In Uncategorized on 02/19/2019 at 14:23

Echoing an old advertising slogan, two Judges, neither one notorious for his sufferance toward the wayward petitioner,  give ‘em a break.

First, Ch J Maurice B (“Mighty Mo”) Foley. Instead of tossing Anthony Dallamarco, et al, Docket No. 16643-18, filed 2/19/19, for his late filing under another docket number, Ch J Mighty Mo gives Anthony and the al a second chance. Note the dates here.

“…petitioner timely filed an imperfect petition with the Court at Docket No. 16643-18, challenging the notice of deficiency dated July 30, 2018, issued to him for taxable year 2015. By Orders dated September 4, 2018, and November 7, 2018, the Court directed petitioner, on or before November29, 2018, to file a proper amended petition and to pay the filing fee in that case. On December 17, 2018, the Court entered an Order of Dismissal for Lack of Jurisdiction at Docket No. 16643-18, due to petitioner’s failure to file an amended petition and to pay the filing fee as directed.

“On November 30, 2018, petitioner filed a second petition at Docket No. 23752-18, as to the same notice of deficiency for 2015.” Order, at p. 1. So Ch J Mighty Mo orders Anthony and the al to show cause why they should not be tossed again.

Instead of awaiting Anthony’s and the al’s reply to the OSC, Ch J Mighty Mo vacates his first toss, closes petition no. 2 as duplicative, and if Anthony and the al pony up the Big Green Sixty, they can go at it.

Next up, ex-Ch J Michael B (“Iron Mike”) Thornton. He’s drawn Jeremiah Francis Manning, Docket No. 22609-17, filed 2/19/19, whom y’all will remember from before the Dia de los Presidentes break as the star of my blogpost “Ubique,” 2/15/19.

Jeremiah wants more time to proffer the documents upon which he intends to reply at trial, because shutdown.

At first ex-Ch J Iron Mike is loath to grant Jeremiah’s request.

“Petitioner indicates… that his request for an extension is warranted by the shutdown of the Federal government without detailing how the shutdown affected his ability to provide respondent’s counsel the documents or other materials as ordered by the Court’s order dated November 15, 2018. The Federal government reopened on January 28, 2019, and petitioner’s motion is silent as to his efforts to provide the documents or other materials to respondent’s counsel at any time before the filing of petitioner’s motion [for more time] on February 14, 2019.” Order, at pp. 1-2.

It does seem a wee bit sketchy. Jeremiah never claims he works for the guvmint in any capacity. Of course, without knowing what the documents or other materials are, one can’t say that Jeremiah didn’t need the largest temporarily-shuttered doors at 111 Constitution Ave, NW, to swing wide for his stuff, with strong-armed IRS functionaries standing ready to receive same.

So ex-Ch J Iron Mike gives Anthony and the al a break, too.

“Nevertheless, giving petitioner the benefit of the doubt, we shall provide a short extension of time for the parties to exchange information. The Court does not contemplate granting further extensions.” Order, at p. 2.

Jeremiah gets two (count ‘em, two) weeks.




In Uncategorized on 02/15/2019 at 15:02

The old Engineers’ motto furnishes me a title for Tax Court subpoenas, in Jeremiah Francis Manning, Docket No. 22609-17, filed 2/15/19. This is another discovery geeks’ delight, as Jeremiah wants to depose a CPA and EA, to whom I’ll hereinafter refer to as Jason.

Jeremiah has laid five (count ‘em, five) documents on ex-Ch J Michael B (“Iron Mike”) Thornton, alleging why he has to depose Jason. Jeremiah was on for trial but got continued. Jeremiah wanted to try this case in Our Fair City, but Jason apparently hangs out in San Jose, CA. Wherefore Jeremiah fears a Tax Court subpoena won’t avail him at trial, as Jason won’t show in The Apple. And ex-Ch J Iron Mike can’t make him, he says.


“Petitioner’s request is based on the false premise that [Jason] is beyond the subpoena power of this Court because he does not live or work within 100 miles of the place of trial in New York, New York. Section 7456(a)(1) provides for the subpoena of witnesses and necessary documents and other evidence by the Tax Court ‘from any place in the United States’ to appear or to be produced at any designated place of hearing. Thus, [Jason] may, in fact, be subpoenaed to attend the place of trial in New York, New York. Moreover, petitioner has not alleged, much less demonstrated, that there is a substantial risk that the proposed deponent will not be available at the trial of this case.” Order, at p. 4.

For you died-in-the-wool discovery geeks, ex-Ch J Iron Mike unpacks all of Jeremiah’s discovery requests, with “somber reasoning and copious citation of precedent,” at great length. And tosses them all.

It would really be better for pro ses to concentrate on assembling evidence, rather than chewing up hours on futile paperwork.


In Uncategorized on 02/14/2019 at 16:47

Not Free, But Deductible

Jeffrey Siegel and Sandra Siegel, 2019 T. C. Memo. 11, filed 2/14/19, have a Valentine’s Day story in reverse, as Jeff’s payment to loved-once and daughter’s 529 plan both avoid the slammer for Jeff and give Jeff and Sandra a $242K tax deduction.

IRS claims it’s a money judgment, not back alimony, that Jeff paid loved-once Belinda .

Jeff’s business went broke, and so did he. He owed beaucoup alimony to Belinda, and she and her attorneys were nowise loath to pursue Jeff, getting a money judgment in Nassau County Supreme.

Jeff didn’t pay, so five (count ‘em, five) years later Belinda finally cornered Jeff in Supreme Nassau. The judge offered Jeff the option of writing the aforesaid couple checks (hi, Judge Holmes), or being adjudged in contempt of that august tribunal and doing 150 (count ‘em, 150) days in the Nassau County Correctional Facility.

Jeff takes the expected option, and coughs up. And cash-basis Jeff takes the deduction for the whole $247K he paid that year (the $225K back alimony plus another $17K in current alimony he paid that year). Of course, Jeff’s divorce decree is pre-12/31/18, so the 2017 TCJA cold-storage treatment of alimony deductions plays no part here.

IRS first raises the deficiency ante, and then says it’s a money judgment, and therefore not alimony. Burden of proof not an issue, as no facts in dispute.

Lump-sum alimony payments generally retain their character as alimony. The earlier money judgment Belinda got specifically granted her judgment for a sum certain, bringing in our old friend Section 71(b)(1)(D) liability-after-death-of-payee-spouse.

But this one was to enforce the decree of the Court.

And Judge Colvin lays out NY law to show how this works. NY lawyers, pay attention.

“Respondent contends that the [contempt] order was (or should be treated as) a money judgment because FCA [NY Family Court Act], sec. 454(2)(a) (McKinney 2018) provides that the judge, upon a finding of failure by a party to comply with a lawful support order, ‘shall’ enter a money judgment under FCA sec. 460.” 2019 T. C. Memo. 11, at pp. 9-10.

But NY law goes further. It gives our judges the power to order either or both fines or imprisonment for those who fail to do what they’re told when it comes to alimony and child support.

The judgment was a chop for contempt of court, not for recompense to Belinda. But she gets the money, and Jeff gets the deduction.

For family lawyers with decrees post-12/31/18, put this one in the cold storage file, and examine 12/31/25.

Edited to add, 2/15/19: Judge Colvin has given family lawyers a tax-planning move that really deserves to be remembered. Note that Belinda (the loved-once) had gotten a money judgment against Jeff five (count ’em, five) years prior to the contempt order at issue in this case. If Jeff had paid up at any time post-judgment during those five years, and tried to take a Section 215 alimony deduction, he’d have foundered on Section 71(b)(1)(D), as if Belinda dies, the judgment is not extinguished by her death, but belongs to her personal representative. And this is the case even if Belinda is alive and well when Jeff pays.

But if Jeff waits until he’s haled before the judge, who orders him incarcerated for contempt unless he pays up, and asks for his checkbook and a Mont Blanc as the Corrections officers are robing him in orange, he gets the deduction.

Do we really want a tax system that rewards the deadbeat dads with a deduction if they stall long enough, where the law-abiding ones get Section 6662 chops if they pay up?