The famous eleven (count ’em, eleven) badges of fraud get a workout in Dawn Chappelle Cottman, T. C. Memo. 2026-88, filed 9/17/26, since her fall in USDCDMD for 14 (count ’em, 14) counts of filing false returns and other delictions didn’t estop her contesting the Section 6663(a) fraud SOL extender. Her Section 7206(1) fall doesn’t establish fraudulent intent, only intent, and her 18 USC §286 conspiracy fall has never been considered by Tax Court as establishing tax fraud and wasn’t briefed by the parties here.  

So Dawn loses seven of eleven badges, and I’ll spare you the details.

Two are neutral: failure to cooperate because Dawn was in the slammer when IRS asked for documents (even though after she was out she clammed up). And her testimony, though it strained, it did not break, her credibility, as it squared with her trial position and confirmed IRS’ bank deposits analysis.

But the two I want to stress are the two that she won. Dawn did file returns, true or not, for the years at issue; filing returns count. And Dawn’s explanations and litigation conduct have been consistent and not incredible.  “Although this Court finds that certain aspects of petitioner’s story lack credibility, there have been no major inconsistencies in petitioner’s legal arguments or factual allegations.” T. C. Memo. 2026-88, at p. 13.

Judge Kashi (“My or the High”) Way unpacks a lot of issue preclusion and Federal criminal law here.

No, not a baseball story. Whistleblower 6417-20W, Docket No. 2026-89, filed 9/16/26, is the story of how someone pitching tax services and technology claims a Section 78623 whistleblower ward, which the Ogden Sunseteers negative by sowing they knew all along. Ch J Patrick J. (“Scholar Pat”) Urda, obviously relishing this opportunity to escape the role of judicial busyworker, delves deep into the administrative record to find Blower 6417 added nothing to IRS’ ongoing examinations.

“Petitioner had no inside knowledge about Target or its tax planning and was not involved in the preparation of Target’s financial or tax returns. Likewise, ‘[v]irtually all the information . . . supplied was derived from publicly available sources, such as newspaper articles, business journals, and SEC filings.’ Researching this type of public information was nothing notable, but the first stop in any transfer pricing examination….

” Although petitioner mentions discussions with an advisor and then in February 2013, Target representatives, there is less than meets the eye. The advisor with whom petitioner discussed Target’s transfer pricing did not work for Target but merely had reviewed ‘how [it] do[es] [its] allocations.’ Target’s advisor moreover did not have ‘direct access to the cost sharing calculations’ or a full picture of the various components of Target’s transfer pricing analysis. Their discussions came in connection with petitioner’s attempts to convince Target to retain petitioner’s services regarding transfer pricing compliance.” T. C. Memo. 2026-89, at p. 24. (Citation omitted).

Ch J Scholar Pat stresses in no fewer than five (count ’em, five) places in his opinion that whatever Blower 6417 got, he got as he pitched Target for their tax business and got no inside scoop.

Making a sales pitch is no route to a Section 7623 payday. 

We all know that CNC status is impermanent; the magic word in “Currently Not Collectible” is “Currently.” Hit the lottery, get named in the will, or score the dream job and you’re back in IRS’ crosshairs, with interest and chops.

But should you stipulate to your deficiency-plus?

That’s the tactical dilemma for Adrian Wright, Docket No. 9547-25L, filed 9/17/26. Adrian, pro se of course, petitions a CDP, from which issues Letter 4223, declaring “Case Closed – Currently Not Collectible.” Order, at p. 2.

IRS tries twice to draft a stiped decision with below-the-line language affirming Adrian’s CNC status. Adrian refuses.

STJ Peter J. (“HB”) Panuthos, master headbanger, dismisses Adrian’s Zuch claim, because Zuch involved a tax liability satisfied in full, so further or future collection is not possible. Jennifer Zuch wanted to contest how the liability was paid, and that she cannot do in Tax Court. Adrian’s tax liability is still open; IRS just can’t grab to satisfy it yet.

STJ HB Panuthos goes to his usual move: if y’all don’t settle, I’ll do it for you or you can try the case, and sotto voce, you won’t like the result.

“If petitioner continues to decline to sign a stipulated decision, the Court would consider an appropriate motion to enter a decision or the Court may set this matter for trial in order to resolve any remaining issues.” Order, at p. 3.

OK, so what should Adrian do? Remember Matty Dean Vigon, or if you don’t, see my blogpost “‘Crafty – Akin to the Weasel,'” 7/24/17.

What would you advise, reader? Stipulate a decision with a below-the-line CNC saver? Insist on the stiped decision stating CNC above the line, making it part of the decision rather than a contract between the parties? Or let IRS enter decision on liability with no mention of CNC?

There is no correct answer.