National Association of Estate Planners and Councils

July, 2017 Newsletter
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Chuck Rubin on U.S. v. Holmes - IRS Schools Taxpayers on Duty of Consistency

“The Holmes case is interesting on several levels. First, it provides an illustration of a court applying the duty of consistency, which is not a regular occurrence. Second, it is interesting on a visceral level, as we witness taxpayers, to use a cliché, being hoisted on their own petard.”

Chuck Rubin provides members with his analysis of U.S. v. Holmes.

Charles (Chuck) Rubin, a board-certified tax attorney, is managing partner of Gutter Chaves Josepher Rubin Forman Fleisher Miller PA, a tax, trusts and estates boutique law firm situated in Boca Raton, Florida ( He is an ACTEC and STEP fellow, and a former adjunct professor at the University of Miami School of Law. Chuck has published numerous treatises, manuals, and articles, including two BNA Tax Management portfolios, and articles in Journal of Taxation, Estate Planning, Tax Management Estates, Gifts and Trusts Journal, and Tax Notes. He authors a popular tax blog at, and speaks regularly at professional meetings and conferences, and was named 2015 & 2017 Attorney of the Year by Best Lawyers in Tax Law for the Miami metropolitan region.

Here is his commentary:


Taxpayers asserted that they submitted a request for a collection due process hearing, and provided a signed certified mail receipt to prove the IRS’ receipt. Later, the taxpayers reversed course regarding whether they made the request when the date became relevant to the expiration of the statute of limitations on collections. The Fifth Circuit Court of Appeals disregarded the taxpayer’s later argument by applying the duty of consistency.


Shirley died in October 1997. The estate filed an estate tax return and paid the tax indicated. The IRS subsequently audited Shirley’s estate and issued a notice of deficiency. After Tax Court proceedings, the court issued a stipulated decision increasing estate taxes by $215,264. This tax was never paid.

The IRS issued liens on real property in the name of the estate and a beneficiary. It also issued a Notice of Intent to Levy. On October 5, 2013, the estate submitted to the IRS via certified mail a Form 12153 Request for a Collection Due Process or Equivalent Hearing. This submission occurred about the same time as a federal government shutdown, and the IRS claimed it did not receive the submission. One of the beneficiaries then wrote a letter to the IRS and enclosed a copy of a certified mail receipt showing that the received the submission in October 2013. Based on the certified mail receipt, the IRS accepted that it received the request on October 5, 2013.

On March 10, 2015, the IRS commenced a case in federal district court against two beneficiaries and the estate to foreclose outstanding liens and obtain a money judgment for unpaid taxes, penalties and fees. A principal argument of the taxpayers was that the IRS’ suit to collect taxes was commenced 10 years and 237 days after the assessment date (the date of the Tax Court stipulated decision). Since the IRS only has ten years to collect taxes under Code §6502, the taxpayers claimed the statute of limitations on collection had expired.

The IRS claimed that it was within the 10-year statute because the limitation period was suspended for 241 days during the pendency of the collections due process hearing, as directed by Code §6330(e)(1). It asserted the tolling commenced on October 5, 2013, the date the IRS treated the request as being received.

The taxpayers responded by claiming that the request for the collections due process hearing was not initiated until May 2014, after one of them sent a letter to the IRS to prove that the IRS received the request in October 2013.

The District Court ruled against the taxpayer on a motion for summary judgment. The 5th Circuit affirmed the ruling, based on the taxpayers’ duty of consistency. The 5th Circuit noted: “The district court found it unfair for the taxpayers to have waved about the certified mail receipt showing that the hearing request was sent and received in October, only to reverse course and insist during this litigation that it was not so. It held the taxpayers to the duty of consistency, an estoppel doctrine developed in tax cases.”


The duty of consistency is an equitable doctrine grounded in fairness. In Herrington v. CIR, 854 F.2d 755 (5th Cir. 1988), the appeals court held that the duty of consistency applies if three elements are met: (1) a representation or report by the taxpayer; (2) on which the Commissioner has relied; and (3) an attempt by the taxpayer after the statute of limitations has run to change the previous representation or to recharacterize the situation in such a way as to harm the Commissioner."

The court found that (1) and (2) were met when the taxpayers asserted that they filed for the due process hearing in October 2013. Item (3) was met based on the taxpayers’ arguments regarding the summary judgment motion.

The taxpayers argued that the duty of consistency applies only when a taxpayer takes inconsistent positions from one year to the next. The appeals court rejected this, noting the application of the duty in cases that only involved one tax year.

The taxpayers also argued that the duty does not apply when the inconsistency concerns a pure question of law and both the taxpayer and the IRS have equal access to the facts. The appeals court rejected this, noting both that the issue involved a question of fact (the date the hearing was requested), and that the IRS did not have equal access to the facts since the taxpayers had the certified mail receipt and so knew what they had sent and when it was received.

The case is interesting on several levels. First, it provides an illustration of a court applying the duty of consistency, which is not a regular occurrence. Second, it is interesting on a visceral level, as we witness taxpayers, to use a cliché, being hoisted on their own petard.


Chuck Rubin


LISI Estate Planning Newsletter #2562, (June 29, 2017) at Copyright 2017

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United States v. Barbara L. Holmes et al, unpublished (5th Cir. No. 16- 20790); Herrington v. CIR, 854 F.2d 755 (5th Cir. 1988); Code §6330(e)(1); Code §6502.

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