Ex-Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan sustains the NITL that was left hanging at the last Tax Court visit of Bryan Edward Menge, T. C. Memo. 2026-41, filed 5/19/26, which I chronicled under the heading “Substantially Prevailed,” 12/16/22. Further background is discussed in T. C. Memo. 2026-41, at p. 3, footnote 2.

Here the NITL is sustained as to the four (count ’em, four) years that weren’t before 1 Cir, where Bryan Edward was battling a contractor holdback, a common source of controversy between contractor and owner. Bryan Edward didn’t contest his self-reported numbers; he claimed he was due a credit from the adjudicated outyear, but ex-Ch J TBS said that was decided at 1 Cir and so off the table.

Seventy (count ’em, seventy) years on, John Osborne’s title, if not his play, is going strong. This time, it bars Jorge Fernandez Maceira, Docket No. 20299-23L, filed 5/19/26, from claiming bankruptcy discharge of four (count ’em, four) years’ worth of income tax, despite a miscue by the SO as to one of those years.

Judge Benjamin A. (“Trey”) Guider III Judge-‘splains.

“SO C investigated whether petitioner’s tax liabilities for these years could have been discharged in his prior bankruptcy proceedings. Certain tax liabilities may not be discharged during bankruptcy, including liabilities based on late-filed returns which are filed less than two years prior to the bankruptcy petition’s filing. 11 U.S.C. § 523(a)(1)(B)(ii). The returns for tax years 2009–2012 were all filed late on December 12, 2013, and assessed on February 24, 2014. SO Cha found a bankruptcy indicator on petitioner’s account which began on December 23, 2013, and was reversed on April 1, 2014. Because the 2009–2012 tax liabilities were filed late and filed less than two years prior to the bankruptcy petition, they are precluded from discharge through bankruptcy. See id.

“Notably, SO C’s sole rationale for determining the liabilities’ discharge eligibility was because ‘[b]ecause [sic] the[] returns were filed and assessed within three years of [petitioner’s] bankruptcy filing.’ Doc. 26, Ex. 35-R. This reasoning seems to be grounded in 11 U.S.C. sec. 523(a)(1)(A)’s three-year lookback rule prohibiting the discharge of tax liabilities ‘for which a return, if required, is last due, including extensions, after three years before the date of the filing of the [bankruptcy] petition.’ 11 U.S.C. § 507(a)(8)(A)(i). Petitioner’s returns for tax years 2010, 2011, and 2012 were each due in April 2011, April 2012, and April 2013, respectively. As such, each of these returns were due in the three-year period prior to the bankruptcy petition’s filing in December 2013. However, petitioner’s 2009 tax return was due in April 2010. As such, this tax year falls outside of the three-year lookback period. Nonetheless, because the 2009 return was filed late and less than two years prior to the bankruptcy petition’s filing, 11 U.S.C. sec. 523(a)(1)(B)(ii) precludes this year’s liabilities from discharge.” Order, at pp. 7-8. (Name omitted). 

So SO C’s error was harmless.

IRS’ motion to toss for nonprosecution fails because, although Jorge’s ‘ participation has not necessarily been ideal, he has not been wholly unresponsive, and his conduct therefore has not amounted to a ‘complete lack of interest in presenting his case.’” Order, at p. 4. Jorge continuously asserted he’d paid tax in Puerto Rico, although presenting no proof until long after CDP was closed.

So Judge Trey Guider prefers summary J for IRS.

That’s apparently IRSspeak for Boss Hossery. Or so we learn from a footnote in Marievi Garalde Palter, Docket No. 9321-25L, filed 5/18/26. 

This is another unpetitioned SND case, so underlying liability is off the table at Appeals, and RCP is over the uncontestable liability, so IRS gets a walkover. But the SO checked with AUR (income from credit card payments are unreported).

“When the IRS Independent Office of Appeals (Appeals Office) Settlement Officer (SO) assigned to petitioners’ request for a Collection Due Process (CDP) hearing reviewed the case, she contacted the Automated Underreporter (AUR) coordinator for verification of the section 6662(a) substantial understatement penalty asserted in the Notice of Deficiency. …the AUR coordinator informed the SO that the substantial understatement penalty assessed under section 6662(a) for taxable year 2021 should be abated because no managerial [sic] was present on petitioners’ account. Accordingly, the SO submitted an abatement to the appropriate IRS operating division for processing… and verified that the abatement was input.” Order, at p. 4, footnote 3.

Footnote to a footnote: AUR? Isn’t that electronical, hence no “managerial” necessary per Section 6751(b)(2)(B)? But cf. the colloquy that followed my blogpost “A Couple Quirks,” 4/30/26.