David E. Bushlow, Docket No. 7733-25, filed 7/17/26, steers clear of the former by dint of IRS’ overreliance upon electronics, but his frivolity lands him upon the latter.

Bushlow files a zero-wages 1040, but his employer gives him a W-2 showing $68K. As aforesaid, Bushlow frivols. Judge Nega therefore gives him the Crain brushoff in this off-the-bencher.

IRS gives Bushlow a Section 6662(a) accuracy chop of $2244 at no extra charge, but doesn’t get it. IRS sent him Notice CP2000 with deficiency and chop, to which Bushlow responded.

“The section 6662 penalty appears to have initially been calculated through electronic means. However, because petitioner responded in writing to the Notice CP2000, respondent cannot benefit from the exception for automatically calculated penalties under section 6751(b)(2)(B). See Walquist v. Commissioner, 152 T.C. 61, 70–71 (2019); Cotroneo v. Commissioner, T.C. Memo. 2024-70, *13. Respondent did not address supervisory approval at trial and therefore has not met his burden of production with regard to the section 6662 penalty.” Transcript, at p. 8.

For the backstory on Walquist, see my blogpost “I Sing the Penalty Electronic – Part Deux,” 2/25/19; for Cotroneo, see my blogpost “Getting Shifty – Redivivus,” 6/24/24.

But IRS will pick up the $2500 Section 6673 frivolity chop Judge Nega lays on first-timer Bushlow. True, Judge Nega says he warned Bushlow at calendar call to drop the frivolity. At trial, though, Bushlow kept on frivoling. So now is there no more free kick? Is a calendar call warning sufficient to put petitioners on notice, when IRS never asked for the Section 6673 chop and the penalty is amerced in petitioner’s first appearance in Tax Court?

Taishoff says it’s a many times told tale I’m telling, but is there no guardrail for Section 6673 mulcts? Before you jump up, reader, demanding whether judges are not to control their courtrooms, of course judges must have widest possible discretion to restrain obstructive or contumacious conduct, whether any such be in writing or by word of mouth or physical gesture. All that said, I submit there must be some limit, however widely cast, so that a petitioner can gauge when word and deed are hazardous to their wallet. I expect some litigant will test that limit.

No, not a misspelling of the 1966 Brian Wilson 90-hour extravaganza. Rather, I comment on a sixteen (count ’em, sixteen) year-old deficiency case that is still dealing with discovery. As I’ve often remarked before, I’ve paid good money for whiskey younger than Harvey Birdman & Diane Birdman, et al., Docket No. 28897-10, filed 7/16/26.

Harv & Diane want sanctions and discovery from nonparty witness the  Virgin Islands Bureau of Internal Revenue, so I infer this is another long-running Section 932 unguided Congressional largesse bestowed upon avowed residents of our Insolvent Islands in the Sun.

Ch J Patrick J. (“Scholar Pat”) Urda, imperturbable, tells VIBIR to respond.

But take heart, reader; trial is scheduled to begin in October. 

Ex-Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan and her colleagues are far too well-bred to use such language as first hereinabove appears at the head hereof (as my expensive ex-colleagues would say), but that is the gist of Siemens Medical Solutions USA, Inc. and Consolidated Subsidiaries, 167 T. C. 5, filed 7/15/26.

Ex-C h J TBS follows Varian (see my blogpost “We Don’t Need No Stinkin’ Distributions,” 8/26/24) in dumping Reg. Section 1.245A-5T.  The multiple mismatches in TCJA affecting Sections 245A, 951A, and 965 (Mandatory Repatriation Tax) were Congress’ attempt to territorialize and deuniversalize CFC taxation and level the playing field for onshore-owned offshores.

IRS’ regulatory attempt to cut the freebie in half founders on Loper Bright.

“Section 245A allows a 100% deduction for qualifying distributions after December 31, 2017. Treasury’s adopted regulation disallows 50% of the deduction for distributions that Treasury admits satisfy the plain terms of the statute, using criteria that appear nowhere in the statute. This creates a contradiction, and the statute must prevail.” 167 T. C. 5, at pp. 15-16.

And every Tax Court Judge (except Judge Rose E. (“Cracklin’) Jenkins, who took no part) says “amen!”