Dunn: Voluntary CDP Dismissal Did Not Promise Another Court Hearing

In Dunn v. Commissioner, T.C. Memo. 2026-2, the Tax Court granted a taxpayer’s request to dismiss his Collection Due Process case without prejudice. That label did not mean he could safely restart the same court challenge later. The court warned that further review would be severely restricted and that the taxpayer would remain subject to collection as provided by law. Official memorandum, pages 5–6.

Judge Goeke filed the opinion on January 7, 2026, in docket 5294-25L. It concerns a voluntary dismissal of a CDP proceeding, not a merits decision that the taxpayer owed no tax or a general right to withdraw any Tax Court case. The taxpayer resided in Michigan, and the opinion identifies the Sixth Circuit as the ordinary appellate venue absent a contrary stipulation. Dunn, at 1 & n.1.

The Taxpayer Wanted to Leave Court and Pursue a Collection Offer

The proposed levy concerned 2018, 2019 and 2020. Dunn timely requested a CDP hearing and challenged the underlying liabilities, but did not propose a collection alternative there. He missed the scheduled telephone conference and did not respond to the Appeals officer’s last-chance letter by its March 10, 2025 deadline. The IRS issued a determination sustaining the proposed levy on March 12. Id. at 2.

After timely petitioning the Tax Court, Dunn moved on August 6, 2025 to dismiss or withdraw his petition. The Commissioner had already answered. Dunn said he no longer wished to pursue the proceeding, initially without explaining why. The Commissioner later reported that Dunn planned to submit an offer in compromise and that the IRS was willing to consider it. The opinion does not say the offer had been accepted. Id.

The court did not treat the request as an automatic exit. It asked whether dismissal would prejudice the Commissioner after Boechler made the CDP petition deadline nonjurisdictional and subject to equitable tolling. The Commissioner disclaimed prejudice and did not object. Through counsel, Dunn also confirmed that he did not intend to file a second petition and understood the collection consequences. Id. at 2, 5–6.

A Court-Ordered Dismissal Required Discretion

Because the Tax Court rules did not provide a governing voluntary-dismissal procedure, the court looked to Federal Rule of Civil Procedure 41(a) through Tax Court Rule 1(b). Rule 41 distinguishes a qualifying early notice or signed stipulation from a dismissal requiring a court order. The opinion analyzed the latter route under Rule 41(a)(2); it did not say that a taxpayer could unilaterally erase the case after an answer simply by labeling the request a withdrawal. Id. at 2–3.

Dismissal without prejudice under that rule is discretionary. The court discussed protection against clear legal prejudice, relevant litigation efforts and expense, diligence, the explanation for dismissal, and judicial resources. The central question was whether the other party would lose a substantial right. Costs or other conditions can matter where prejudice exists. Here, the Commissioner’s lack of objection supported granting the motion. Id. at 3–4, 6.

A Nonjurisdictional Deadline Was Not a Fresh Filing Period

The court revisited Wagner v. Commissioner, 118 T.C. 330 (2002), which had permitted voluntary CDP dismissal when the court treated the filing deadline as jurisdictional. Under that earlier understanding, an expired deadline effectively prevented the taxpayer from returning even though the dismissal was labeled without prejudice. Dunn, at 4–5.

Boechler changed the jurisdictional premise. After that decision, lateness does not by itself create a jurisdictional bar to a second CDP petition. But a late filer still needs a legally sufficient basis for equitable tolling or other applicable relief. Dunn stressed the heavy burden and questioned whether someone who voluntarily dismissed an existing case could establish tolling afterward. It did not decide that Dunn qualified for tolling or grant him an extension. Id. at 5–6 & n.4.

Our Boechler analysis explains the separate Supreme Court holding. Dunn adds a different practical problem: What a taxpayer gives up by abandoning a timely pending case. Nonjurisdictional does not mean optional, and dismissal does not supply a new 30-day period.

The Offer Did Not Guarantee a New Notice or Another Court Hearing

Dunn acknowledged that if the IRS rejected his planned offer, it would not issue a supplemental notice of determination for the court to review. He also accepted that granting dismissal would leave him subject to lawful collection action. The court therefore warned against reading its dismissal label as assurance of another opportunity for judicial review. Id. at 6.

The opinion also distinguishes deficiency cases. Footnote 3 explains that the CDP dismissal approach does not carry over to a deficiency proceeding, where section 7459(d) generally treats dismissal as a decision that the deficiency determined in the notice is correct. Classify the actual case before assuming withdrawal leaves every issue undecided. Id. at 4 n.3.

Read the Disposition With the Consequences

The memorandum concludes that the case will be dismissed without prejudice because the Commissioner does not object; an appropriate dismissal order would follow. The official docket separately records a January 7 order granting the August 6 motion and dismissing the case. Neither the opinion nor that docket description is an approval of the contemplated offer or a cancellation of the assessments. The analysis is based on the complete memorandum and the observed official docket, not a claim of comprehensive later appellate treatment.

Before seeking dismissal, identify the proceeding, the court orders requested, any remaining petition deadline, the consequences for collection, and whether the hoped-for alternative actually creates another reviewable determination. Our Crawford analysis concerns a different CDP issue—prior opportunity and an offer record. For review of the specific choice in a pending case, bring counsel the petition, answer, collection notices and proposed motion through our tax services practice.