DocketNumber: Docket No. 22360-12L.
Judges: HALPERN
Filed Date: 9/29/2015
Status: Non-Precedential
Modified Date: 11/20/2020
Decision will be entered under
Until it ceased operations in April 2007, P was a single-member LLC owned and managed by B who, because P was a disregarded entity under the "check-a-box" regulations, reported P's results on a Schedule C, Profit or Loss From Business, included in B and his wife's joint individual income tax returns. On its Forms 941, Employer's Quarterly Federal Tax Return, filed for 2005, 2006, and the first quarter of 2007, P offset the employment taxes due with respect to its employees' wages by the advance earned income credits (AEIC) allegedly paid to those employees. Under the Combined Annual Wage Reporting program, the Social Security Administration (SSA) and the IRS compare the Forms W-2, Wage and Tax Statement, filed with the SSA, with the Forms 941, filed with the IRS. R discovered that the wages and AEIC payments that P reported on its Forms 941 for 2005 and 2006 exceeded the wages and AEIC payments it reported on its Forms W-2 for those years. A statement from its Memphis, Tennessee, Service Center reported that P filed no Forms W-2 for the first quarter of 2007.
*195 In April 2011, R issued a Notice of Intent to Levy and Notice of Your Right to a Hearing (notice of levy), addressed to both P and B, in which R sought to collect (1) employment taxes for 2005 and 2006 equal to P's alleged overstatements of AEIC payments to its employees on its Forms 941 for those years and employment taxes equal to the entire amount of the AEIC offset for the first quarter of 2007, on the basis of P's alleged failure to file any Forms W-2 for that quarter, (2) interest, and (3) additions to tax under
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HALPERN,
Petitioner was a temporary-labor employment agency. It was a single-member limited liability company owned and managed by Mr. Borre. Its place of business was 6050 South Pulaski Road, Chicago, Illinois (Pulaski Road address or premises), at all relevant times until it ceased operations and closed on April 10, 2007. Mr. Borre resides (and, at all relevant times, resided) in Highland Park, Illinois.
*201 When petitioner ceased operations on April 10, 2007, its customer*208 lists and general intangibles relating thereto were sold by its creditor, Capital Tempfunds, to Personnel Services Group, LLC. Petitioner abandoned its lease at that time, and neither petitioner nor Mr. Borre retained possession of the Pulaski Road premises thereafter.
Petitioner timely filed its Forms 941 for three of the four 2005 quarterly tax periods; it delinquently filed its Form 941 for the third quarter on November 10, 2005. On those Forms 941, petitioner reported employment taxes of $217,867, $233,167, $272,988, and $408,182 for the first through fourth quarters of 2005, respectively, which respondent assessed on June 27, September 12, and December 12, 2005, and April 10, 2006, respectively. On its 2005 quarterly Forms 941, petitioner offset the employment taxes due by the following AEIC amounts for the first through fourth quarters, respectively: $95,275, $77,537, $109,096, and $142,701, for total claimed AEIC of $424,609 for 2005.
Petitioner filed 2005 Forms W-2 reporting $4,406,558 of taxable Social Security wages and $325,247 of AEIC. Petitioner's*209 Forms 941 for 2005 reported *202 total taxable Social Security wages of $6,789,815, which was $2,383,257 more than the $4,406,558 it reported on its 2005 Forms W-2. Correspondingly, the $424,609 of AEIC petitioner reported on its 2005 Forms 941 was $99,363 more than the $325,247 it reported on its 2005 Forms W-2. On September 8, 2008, respondent disallowed $99,363 of the $142,701 of AEIC that petitioner claimed for the fourth quarter of 2005, which resulted in a $99,363 underpayment of petitioner's 2005 employment taxes.
Petitioner timely filed its Forms 941 for the four 2006 quarterly tax periods. On those Forms 941, petitioner reported employment taxes of $191,774, $311,624, $496,740, and $489,706 for those quarters, respectively, which respondent assessed on July 17, September 4, and December 11, 2006, and March 12, 2007, respectively. On its 2006 quarterly Forms 941, petitioner offset the employment taxes due by the following AEIC amounts for the first through fourth quarters, respectively: $82,095, $99,827, $170,923, and $169,875, for total claimed AEIC of $522,720.
Petitioner filed 2006 Forms W-2 reporting $8,540,822 of taxable Social Security wages and $502,182 of AEIC. Petitioner's*210 Forms 941 for 2006 reported total taxable Social Security wages of $8,583,001, which was $42,179 more than *203 the $8,540,822 it reported on the 2006 Forms W-2. Correspondingly, the $522,720 of AEIC petitioner reported on its 2006 Forms 941 was $20,538 more than the $502,182 it reported on its 2006 Forms W-2. On January 4, 2010, respondent disallowed $20,538 of the $169,875 of AEIC that petitioner claimed for the fourth quarter of 2006, which resulted in a $20,538 underpayment of petitioner's 2006 employment taxes.
On August 3, 2007, petitioner delinquently filed its Form 941 for the quarterly tax period ending March 31, 2007. Petitioner reported employment taxes of $204,888 on that Form 941, which respondent assessed on September 3, 2007. On that Form 941, petitioner offset the employment taxes due by alleged AEIC payments of $64,183. Petitioner also reported on that Form 941 total taxable Social Security wages of $1,180,885. On the grounds that petitioner failed to file any Forms W-2 reflecting any AEIC payments to employees for the first quarter of 2007, respondent, on February 7, 2011, disallowed the entire $64,183 of AEIC offsets that petitioner reported on its Form 941 for that*211 quarterly tax period, which resulted in a $64,183 underpayment of employment taxes for the period.
All of petitioner's Forms 941 filed for the quarterly tax periods in issue listed the Pulaski Road address as petitioner's address.
Respondent assessed an $11,553 late-filing addition to tax under
On April 4, 2011, respondent sent by certified mail a "Final Notice--Notice of Intent To Levy and Notice of Your Right To A Hearing" (notice of levy). The notice of levy was addressed to both petitioner and Mr. Borre at Mr. Borre's home in Highland Park, Illinois. The notice of levy listed amounts of employment taxes *205 and penalties (described as "Unpaid Amount from Prior Notices") for all of the quarterly tax periods in issue, an "Additional Penalty" amount for the first quarter of 2007, and "Additional Interest" for all quarterly tax periods, totaling an "Amount You Owe" of $445,726. It advised that the listed amounts remained unpaid despite prior requests "to pay the tax", and it described the letter as "your notice of our intent to levy * * * and your right to request an Appeals hearing (under
On April 29, 2011, petitioner, listing Mr. Borre's home address as its address, filed a Form 12153 requesting a CDP hearing. The request erroneously described itself as a request for an equivalent hearing, and it indicated an intent to discuss collection alternatives, specifically, offer-in-compromise and inability to *206 pay the amount due. It also contained the following statement: "Unable to determine composition of proposed penalty. Also, I would like to propose a different way to pay the money I owe. Also, I am not liable for all or part of the taxes."
On January 10, 2012, petitioner, through its authorized representatives, and Appeals Officer Patricia*214 J. McCormick (sometimes, Appeals officer) participated in a face-to-face CDP hearing. That hearing and subsequent discussions between Ms. McCormick and petitioner's representatives concerned respondent's compliance with relevant procedural requirements and petitioner's liability for the assessed amounts. Among other things, petitioner's representatives told Ms. McCormick that the first collection notice that the taxpayer had received was the notice of levy and that any prior computer-generated notice and demand likely had been sent to a wrong address. Contrary to the intent expressed in the request for hearing, petitioner's representatives did not offer any collection alternatives. They argued that the taxpayer (presumably, Mr. Borre) should not be held responsible for any 2007 liabilities since he "was gone from [the] business 12/31/2006": He "walked away from the business and some of the people he was working with took it over."
*207 On August 10, 2012, Appeals issued a Notice of Determination Concerning Collection Action(s) Under The W-2 records were requested from the Service Center's database. W-2s were sent by the Internal Revenue Service Center for years 2005 and 2006. Unfortunately, since there were over 6,000 *208 W-2s issued for 2007, it was too voluminous for the Service Center to print. The W-2s for 2005 and 2006 were reviewed. Many of the W-2s showed either incorrect or missing social security numbers. * * *
Ms. McCormick testified that she had queried the IRS Integrated Data Retrieval System (IDRS), asking for data from 2007 Forms W-2 filed by petitioner and that she had received a response from the IRS Memphis Service Center referencing the IRS "Payer Master File on Line" and stating that "there were no payer documents posted to the PMF [payer master file] for TY2007". She concluded from that response that she had asked with respect to the wrong service center, and she testified that she then queried the IRS Kansas City Service Center regarding petitioner's 2007 Forms W-2. She received a response from Kansas City referencing the IRS "Information Returns Master File" and stating that her request for a transcript was not processed because "the transcript would have been over 2,000 pages", too many to print out. Petitioner is identified by its taxpayer identification number (TIN) in each report. Ms. McCormick testified that she could not reconcile the inconsistent reporting*217 by the two service centers for 2007 with their consistent reporting as to Forms W-2 filed by petitioner for 2006.
Respondent audited Mr. and Mrs. Borre's 2003-05 jointly filed Forms 1040, U.S. Individual Income Tax Return (2003-05 income tax audit). That audit resulted in no change for 2003 and various adjustments for 2004 and 2005.
During the course of the 2003-05 income tax audit, the agent, Michael Hershman, issued an information document request (IDR) to the Borres in which he noted the discrepancy between petitioner's wage payments as reflected on its 2005 Forms 941, $6,789,815, and the wages reported on petitioner's 2005 Form W-3, Transmittal of Wage and Tax Statements, $4,406,558. Both of those amounts differ from the cost of labor set forth on the Schedule C computation of the Borres' 2005 cost of goods sold, $6,465,653. Nonetheless, Mr. Hershman made no adjustment in his examination report with respect to the Borres' 2005 cost of goods sold computation.
The audit concluded with respondent's and the Borres' execution of Forms 4549, Income Tax Examination Changes, one for 2003 and one for 2004 and 2005, on which the Borres consented to*218 the assessment and collection of the proposed 2004 and 2005 deficiencies.
Respondent in January 2007 assessed a 10%
OPINION
I.
If the taxpayer requests a hearing in response to a notice of levy, he may raise at the hearing "any relevant issue relating to the unpaid tax or the proposed levy", including challenges to the appropriateness of the levy and collection alternatives such as an installment agreement or an offer-in-compromise.
Following the hearing, the Appeals officer conducting the hearing must determine whether the collection action is to proceed, taking into account his verification of the Secretary's compliance with "the requirements of any applicable law or administrative procedure", the issues raised by the taxpayer at the hearing, and whether the collection action "balances the need for the efficient collection of taxes with the legitimate concern of the * * * [taxpayer] that any collection action be no more intrusive than necessary."
Where the underlying tax liability is properly at issue, we review the determination de novo.
Because petitioner was a disregarded*220 entity for Federal tax purposes under
We have disposed of these types of jurisdictional issues in prior cases. In
Petitioner did not receive*223 a notice of employment tax deficiency and has not otherwise had an opportunity to dispute its tax liability for the years in issue. Therefore, it is entitled to de novo review of its underlying tax liability to the extent that it is in dispute. Respondent conceded at trial that "this is a de novo tax liability review. We've agreed that we're reviewing the tax de novo." Respondent argues on brief, however, that the Appeals officer's compliance with the verification requirements of
While it might appear that petitioner's argument does not pertain to 2006 because petitioner's counsel conceded at the conclusion of the trial that petitioner does not challenge the underlying tax liability for that year, petitioner still*225 challenges the addition to tax and penalty for 2006 (part of the underlying liability).
For all three years in issue, petitioner argues that the limitations period under
Ms. McCormick states in the attachment to the notice of determination that her verification that notice and demand had been properly issued was based on IRS computer records. Her statement that the notice and demand was mailed within 60 days of assessment to petitioner's last known address, presumably, was *217 also based on a computer listing of that address. At trial, respondent's counsel stated that "when assessments are made of * * * [the type involved in this case] then a notice and demand is computer generated automatically." He acknowledged, however, that there is "no physical evidence" to support the conclusion that that had occurred or that, if it had occurred, that the notice and demand, in fact, had*226 been mailed to an address at which Mr. Borre was likely to have received it. On the basis of computer-generated "account transcripts" for 2005-07, which listed the Riverside address as petitioner's address, it is likely that any computer-generated notice and demand would have been mailed to that address and that Mr. Borre would have been unlikely to have received it.
Normally, we would be reluctant to conclude that an Appeals officer has abused his or her discretion by relying on IRS computer records to verify that timely notice and demand had been mailed to the taxpayer's last known address. We have repeatedly held that it was not an abuse of discretion for the Appeals officer to have relied on computer-generated transcripts for purposes of complying with
Before it was repealed, effective for tax years beginning after December 31, 2010,
As noted
Respondent argues that the Appeals officer was entitled to rely on IRS computer-generated transcripts in concluding that a notice of unpaid tax and demand for payment, with respect to each taxable period in issue, was issued to petitioner at its last known address within 60 days of assessment, in conformance with
With respect to petitioner's preclusion argument for 2005, respondent argues that he is not bound by positions taken*231 with respect to the Borres in a prior audit. Respondent further argues that Mr. Hershman's prior audit did not involve an audit of petitioner's 2005 Forms 941 and that "[a]ny determinations made by * * * [Mr. Hershman] with respect to Borre's personal income tax liability are irrelevant to * * * [his] disallowance of the AEIC claimed on petitioner's Form 941s for the 2005 tax year."
*222 On the basis of a statement from respondent's Memphis Service Center alleging that no Forms W-2 for petitioner were posted to the payer master file for 2007, respondent argues that petitioner did not file any Forms W-2 with the Social Security Administration (SSA) for that year.*232 Therefore, respondent argues that petitioner is not entitled to any of its claimed AEIC for the first quarter of 2007. In reaching that result, respondent argues that Ms. McCormick's conclusion that over 6,000 Forms W-2 had been filed for 2007 "was based on her misinterpretation at trial of IRS transcripts and should be disregarded."
For 2005 and 2006, all of respondent's adjustments to petitioner's employment tax liabilities are attributable to reductions in petitioner's AEIC equal to the excess of the AEIC reflected on petitioner's Forms 941 for those years over the AEIC reflected on petitioner's Forms W-2 for those years. Respondent's disallowance of all of the AEIC reflected on petitioner's Form 941 for the first quarter of 2007 is based upon respondent's conclusion that petitioner did not file *223 any Forms W-2 for that quarter and, therefore, is unable to demonstrate that it paid any AEIC during that time.
For 2005 and 2006, respondent does not reduce the employee wages reflected on petitioner's Forms 941 to conform to the lesser amounts of wages reflected on the Forms W-2 that petitioner filed for those years. Such an adjustment would have been consistent with his reduction of petitioner's AEIC reflected on the Forms 941 to the amounts reflected on the Forms W-2, but it also would have resulted in reduced 2005 and 2006 employment tax liabilities, which may be why no such adjustment was made. Thus, for 2005 and 2006, we confront the anomalous*233 circumstance of respondent's accepting as accurate the wages, but not the AEIC, reflected on petitioner's Forms 941, and, conversely, accepting as accurate the AEIC, but not the wages, reflected on petitioner's Forms W-2.*234 Curiously, petitioner has not objected to respondent's inconsistent position, and it has not argued that if the AEIC reflected on its Forms W-2 is to be adopted as *224 accurate, so too should the wages reflected on those Forms W-2. As a result, we find that petitioner has conceded the accuracy of the wage amounts reflected on its Forms 941 for 2005 and 2006, and contests only respondent's adjustments to the AEIC reflected on those returns.
To begin with, it appears that petitioner has confused the
Although articulated as a defense based upon the expiration of the
*226 It is also significant that the Court of Appeals for the Seventh Circuit, the court to which an appeal of this case would most likely lie (on the basis of Mr. Borre's residence),*236 has held that violation of the 60-day rule does not, in itself, invalidate an otherwise valid notice and demand.
We hold that the assessment and collection actions with respect to the liabilities at issue herein were timely and were procedurally valid as a matter of law.
We reject petitioner's argument that the fact that respondent did not make any adjustment to petitioner's cost of goods sold, as reported on a Schedule C attached to the Borres' 2005 joint individual income tax return, precludes his disallowance of allegedly overstated AEIC payments to its employees for 2005. Ignoring the fact that we are concerned here with allegedly underreported employment taxes for 2005 whereas the prior audit involved the Borres' 2005 income tax liability, and assuming arguendo that an employment tax adjustment for 2005 based upon overstated AEIC payments would be inconsistent with respondent's not reducing petitioner's cost of goods sold as reported on the 2005 Schedule C incorporating petitioner's 2005 results, we find that petitioner's preclusion argument must fail.
As noted
Other than its statute of limitations/
As noted
There is no satisfactory explanation in the record as to why a statement from the Kansas City Service Center confirms petitioner's filing of some 6,000 Forms W-2 for the first quarter of 2007 whereas a statement from the Memphis Service Center confirms, in effect, that petitioner filed no Forms W-2 for that quarter. Both statements reference*240 the same TIN, and there is no dispute that that TIN *230 belongs to petitioner. During the trial, Ms. McCormick attempted to explain the discrepancy between the two statements by testifying that the Memphis Service Center was the "wrong" service center for the Form W-2 information. She assumed that to be the case because of the lack of any Form W-2 postings at that service center. On the basis of that assumption, she requested the statement from the Kansas City Service Center, which she deemed to be the "right" service center, and she agreed, on the basis of that statement, that petitioner probably had filed Forms W-2 for the first quarter of 2007. Under cross-examination, however, when respondent's counsel pointed out to her that, for 2006, the two service centers provided "the same information" regarding petitioner's Form W-2 filings, she was at a loss to explain why that was not also true for 2007. When asked whether she wished "to correct or change" her prior testimony that the Memphis Service Center was the "wrong" service center, she replied: "Yes, I guess, I don't know why they're [the two statements for 2007] different."*241
*231 The burden of proof with respect to factual issues pertaining to petitioner's liability for additional employment taxes for the quarterly tax periods in issue is on petitioner.
Respondent's assessments for all of the taxable periods in issue, based upon overstated AEIC, were made pursuant to the Combined Annual Wage Reporting (CAWR) program created by the Commissioner and the SSA "to ensure that employers paid and reported the proper amount of taxes and federal withholding."
Under the circumstances, the only credible evidence pertaining to petitioner's issuance (or nonissuance) of Forms W-2 (and, derivatively, of its having made, or not made, the AEIC payments reflected on its Form 941 for the first quarter of 2007) resides in the inconsistent service center statements. As noted
To begin with, we note that the Kansas City Service Center statement alleging petitioner's filing of "over 2,000 pages" of Forms W-2 is based upon information taken from the IRS "Information Returns Master File (IRMF) Transcript for TY 2007 Cycle". (1)
The Memphis Service Center*246 statement, reporting "no * * * [petitioner] documents posted to the PMF for TY2007", was based upon information supplied by the IRS "Payer Master File on Line (PMFOL)", which is described in 1. PMFOL provides information from the Payer Master File (PMF) at MCC. The summary screen shows all sources and amounts of income and withholdings, and the number of payment documents (Form 1099's, W-2's, etc.) filed by the payer as shown on Form 1096 transmittal.
The foregoing reference to information in the Form 1096, Annual Summary and Transmittal of U.S. Information Returns, is reiterated in
On the basis of the foregoing, and taking into account the parties' apparent agreement that the assessed employment tax liability for the first quarter of 2007 is sustainable, or not, in its entirety according to which of the two conflicting service center statements accurately reflects petitioner's Form W-2 filings for the first quarter of 2007, we find that petitioner is not liable for the assessed employment tax deficiency for that quarter.*250
Respondent*251 determined additions to tax pursuant to
Petitioner was required to file its Form 941 for the first quarter of 2007 on or before April 30, 2007, the last day of the month following the end of the quarter.
Respondent has computed the
For all of the taxable periods in issue, respondent does not dispute that petitioner timely paid the amounts shown as deposits on the Forms 941 that it filed. Respondent argues, and we agree, that petitioner overstated the credits it claimed*254 for AEIC payments, and that gave rise to underpayments. On that basis we sustain respondent's imposition of the
Respondent seeks to impose 10% intentional disregard penalties under
Respondent argues that the penalties apply against petitioner on the ground that it filed "incorrect Forms W-2" and that its failure to file correct Forms W-2 was due to intentional disregard of the requirement to correctly report the items on the Form W-2.
For 2005 and 2006, respondent focuses on the excess of the total employee wages shown on petitioner's Forms 941 over total employee wages shown on its Forms W-2 filed with the SSA. He argues that the penalties should be 10% of that excess: for 2005, 10% of $2,383,257, or $238,326, and for 2006, 10% of $42,179, or $4,218.*243 premised on the assumption that petitioner's Forms 941 for 2005 and 2006 accurately set forth the wages paid to its employees for those years, and, to the extent the Forms W-2 that petitioner filed for those years reported lesser amounts of wages, either they were incorrect or there were additional Forms W-2 that petitioner should have filed. As noted
Pursuant to
Also, we agree with petitioner that the single prior assessment of the intentional disregard penalty for 2003, to which petitioner acquiesced, does not establish "a pattern of conduct * * * of repeatedly failing to file timely or repeatedly failing to include correct information", within the meaning of
Petitioner is not liable for the penalties for 2005 and 2006.
Respondent*259 argues that petitioner is liable for the
1. Unless otherwise indicated, all section references are to the Internal Revenue Code (Code) of 1986, as amended and in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. We round all dollar amounts to the nearest dollar.
2. For employment taxes related to wages paid on or after January 1, 2009 (not this case), a disregarded entity is not disregarded and is treated as a corporation for purposes of employment tax reporting and liability.
3. Petitioner objects to only 10 of respondent's 88 proposed findings of fact. Respondent objects to all but 8 of petitioner's 25 proposed findings of fact. To the extent that either party fails to object to the other's proposed findings of fact, we conclude that they are correct except insofar as any such proposed findings are without evidentiary support in the record or are clearly inconsistent with evidence in the record, or the nonobjecting party's proposed findings of fact are clearly inconsistent therewith.
4. The parties have stipulated: "Petitioner in this case is Scott Labor, LLC." Nevertheless, because Mr. Borre was the sole shareholder of a disregarded entity, which, under the applicable regulations, is treated as a single taxpayer for Federal tax purposes,
5. Pursuant to
6. In her "case activity report", Ms. McCormick indicates that the Riverside address may have been petitioner's bookkeeper's address, used as a default address after petitioner ceased operations and abandoned the Pulaski Road address.
7. Both
8. Both
9. A reduction in petitioner's AEIC payments to its employees for any period necessarily reduces its reported cost of goods sold for the same period, which, in turn, increases its income or profit for the period. Because the 2003-05 income tax audit did not result in increased Schedule C income for the Borres' 2005 taxable year (as there was no downward adjustment in petitioner's reported cost of goods sold for that year), petitioner argues respondent is barred from reducing petitioner's 2005 AEIC payments (which necessarily would result in a corresponding reduction in petitioner's reported cost of goods sold) because that adjustment would be inconsistent with the results of the agreed income tax audit for that year.
10. Although a Form W-2 for 2007 was prepared for Mr. Borre as an employee of petitioner's, the record is inconclusive as to whether that Form W-2 was reported to the SSA or to respondent. In any event, Mr. Borre's Form W-2 for 2007 shows no payment to him of AEIC.
11. Because the record in this case includes Forms 941 only for the fourth quarters of 2005 and 2006, we cannot verify, on a quarter-by-quarter basis, that the wage amounts to which respondent has made no adjustment are the total wages reflected on petitioner's Forms 941 for those two years. Nonetheless, we are satisfied that petitioner did, in fact, compute its 2005 and 2006 employment tax liabilities on the basis of the total wages reflected on the four Forms 941 petitioner filed for each of those years because IRS transcripts that are in the trial record clearly indicate that to be the case.
12. When asked by petitioner's counsel, on redirect examination, whether the listing of the (incorrect) Riverside address for petitioner on the Memphis Service Center statement, rather than the Pulaski Road address set forth on the Form 941 for 2007, would have had any impact on the "printout from * * * [that] Service Center", Ms. McCormick replied: "It shouldn't, but I can't say for sure." We do not consider that testimony to compromise her earlier testimony that she has no explanation for the inconsistency between the two service center statements. Moreover, we do not consider the listing of an incorrect address to be significant in the light of the fact that both statements showed petitioner's TIN.
13.
14. "The IRM is the primary, official source of instructions to employees relating to the organization, administration and operation of the IRS. The IRM contains directions for employees to carry out their responsibilities in administering IRS obligations."
15. The parties have for the most part referred to data from the Memphis Service Center and not the Martinsburg Computing Center. We do not think that the identities of the sources of the admittedly conflicting reports about petitioner's 2007 Form W-2 filing is important, and we will continue to refer to the Memphis and the Kansas City Service Centers as the sources of that data.
16. To add to the confusion,
17. In contrast to respondent's argument herein that petitioner failed to file any Forms W-2 for 2007 and, for that reason, was not entitled to any AEIC offset for the first quarter of that year, the notice of determination specifically acknowledges, on the basis of "W-2 records * * * from the Service Center's database", that "there were over 6,000 W-2s issued for 2007". Presumably, that conclusion was based upon Ms. McCormicks' belief, at the time, that the Kansas City Service Center's statement contained the correct information regarding petitioner's Form W-2 filings for 2007. Despite that belief, she, nonetheless (apparently on the basis of her finding of "numerous incorrect W-2[s] through the years"), sustained both the tax and intentional disregard penalty assessments for the first quarter of 2007. Because, for 2007, petitioner's underlying liability for employment taxes and the penalty are at issue, and because Appeals' determination with respect thereto is subject to de novo review, we may make, and have made, our own findings of fact relating to that issue, and we ignore the Appeals officer's findings of fact, which constituted the basis for her sustaining respondent's assessments for 2007.
18. While petitioner filed its Form 941 late for the third quarter of 2005, respondent does not argue on account thereof for a
19. The requirement to report employee wages on a Form W-2 is in regulations issued under
20. As noted
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