Once a taxpayer accepts an installment agreement in a collection due process (CDP) case, the fight over penalties and interest is over.
Holding
The Tax Court granted summary judgment for the IRS. It held that the taxpayer could not challenge penalties or interest after agreeing to an installment agreement that resolved the liabilities.
Why It Matters
CDP hearings are not a second chance to relitigate missed deficiency cases.
Accepting an installment agreement ends the controversy over the liabilities covered by the agreement.
Arguments based on fairness or bad tax preparers do not reopen penalties or interest.
Failure to raise issues properly during the CDP hearing is fatal on review.
Timeline
2014–2017: Taxpayer files returns. Two are delinquent.
January 30, 2019: IRS issues a notice of deficiency with §6662 accuracy-related penalties.
August 12, 2019: IRS assesses tax, penalties, and additions after no Tax Court petition.
October 27, 2021: IRS issues a notice of intent to levy.
June 29, 2023: IR…
