Terrence Howard

[The Observer]

Thanks for linking the audio, Wes.

After listening, we can confirm that Howard did file returns for all of the periods in the judgment and they were not the result of an SFR process. The testimony confirmed that the additional assessments were due to additional tax discovered by the IRS that was not reported by Howard. So I think it is safe to say that Howard was not claiming false credits based on the slavery reparation nonsense.

The testimony of the RO was a bit vague regarding the nature of payments that were made for the 2011 tax year. He stated that Howard appeared to "...be on an installment agreement of some type..." This is an unsatisfactory answer in my opinion given that there should be enough information available to the RO to determine the nature of the payments. Given that installment agreements are supposed to include all periods that are due and that resulting installments are applied to the earliest period, it is unusual that all of the payments were posted to 2011 and not 2010. Secondly, as I have pointed out before, the transcripts will show if the payments were coded as being for an installment agreement approved by the IRS. It appears that the RO never bothered to even do a cursory research as to what these payments were.

My guess is that Howard may have sent in voluntary payments for a period of time, hoping that it would somehow convince the IRS that money coming in would mean they could leave him alone. The RO had testified that Howard had never established any "...level of cooperation..." with the IRS in resolving the debt, which I take it to mean that Howard avoided contact with IRS employees and did not respond back to their attempts to contact him. So it is very unlikely that these payments were the result of an agreement reached with the IRS.

I would have thought that the judge would pursued the line of questioning he initiated in regards to what the IRS would be doing with a judgment if he awarded the relief requested by DOJ. The only point of spending the time, manpower and resources to obtain a judgment is that there is some likelihood of collecting from the taxpayer during the twenty years that the judgment exists. Therefore a AUSA worth their salt is going to grill the assigned IRS employee(s) as whether they have some plan or idea on where they can collect. I didn't get the impression that the attorney or the RO had explored this aspect. If the judge had been more experienced about this type of suit and had drilled down on the RO and AUSA, he might have embarrassed them for not having answers.

Edited to remove a typo.

[wserra]

Every now and then, you will see a judge - given the time and inclination - give an inexperienced lawyer an opportunity to get on his/her feet and do something in a real courtroom in a situation where it's not really necessary. I've seen that a few times in my own cases, once even during an appellate argument. I could be completely wrong, but I got the feeling that this is what was going on here. A default proceeding - so there won't be any cross-examination or argument - is a good opportunity for a judge so inclined to do this.

I also got the impression that neither the AUSA nor the RO was expecting that to happen. In their defense, it is not that common. A typical default hearing takes 30 seconds, not 30 minutes.

[The Observer]

A typical default hearing takes 30 seconds, not 30 minutes.

Yes, it seemed an open-and-shut case. But in the last few years, courts and DOJ have seemed to be looking at IRS suits with a critical eye - all the way to the point that a AUSA may be grilling an RO several times over seemingly mundane issues such as perfection of the assessment(s), verification of final notice delivery to the taxpayer and other critical due process issues. I have no idea if that happened here given the paucity of what actually occurred on the audio . I would like to think that she had at least secured verified 23C documents to establish the validity of the assessments.

I have to agree with your take that maybe the judge was giving this AUSA some courtroom experience. But if Howard had properly lawyered up and his attorney had found some holes in this case, DOJ would have had egg on their face.

[The Observer]

Howard has lawyered up again by filing a suit against his talent agency, CAA, claiming that they did not represent him fairly when negotiating his contract for the television series "Empire."

Howard claims they owe him $120 million and that they had also represented the producers and creators of the series in negotating a package deal, which he claims provided a motive to keep his own salary lower than white actors in other series.

The reason I am posting this is that the revelation that Terrence was receiving $325,000 an episode indicates that he should have had the ability to resolve the tax liability in a reasonable period of time.