Frantic Frank Wins One

IRS tried to levy on Joseph White, T. C. Memo. 2026-56, filed 6/29/26, for a Restitution-Based Assessment (RBA) north of $1.8 million.

Except.

Joe was (a) making all payments due currently on stiped decision in USDCEDPA which still has a year to run, and (b) Joe is represented by none other than The Great Chieftain of the Jersey Boys and barbecue king hisself, Frantic Frank Agostino, Esq. 

Joe hadn’t exactly been a model taxpayer. He hadn’t filed for nine (count ’em, nine) years, until his ex-wife’s trusty attorneys made him come clean (or at least try). He bounced a check for a subsequent year’s tax. At Appeals, his OIC was bounced, and his subsequent bankruptcy petition was tossed for bad faith. See T. C. Memo. 2026-56, at pp. 3-4.

When Joe contested the NITL IRS gave him five (count ’em, five) years later, the SO said RBA has nothing to do with tax owed. True, except the stiped decision in USDCEDPA said IRS would treat the RBA installments as tax paid and wouldn’t try to collect unless Joe defaulted. So Joe petitioned the NOD.

Except.

Of course Frantic Frank tried to wildcard in abatement of interest during COVID, but as he hadn’t raised it at Appeals, Judge Albert G. (“Scholar Al”) Lauber calls it foul.

But Frantic Frank gets an RBI, 

“The DOJ settlement permitted petitioner to pay his … tax liabilities in regular monthly installments, with the last payment not due until July 2027. As of May 1, 2025, when Appeals upheld the levy, petitioner’s monthly payments had reduced his remaining balance … to $948,000. By sustaining a levy for $1,101,788, the SO would have allowed the IRS to collect petitioner’s entire remaining balance for those years (and then some) immediately, whereas the DOJ settlement entitled him to pay that balance in installments over the ensuing 27 months. By permitting acceleration of the payments in this way, the SO’s determination was fundamentally inconsistent with the DOJ settlement and with petitioner’s contract rights thereunder. It was therefore an abuse of discretion.” T C. Memo. 2026-56, at pp. 11-12.

IRS tries the “different liabilities” tack, but is thrown out at first.

“The restitution ordered by the sentencing court, $1.2 million, was identical in amount… to petitioner’s unpaid tax liabilities … as calculated by the attorneys in the criminal case and accepted by the court. The RBAs were concededly ‘distinct’ from the assessments the IRS made when receiving petitioner’s … tax returns: The two sets of assessments were made at different times using different procedures. But the RBAs were not separate from petitioner’s personal income tax liabilities …. They were identical to his personal income tax liabilities for those years, and they simply afforded the IRS a distinct mechanism for collecting those liabilities. The character of the RBAs as a collection mechanism is evident from the fact that any payment petitioner made against the RBAs would be credited toward his personal income tax liabilities ….

“What makes this case different from previous cases we have considered under section 6201(a)(4) is that, six years after the IRS made the RBAs, petitioner and the Government agreed to a different collection mechanism for his … tax liabilities, effected by the settlement of the collection suit. The United States thereby accepted $1.6 million as a compromise of petitioner’s aggregate … income tax liability and gave him the right to pay that liability in monthly installments ending in July 2027. By sustaining in May 2025 a levy issued to collect petitioner’s entire outstanding balance immediately, the SO acted in contravention of the contract DOJ and petitioner had executed.” T. C. 2026-56, at pp. 12-13.

Joe crosses the plate, and credit Frantic Frank with a Run Batted In and another oak leaf to his Taishoff “Good Job.”

Pro ses Gaetan Pelletier & Nancy J. Pelletier, Docket No. 3960-24, filed 6/29/26, employ that old coordinated-arms doctrine, firing off four (count ’em, four) motions for partial summary J, one of which Judge Benjamin A. (“Trey”) Guider, III, recharacterizes as a motion to shift BoP, and one to require discovery responses.

While all get shot down, they all point Gaetan & Nancy to where their problems of proof lie, and what weight Judge Trey Guider is likely to accord each. 

Start with the basic rookie error, making formal discovery demands and then sending a Branerton letter. The attempted cure doesn’t work. However, “parties are still actively in the process of or will be negotiating a stipulation of facts,” Order, at p. 7, so maybe so might could be the formal demand woke up IRS’ counsel and moved things along faster than the three (count ’em, three) months it took IRS to respond to Motion One (Order, at p. 3).

Since deficiencies are tried de novo, the old mantra that what happened at Exam doesn’t count sinks Gaetan’s & Nancy’s limited argument that IRS hadn’t established an evidentiary basis for denying their claimed NOLs. BoP is still with petitioners; SNDs are presumed correct, the only exception being unreported income (not in play here\). Whatever Gaetan & Nancy claim IRS ignored they can still bring out at trial, but Judge Trey Guider finds what they submitted to support their motion doesn’t cut it.

That change in method of depreciation is a Section 481 change in method of accounting is well-established. Keeping the old method of accounting while changing method of depreciation doesn’t get around Reg. Section 1.446-1(e)(2)(ii)(d)(2)(a). That Gaetan & Nancy didn’t elect to change their method of accounting is irrelevant.

And if IRS stands mute on its basis for change in method and denial of NOLs, mox nix. “Respondent’s lack of explanation relating to the disallowance of the NOLs and his silence as to the amended returns petitioners submitted does not preclude him from litigating those issues. For that reason, we will deny petitioners’ fourth Motion for Partial Summary (sic)….” Order, at p. 6.

Having gotten a look at what Judge Trey Guider thinks of the case and where he thinks their problems are and how great, Gaetan & Nancy can work out strategy for trial or settlement.

Taishoff says these motions are time well spent.

It’s been quite a long-time mantra with me that a lawyer who can’t find an ambiguity should find another way of making a living. Judge Christian N. (“Speedy”) Weiler surely can find an ambiguity with the best of them.

Carver Mountain Reserve, LLC, Carver Mountain Reserve IP, LLC, Tax Matters Partner, et al., Docket No. 15761-24, filed 6/26/26, claims the TMP’s extensions of 3SOL are defective, because the second of the three (count ’em, three) successive extensions mentioned it was executed and delivered “For the pure purpose of appeal.” Order, at p. 2. Neither of the other two (count ’em, two) contained that phrase.

This is the second motion from Carver; the first was disposed of last month. See my blogpost “Five, Seven, Eight, Fourteen,” 5/8/26. 

Carver says the second extension “would only apply to matters proceeding to the IRS Independent Office of Appeals.” Order, at p. 2. Hence the third doesn’t cover everything else.

No, says Judge Speedy Weiler. Carver didn’t raise 3SOL in its petition. 3SOL is an affirmative defense which petitioner must plead and prove; use it or lose it.

“It is the third set of Forms 872-P which extended the period of assessment to July 31, 2024, in each of these cases, and does not contain any such statement. Further, we determine the clause relied upon by petitioners and found in the second set of Forms 872-P to be ambiguous and not clearly intended to limit respondent’s authority to make a future assessment of federal income tax against the partnerships.” Order, at p. 3.

Leaving aside inartful drafting (didn’t you mean “solely to preserve petitioners’ right to appeal any determination, finding, order, or opinion adverse in whole or in part to petitioner, to any forum having or asserting jurisdiction, and to object to any assertion of claim preclusion or issue preclusion of any thereof in any other juridical or administrative proceeding”?), there’s plenty of ambiguity here.

Btw, isn’t there a typo at Order, at p. 3, third full paragraph, line 6? Don’t you mean “872-P,” and not “372-P”? 

Again I volunteer as proofreader.