Though the contrast between the two cases is great, here are examples of the lengths to which taxpayers (or rather, nontaxpayers) go to avoid paying up. And what happens when they don’t.

First, Robert W. Smiley, Jr., An Incompetent Person, Margaret T. Smiley, Guardian, et al., T. C. Memo. 2024-66, filed 6/18/24. Rob had an impressive c.v. “Robert was honorably discharged from the Navy in 1964 after serving in a combat zone off the coast of Vietnam. He thereafter became an attorney and was a member of the State Bar of California during the taxable years at issue in these cases. He also served on the faculty of the University of California, Los Angeles.

“During his career Robert held himself out as a leading expert on ESOPs and their implementation.” T. C. Memo. 2024-66, at p. 4. And Rob had the creds to prove it. He was an adjunct professor, lecturer, and co-author of a textbook.

Unhappily, Rob turned to the dark side. When a furniture company with too much cash in its ESOP wanted to sell out, Rob employed a friendly bank teller in a rural supermarket branch, his own longtime personal attorney, and a brigade of controlled entities, to lead IRS on a 46 (count ’em, 46) page steeplechase. And apparently this isn’t the only time he pulled off such a maneuver, although Judge Gale doesn’t want to hear about it. Order, at pp. 41-42, footnote 52.

When IRS Boss Hosses the Section 6663 fraud chop, Rob’s guilty knowledge sinks any defenses he might have had.

“Most significantly, Robert went to considerable lengths to conceal his income and assets. As a general practice, he preferred to work with a specific bank teller who was willing to make transactions for him in a way that would obscure the identity of the originating entity. In the specific context of the S acquisition and the transfers of funds from [overfunded] Plan #010, he channeled money through multiple bank accounts held at different financial institutions in order to hide the sources and destinations of the funds. He also obscured the identities of the lenders who financed the S acquisition, and who would ultimately be repaid with Plan #010 funds, by borrowing money through an entity that was not directly involved in the transaction—namely, M. He covered up the payment of Plan #010 funds to the Smiley Trust by manufacturing sham transactions involving E stock that he reported on his personal income tax return. And the entire scheme was papered over by a trail of Forms 5500 that created an appearance that S might simply have restructured its pension plan, but which actually dead-ended into nonexistent plans that never received any of the money that was supposedly transferred to them.” T. C. Memo. 2024-66, at p. 41. (Names omitted).

Across the country, Atif A. Khan & Huma A. Khan, Docket No. 15025-21, filed 6/17/24, run up only half so many pages as Rob and Margaret, but give Judge Courtney D. (“CD”) Jones a solid workout. True, Huma gets hurt in a vehicle accident, but Atif leaves no stall unoccupied. I haven’t seen so many adjournments (they call ’em “continuances” in Federal courts), or requests to find counsel (despite getting the LITC lists several times), since my salad days in the last millennium in NYC Landlord-Tenant part.

And their first lawyer bails with an ABA Model Rule 3.1 out. Order, at p. 2.

Atif & Human get tossed with a sustained deficiency. And Judge CD Jones gives them the Section 6673 yellow card at no extra charge.

Don’t try either of these gambits at home. Or anywhere else.