The U.S. Court of Appeals for the Tenth Circuit affirmed the Tax Court’s decision upholding IRS assessments against Steven and Tobie Ness for tax years 2015 through 2018. The opinion describes the amount as about $655,000; the $650,000 figure in the case’s headline coverage is rounded, not a precise final balance. The October 6, 2026 decision is an unpublished order and judgment, not binding precedent, though it may be cited for persuasive value under applicable rules.
What the tax dispute was about
The IRS notified the Nesses in 2021 that it had assessed about $655,000 for 2015–2018 based on returns filed for those years. The couple said they had filed no returns and speculated that identity theft might be involved. During a collection appeal, they said they had asked the settlement officer for copies of the returns and more time to obtain them.
The Tax Court initially questioned whether a March 16, 2023 letter had reached the settlement officer and whether the administrative record was complete. The IRS requested a remand so the record could be clarified and the returns searched for.
What the IRS found on remand
The IRS produced returns for 2016, 2017, and 2018, but the settlement officer could not locate a 2015 return. The Nesses no longer disputed the authenticity of the three produced returns. At the later Tax Court trial, they offered no evidence that those returns were not theirs or were incorrect. The Tax Court upheld the assessment.
Why the Tenth Circuit did not require production of the 2015 return or Form 4340
The Nesses argued that the IRS had to produce the 2015 return or a Form 4340 to establish their tax liability. The Tenth Circuit rejected that argument on the record before it. The panel noted that the couple cited no authority requiring the IRS to produce a taxpayer’s return before collection.
Form 4340 is used to fulfill the IRS’s statutory duty to provide a taxpayer, upon request, a record of assessment. The opinion discusses 26 U.S.C. § 6203, 26 C.F.R. § 301.6203-1, and March v. IRS, 335 F.3d 1186 (10th Cir. 2003), in explaining that role. The Nesses contended that because the Tenth Circuit had described Form 4340 as presumptive proof of a valid assessment, it was the minimum evidence the IRS had to provide. The panel said that description did not make the form the only adequate proof or the minimum possible proof.
The panel also observed that the record did not show the Nesses had requested Form 4340 or raised that issue in the Tax Court. Information on the account transcript in the record appeared to match the information required on Form 4340. The court put its conclusion directly: “We therefore reject the claim that the IRS must at least produce a Form 4340 to prove tax liability.”
Why the court distinguished Hoyle
The Nesses relied on Hoyle v. Commissioner, 131 T.C. 197 (2008), arguing that it required underlying documents when a taxpayer disputes a return. The Tenth Circuit said Hoyle addressed a different question: whether a required notice of deficiency had been sent before collection. It did not establish a general rule requiring underlying return documents whenever a taxpayer challenges a return.
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The decision is narrow: it does not say IRS returns can never matter or that Form 4340 is irrelevant. It rejects the couple’s arguments given the record and the issues they had preserved.
Why the court upheld denial of the briefing request
The Nesses also argued that the Tax Court should have allowed written briefs. When the Tax Court asked what issues they intended to brief, they could not identify them. The Tenth Circuit reviewed the denial for abuse of discretion and found none.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the ruling does—and does not—establish
- The appellate court affirmed the Tax Court’s judgment upholding the IRS assessments for 2015–2018.
- The IRS produced the 2016–2018 returns on remand but could not locate the 2015 return.
- The court did not require Form 4340 as the exclusive or minimum proof of an assessment in this case; it considered the record, including the account transcript, and the Nesses’ failure to show that they had requested the form or raised the issue in Tax Court.
- The opinion is an unpublished order and judgment. It is not binding precedent, although it may be cited for persuasive value consistent with applicable rules.
For someone facing an IRS collection dispute, the practical lesson is limited: the records required and arguments available depend on the case’s procedural posture and evidence. This decision does not establish a universal rule for every challenge to an IRS assessment.
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