No, not a misspelling of the 1966 Brian Wilson 90-hour extravaganza. Rather, I comment on a sixteen (count ’em, sixteen) year-old deficiency case that is still dealing with discovery. As I’ve often remarked before, I’ve paid good money for whiskey younger than Harvey Birdman & Diane Birdman, et al., Docket No. 28897-10, filed 7/16/26.

Harv & Diane want sanctions and discovery from nonparty witness the  Virgin Islands Bureau of Internal Revenue, so I infer this is another long-running Section 932 unguided Congressional largesse bestowed upon avowed residents of our Insolvent Islands in the Sun.

Ch J Patrick J. (“Scholar Pat”) Urda, imperturbable, tells VIBIR to respond.

But take heart, reader; trial is scheduled to begin in October. 

Ex-Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan and her colleagues are far too well-bred to use such language as first hereinabove appears at the head hereof (as my expensive ex-colleagues would say), but that is the gist of Siemens Medical Solutions USA, Inc. and\ Consolidated Subsidiaries, 167 T. C. 5, filed 7/15/26.

Ex-C h J TBS follows Varian (see my blogpost “We Don’t Need No Stinkin’ Distributions,” 8/26/24) in dumping Reg. Section 1.245A-5T.  The multiple mismatches in TCJA affecting Sections 245A, 951A, and 965 (Mandatory Repatriation Tax) were Congress’ attempt to territorialize and deuniversalize CFC taxation and level the playing field for onshore-owned offshores.

IRS’ regulatory attempt to cut the freebie in half founders on Loper Bright.

“Section 245A allows a 100% deduction for qualifying distributions after December 31, 2017. Treasury’s adopted regulation disallows 50% of the deduction for distributions that Treasury admits satisfy the plain terms of the statute, using criteria that appear nowhere in the statute. This creates a contradiction, and the statute must prevail.” 167 T. C. 5, at pp. 15-16.

And every Tax Court Judge (except Judge Rose E. (“Cracklin’) Jenkins, who took no part) says “amen!”

That’s ex-Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan’s message to Piton Holdings,  LLC, David L. Hall, Partnership Representative, 167 T. C. 4, filed 7/15/26. Ex-Ch J TBS gets there after 45 (count ’em, 45) pages of deconstruction of another discounted cash flow Dixieland Boondockery; this one is a limestone quarry, but it’s the same old story. A Jarkesy attack founders, so the Piton Holders try the disclosure exception pursuant to section 6662(d)(2)(B), stretching same to apply to the substantial or gross valuation misstatements. 

IRS says Reg. Section § 1.6662-5(a) says no disclosure exception applicable to those. Piton Holders says reg is invalid.

“A plain reading of section 6662 reflects that provisions in subsections (c) through (g), (j), and (k) do not apply to all section 6662 penalties. Rather, those provisions apply only to the specific penalty that the subsection in which they are found pertains to. The adequate disclosure exception is found in section 6662(d)(2)(B)(ii), and no text extends that exception to any other section 6662 penalty. The adequate disclosure exception therefore applies only to the substantial understatement penalty under section 6662(d).” 167 T. C. 4, at p. 50. 

“The plain wording of section 6662(d) makes it clear that the adequate disclosure exception does not apply to the section 6662(e) substantial valuation misstatement penalty nor to the section 6662(h) gross valuation misstatement penalty. Accordingly, the disclosure exception pursuant to section 6662(d)(2)(B) does not apply and therefore, petitioner is liable for the gross valuation misstatement penalty under section 6662(h).” 167 T. C. 4, at p.52. (Footnote omitted, but it cites Hughes, as to which see my blogpost “The Unrecognized Alien,” 5/11/15).