I mean persons who are seeking frequent litigator points in Tax Court. They gravitate to 400 Second Street, NW, in Our Nation’s Capital, as moths to a cliché. We have two of them back today, one a multiple previous participant in my blogposts, and one swum fresh into my ken.
Randy Thompson is back again. You remember Randy, who inspired The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being and implacable foe of the partitive genitive, Judge Mark V. Holmes, to a memorable dissent, as to which see my blogpost “The Great Dissenter”, 12/28/11. And Randy even got Eighth Circuit to praise Judge Holmes, as more fully set forth in my blogpost “The Great Dissenter Vindicated”, 11/12/13.
But Randy stipulates and capitulates, so the point that Judge Holmes raised is moot. See Randall J. Thompson and Karen G. Thompson, 2014 T. C. Memo. 154, filed 7/31/14.
Judge Wherry gets in the last word, but Randy really handed it to him. “The Court of Appeals found that we have jurisdiction to determine Mr. Thompson’s outside basis in his partnership interest. We need not make such a determination, however, because the parties have stipulated the deficiency. See Thompson v. Commissioner, 137 T.C. at 223-224. Our task on remand is, therefore, limited to entry of a decision formalizing that agreement.” 2014 T. C. Memo. 154, at p. 8. (Footnote omitted).
Finally, in United States v. Woods, 571 U.S. ___, 134 S. Ct. 557 (2013), the Supremes said that Tax Court could apply the overvaluation chop at a partner-level proceeding, but how that impacts each partner necessitates a partner-level proceeding. Unless, as here, the partnership is a sham, so a fortiori (as my high-priced colleagues say), the partners’ outside basis is zero, and the chop is purely computational.
So if Randy is still unhappy, let him pay and sue for a refund.
The new rounder is Alvin Sheldon Kanofsky, 2014 T. C. Memo. 153, filed 7/31/14. Al has been around. He lost in Tax Court, lost again in Third Circuit, filed for cert with the Supremes (denied), and moved for rehearing (ditto). Al never filed a bond on appeal, so IRS proceeded with collection.
Al, of course, asked for a CDP and raises the same arguments that got blown away before. Appeals says no, so does Tax Court, Alvin hits the Third Circuit trail again, loses, moves for rehearing en banc, knocks on the Supremes’ door and gets denied.
Al is a physics professor at Lehigh University. He didn’t follow the dictum misattributed to his famous colleague from Princeton, Dr. Einstein: “Insanity is doing the same thing and expecting a different result.”
Judge Dawson: “Petitioner is no stranger to this Court. He was warned in prior proceedings that his conduct could subject him to a penalty if he continued to repeat the arguments he made in earlier cases before this Court and the Court of Appeals for the Third Circuit in his deficiency and levy cases for the tax years 1996, 1997, 1998 and 2000. He has also litigated in this Court in docket No. 3774-11 his case involving income tax deficiency for 2006 and 2007. In each case, petitioner has continued to raise arguments of fraud, corruption, and whistleblowing activities nearly identical to those raised in this lien case.” 2014 T. C. Memo. 153, at pp. 16-17. (Footnote omitted).
Now that sounds like a Section 6673 chop is on the way.
Especially since, when trying the docket No. 3774-11 case, Al got what Rudy Kipling would have called a “wigging”:
“Now, to the extent that you start off on side trips that I don’t think are relevant, I’m going to warn you. But if it turns out that you persist in making arguments — now, you know the government has been yelping about the fact that you’re taking positions they view as frivolous and groundless. And to some degree, if those positions are the same positions you asserted in your previous two visits to the Tax Court [Kanofsky I and II], I may well agree with them.
“If I do, you’ve run the risk that you might be penalized because there is a penalty under the Internal Revenue Code that I can impose in my discretion if I conclude that various arguments and positions are being asserted that are frivolous, groundless, have been rejected over and over again. So you just need to be forewarned.” 2104 T. C. Memo. 153, at p. 17.
Of course Al appealed. Third Circuit gave Al the usual. So Al is back for the fourth (count ‘em, fourth) time in Tax Court. And that’s enough.
“Petitioner is a well-educated individual who admits that he understood cautions and warnings given by this Court, yet he continues to reiterate the same irrelevant and groundless arguments.” 2014 T. C. Memo. 153, at p. 19.
Ten grand, Al.
But check today’s orders, namely and to wit, Alvin Sheldon Kanofsky, Docket No. 21821-13 L, filed 7/31/14. Judge Lauber, that man of many talents, can use them in dealing with Al yet again.
Will Al get twenty? Stay tuned.