According to Law360, the U.S. Tax Court decided on May 19, 2025, in Garcia v. Commissioner, docket number 27496-22P, for the first time that its review of a challenge to an IRS certification of tax debt as "seriously delinquent" is not limited to the agency's administrative record, saying a trial is needed in a man's case to determine the facts.
In the ruling, the full Tax Court rejected the Internal Revenue Service's request to find through summary judgment that the agency correctly certified the $130,000 tax debt of Alberto Garcia Jr. as seriously delinquent under Internal Revenue Code Section 7345(a), a designation that can cause a taxpayer's passport to be revoked.
Garcia argued that his tax liabilities, dating to 2005 through 2008, were unenforceable because they were so old and therefore couldn't constitute a seriously delinquent debt under the law.
The IRS countered that the agency qualified for an exception to the 10-year time limit on collections because Garcia's liabilities had been reduced to judgment by a federal court within the proper time frame.
The court said the case tasked it with deciding an issue of first impression. As Judge Emin Toro framed it in writing the opinion for the court: "What is the scope of our review or, put differently, on what evidence do we determine whether the commissioner's certification that a seriously delinquent tax debt exists is correct?"
The court concluded that the text of the law and the court's precedents require it to review the case from the beginning, or "de novo," meaning that the review must include evidence introduced at trial.
"Because Mr. Garcia raises a genuine issue of material fact as to whether he was served in the district court suit, we cannot conclude at this stage of the proceedings that the liabilities at issue are legally enforceable," Judge Toro said.
Read more at: Tax Times blog
