In Hogan v. Commissioner (T.C. Dkt Docket No. 11229-15 Bench Opinion dated 6/9/21), here, the Tax Court (Judge Buch) rejected the taxpayer’s request for interest abatement on tax liabilities. Hogan had previously pled guilty to tax evasion. All of the commotion about tax liability and interest arose from that event. There was nothing particularly interesting or of precedential value (hence the bench opinion). But I noted that Hogan complained about being designated a “Potentially Dangerous Taxpayer.” The relevant portions of the transcript (pp. 13 & 15-16):
Mr. Hogan was displeased with having been labeled as a potentially dangerous taxpayer or PDT. The Commissioner uses the designation of PTD to "identify taxpayers who represent a potential danger to employees." Internal Revenue Manual, 25.4.1.1.1 (Oct. 31, 2018). Mr. Hogan learned of this designation through a request under the Freedom of Information Act. He argues that this designation resulted in unfavorable treatment during the appeal process. He did not direct us to any error or delay resulting from his designation as a potentially dangerous taxpayer.
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Regarding his designation as a potentially dangerous taxpayer, Mr. Hogan failed to meet his burden at every level. He did not establish that there was an error in designating him as a PDT. Even if that were erroneous, he did not establish that the designation caused any error, delay, or additional interest. And given his repeated efforts to avoid payment, he clearly did not establish that he would have paid his tax earlier.
Having not recalled paying any attention to the PDT designation, I did a Google scholar search and found nothing of interest. I recommend that readers of this blog interested in the PDT designation, read the IRM here discussing the PDT Program and the related Caution Upon Contact ("CAU") designation. Key excerpts are:
25.4.1.1.1 (10-31-2018)
Background
In 1984, the IRS Commissioner assigned IRS Inspection the responsibility of developing a program to improve the Service's ability to identify taxpayers who represent a potential danger to employees. Inspection developed the Potentially Dangerous Taxpayer (PDT) program, which included the PDT System database. Inspection was then given responsibility for administering the program.
Inspection became the Treasury Inspector General for Tax Administration (TIGTA) in 1999. Most of Inspection’s previous duties, including the administration of the PDT program, were transferred to TIGTA. Due to TIGTA’s statutory role and responsibilities, however, it was agreed that the administration and maintenance of the PDT program be transferred back to the IRS. IRS established the Office of Employee Protection (OEP) in February 2000 to administer and maintain the PDT program and fulfill other employee safety recommendations. TIGTA, however, retains its investigatory role in the PDT program.
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