Every so often, the collective bench at 400 Second Street, NW, unloads a bunch opinions (hi, Judge Holmes) featuring the longtime dodgers and protesters. Today, it comes again.

It took four (count ’em, four) days in the jug to convince Joseph Belcik, T. C. Memo. 2024-49, filed 4/22/24 (Happy Kickoff to Palindrome Week!) to unload 3000 (count ’em, 3000) pages of unsorted and unexplained bank statements, but at the end of the day Joe’s multi-year failure to file, pay, and noncooperation with IRS, earn him a $2K Section 6673 delay of the game chop. And some eyepopping deficiencies and add-ons, including without limitation fraudulent failure to file. Spouse Kaylyn gets off with none of the above, as IRS treats their nonfilings as MFS on the SFRs, so Kaylyn’s personal exemption and standard deduction wipe whatever partnership income she had.

PICCIRC, LLC, PIMLICO, LLC, A Partner Other Than the Tax Matters Partner, T. C. Memo. 2024-50, filed 4/22/24, is a throwback to the old Distressed Asset/Distressed Debt dodge of yesteryear. This is the purchase of worthless offshore paper (usually Brazilian), which gets shuffled through a chain of box-checked LLCs, the last of which partners with a an onshore highroller looking to buy a big write-off. Using Section 721, the seller redeems out, leaving the buyer with a big paper loss. Judge Gale doesn’t need step transaction; this is a disguised sale.

“A disguised sale occurs where a partner contributes property to a partnership and receives a related distribution that is, in effect, consideration for the contributed property. See § 707(a)(2)(B); Canal Corp. & Subs. v. Commissioner, 135 T.C. 199, 210–11 (2010); Treas. Reg. 1.707-3. A transaction may be deemed a disguised sale if, on the basis of all the facts and circumstances, (1) the partnership’s transfer of money or other consideration to the partner would not have been made but for the partner’s transfer of property and (2) if the transfers were not made simultaneously, the subsequent transfer was not dependent on the entrepreneurial risks of partnership operations. Treas. Reg. § 1.707-3(b)(1); see also Route 231, LLC v. Commissioner, 810 F.3d 247, 253 (4th Cir. 2016), aff’g T.C. Memo. 2014-30. The regulations provide that transfers between a partnership and a partner within a two-year period are presumed to be a sale of property to the partnership unless the facts and circumstances ‘clearly establish’ otherwise.” T. C. Memo. 2024-50, at p. 6.

There’s no evidence that any of these outfits engaged in any business activity.

Taishoff says how come the high-priced accountants and attorneys who papered this didn’t get chopped?

Brian Dean Swanson, Docket No. 2526-23, filed 4/22/24, has a long record, and Judge David Gustafson goes through all of it. He’s only featured in this my blog twice before now (see my blogposts “Dealer’s Choice,” 7/29/20, and “DFAS To The Rescue,” 4/20/21), but collected three (count ’em, three) $8K frivolity chops in separate 11 Cir cases. Brian Dean does avoid a late-filing chop because what he filed was timely. “(We do not find that the position he reported on the return was valid, nor that he necessarily even thought that it was, but that he thought had filed a valid return.).” Transcript, at p. 22.

Ol’ Brian Dean is a GA high school teacher, so Judge David Gustafson goes easy on him. Brian Dean did file stuff on time and complied with court orders. “He has previously had sanctions imposed on him by the Court of Appeals—i.e., three $8,000 sanctions totaling $24,000. If deterrence were the only consideration for deciding the amount of the penalty, the fact that $24,000 in sanctions has not deterred him yet might call for the maximum of $25,000 to be imposed here. But in light of the considerations we note above in his favor, and out of reluctance to impose against a teacher’s salary the full force of the penalty, we will impose a penalty of $15,000.” Transcript, at p. 26.