James W. Smith v. United States

The Meaning of “Shall” in the Internal Revenue Code. Sections 6501(a), 6213(a), and 6901(a) of the Internal Revenue Code all provide that the Government “shall” or “shall not” take certain actions in connection with providing notice, making assessments, and collecting unpaid taxes, and § 6502(a) uses an equivalent phrase (“but only if”). Does the use of the word “shall” in the identified code sections make their provisions mandatory with respect to notice, assessment, payment, and collection in the case of transferees, or can the Government bring proceedings in court to collect taxes without complying with these provisions?

The Overall Statutory Scheme. The Internal Revenue Code has a very detailed framework of interrelated code sections dealing with a wide range of procedural and administrative issues, including provisions governing notice, assessment, payment, and collection of taxes. Can the Government substitute a judiciallycreated alternative for the very detailed statutory scheme designed by Congress for purposes of enforcing transferee liability?