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Ink Is Finally Dry on Charlie Sheen’s Agreement With IRS

By: Erin McManus

 

Actor Charlie Sheen is now on the same playing field as any taxpayer in a similar financial situation, which wasn’t the case when he had his first hearing, according to his counsel, Steven L. Jager. 

 

Jager of Fineman West & Co. and Laura Mullin of the IRS Office of Chief Counsel signed two stipulated decisions, according to an August 17 status report, agreeing to a $3.3 million offer in compromise and putting an end to Sheen’s Tax Court cases, both titled Sheen v. Commissioner

 

Sheen’s first collection due process hearing, for the 2015 tax year, lasted 34 calendar days, and the settlement officer refused to grant a continuance once Sheen obtained representation at the end of the 34-day period, according to an August 5 status report

 

Jager told Tax Notes that 34 days would be an extraordinarily short period for a CDP hearing for a taxpayer with a relatively simple financial situation. A second CDP hearing regarding Sheen’s 2017 and 2018 tax years began in January 2020, and Sheen proposed an OIC covering all three tax years. The Los Angeles area director for the IRS Independent Office of Appeals ultimately rejected the OIC on October 7, 2021, without explaining his reasoning or offering an opportunity for Sheen to address his concerns. 

 

In October 2021 the IRS filed a motion for summary judgment in the first Tax Court case, Dkt. No. 14774-18. Sheen filed a second Tax Court petition, Dkt. No. 29680-21, in November 2021. 

 

The second petition requested the court to consider the consolidation of the two cases. It also asked the Tax Court to remand the two CDP cases to an Appeals office in a geographic location outside the jurisdiction of the Los Angeles area director. 

 

The Tax Court remanded both cases in a January 24 order, and the respective counsels chose the Dallas area director. 

 

Sheen also filed his response to the IRS’s summary judgment motion on January 1, noting that Form 433-A, “Collection Information Statement,” appeared to be missing from the administrative record. Jager said the absence of the document would have brought into question its accuracy and completeness. 

 

Tax Court Judge Mark V. Holmes denied summary judgment as moot on August 18, concurrent with the filing of the stipulated decision in Dkt. No. 14774-18 and proposed stipulated decision in Dkt. No. 29680-21.

Company Tax Notes
Category FREE CONTENT;ARTICLE / WHITEPAPER
Intended Audience CPA - small firm
CPA - medium firm
CPA - large firm
Published Date 08/19/2022

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Tax Notes is the first source of essential daily news, analysis, and commentary for tax professionals whose success depends on being trusted for their expertise.

Tax Notes is a portfolio of publications offered by Tax Analysts, a nonprofit tax publisher. It provides comprehensive and impartial coverage of tax news, while its commentary contributes important voices to the discussion and understanding of tax policy.

Founded in 1970, Tax Analysts was created to foster free, open, and informed discussion about taxation. In 1972 Tax Analysts published Tax Notes Federal, its first weekly journal, featuring news, commentary, and analysis on federal taxation. In 1989 Tax Analysts added Tax Notes International, a weekly magazine focused on international taxation. Tax Notes State rounded out the weekly portfolio in 1991. Each magazine offers best-in-class tax commentary and analysis on the latest changes in tax law and policy, as well as on court opinions, legislative action, and revenue rulings.

Tax Notes has continued to innovate through the years, adding the online daily news services Tax Notes Today FederalTax Notes Today International, and Tax Notes Today State between 1987 and 1991. Tax Notes also provides several research and reference tools, as well as specialized services focusing on exempt organizations, state tax audit guidance, and international tax treaties.