CCA recommends a mootness motion when a CDP tax is fully paid

Plain-English summary

Chief Counsel Advice addressed documents and proposed language in a collection due process case. It stated that when the tax has been fully paid, the IRS's general position is to file a motion to dismiss for mootness instead of a decision document. A decision document may be appropriate when non-CDP taxes or refunds also need to be resolved through a stipulation. For assessed taxes in a CDP case, the advice generally favored stating that the assessment will be abated, and that a notice of federal tax lien will be released if one was filed.

Ruling snapshot

• Question: What filing and disposition language should be used in a collection due process case when the tax is fully paid or abated?
• Outcome: Advice given
• Key authorities: IRC § 6330

Full text (IRS public release)

ID: CCA_2012071908242355 Number: 201240020
Release Date: 10/5/2012
Office: ----------------------------
UILC: 6330.00-00

From: ---------------------
Sent: Thursday, July 19, 2012 8:24:25 AM
To: ---------------------
Cc: -----------------
Subject: RE: CDP decision documents

Our general position is that a motion to dismiss for mootness, rather than a decision document, should be filed when the tax is fully paid. Perhaps a decision document would be appropriate if there are issues involving non-CDP taxes or refunds that we want to resolve in a below the line stipulation. In that scenario, your proposed language would not work.

As far as your last question, since in CDP we are dealing with actual assessed taxes, we have usually thought it was appropriate to state that the assessment will be abated (and if a NFTL is filed, that the NFTL will be released). Of course, in some cases the tax has already been abated by the time we draft the decision document, or we are only dealing with unassessed interest accruals. I have found it impossible to come up with sample decision documents that cover every possible scenario in a CDP case.