS has thee year to assess an additional tax due. For example, for a tapayer who filed a 2004 ta retu on April
15.2005) the IRS has until April 15,2008, to assess an additiona ta. This rule has

two major exceptions. The thee-year statute is extended to six yea in a case where

the taxpayer has omitted more than 25% of grss income (se IRe setion
been fied or where the taxpayer has filed a fraudulent retu (see IRe setions
assess an additional ta at any tie.

650l(e)(1)(A)). Seconel there is no statute oflimtation in cases where no retu has

6501(c)(1), 6501(c)(2). and 6501(c)(3)). These two exceptions permit the IRS to

Less widerstood is the second basic statute of limitations that defies the perod of the tax. IRe secton 6502(a)(1) establishes a statute
limitation for the collection of

of limitation collection period of 10 year.
Taxpayer faced with a collection action must

know the general rule of

the circumstaces when the state is extended by agement or by law.
When the Statute Begins to Run

litation and

Identifyng the date on which the running of the collet,iion sttute commences
depends upon the date the ta is assessed. (See IRe section 6203 and Treasur

Regulations section 301.6203-1.) The assess1Jnt glthe tax he~;ns wiJli the filinV n( the tax return. or wit the final determnation in the exmination pracess. The
assessment is not the sae as the fiing of the retu. In the case of a paper return

mailed to a service center or an electroiucally fied retur. the acissment occurs
when the assessment offcer signs Form 23C, Assessment Certificate-Sumar

Record of Assessment. AccOTding to TTea Regulation 301.6203- I. the
assessment shall be made by an assessment offcer signing the suar recrd of

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assessment. The U.S. Tax Cour has upheld the use of computer-generated Revenue Accounting Control Report 006 (Sumar Record of Assessment) in lieu of a hand.

signed Form 23C (see Thomas W. Roberts v. Comm'r, 118 TC 365
(2002)1.(emphasis added)

Certin cass involve both an initial assessment and a subseuent assessment (IRC
section 6204(a)). The last assessment of the ta is the commencement date of

year statute peod. Ifa tapayer fies a paper retu with th servce center on April
15,2005, the actual assessment of

the 1 O.

the ta may not occur until June or July 2005,

when the assessment entr is made Q1 the IRS's reords (freaur Regulations

section 301.6203-1). If, however, the tapayer's retu is subject to examinon and

a subsequent assessment is made, the new penod for the 10-year statute will commence with th recordíg of the send asessment (Treur Regations
the original retu was fied with an unpaid balance due and a subsequent examination of the retur resulted in a second assessment, then there will be two 1 O-yea statutory periods. The initial balance assessment wil sta the 1 O.year sttute for the fist asssment; the balce due created by the subsequent
section 301-6502-1 (a)(1)). If

examination wil sta the 10-yea state for the seond assessment.

Precisely when the statute of limtation has commenced ca be ascertned from a

transcript of the taxpayer's account, which can be obtaied by fiin IR Form 4 506~ T. The transcript of the tapayer account wil identifY the date of all assessments with
to properly veritY the time remaig on the collection of sttute.

respet to the ta yeas at issue. Securig Ù1e tranript of acunt is an essential step
The Internal Revenue Service has consistntly taen the position that the Date of Assessment

of the 1993 taxes was 5/31/95 and that the Date of Assessment ofthe 1994 taxes was 06/05/95.

Contrar to the IRS position, Petitioner wa fushed by the IRS an Internal Revenue Document
entitled 490 Adivity Summary 1040 Tax Period: 1993/12. A tre, correct and accurate copy of

Fed -

Rodney M & Marcia L Toothacre
that document is attahed as Exhbit

#5 to Exhibit #3 of

the Stipulation of Facts and made a par hereof as though set fort here in fuL.

A review of that document reveals that at two different places under date of 4/15/1994, it is stted
that the retu is fied and the tax is asses~ed. (emphasis added). Ms. Chadwell, in her Case

Activity Record Prit, on the top of page two disingenuously staes:

Transcript TP provided showig assmt date for 1993 as 4/15/94 is not an IRS Trancript. Bottom shows copyrght decision Modeling, Inc. is a DM! third par
vendor soft progr. This is not an IRS tl1script contaning information on the

account from IDRS.

Ms. Chadwell admits that the IRS fushed ths docwnent to petitioner. In tact on page 52
of Exhibit #8 to The Stipulation of

Facts, Revenue Offcer Marinez states:

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RECEIVED ANOTHR FAXD LETTER FROM MR. CARLLINO
T AXS WHCH ACCORDING TO TH TP AND MR. CARLLINO AR
UNCOLLECTIDLE. TH TP PROVIDED MR. CARELLINO WIll A COPY

REQUESTIG A CALL BACK TO DISCUSS THE LEVY PROCEEDS RECEIVED FROM SSA WICH HAVE BEEN APPLffD TO THE TPs 9312

OF THE 490 ACTIVITY SUMMARY, THE TP RECEIVED FROM CINCINATI SHOWIG THE ASSESSMENT DATE FOR 1993 WAS
04/04/94. MR CARLLINO is REQUESTIG A CALL BACK TO DISCUSS
TPs REFINANCE ESCROW TO CLOSE wrOUT FURTHER

THE LEVY AMOUNS TAKEN AN TO MA ARGEMENTS FOR THE
FROM THE IRS. (empl:is added)

INRFRENCE

Tros IRS document furished to the Petitioner by the Internal Revenue Servce and as such
is an admission and a declartion against interest. As a mater of fact, Petitioner ha discovered that
the document in question is an attachment to a document sent to Petitioner and his wife by the IRS
on or about July 18, 2005: "Urgent!! We intend to levy on certai assets. Please respond NOW
The law requires that you pay your ta at the time you tlle your retu." The notice is date July 18,

2005 and was issued by the Internal Revenue Serice in Ogden, UT 84201-0030. That notice was
served on Petitioner with an attachment Notice i 2 i 2 and a document concerg Penalty and Interest

(2 sided) and the document entitled Activity Summary. "Ibe total amount of$264,174.71 on the
notice coincìdes with the figure of$264, 174.7 i on the Activity Sumar Shee The Activity Sheet
states: "4/14/94 150 RetLU filed & Assessment of

Tax 92,666.00" A copy of the entire document

sei:ved on Petitioner is marked Exwbit # 18 to the to the Administrative Record and made a par
hereof as though set forth here in fulL.

A review of Exhbit #s 10 and 11 to The Stipulation of Facts reeals that Exhibit i O-J is a

copy of the Internal Revenue Servce Certficate of Assessments, Payments, and other Specified
Matters dated June 20,2006 with respect to Petitioner's income ta account for the ta year 1994
and Exhibit I1-J is s a copy of

the Internal Revenue Servce Certificate of Assessments, Payments,

and other Specified Matters, dated June 20,2006, with respect to Petitioner's income ta account for the ta year 1993. Exhibit # i 1-J clearly states:
03-27-1995 RETUR FILED & TAX ASSESSED

Exhbit 10-J clearly states:

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04-15-1995 RETURN FILED AND TAX ASSESSED
Each of

these exhìbits bearg the date of August 8) 2005 state:

"FEDERAL TAX LIEN RELEASED. "
Also Exhibit 6, which is described in the Stipulation of

Facts as "a copy of the Case Activity

Records (case notes) maitaed by Settlement Offcer Chadwel1 in connection with her

consideration of petitioner's CDP request" shows that the Assessment Statute Ending Date is
03271998 whch coincides exactly with the dates reflected on the document that is claimed not to
be an IRS document.

iv. ¡HE NOTICE OF FEDERA l~ LIEN EXPIRD BY ITS OWN TERMS
The original Notice of

Federal Tax Lien, dated Janua 30, 1997 and recorded in the records

of

the San Diego COtUty Recorder's Offce on Febru 4, 1997, contains, on its fac, the following
Exhibit #3 of

information. (See Exhbit #2 of

the Stipulation of facts_)

IMPORTANT RELEASE lNORM TION: For each assessment listed below,
uness a notice of the lien is retìled by the date given in column (e), this notice shal, the day following such. date, opete as a certificate of release as defined in JRC 6325(a)_

Accordigly the Notice of Federal Tax Lien on May 31, 2005 and July 5, 2005 becae

Certficates of Release and released the liens claimed. A tre, correct and accurate copy of the
original Notice of Federa Tax Lien attached to the Stipulation of

Facts, as Exhibit #2 to Exhibit #3

and made a par herof as though set fort in fulL.
Alvin S. Hro"\, úP attorney, formerly with the Offee of the ChiefCouoel of

the Internal

Revenue Service, in an aricle entitled Tax Regs in Plain English - IR Restructung and Reform
Act of i 998 Section 3461, Procedures for Extension of Statute of

Limtaions by Agreement, sttes:

Section 346 i
A. ProvisioD(S) covered: R.R.A. §§ 3461. Procedures Relatig to Extensions of

Statute of Limitations By Agrement. I.R.C. §§§§ 6501(c) and 6502(a)_
B. Background; Section 650 i of the Internal Revenue Code generally provides that the Servce has threc years from the date a retur is tïled to ao;sess additional taes.

Section 6502 generaly provides that the Servce ha ten yea from the date of assessment to collect the ta. Prior to the expiration of the limitaons period

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provided by these provisions, the law provided that the tapayer and the Service

could agree in wrting to extend the statute of limitaons. Congrss believed that
many tapayers were not being infonned of

their rights to refuse to extend the sttute

of lintations on assesment or to limt the scpe of any such extension. In addition,

Congrss believed tht all taes should be collected within the 10 yea state and
that the staute should not be extended.

C. Change(s): The authority to extend the collection statute of litations by
agreement ends on December 3 i, i 999. An extension of the collecton statute

already in effect on December 31~ 1999. wil ei¡pire on December 31,2002. An
exception to ths secon is provided for extensions relat to instlment agments.
An extension of

of an inslment ageement should be for the perod necssa to satisfy the tax liability via the ageement. The legislation provides that the period oflimitations for extensions related to intalment ageements will expire 90 days afr the end of the extension period. (emphasis added)

the collection sttute entered into in conjunction with the acceptace

V. THE INERNAL REVENUE SERVICE RELEASED THE l.ll;NS RENDERING

THE TAXS UNcoLLEcrmLE

The Internl Revenue Service's attempt to revoke priously released liens was invalid. In

addition to the fact that the lien(s) expir by its (their) own ters, there was also a Certificate of

Release of Federa Tax Lien issued by the Internal Revenue Service on August 8, 2005. Tht
Certificate of Release of Tax Lien was signed by the Director, Payment Compliance. A tre,
accurate and corrct copy of that Certificate of Release of

Federa Tax Lien is athed to Exlúbit

#3 to the Stipulation of Facts (Request for CDP Hearing) marked Exlbit #3 to tht docwnent and
made a par hereof as though set fort here in full. Intern Revenue Code §6325 (f) provi~es in par
as follows:
Except as provided in paragphs (2) and (3), if a ceificae is íssued puruat to ths

seion by the Seceta and is filed in the sae offce as the notice oflien to which
following effect:

it relates (if such notice of lien has been filed) such certficate sha have the
A) in the case or B certifcate of ..eleae, such certifcate shall be conclusive that the lien ..efe....ed to in such certifcate is extiguished; (emphasis added)
Petitioner's expert Forensic Accuntant, Ms. Osborn, in her leter dated August 12,2006,

Exhbit #15 to the Stipulation of Facts, on page 2 states:
Is~ue #3: Tb,e lien ~ released.. tbe lien rcfiling date had passed and you were not

given tjmely Dotice QftJie lien ülim!.

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The CSED has been sanitized from the literal trscript printed on 8.3-2006 and the IMF MCC TRASCRIPT-SPECIFIC prited on May 11,2006 you reived from the IRS Disclosure offce. Ths information is (,..ritical to your issues.
These master file trscripts also contan the appropriate litigation indicator for the

banptcy petition and its discharge and the subsequent offer in compromise
describe in Ms. Chadwell's letter of July 17,2006. However, followin all of

the

above inormtion a voluntary decision was made to release the Federa tax liens.
I t is important to know that these liens did not "self release" and are not eligible

for reinstatement. (emphais added)
The trnsctions in the master me accounts for Form 1040 (or ta1 periods 1993
with a decision that the liabilty assessed together have become legally unenforceable. See 26 use 6325

and 1994 and Form 941 for tax period ending December 31 J 1991 are consistent with all interest and penalties
(A)

(1)- Ms. Chadwell's

letters dated July 17. 2006 and Augu 3. 2006 do not identi a cacuated collecon

staute expiron dae even though she alleges the ste was open when you
submitted your reuest for a collection due procss heag. (emphasis added)
In her Case Activity Record Pnnt Ms. Chadwell stes on the seond page:
3. Lien was releaed and the IRS issued a Certficate of

Releae. The TP was not

given tiely notice of the lieD t""iin~. The NF on the 1993 and 1994 yea was not refied timely so the a (sic) cerificate of releae of the NFL wa erroneously
issued. IRC 6325(t)(2) gives the IRS authority to revoke the release and reinstate the
lien. A new lien wa fied under IRC 6323(1) so that the reintate lien wil be valid agait any lien or interest in 6323(a). Per IBM new lien has to befúed after the

notice of rf!ocation is maih to the TP and l'corded. The effective date of
reinstatement is the date the IRS mails the notice of before the date the notice is i-lcd at the SDCR. I wi need a copy of

the notice of revocation. Per ALS the new lieD was recorded (sic) 12/05/05 with REC #2005-1042915. Hopefully the notiee of rl!ocalum was recorded and maüed to the
TP before this di. ALS shows 1217/05 as 3172 date yet copy of 3172 shows

revocation to the TP but Dot

12/13/05. The difference may be due to fact RO manuall fied lien. Alo noted that lien fig date on notice is given as 12/06/05 when ALS and ICS shows the
actual recording date to be 12/5105. 5 business days after recording date is

12/12/05. IRC 6320(a)(2)(c) Thus it ca be argued that notice was issued one day
late. However as far as I am concered ths is an adstitive error ilat does not

invalidate the NFL. Based on wording in TPS appea he claims tht he was not
notified with 5 busines (sic).(empbasis added)
As a matter of

fact the Notice of Revocatinii was not recrded and mailed to the TP before

August 5, 2005~ On February 2, 2006, Petitioner received, in his residential mail box, an envelope

which wa ""fraed" January 3G. 2QQ(i ìn Cincinnati, Ohio. In that envelope was a Revocation of
Certificate of Releas of

Federal Tax Líen. 11t document appear to have been prepared and signed

at Lagu Niguel, Califomi~ on December' i. 200S. The reipt ofthe envelope by Pettioner was

witnessed on Februarv 2. 2006. by Jane T. SchiftÌTann in handwrting on the envelope. The
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Revocation of

Certificate of

Release ofFederaJ Tax Lien received by Petitioner on February 2.2006

has no recording inormation. The document, envelope and a declartion by Mr. Schiffar are

attched to the to the Augmentation to the Administrative Record as Eilbit # 24 and made a par

hereof as though set fort herein fulL. For some unown reason it took the Internal Revenue Service
from December i, 2005 until Febru 2, 2006 to notify Petitioner th ths action was being taen.
Fwter evidence of the fact that the subject Notice of

Tax Liens h.ad expired, both by their

own ters by self

releasing, and also by volunta act of

the IRS, are two documents which were

issued by the Lien Unit Manager of the Internal Revenue Service. Both of these documents are
intended to be "Beneficiar Statements" or "Pay Off

Notices" to be placed in Pettioner's refinance

escrow.
The firSt of the documents is datd August 5, 2005, and wa addressed to Fidelity

National

Title Company % Nataie Dorsi at 5060 Shorea Place, Stc. 130, San Diego, CA 92122. Ms. Dorsi

was/is the escrow offcer handling Petitioner's refince escrow. Tha document 'purrt to reflect

all ta liens fied in San Diego County, CA affecting Petitioner's residence and listed the ta
liabilties for which there were fied liens. There is no mention of a lien for eithe( ta year 1993 or
ta year 1994. The tota payoff

figur set fort in the Augut 5th document was $147,528.16. The

second docwnent is dated September 3) 2005, also issued by the Lien Unit Maner of

the IR and

addrssed to Rodney M & Marcia L Toothacre at the residence addres- Ths document also was

intended to be a beeficiar statement and it reflects a payoff figue of $90,504.3 i. The reduction
from the prevïous payoff figu is accunted for by the fac that liens agait th parership
TOOTICRE & PEDERSON had been removed, both by self releasin and by action of

the IRS

in issuing Certificates of

Release of

Liens.

The second document specifically states that the taes for ta year 1993 and i 994 had been
assessed, '"but liens have not been fied"- Tnie and correct copìes of

both of these documents are

attached to the Augmention to the Administrtive Recrd as Exhbit # 24 and made a par heref
as though set forth ìn fulL. These documents clearly establish that as far as the Lien Unit of

the IRS

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was concerned. in Augst and September of2005, there were no valid liens concerning tax years
1993 and 1994.

Presented herewith as Exhbit #s 20, 21, and 22 to the Augmentation to the Admsttive
Record are copies of

three documents which were certfied by the San Diego County Recorder all

of which by this reference are made a par hereof as though set fort in fulL.
Exhbit #21 which consist of two pages and is a Notice of

Federal Tax Lien. The Notice
December,

indicates that it wa prepard and signed at Laguna Niguel, California on the Zod day of

2005. It is signed by A Martinez, the Revenue Ofticer. The recordig information indicates that
this document was recorded with the San Diego COWlty Recorder Offce on Decmber 5. 2005 at
8: 19 AM. Ths is the docwnent that Ms. Chadwell is referr to above "Per ALS the new lien was

recorded (sic) 12/05/05 with REC #2005-1042915"_

Exhbit # 22 to the Augmentation to the Administrati ve Record is a copy of a certified copy
of a Notice of

Federal. Tax Lien which appears to have ben prepared and signed at Laguna Niguel,

CalifoITa on the 2nd day of December, 2005. This Notice is signed by Susan A. Hansen for A.

Marinez. It covers the exact same information as the previous notice conccmìng the tax years,
taxpayers etc, but the forms are different and the second one bears recording information indicating

it was recorded at the County Recorder's Oftice on December 16.2005 at 11:26 AM.
Exhbit #20 to the Augmentation to the Administrative Record is a copy of a certified copy
of a Revocation of Certficate of Releas of

Federal Tax Lien which appe to have been prepared

and signed at Laguna Niguel. California on the 1 Sl day of Deceber. 2005. by Sus A. Hansen,
Direcor, Campus Compliance Operations. Ths Revocaon of Certficate of Release of

Federal Tax

Lien bear recrding information that it was recorded on December 16. 2005 at 1 i :26 AM. The
Revocation of Cerificate of Release of

Federal Tax Lien which Taxpayer reived on Febru 2,

2006) in an envelope which bears the fraking date of Janua 30, 2006. is different from the
Certificate which wa actualy recorded. Ms. Chadwell stated:

Per IR new lien has to be fied after the notice of revocation is maied to the TP
and recorded. The effective date ofreinstatemelJt is the date the IRS mails the notice

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of revocation to the TP but not before the date the notice is fied at the SDCR. 1 will need a copy of the notice of revocation Per ALS the new lien was rerded (sic)

recorded and maled to the TP before this date" (emphasis added)(impariality?) The Internl Revenue Manual provides as follows:

12/05/05 with REC #2005-1042915. Hopefullv the notice of revocation was

5.12.3.26 (09-07-2006)

FiHng of Revocation Certificates and Notices
All cerificates and notices wil be fied in the sae offce where the original filing
took place, uness the stte has since redesignated its filin offce for of

the specifc tye

propert. The Uniform Federal Lien Act ofthe stte should be checked to confirm where to file the certitlcate or notice.

Expenses related to the filing or recording of certificates wil be borne by the
government.

In the event that these certficates and notices may not be fied in the offce
designated by State law. they are to be fied in the offce of the clerk of

the United

States distrct cour for the judicial distrct in the State offce where the NF is
filed.

Whim (ilinfl a CerlirlCte of Revocation and a new No/we of Federal Tax Lien. documents must be recorded in th1I.llrODer Qrdl:r tQ lJe valid. The Certificate of B.evnJ;alf" m¡qt lJ~ reçorded priar to the new Notice of Federal Tax Lien. (emphasis added)

5.12.3.23 (09-07-2006)

Revocation of Certificate of Release or Nonattachment
IRC §§ 6325(f)(2) provides tor a revocation of a cerificate of release or non
attachment and the reinstatement of the NFTL to whch the certficate relates.
A certificate of revocation may be issued when it ha been detenned tht a release of FTL or a certificate of nonattchment wa issued;
erroneously, improvidently, or in connection with a collater agrement entered into in connection with a compromise under IRe §§ 7122 which has ben bre~hed and
if

limtation on collection after assessment has not expired. the period of Issue a Certificate of Revocation to rcvoke a self-releaing NFTL in those instaces
Federal Tax Lien to revoke

when new NFTL ha been fied late.
Use Form 12474, Revocation of Certificate ofRclea of

the release when the lien was not self-releasing.

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Use f'orm 12474-A. Revocation nJCerliïicate of !.ekase QfFederal Tax Lien to

revoke a lien that self-released.
A new Notice of afer the Certficate of Federal Tax Lien should be filed to protect the priority of

the lien

Revocation is filed. See IR 5.12-3.25.

When revocation is require, a request will be sent to Advisory to have the Lien

Processing Unit, prepare the certifcate and fie a new NFTL (emphasis added)
The copies of Certificates of Releas of

Federa Tax Liens included in Exhibit #s 19 & 20

of the Augmentation of Administrative Rccord prove that in neither cae was Fonn 12474-A used

by the IRS. In each case the form utilized was 12474. Form 12474, provides: "I certify that we
mistakenly issued a certficate of release of the Notice of

Federal Tax Lien etc"...: where Form

12474-A provides:"1 certfy that we mistakenly allowed a Notice of

Federal Tax Lien filed against

the taxpayer named below to operate as a Certifcate of Release..".
Revenue Procedure 2000-43 prohibits ex pare communications that appear to compromise
the Appeals OtIce. Actual influence isn't reuied, only a reasonable possibHìty that the prohibited

communications may have compromised the Appeals offcer's impartiality. See Drake 125 T.e. at

209-20. Petitioner submits that Ms. Chadwell was anything but imparaL. This evidence is
irrefutable proof

that the IR and its employees frudulently attempted to col1ect uncollectible taes.

Also the Intemal Revenue Service Collection fuction (ICS) case history prtout dated June

1, 2006, Exhbit 8 of the Stipulation of Facts, the following appes under the action date of
i 0/18/05:
SPOKE WITH OM LATE P.M. i 0/17/05 REGARDING THE LIEN AND STATUTE ISSUE. GM STATED THE CERTlFJCA TE OF RELEASE SHOULD NOT HAVE BEEN ISSUED ON A SELF RE'LEASING NFf. WE REVIEWED THE STATUTE DATES AND mE DATES OF

THE BANKRUPTCY AND THE OFFER. OM SUGGESTED THAT I MEET WITH A
BANKRUPTCY TECH TO COMPLETE REEARCH ON PACER REGARDING THE FIRST TC 520/521. RIO lS THEN TO MA AC REGARING THE ISSUE OF THE FIRST 520/521 AND THE EXTENSION OF THE ST A TlI PRlOR TO THE TC l50 DA TEo OM REQUBSTED A

t~'1 (' ;" Ut
)'1,

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FAXED COPY OF THE CERTIFICATE OF RELEASE FOR HER REVIW. FAXED TH LIEN RELEASE AND THE ESCROW DEMA ISSUED BY CINCINNA11. (Emphasís added)

At page 44 of the Internal Revenue Servce Collection fuction ICS case history printout
datedJune 1,2006, Exhibit 8 of the Stipulation of Facts, the followig appears under

the action date

of 10/18/05:

I ADVISED TP THAT TH NIL WIL BE REINSTATED. HE STATED THAT I ENJOYED RUINING HIS LIFE. I STATED THA TWAS NOT TRUE AND ADVISED THE TP OF HIS CAP

RIGHTS. HE STATED WHAT GOOD WOULD THAT DO, HE WILL HA VB TO HIE AN
A TTORNEY AT THIS POINT. J ALSO ADVISED THE TP OF HJS CDP RIGHTS AFER. THE

LIEN IS FILED. TP ASk'ED WH TIE LIENS HAD BEEN RELEASED. I STATED I DID NOT KNOW THE ANSWER. IT COULD HAVE BEEN DUE TO TH REFI PERIOD OF THE LIEN, WHICH WAS WHEN THE TP WAS IN THE OFFER STATUS.. HOWEVER,

THE EXPIRTION OF THE REFILE PERIOD WOULD NOT JUSTIFY TH
CERTIFICATE OF RELEASE OF LIEN. (emphasis added)

VI. THE INTERNAL REVENU SERVICE ENGAGED IN IMROPER EX PAR1'
COMMUNICATIONS

The Intern Revenue Manual (IR provides, in par as follows:

13.1.2.6 (10-31-2004) RR98 §§ 3417 Third Party Contacts
RRA98 §§ 3417/1RC §§ 7602(c) specifies requirements when third par contacts

will be made in connection with working a case. Basically, IR employees are
prohibited from contacting persons other th the taxpayer about the collection or

determnation of a ta without rust giving the tapayer reasonable notice that such
contacts may be made. Refer to IRM 11.3, Disclosure of Offcial Information for

Third Part Contact procedures.

The IRS has been guilty ofinappwpriate and improper ex parte communcations with regard
to the intat case. One improper ex parte communication is found in Exhibit # 5 to the Stipulation
ofF

acts. That docwnent is entitled Case Activity Record POOt. It jndicates that the Appeals Offcer

(AO) is Cynthia ChadwelL. She is sometimes referred to as Settlement Offcer (SO) The very first
entr by Ms- Chadwell, the Appeals Offcer reads as follows:

Received cae file from screener per litigation advisor in lagun, this TP has a damage suit pending relating to the lien.
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In truth, Petitioner did not have a damage suit pendig relating to ths lien or any other lien.
He did, however, in an attempt to get some sort of cooperation out ofthe Revenue Officer or anyone
else at the IRS, prepare and submit a Notice of Intention To Sue

The United States of America. That

document, together with all ofit5 attchments is attched to the Stipulation of

Facts as Exhbit #18

and made a par herof

by ths reference. Tht document clearly establishes the many many attempts

the tapayer made to obtain some sort of coopertion from the IRS, and his offers to get the
undisputed taxes paid in fulL.

Also the Case Activity Record Print Exhibit # 5, atthed heri~to and made a par hereof as

though set fort in full, which wa produced to pettioner prior to ths matter had the first several
Jines on page two (2) redacted so that it could not be read. The Case Activity Record Print provided

in coruectjon with this tral is unredacted) the redacted language irrefutably estblishes that the IRS
engaged in improper ex parte communications.

CDP recived on 413/06. Assigned to this SO on 5/16/06. Was notied by
Litigation AdvL'lOr in Laguna Niguel that TP had a damage suit pending relating to the lien fiing. Also have CDP on related Pship entity with sae issues 5/5/06 ieS

History Entry by Litigation Advisor shows possible dierent CSED computation.
(emphasis added) (CDP Collection Due Process Hearg) (SO Settlement Offcer)

The IRS has failed to produce any information whatoever concerning a "possible different
CSED computation."
Another clearly inappropriate ex parte communcation is a rnernorandwn from the Revenue Officer Marinez, to Karen Buhow, Lien Advisor thru Patricia Med, Abusive Tax Avoidance
Transactions (A TAl) Group Manager 3100 dated November 07, 2005. lnat memorandum is
Exhibit #9 to the Stipulation of

Facts. In that letter Revenue Offcer Marnez stted: "The taxpayer

owes 1040 income ta for the tax years 1993, 1994, 1995, 1996,2003 and 2004"
Page ~21-

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IRC Section 6330 set out the process for adnistrative revicw or decision by the IRS to
levy on taxpayers' propert. One of the protections tht setion gives tapayers is a promise tht the

hearg will be conducted by an IR employee who is imparal. (Sec. 6330(b)(3).) Congress
reinforced this reuirement by directing the Commissioner to reorgane the IRS so that the entire
IRS Appeals fuction would be independent. (Iternal Revenue Servce Restrctug and Reform

Act of 1998, Pub. L. 105-206) sec. 1001(a), 112 Stat. 689.) The Commssioner then made the
guartee of impariality par of the IRS's stdad operatig procedur by issuing Revenue

Procedure 2000-43, 2000-2CJÐ- 404. This proceure .prohibits ex parte commwucations by IRS
employees that would appear to compromise the independence of an Appeals Offcer. United States
No. 14928-04L; Filed April

Tax Court - Memorandum Decision, T.e. Memo 2007-93; Docket

23,

2007. The Cour in finding inappropriate ex parte communcations sted:

There can't be any suspense in our holding on tls point-the cover letter scnt to
Talbott tht accompanied the adminìstratìve file was precisely the sort of

prohibited

ex parte contact that the Commssioner and Congress wanted to ban. It put the revenue offcer's spin on what he thought of Wells and Industrial, and blatatly
advocated a paricular result. In tw rect:nt cases, Dralæ v. Commissioner, 125 T.C.
201 (2005), and Moore v. Commissioner, T.e. Memo. 2006:-171, we held tht

communcations very similar to the cover letter in ths case were likewise prohibited ex parte communications...

Ths needs to stop. Congress wanted to give tapayers an opportnity to appeal their
case to an IRS employee who would take a fresh look at the facts. Ex parte contats
not only undermine the impariality of the offcer hearg the appeal, but ar

especialy pernicious because they are SO hard to detect. Wells only discovered the cover letter sent to Talbot because, as a lawyer) he wa savv enough to ferret out its existence from a reference in the Appeals Offcer's cas activity report-Revenue Proceur 2000-43 prohibits ex parte communications that appear to
compromise the Appeals offce. Act influence isn't requird, only a reonable

possibility that the prohibited communications may have compromised the Appeals
offcer's imparality. See Drake, 125 T.C. at 209-20.

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VII. CONCLUSION
As demonstrted herein the IR ha acted ilegally and unconscìonably with regar to this
taxpayer. The IRS has engaged in ìmproper er parte communications; it has frudulently back dated

documents to make it appear that the IRS complied with mandatory provision of

both the IRe and

the lR, when refiling liens whìch were previously releaed both by self releaing and by the
issuace and reordation of Cerificates of

Releae ofFedeml Tax Liens and not subject to refiing

in any event.

Revenue Offcer Marnez falsely, frudulently and maliciously Intedered with tapayer's
escrow causing the escrow to fall through resulting in moneta and emotional daages to tapayer.

WHREFORE petitioner requests the taes for ta yeas 1993 and 1994 be ordered
uncollectible.

Respectfully submjtted:

Dated: December 14, 2007

~

Page -23-

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Rod M. Toothcre (Stae Bar No. 033048) 13742lndian Peak Trail Poway, California 92064 (858) 513-0217

UNTED STATES TAX COURT
Toothacre v. Commissioner

Docket No: 26357-06"L"

PROOF OF SERVICE BY u.s. MAIL
I, declare that: I am over the age of eightee year and not a par to the action; i am employed in, or am

a resident of the County of San Diego, Californa. where the mailing occur; and my business address is: Post Offce Box 500347, San Diego, Ca1üomia 92150-0347.

On December J! 2007, I served the followig document(s): PETITIONER RODNEY M.
TOOTHACREJS TRIAL BRIF; by placing a copy thereof in a separte envelope for each addressee
respectively as follows;

Kaen Nicholson Sommers

General Attorney DEPARTMENT OF THE TREASURY Internal Revenue Service 701 "B" Street, Suite 901
San Diego. Californa 92101

(619) 557-6014 Fax: (619) 557-6581

I then sealed each envelope and, with postge thereon fully pre-paid, 1 place each for deposit in the United
States Post Service. ths same day.

I declare. under penalty of peljuIy, according to the Jaws of is true and correct and that ths service was made under the direction ora member of

the United States of America, that the foregoing
the Bar of

ths Court.

Executed this 4 day of

December, 2007, San \

.ego, Caforn ~ &

Case 3:07-cv-02289-DMS-WMC

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EXHIBIT B:
Answering Brief by the IRS

Case 3:07-cv-02289-DMS-WMC

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BRIEF INITIAD PAGE
ANSWERING BRIEF FOR RESPONDENT

In re:

Toothacre v. Commissioner Docket No. 26357-06"L"

Name

Date

Attorney:
KAREN NICHOLSON SOMMERS General Attorney

(Small Business ! Self-Employed)

Reviewer:
JEFFREY A. SCHLEI Associate Area Counsel
(Small Business! Self-Employed)

Case 3:07-cv-02289-DMS-WMC

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UNITED STATES TAX COURT
RODNEY M. TOOTHACRE,

Peti tioner,
v.
COMMISSIONER OF INTERNAL REVENUE,

Docket No. 26357-06"L"

Respondent.

ANSWERING BRIEF FOR RESPONDENT

DONALD L. KORB Chief Counsel Internal Revenue Service

OF COUNSEL: THOMAS R. THOMAS Division Counsel (Small Business/Self-Employed) JAMES A. NELSON Area Counsel

(Small Business/Self-Employed: Area 8)
JEFFREY A. SCHLEI Associate Area Counsel

(Small Business/Self-Employed: Area 8)
KAREN NICHOLSON SOMMERS General Attorney

(Small Business/Self-Employed)

Case 3:07-cv-02289-DMS-WMC

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CONTENTS

Page

PRELIMINARY STATEMENT......................................... 1 PRELIMINARY STATEMENT......................................... 1

QUESTIONS PRESENTED........................................... 3
RESPONDENT'S REQUEST FOR FINDINGS OF FACT...................... 4

ULTIMATE FINDINGS OF FACT..................................... 13
POINTS RELIED UPON........................................... .15

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
I. The settlement officer properly determined that the statute of limitations on collection of petitioner's income liabilities for tax years 1993 and 1994 had not expired, that the liabilities had not been discharged in bankruptcy, and that peti tioner had received timely notice of the filing of the Notice of Federal Tax Lien. ............ 17

A. The statute of limitations on collection has not
B. Petitioner's 1993 and 1994 tax years were not

expired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

discharged in his Septemer 8, 1995 bankruptcy case. ...... .20
C. Petitioner received timely notice of the December 5,

2005, Notice of Federal Tax Lien filing. . . . . . . . . . . . . . . . . . . .24

II. The settlement officer's determination that the Notice of Federal Tax lien had been properly filed after reinstatement of the federal tax lien was incorrect as a ma tter of law, and was accordingly an abuse of discretion. ..25
III. No prohibited ex parte communication took place in this case. ..................................................28

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

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CITATIONS

Page

Cases
Baker v. Commissioner, 24 T.C. 1021, 1025 (1955) ..............25

Miller v. Commissioner, 23 T.C. 565, 569 (1954), affd. 231 F.2d 8 (5th Cir. 1956) ...................................... 25
Petzoldt v. Commissioner, 92 T.C. 661, 683-687 (1989) .........24
Richmond v. United States, 172 F.3d 1099, 1103 (9th Cir. 1999) ....................................................... 18

Severo v. Commissioner, 129 T.C. No. 17 (Nov. 15, 2007) .......19
Smith v. United States, 109 Bankr. 243, 245 (Bankr. w.o. Ky. 1989), affd. 114 Bankr. 473 (W.O. Ky. 1989); ...........23

Woods v. Commissioner, T.C. Memo 2006-38. .....................21
Young v. United States, 535 U.S. 43, 49, 122 S. Ct. 1036,
152 L. Ed. 2 d 79 ( 2 002 ) ..................................... 23

Code Sections
Bankruptcy Code § 362 (a) ...................................... 17
Bankruptcy Code § 362 (c) (1) ................................... 18

Bankruptcy Code § 362(c) (2). ..................................18

Bankruptcy Code § 507 (a) (7)................................. .21

Bankruptcy Code

§ 507 (a) (7 ) (A) § 523
§

(i) . . . . . . . . . . . . . . . . . . . . . 22, 23,

24

Bankruptcy Code
Bankruptcy Code Bankruptcy Code

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21, 24

523 (a)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20, 21, 23

§ 523

(a)

( 1) (A)

. . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22

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CITATIONS

Page
Bankruptcy Code § 523 (7) (B) ................................... 24

Bankruptcy Code § 727 (b) ...................................... 21

I.R.C. § 6320 .................................................. 1

I.R.C. § 6320 (c) .............................................20 I.R.C. § 6323(j) ..............................................27
I.R.C. § 6325(f) (1) ...........................................25
I.R.C. § 6325(f)

(2) .......................................25,27

I.R.C. § 6330 .................................................. 1 I.R.C. § 6330(e) (1) ...........................................20

I.R.C. § 6331(i) (5) ...........................................19
I.R.C. § 6331(k) (1) (A) ........................................19

I.R.C. § 6502(a) (1) ...........................................17

I.R.C. § 6503(h) ..............................................18

I.R.C. § 6503(h)(2....................................17, 18, 19

Regulations
Treas. Reg. 301.6325-1(f) (1) (i) ................