In Uncategorized on 05/17/2019 at 16:35

Thomas L. Kitts & Amanda M. Kitts, Docket No. 5629-17, filed 5/17/19, echo the words of Hank Longfellow, but Judge Buch can‘t get them out of the stip they signed, apparently on the eve of trial last December, after they’d bounced an earlier one IRS proposed.

When IRS tries to enter decision, Thom & Amanda balk, because the numbers on the Form 4549B embodying the changes were not what they thought. Judge Buch was induced to hold a phoneathon, whereat IRS agreed to drop a number or two. IRS then moved to enter decision incorporating the agreed changes, whereupon Tom & Amanda moved to be relieved from the stip, claiming IRS misrepresented something. Clearly, Tom & Amanda didn’t like the numbers their stip yielded.

Nope, says Judge Buch.

“The Kitts did not provide any basis to support their claim of misrepresentation. The Kitts may have misunderstood the tax effect of their stipulation, but that unilateral mistake (assuming there was one) is not grounds to set aside the stipulation.

“A stipulation of settled issues is a compromise, and we are unlikely to grant relief from a stipulation entered into through considerable negotiation. The Kitts had the Form 4549B from the Commissioner’s initial settlement offer since at least April 2018. The Kitts were represented by their accountant who also had the Form 4549B before they entered into the stipulation. The parties freely and fairly signed the stipulation long after both parties were aware of what was at issue.” Order, at p. 3 (Footnotes omitted, but get the cases cited and be prepared for bombardment therewith if you ever need to avoid a stip).

The various IRS Manuals give taxpayers no rights. And if Tom & Amanda wanted a trial, that train has left.

And having your accountant represent you in Tax Court raises other and further questions, which I have elucidated more than once.

Remember my advice: Stipulate, don’t capitulate.



In Uncategorized on 05/17/2019 at 15:55

It looked like Hisham N. Ashkouri & Ann C. Draper, Docket No. 17514-15, filed 5/17/19, might have caught a break when Clay & Osceola walked back the initial chop determination date to the 30-day letter.

Confused? See my blogposts “Indians Not Taxed – NOT!” 4/24/19, and “Here Comes the Silt,” 4/25/19.

Now Judge James S (“Big Jim”) Halpern finds IRS’ tell-all establishes the Section 6751(b) Boss Hossery, so he allows a reopener so IRS can dish.

Hish & Ann claim that after the RA and Acting Group Manager (his boss) confabbed as alleged, they went to Appeals and got their alleged deficiency cut by 50%.

No go, says Judge Big Jim.

“Petitioners base their opposition to respondent’s motion on the transfer of their case to Appeals after [AGM]’s involvement in it. Although petitioners do not explicitly address the standards we employ in considering a party’s request to reopen the record, they suggest that receipt of the evidence respondent seeks to admit would not affect the outcome of their case because it does not establish compliance with section 6751(b)(1). Petitioners allege that Appeals ‘amended’ their tax liability by reducing their deficiencies ‘by 50% of what was stated by [AGM].’ ‘This change in tax liability and amount of deficiency,’ they contend, ‘amounts to a fundamental change to * * * [what was] proposed by [AGM].’ They thus view Appeals’ offer of compromise as having ‘supersede[d]’ the 30-day letter.

“Contrary to petitioners’ argument, the evidence respondent seeks to admit would establish compliance with section 6751(b)(1). The plain terms of that section require the approval of ‘the initial determination’ to assess penalties. Clay & Osceola establishes that the initial determination to assess penalties occurs no later than the issuance of a 30-day letter to the taxpayer. Because a 30-day letter advises a taxpayer of his right to appeal proposed adjustments or penalties, the rule established in Clay & Osceola presupposes the possibility that a taxpayer’s case may go ‘beyond’ the examining agent and his immediate supervisor. Neither the statute nor our opinion in Clay & Osceola gives any indication that a determination to assess penalties must receive subsequent approval during consideration of the taxpayer’s case by Appeals. (Indeed, as noted above, such a requirement would be contrary to section 6751(b)(1)’s plain language.) Moreover, the compromise offered to petitioners by Appeals did not amount to a ‘fundamental’ redetermination of their tax liabilities for the years in issue. The offer–which the notice of deficiency demonstrates was never implemented—simply reduced each proposed adjustment by approximately half.” Order, at p. 3.

So this evidence is a game-changer, is material, and is neither cumulative nor impeaching.

Hish & Ann are “wrapped in white linen as cold as the Clay.”


In Uncategorized on 05/17/2019 at 01:17

On May 16, 2019, United States Tax Court issued 206 (count ‘em, 206, and I did) orders. Not one was designated.

Not one deserved to be designated.

On May 16, 2019, United States Tax Court issued no opinions.

On May 16, 2019, I posted nothing. Nothing was worth posting.

On May 16, 2019, my blog got 108 (count ‘em, 108) views. So far, in this month of May, 2019, my blog averages 35 views per day, and I posted every weekday so far.

Go figure.