Publication Title (Abbreviation)
When the collection of tax could be imperiled by going through the usual deficiency procedures, the IRS may make a jeopardy assessment or a termination assessment (hereinafter sometimes called “summary assessment”) and proceed immediately to collection. To prevent the misuse of this power, section 7429 provides affected taxpayers expedited administrative and judicial review. The IRS has made tens of thousands of jeopardy and termination assessments over the years, and there are hundreds of court decisions in litigated section 7429 cases.
The unique nature of jeopardy and termination assessments makes section 7429 proceedings very different from typical tax litigation. This article addresses a significant difference – the extent to which taxpayers may be allowed discovery of the basis of the IRS’s summary assessment. Part I sets the context by describing jeopardy and termination assessments and section 7429 review. Part II examines a number of judicial decisions foundational to discovery incident to section 7429. Part III considers special factors that likely will incline a court to expand or contract discovery available to taxpayers in such cases. The conclusion that will emerge from these parts is that only limited discovery typically is permitted in section 7429 cases, although special factors may alter the permitted extent of discovery. This pattern deviates from the generally more liberal discovery usually available in federal district courts. Part IV asks whether such deviation is consistent with rules of civil procedure and concludes that it is.
© 2001 Steve R. Johnson
Steve R. Johnson,
Discovery in Summary Assessment Proceedings, 93
Available at: http://ir.law.fsu.edu/articles/278