IRS Rejects Former NBA Player’s Offer in Compromise, Upheld by Tax Court – Los Angeles Income Tax Planning & Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on June 12, 2014

The US Tax Court upheld the Internal Revenue Service’s (IRS’s) rejection of a taxpayer’s offer in compromise (OIC) after the taxpayer failed to provide all the necessary financial information requested by the agency.

Former Chicago Bulls shooting guard Kelvin Trent Tucker asked for a collection due process hearing after receiving a notice of intent to levy and federal tax lien related to his 2009 tax liability of more than $125,000. In his request, Tucker proposed an OIC of $100 per month for a duration of six months, followed by payments of $833 per month over the next three years. At the time of Tucker’s OIC submission, however, Tucker had failed to provide all of the pertinent financial information the IRS had requested, including especially an appraisal of the value of Tucker’s National Basketball Association Championship ring.

After receiving Tucker’s OIC, the IRS appeals office transferred the case to one of its Centralized OIC units, which then sent the case back to the appeals office after determining that Tucker had failed to provide the requested financial information. Upon learning that the case had been returned to the appeals office, Tucker promptly ceased making payments despite being informed that he was required to continue making those payments as his case was pending.

In May of 2012, after repeated attempts to collect all of Tucker’s requested financial information, the IRS formally rejected Tucker’s OIC and proceeded with the proposed levy and federal tax lien.

Judge David Gustafson ruled that the IRS had reasonably rejected Tucker’s OIC on the grounds that Tucker both failed to provide the requested financial information and stopped making payments while his OIC was being resolved. Gustafson added that the IRS had the right to request an appraisal of Tucker’s championship ring despite Tucker’s argument that the ring was a personal item not subject to levy. Even if the ring did qualify as a personal item under Section 6334, the Judge continued, “the value of the ring – and thus the missing financial information – would still have been essential to Appeals’ consideration of Mr. Tucker’s OIC.” Indeed, Section 6334 only exempts items up to $6,250 in value, whereas Tucker valued the NBA championship ring at between $10,000-$20,000.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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