In Uncategorized on 08/19/2014 at 16:01

No, not Ado Annie’s line from Rodgers’ & Hammerstein’s “no legs, no jokes, no chance” musical that saved the Theatre Guild. No, this was The Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, s/a/k/a The Implacable Foe of the Partitive Genitive, Judge Mark V. Holmes, telling IRS that they “cain’t say no” to that diehard whistleblower Kenneth William Kasper, Docket No. 22242-11W, filed 8/19/14.

This is yet another variation on the theme “win your case at discovery”. But first, do you remember Kenneth William? No? Then read my blogpost “The IRS Loses a Doubleheader”, 7/12/11, where some sloppy mailing by IRS keeps Kenneth William in the Hunt for the Gold. And Kenneth William isn’t giving up soon.

Kenneth William wants to check out IRS’ files in a bankruptcy case, whereat IRS may have gotten some boodle based on Kenneth William’s pictures, descriptions and accounts of corporate and individual skullduggery.

IRS says no, but Judge Holmes gets the parties on the horn (a great fan of teleconferencing, he), and as they stick to their positions, Judge Holmes, recognizing the law is, in his words, “uncertain”, calls for briefs.

Well, Kenneth William comes out swinging.

“A review of their briefs shows that a major issue in the case is whether the record rule applies in whistleblower cases. It is a strong possibility that this Court will find that it does, and it is also quite possible that the documents that Mr. Kasper seeks will not be in that administrative record. But one of the ways in which a litigant in a case governed by the record rule gets a trial is if he alleges that something is missing from the record that ought to be there – such as whether an agency ‘has considered all relevant factors and explained its decision.’ Tri-Valley CAREs v. U.S. Dept. of Energy, 671 F.3d 1113, 1130 (9th Cir. 2012). This makes discovery – particularly a very pointed and well-described request like Mr. Kasper’s – useful and available.” Order, at p. 1.

For those who tuned in late, the record rule, much beloved by, among others, Ninth Circuit (and trial is set for Phoenix, AZ, Ninth Circuit country), is the contrapositive of the Yellow Pages’ famous slogan: “If it’s not in here, it’s not out there”.

In “record rule” jurisdictions, the courts review agency determinations based upon the record before the agency at the moment of determination. “All thy piety and wit”, as the Persian bard put it, cannot change a line of it, either by addition or subtraction. If the parties are unhappy with the proffered record, they must say so.

So hand it over, IRS, right after Labor Day.

Takeaway for whistleblowers and their representatives: Get the discovery demand that Kenneth William put together and govern yourselves accordingly.


In Uncategorized on 08/18/2014 at 19:13

No, not the 1971 Clint Eastwood thriller; this is the story of Misty S. Doonis, 2014 T. C. Memo. 168, filed 8/18/14, as told by Judge Lauber.

Misty missed two years’ worth of 1040s, so IRS obligingly prepared SFRs for her and gave her SNODs for each at no extra charge. Misty never bothered to petition either SNOD, so IRS assessed tax and gave Misty a Final Notice of Intent to Levy and Notice of Your Right to a Hearing.

This gets Misty’s attention, and she asks for a CDP. “In her request, petitioner asked that her account be placed in currently not collectible (CNC) status or, alternatively, that the IRS consider a collection alternative in the form of an installment agreement or offer- in-compromise.” 2014 T. C. Memo. 168, at p. 3.

The SO asks Misty for a Form 433-A wage earner and SE tell-all, which Misty proffers timely. OK so far.

One minor problem. In addition to the two unfiled years, Misty has five (count ‘em, five) other unfiled years, so before the SO will hear Misty’s plea, she must come up with the returns.

And she does. All but one.

SO says that Misty’s income well exceeds local and national standards, per the returns she did file (each of which show a hefty balance due).

“Petitioner requested an installment agreement or an offer-in-compromise. Both collection alternatives require that the taxpayer be in full compliance with filing required tax returns. Petitioner concedes that she did not file a tax return for 2005.” 2014 T. C. Memo. 168, at p. 7. (Citations omitted).

It doesn’t get better. “Petitioner first argues that the SO should have excused her failure to file this return because ‘she did not have sufficient records to file a tax return for 2005.’ This excuse is unavailing. Taxpayers are required to keep and produce adequate records that enable the Commissioner to determine the correct tax liability. This is an affirmative duty placed on the taxpayer, and an unexplained failure to maintain adequate records is no defense to the duty to file a required return.” 2014 T. C. Memo. 168, at pp. 7-8. (Citations omitted).

Ya gotta give Misty and her lawyers credit for trying.

“Petitioner next contends that she had ‘no reported income for tax year 2005 per the IRS wage and income transcripts.’ Petitioner is a self-employed medical recruiter who earned Schedule C business income averaging in excess of $78,000 for 2006-2012. On her Schedule C for 2006 she did not check the box for designating that she ‘started or acquired this business during 2006.’ This implies that she was engaged in her medical recruiting business during 2005. Petitioner has set forth no specific facts, by affidavit or otherwise, tending to show that she did not work in her business during 2005; that she earned no income in 2005; or that the income she earned in 2005 was below the threshold requiring her to file a tax return. See sec. 6012(a).

“The fact that the IRS transcript of petitioner’s 2005 account shows no third-party reporting of payments to her does not imply that she received no income for 2005. Self-employed individuals are not subject to reporting on Form W-2, Wage and Tax Statement, and they often are not subject to reporting on Form 1099- MISC, Miscellaneous Income, either. Petitioner has set forth no specific facts, by affidavit or otherwise, indicating how many clients she had, how those clients paid her, and whether those clients generally supplied the IRS with Forms 1099-MISC reporting the income that she received.” 2014 T. C. Memo. 168, at pp. 8-9.

Finally, Misty and lawyers claim the IRS Manual says IRS won’t ask for returns more than six years old, and the missing return is one such. Great, says Judge Lauber, but “We have previously found no abuse of discretion when an SO required a taxpayer to file returns going back more than six years. The IRM, which includes Policy Statement 5-133, does not have the force and effect of law but provides only direction and guidance.” 2014 T. C. Memo. 168, at p. 9. (Citations omitted).

Rather like the Pirates of the Caribbean, the IRS Manual and Policy Statements therein set forth are “guidelines…aspirational goals.”

So Misty has to pay up. The SO was right in not putting Misty in CNC or putting her on  the installment plan, because she has money.


In Uncategorized on 08/18/2014 at 14:27

No, not Robin Williams (although I much lament his passing).

Rather, I somewhat belatedly note the passing on June 3, 2014 of Blonde Grayson Hall, Esq., star of my blogpost “When All Else Fails”, 4/4/13. Whatever her subsequent delictions, she was a member of the initial steering committee of the President’s Council of Cornell Women in 1990. Hail, all hail, Cornell!

I was made aware of Ms. Hall’s decease from Judge Ruwe, who filed an Order 8/18/14 in Blonde Grayson Hall & Neal E. Hall, Docket No. 353-12.


Get every new post delivered to your Inbox.

Join 105 other followers