Case: Tax Court Rules IRS Assessment Invalid Due to Lack of Deficiency Notice, Halts Proposed Levy on Taxpayers (T.C. Memo)

The U.S. Tax Court held that the IRS’s assessment of additional tax on taxpayers without issuing a notice of deficiency was invalid, granting the taxpayers’ petition challenging the proposed levy. Taxpayers, a married couple, filed a joint tax return for 2018 that did not include the required forms related to advance premium tax credit (APTC) payments they had received. After the IRS requested and received the missing forms, it assessed additional tax based on excess APTC payments. Taxpayers requested a collection due process hearing and challenged the underlying liability. The IRS Appeals Office sustained the proposed levy, determining the assessment ...