In Uncategorized on 05/23/2017 at 17:03

This somewhat cryptic remark is a puzzlement to Paul Niski, 2017 T. C. Sum. Op. 33, filed 5/23/17, and it leads to an unfair result, but such are the anfractuosities of the IRC. And even the taxpayer’s friend, STJ Leyden, can’t help.

The chronology is somewhat muddled, but Paul overpaid some years and underpaid (or didn’t pay) a couple others (hi, Judge Holmes). But he did file and pay late. The arithmetic seems to show Paul would owe little or nothing, except for late filing.

He’s been hit with nonpayment and nonfiling chops, with interest to boot.

Paul says “you had my money.”

IRS says “Overpayments from one year don’t apply to the next, or any other year, unless you seek application or refund within the Section 6511 lookback periods.” In other words, Paul wants refunds, but the SOL on refunds has run.

That Treasury has “the use of monies” is a good argument if the tax had been paid when due, and Treasury held the overpayments. But Paul hadn’t paid when the taxes were due.

“Whether or not the barred claimed overpayments from 2002 and 2006 are characterized as moneys generally in respondent’s hands, they are not considered payments for purposes of calculating the additions to tax.  The Court is bound by the strict terms of the statutory provisions that limit credits or refunds for overpayments to those properly claimed within three years of the date they are paid.  Landry v. Commissioner, 116 T.C. 60, 62-63 (2001); see sec. 6511(b)(2)(A).  As a matter of law amounts paid or deemed paid more than three years before a tax return claiming them is filed cannot reduce or eliminate the additions to tax.  See Mason v. Commissioner, 2001 Tax Ct. Memo LEXIS 75, at *18; Stephenson v. Commissioner, 1995 Tax Ct. Memo LEXIS 35, at *7.” 2017 T. C. Sum. Op. 33, at p. 22.

And see my blogposts “Lookback in Anger,” 11/12/12, and “Lookback in Anger – Part Deux,” 4/15/15.

So even though Paul gets a chance to challenge tax due de novo in this CDP case, he loses.


In Uncategorized on 05/22/2017 at 16:14

Pre-answer motions are a favorite tactic of defendants. I like them too. And the appropriate templates should be kept handy in IRS’s shot locker as well.

Ch J L Paige (“Iron Fist”) Marvel thus reminds IRS’s counsel in Craig D. Kahn, Docket No. 8733-17, filed 5/22/17, a real dull day at The Glasshouse.

Craig is petitioning a SNOD for tax year 2017, which he doesn’t attach to his petition. This isn’t surprising, because unless Craig somehow has a tax year that ended after January 1 but before April of this year, a SNOD for tax year 2017 is an unlikely occurrence.

IRS answers Craig’s petition, claiming no SNOD or NOD. And not a word about a jurisdictional motion to follow.

“The answer was similarly silent regarding any other potential taxable years that might support this proceeding, simply noting that petitioner’s 2017 tax year had not yet closed.” Order, at p. 1.

OK, but where does that leave this case?

Ch J Iron Fist will tell us.

Since the record shows neither a SNOD nor NOD for 2017, and is silent as to any other year, IRS can either make a jurisdictional motion, or show some basis for jurisdiction, with documents annexed.

A pre-answer motion would have saved a lot of trouble.


In Uncategorized on 05/20/2017 at 09:17

This lesson was brought home to me so many years ago that I forget what the facts were in that case. But the lesson remains.

I was discussing Muncy, Ertelt and Banister yesterday. See my blogpost “Play It Now, Play It Now, Play It Now,” 5/19/17. I thought Ninth Cir gave Banister a real quick brush-off.

I hadn’t read or blogged Judge Cohen’s opinion, Joseph R. Banister, 2015 T. C. Memo. 10, filed 1/12/15, the opinion Ninth Cir affirmed so tersely. Her discussion about reforming extensions of SOL of even date therewith (as my expensive colleagues would say) was more interesting than Joe’s multiplex misdeeds. See my blogpost “Reformation Symphony,” 1/12/15.

Turns out Joe was an all-round bad dude and top-class rounder. I won’t repeat what Judge Cohen had to say. If I had been on Ninth Cir at the time, Joe would not have fared as well as he did.

Now Leroy Muncy wasn’t in Joe’s league, so maybe he caught a break. Or maybe litigants are somewhat more douce out on the Great Plains than in LaLa Land.

But I suggest we all, bloggers, litigants, attorneys, USTCPs, and even Judges, must “with a joyful mind, bear through life like a torch in flame” the simple rule: The facts are everything.