Crawford: A Prior Penalty Appeal Opportunity and an Unsupported $100 Compromise Offer

In Crawford v. Commissioner, T.C. Memo. 2026-3, the Tax Court granted summary judgment sustaining a federal tax lien collection determination. The taxpayer could not reopen the underlying trust-fund recovery penalty after receiving an earlier appeal opportunity, and the IRS did not abuse its discretion by rejecting his $100 offer in compromise on the financial record presented. Official opinion, pages 9–14.

Judge Landy filed the 14-page memorandum opinion on January 7, 2026, in docket 8081-23L. It concerns a Michigan taxpayer and a 2018 payroll-tax period. The opinion explains that, absent contrary stipulation, appeal would lie in the Sixth Circuit; it should not be presented as a Ninth Circuit ruling or a new California payroll standard. Crawford, at 1, 6 n.5.

The Remaining Quarter and the Collection Posture

Todd Crawford was the sole owner and officer of Crawford Pile Driving, LLC. The company filed its third-quarter 2018 Form 941 late and did not fully pay the reported employment tax. The IRS investigated personal trust-fund recovery penalty responsibility using corporate records, tax filings, a business financial statement and bank records. The opinion recounts these facts for summary-judgment purposes, not as findings after a trial. Id. at 2–3.

The original collection case included quarters ending September 30 and December 31, 2018. The December liability was satisfied, and the court dismissed that period as moot in July 2025. Only the September period remained for the January decision. The opinion reports a $28,977 liability for that period as of June 17, 2025; it does not identify that figure as a current account balance. Id. at 1 n.2, 3.

After a lien notice, Crawford timely requested a CDP hearing and listed collection alternatives. His $100 offer sought to resolve the remaining trust-fund liability together with other liabilities outside this CDP case. It was based on doubt as to collectibility. The court’s later comparison of the offer and collection potential should be read in that setting. Id. at 3–4.

Why Underlying Liability Was Not Open for Redetermination

The IRS mailed Letter 1153 and Form 2751 by certified mail on November 13, 2020. Its records reflected delivery November 24. Crawford did not protest the proposed penalty, and the IRS assessed it March 8, 2021. He later asserted nonreceipt in opposing summary judgment. Id. at 3, 7.

The court distinguished proper preliminary notice under section 6672 from the prior-opportunity restriction under section 6330(c)(2)(B). It explained that Letter 1153 offers an administrative means to contest a proposed trust-fund penalty, but a letter neither received nor deliberately refused is not such an opportunity. Here, USPS Forms 3800 and 3811 and the revenue officer’s notes supported actual receipt. Crawford offered no additional supporting evidence for his denial. Id. at 9–10.

Because he had received the earlier opportunity and did not use it, he could not challenge the underlying liability through CDP or this court proceeding. The remaining determination was reviewed for abuse of discretion. This was not a trial deciding anew whether he was responsible or willful. Id. at 10.

A Verification Remand Was Not the Final Result

The procedural record was important. In December 2024, the court had denied an earlier summary-judgment request because the Commissioner had not demonstrated required verification, particularly compliance with written supervisory approval requirements. The court remanded for supplemental proceedings. Id. at 6.

On remand, the settlement officer reviewed the assessment file, Letter 1153, certified-mail records, case notes and an approved Form 4183. A supplemental determination sustained the lien. The court explained that it could review procedural verification regardless of whether the taxpayer raised that issue at the hearing, and found the supplemented verification sufficient. Id. at 6–7, 11.

The court also explained that a supplemental CDP hearing continues the original proceeding rather than creating a new one. Its review included the initial determination and related documents because the supplemental determination incorporated them. Id. at 9.

The $100 Offer and the Missing Financial Support

Crawford argued that his reported wages overstated available income because he put substantial funds back into the company. The settlement officers requested supporting records, received incomplete submissions and allowed additional opportunities. They reduced the initial reasonable collection potential calculation from $1,003,664 to $568,280, still substantially above the $100 offer. Id. at 4–5, 12–13.

The court did not calculate its own preferred compromise. It asked whether rejection lacked a sound basis in fact or law. It found the officers considered the submitted information and did not act arbitrarily. The court found it sufficient that the collection potential exceeded the offer and that repeated opportunities had produced incomplete or unreliable supporting records. Id. at 5, 12–13.

Although the hearing request mentioned an installment agreement, Crawford never actually proposed one. The court found no abuse in failing to consider an unproposed agreement. It also found the required collection balancing satisfied and granted the Commissioner’s motion. Id. at 13–14. The official docket separately lists a January 7 order and decision granting that motion.

Our prior-opportunity guide turns the notice issue into a practical record task. The existing Letter 1153 guide addresses preparation before assessment. These are distinct from asking the court to substitute its own offer amount after an adverse collection determination.