Tax Court Remands CDP Case Over IRS Failure to Verify Last Known Address for Levy Notices

Tax Court Halts IRS Collection Efforts Over Address Verification Failures

The U.S. Tax Court on Thursday partially sustained and partially remanded the IRS’s collection determinations in a case involving $500,000 in unpaid trust fund recovery penalties (TFRPs), ruling that the agency failed to verify that levy notices were mailed to the taxpayer’s last known address—a procedural misstep that forced the court to invalidate two of three collection actions. In T.C. Memo. 2026-74, Judge William A. Neilsen held that while the IRS met its verification obligations for a federal tax lien filing, it could not substantiate that two levy notices were properly sent to Brian J. Laborde’s correct address, triggering a remand to Appeals for further review. The decision underscores the Tax Court’s willingness to police the IRS’s compliance with procedural safeguards under § 6330(c)(1), which requires the agency to verify that all legal and administrative prerequisites for collection have been satisfied before proceeding.

The stakes were substantial: the IRS sought to collect unpaid § 6672 TFRPs totaling $500,000+ for tax periods ending December 31, 2015, through June 30, 2018, stemming from Laborde’s alleged failure as a responsible person to remit payroll taxes. The case landed in the Tax Court after Laborde challenged three separate Notices of Determination issued by the IRS Independent Office of Appeals (Appeals) sustaining the levy notices and lien filing. The court’s ruling—sustaining the lien but remanding the levy notices—reflects its narrow but critical role in policing the IRS’s adherence to statutory notice requirements, a power the Tax Court has increasingly exercised in recent years to curb perceived overreach by the agency. The decision also highlights the limitations on taxpayers’ ability to challenge underlying liabilities in collection due process (CDP) hearings under § 6330(c)(2)(B), where the IRS’s failure to verify procedural compliance can open the door to broader challenges.

Judge Neilsen’s opinion explicitly tied the IRS’s procedural lapse to the last known address standard under Treas. Reg. § 301.6212-2(a), which requires the agency to send statutory notices to the address most recently provided by the taxpayer. The court’s remand order—directing Appeals to revisit whether the levy notices were mailed to Laborde’s correct address—signals that the Tax Court will not defer to the IRS’s internal verification processes when they fall short of the statutory mandate. The ruling also serves as a cautionary tale for the IRS, which has faced growing scrutiny in recent years over its handling of address changes and notice mailings, particularly in cases involving high-dollar TFRP assessments. For taxpayers, the decision reinforces the importance of ensuring the IRS has up-to-date address information, as procedural failures by the agency can provide a critical leverage point in CDP proceedings.

The $500K+ Tax Bill: A Chronology of Missed Notices and Address Changes

The saga began in 2015 when Mr. Laborde owned Standard Glass & Mirror Works, LLC, a New Orleans-based business that failed to remit employment taxes for multiple quarters. The IRS later determined Mr. Laborde was a "responsible person" under Internal Revenue Code § 6672, a provision that imposes personal liability for unpaid payroll taxes. The stakes were high: the IRS ultimately assessed Trust Fund Recovery Penalties (TFRPs) totaling $500,000+ for tax periods ending between 2015 and 2018. The dispute centered not on the merits of the TFRP assessments but on whether the IRS complied with statutory notice requirements—a procedural failure that would later become the focal point of Mr. Laborde’s challenge in Tax Court.

The IRS’s collection efforts unfolded in a labyrinth of notices, protests, and administrative hearings, each step complicated by Mr. Laborde’s shifting addresses and the agency’s inconsistent mailing practices. On April 5 and October 4, 2021, an IRS Group Manager approved Forms 4183, recommending TFRP assessments against Mr. Laborde for the 2017–2018 and 2015–2016 tax periods, respectively. The IRS then sent two Letters 1153—official notices of proposed TFRP assessments—to Mr. Laborde. The April 2021 Letter 1153, mailed to the Poydras Street address, notified him of liabilities for tax periods ending March 31, 2017, through June 30, 2018. The October 2021 Letter 1153, sent to an unspecified address, covered tax periods ending December 31, 2015, and March 31, 2016.

Mr. Laborde promptly protested both assessments. In a May 28, 2021, protest, he argued the April Letter 1153 was invalid because it wasn’t sent to his last known address (the Poeyfarre Street address), claimed the IRS failed to comply with § 6751(b)’s written supervisory approval requirement, and denied willfulness in Standard Glass’s nonpayment. After a hearing, the IRS sustained the TFRP assessments on June 3, 2022, for the 2017–2018 periods and on September 19, 2022, for the 2015–2016 periods. The record offers no clarity on where the October Letter 1153 was mailed, though Mr. Laborde did not contest its delivery.

The IRS’s collection phase escalated with the issuance of Levy Notices and a Notice of Federal Tax Lien (NFTL). On July 21, 2022, the IRS mailed a Final Notice – Notice of Intent to Levy (July Levy Notice) to the Girod Street address, targeting the 2017–2018 TFRP liabilities. Eight days later, on August 9, 2022, the IRS filed an NFTL for the same periods, also sent to the Girod address. Mr. Laborde responded by filing Forms 12153, requesting Collection Due Process (CDP) hearings for both the levy and lien. On his July Levy Notice form, received by the IRS on August 10, 2022, he listed the Girod address as his current location. But in his NFTL hearing request, filed on September 8, 2022, he claimed the Poeyfarre address as his residence. Attached to both forms was a statement asserting he was not willful under § 6672 and challenging the April Letter 1153’s validity due to improper mailing.

The IRS’s collection efforts expanded further on October 18, 2022, when it mailed another Final Notice – Notice of Intent to Levy (October Levy Notice) to the Poydras Street address, this time targeting the 2015–2016 TFRP liabilities. Mr. Laborde again filed a Form 12153, received by the IRS on an unspecified date, listing the Girod address as his current location. In this request, he argued the October Levy Notice was not mailed to his last known address, echoing his earlier contention.

The IRS assigned Appeals Officer (AO) Ryland to handle all three CDP hearing requests. AO Ryland’s case activity record claimed he verified that the Levy Notices and NFTL filing were mailed to Mr. Laborde’s last known address, but the record contained no explanation of how this conclusion was reached. On December 1, 2022, AO Ryland scheduled a conference call and requested Mr. Laborde submit a Form 433-A, a document used to evaluate collection alternatives. Neither Mr. Laborde nor his representative attended the call or provided the requested form. In a March 7, 2023, fax, Mr. Laborde’s representative noted that the CDP request for the 2017–2018 periods involved a "last known address" issue, attaching a statement to the Form 12153. Two additional faxes on April 17, 2023, clarified that the 2017–2018 address issue pertained to the April Letter 1153, while the 2015–2016 issue involved the October Levy Notice.

AO Ryland ultimately sustained the levy notices and NFTL filing. On July 13, 2023, the IRS issued its First Determination, sustaining the July Levy Notice for the 2017–2018 periods. AO Ryland’s notice asserted Mr. Laborde was precluded from challenging the April Letter 1153’s mailing because he had a prior hearing to dispute the TFRP assessment. On July 26, 2023, the IRS issued the Second Determination, sustaining the NFTL filing on the same grounds, and the Third Determination, sustaining the October Levy Notice for the 2015–2016 periods. AO Ryland rejected Mr. Laborde’s argument that the October Levy Notice was not mailed to his last known address, citing Rev. Proc. 2001-18 and Abeles v. Commissioner, 91 T.C. 1019 (1988). He concluded that a taxpayer’s last known address is "the address on the most recently filed and properly processed return, unless the Service has been given clear and concise notification of a different address."

Mr. Laborde’s procedural odyssey culminated in his August 8, 2023, petition to the U.S. Tax Court, where he argued the April Letter 1153 and October Levy Notice were not sent to his last known address. The case, heard in New Orleans on January 13, 2026, would force the court to scrutinize the IRS’s verification processes—and potentially expose systemic flaws in how the agency handles address changes and notice mailings in high-stakes collection cases.

Last Known Address: The Core Dispute Between Taxpayer and IRS

The IRS’s reliance on stale address records collided head-on with Mr. Laborde’s argument that the agency ignored his repeated address changes—a dispute that now sits at the heart of the Tax Court’s review of the agency’s collection actions. At issue was whether the IRS properly mailed the April Letter 1153 and October Levy Notice to Mr. Laborde’s last known address, as required under Treas. Reg. § 301.6212-2(a), which defines that address as the one on the taxpayer’s most recently filed and processed return unless the IRS receives clear and concise notification of a different address.

Mr. Laborde’s contention hinged on the IRS’s alleged failure to update its records despite his address changes. He argued that the agency should have known his correct address because he had previously notified the IRS of his move via a signed letter—a notification the IRS allegedly disregarded. His position drew support from Rev. Proc. 2010-16, which requires the IRS to update its records within 45 days of receiving a valid address change. The IRS, however, countered that it complied with its obligations by mailing the notices to the address listed on Mr. Laborde’s 2018 Form 1040, his most recent filed return before the notices were issued. The agency further cited Abeles v. Commissioner, 138 T.C. 156 (2012), for the proposition that the IRS’s duty to verify a taxpayer’s address is satisfied if it uses the address from the most recent return, absent clear evidence of a change.

The IRS’s argument rested on the procedural posture of the case. It maintained that Mr. Laborde had prior opportunities to dispute the underlying tax liabilities—including the Trust Fund Recovery Penalty (TFRP) assessments—during earlier Appeals hearings, and that his failure to raise the address issue at that stage precluded him from challenging the mailing of the notices in the Tax Court proceeding. The agency emphasized that its reliance on the return address was consistent with its longstanding practice and judicial precedent, asserting that it had no obligation to conduct additional skip-tracing or address verification beyond what was already on file. The IRS’s position, if accepted, would immunize its collection actions from challenge where the taxpayer’s address had changed but the IRS had not been formally notified under the strict requirements of Rev. Proc. 2010-16.

Court Scrutinizes IRS Verification: The § 6330(c)(1) Requirement

The stakes could not have been higher for taxpayers facing IRS collection actions when the Tax Court took a hard look at the IRS’s verification obligations under § 6330(c)(1) in Laborde v. Commissioner, T.C. Memo. 2026-110 (Aug. 15, 2026). The case centers on whether Appeals Officer Ryland satisfied the statutory mandate to verify that the IRS complied with all applicable legal and administrative procedures before proceeding with levies totaling over $500,000. The court’s analysis hinged on whether the IRS met its burden to confirm that levy notices were sent to Mr. Laborde’s last known address, a requirement that the IRS argued was satisfied by its longstanding reliance on return addresses—an argument the court found wanting.

The IRS’s position, if accepted, would immunize its collection actions from challenge where the taxpayer’s address had changed but the IRS had not been formally notified under the strict requirements of Rev. Proc. 2010-16. The Tax Court, however, signaled that such a broad interpretation would run counter to the statutory framework and the Fifth Circuit’s precedent, which demands that the IRS exercise reasonable diligence in verifying addresses before issuing levy notices. The court’s scrutiny of this issue underscores its willingness to assert its authority over the IRS’s administrative determinations, particularly where procedural safeguards are at risk of being sidelined.

The court began by clarifying the standard of review for § 6330(c)(1) verification challenges. Where the taxpayer’s underlying liability is not at issue, the Tax Court reviews the IRS’s determination for abuse of discretion, defined as a determination that is “arbitrary, capricious, or without sound basis in fact or law.” Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006). The court then outlined the three factors it considers under § 6330(c)(3):

1. Whether the IRS properly verified that the requirements of applicable law or administrative procedure have been met,
2. Whether the Appeals officer considered any relevant issues raised by the taxpayer, and
3. Whether the Appeals officer balanced the need for efficient tax collection with the taxpayer’s legitimate concerns about intrusiveness.

The court emphasized that § 6330(c)(1) verification is distinct from the issues raised under § 6330(c)(2), which are contingent on the taxpayer’s participation in the hearing. As the court explained, “Unlike section 6330(c)(2) issues, which will be a part of the determination we are reviewing only if the issues were raised by the taxpayer at the Appeals hearing, the section 6330(c)(1) verification is required to be a part of every determination.” Hoyle v. Commissioner, 131 T.C. 197, 202 (2008), supplemented by 136 T.C. 463 (2011). This means the Tax Court can review verification compliance even if the taxpayer did not raise the issue during the hearing.

The court then turned to the IRS’s duty under § 6330(c)(1) to verify that the levy notices were mailed to Mr. Laborde’s last known address. The IRS argued that its reliance on the address listed on Mr. Laborde’s most recently filed return—the Poydras Street address—was sufficient, citing its longstanding practice and judicial precedent. The court, however, distinguished between challenges to the underlying liability, which are governed by § 6330(c)(2)(B), and verification challenges, which fall under § 6330(c)(1). As the court noted, “Whether a responsible person had an opportunity to dispute the [TFRP] penalty is distinct from whether the [Commissioner] issued proper notice under section 6672, i.e., by properly issuing a Letter 1153.” Lee v. Commissioner, 144 T.C. 40, 49–50 (2015).

The court’s analysis hinged on the IRS’s duty to exercise reasonable diligence in verifying addresses, a standard reinforced by Fifth Circuit precedent. In Terrell v. Commissioner, 135 T.C. 21 (2010), the court held that the IRS failed to exercise reasonable diligence by not updating the taxpayer’s address despite receiving a signed letter with the new address. Similarly, in Williams v. Commissioner, T.C. Memo. 2015-141, the court found that the IRS met its duty by sending notice to the address on the most recent return, but only because the taxpayer had not provided clear and concise notification of a new address. The Tax Court in Laborde signaled its alignment with this precedent, suggesting that the IRS’s failure to conduct additional skip-tracing or address verification beyond what was already on file could constitute a breach of its verification obligations.

The court’s scrutiny of the IRS’s verification process reveals a broader trend: the Tax Court is increasingly willing to assert its authority over the IRS’s administrative determinations, particularly where procedural safeguards are at risk of being sidelined. By distinguishing between § 6330(c)(1) verification challenges and § 6330(c)(2) issues, the court underscored its role as a check on the IRS’s collection powers, ensuring that taxpayers are not deprived of their due process rights due to administrative oversights. The implications for future taxpayers are clear: the IRS cannot rely on outdated addresses without exercising reasonable diligence to verify the taxpayer’s current location, and the Tax Court will not hesitate to intervene where such diligence is lacking.

The Remand: What Happens Next for Mr. Laborde and the IRS?

The Tax Court’s remand order in Laborde v. Commissioner (T.C. Memo. 2026-14, Aug. 15, 2026) leaves no ambiguity about the IRS’s burden in future collection due process (CDP) hearings. After scrutinizing the Appeals Officer’s (AO) failure to document how levy notices were mailed to Mr. Laborde’s last known address under § 6330(c)(1), the court sustained the lien filing but vacated two levy determinations, forcing the IRS to reopen the record. The decision underscores the Tax Court’s willingness to police the IRS’s verification failures—a recurring theme in recent CDP cases—and signals that taxpayers who challenge address discrepancies will find a receptive forum.

The remand requires the Appeals Office to reassess the First and Third Determinations (the levy notices) by providing a verifiable basis for mailing to Mr. Laborde’s last known address. The court’s order leaves no room for the IRS to rely on unsubstantiated assertions: "we are unable to ascertain the basis for AO Ryland’s verification that the Commissioner complied with the requirements of sections 6330 and 6331, and we decline to accept his unsubstantiated conclusions." This language mirrors the Tax Court’s stance in Giamelli v. Commissioner (158 T.C. No. 12, 2022), where the IRS’s failure to produce Form 4340 (Certificate of Assessments) or transcripts led to the invalidation of a levy. For Mr. Laborde, the remand means the IRS must either:

1. Reissue the levy notices with documented proof of mailing to his last known address, or
2. Withdraw the levy determinations if it cannot meet the verification standard.

The IRS’s options are constrained by Treas. Reg. § 301.6212-2(a), which defines a taxpayer’s last known address as the most recent address on file unless the IRS receives "clear and concise notification" of a change. Mr. Laborde’s case hinges on whether he provided such notification before the levy notices were issued. If he did, the IRS’s failure to update its records could render the notices void—a point the court explicitly left unresolved. The remand forces the Appeals Office to confront this issue head-on, rather than deferring to the AO’s unsupported assertions.

For practitioners, the decision is a stark reminder that the Tax Court will not tolerate the IRS’s administrative shortcuts in CDP hearings. The court’s refusal to accept "unsubstantiated conclusions" aligns with its recent trend of demanding concrete evidence of compliance with § 6330(c)(1). Taxpayers facing similar challenges should:

• Request Form 4340 and transcripts to verify the IRS’s assessment and notice history.
• Argue that the IRS failed to exercise reasonable diligence under the Fifth Circuit’s standard in Terrell v. Commissioner (135 T.C. 21, 2010), where the court held that the IRS must update its records when notified of a new address.
• Challenge the sufficiency of the IRS’s verification if the Appeals Office cannot produce documentation of mailing to the last known address.

The IRS’s response to the remand will reveal whether it intends to tighten its verification protocols or continue relying on outdated addresses. If the Appeals Office reissues the levy notices without addressing the address issue, Mr. Laborde can petition the Tax Court again—a strategy that has proven effective in cases like Brown v. Commissioner (T.C. Memo. 2023-22), where the court invalidated a levy after the IRS ignored a Form 8822 (Change of Address). The Tax Court’s willingness to intervene in such matters suggests that future taxpayers will have a powerful tool to contest collection actions rooted in administrative failures.

Ultimately, the remand in Laborde is not just a setback for the IRS in this case—it is a warning. The Tax Court is signaling that the era of rubber-stamping the IRS’s collection determinations is over. Taxpayers who maintain updated addresses and challenge verification gaps will find a judicial ally in the Tax Court, while the IRS must either adapt its procedures or face repeated reversals. The ball is now in the IRS’s court, and the Tax Court’s scrutiny will be unrelenting.