I’m reluctant, not because of any criticism from the reader (Bob Kamman, Esq.), but because he has raised, in a comment to a very old post, a point that I have beaten to what I supposed was death a long time ago. You can find his comment, and my reply, at my blogpost “Statute of Limitations? Maybe Not,” 12/28/10.  That’s only about sixteen (count ’em, sixteen) years ago. 

The case is Estate of Arthur I. Appleton, Deceased, Linda Potter, Executor, Docket No. 15121-12, filed 9/10/26. Ch J Patrick J. (“Scholar Pat”) Urda orders either a stip of settlement or a status report 90 days out.

Mr. Kamman points out that this is status report number 28; I count 34, but it really doesn’t matter.

Can any reader point me to another court where cases hang around for decades with no end in sight? I mean, besides Jarndyce v. Jarndyce.

Way back in 2010, Judge Julian I. Jacobs (now long since retired) stated in a companion case “that the interest of the taxpayer in a speedy resolution outweighs the specific governmental interest of the Virgin Islands Bureau of Internal Revenue in orderly tax administration of the USVI.”

Yeah, roger that, most affirmative.

I’m going to indulge in the third-favorite indoor sport at the end hereof, so take this as a warning. I mean, of course, second-guessing someone else’s trial strategy. So here are the facts of David L. Tunkl, T. C. Memo. 2026-83, filed 9/10/26, with Judge Adam B. (“Sport”) Landy’s account of the facts and his disposal of the arguments of petitioner’s trusty attorneys.

David is a high-priced art dealer who was short of what is pocket change in fine art circles, a mere $16.5 million. So he went to Gallery, a big-ticket highrolling outfit, and got $16.5 million on a handshake to buy and flip Picasso’s Man With Ice Cream Cone (I kid you not) for a $14 million profit to be split. Except the ice cream melted and so did the deal. Burt since Gallery put no restrictions on what David could do with the $16.5 million, David went off and bought a Francis Bacon (not the 16th Century Shakespeare body double, the 20th Century figurist). Much later Gallery insisted on papering their Picasso deal and backdating the paper.

David operated with a Sub S and himself, but intermingled finances. IRS claimed unreported income for the $16.5 million.

Trusty attorneys claim customer deposit, but that needs a CWA like a charitable donation, or equivalent. Nothing like that for six (count ’em, six) months after, and insufficient.

Claim of Section 7701(a)(2) partnership between David and Gallery is pursued neither at trial nor on brief, hence deemed conceded. See T. C. Memo. 2026-83, at p. 8, footnote 3. No, this is not the second-guess of which I was speaking at the head hereof, but you can pick up on it. Failing to file a 1065 is strike one, and failure of Gallery to testify or provide documents in support is strike 2.

Claim that the $16.5 million was a loan founders on want of 9 Cir’s 7 (count ’em, 7) part test; David petitions from CA, hence Golsenized to 9 Cir. And David repaid only $2.5 million, after Gallery brought in their lawyers.

David loses.

Here’s my second-guess.

Judge Sport Landy makes much of the complete want of paperwork or any explicit restriction on David’s use of the $16.5 million. But he does note that Gallery and David weren’t a one-night stand. 

“Mr. Tunkl purchased paintings and sculptures for the Gallery, which were later resold for profit. Before the year in issue, Mr. Tunkl participated in 13 transactions with [Gallery owner], totaling between $100 and $200 million. Mr. Tunkl identified three specific transactions where he purchased a painting for [Gallery owner] at a low price that was subsequently sold for a substantial profit. Given their relationship and industry practice, Mr. Tunkl and [Gallery owner] rarely executed written agreements for their business deals.” T. C. Memo. 2026-83, at p. 2.

Now for my second-guess. There’s a $5 million deficiency, plus chops and add-ons, on the table. Why not scare up a few experts from the art world to testify as to the custom and usage of the trade, business, or occupation? If such be the case, let them testify that everything is done on a handshake, that trust among dealers is the essence of the business, that no piece of paper is a shield to a breach of trust, that routinely millions of dollars transfer between on-and-offshore banks on nothing more than a phonecall between dealers. Might save the deposit argument. Or even joint venture.

Judge Christian N. (“Speedy”) Weiler explores what a Form 872–M, Consent to Extend the Time to Make Partnership Adjustments, does to Section 6235 SOL in Katanga Properties, LLC, R. Brent Evans, Partnership Representative, 167 T. C. 10, filed 9/9/26.

R. Brent, duly appointed PR, oversaw timely filing of 1065 for box-checked Katanga. IRS selected same for exam, so R. Brent and IRS signed said Form 872-M. IRS issued a NOPPA two (count ’em, two) years later. R. Brent let the calendar run out on the 270 days to file a request to modify.  IRS then sent the FPA, which R. Bent now claims blew the 3SOL, wherefore is untimely and invalid.

R. Brent claims the 872-M only extended the time to file NOPPA, not time to request modification nor FPA.

No, says Judge Speedy Weiler.

“Petitioner ignores the plain text of section 6235(a), which provides that ‘no adjustment under this subchapter for any partnership taxable year may be made after the later of.’ Furthermore, the use of ‘or’ between paragraphs (1) and (2), and paragraphs (2) and (3), supports our understanding that the paragraphs are read disjunctively and indicates that the reader must determine the ‘later of’ deadline for which partnership adjustments may be made. Thus, the statutory text furnished by Congress, and our precedent, establish that subsection (a) allows the Commissioner to make adjustments any time before the latest of paragraphs (1), (2), and (3). See Mammoth Cave Prop., LLC v. Commissioner, No. 5401-24, 166 T.C., slip op. at 8 (Mar. 9, 2026); JM Assets, LP, 165 T.C. at 11.” 167 T. C. 10, at p. 6

For Mammoth, see my blogpost “A New Day – Redivivus,” 3/9/26; for JM Assets, see my blogpost “A New Day – Redux,” 7/2/25.

When R. Brent tries to drive a syntactical wedge between Sections 6231(b)(2) and 6235(a), Judge Speedy Weiler shuts him down.

“… it is apparent that section 6231(b)(2) acts in conjunction with section 6235(a) and sets forth the requisite minimum timing in which an FPA may be issued. Section 6231(b)(2) subparagraph (A) establishes the 270-day modification period and subparagraph (B) refers to section 6235 for the timing on issuing the FPA. Congress’s use of the word “adjustment” is sufficiently broad as intending to include the process by which the Commissioner makes adjustments, namely first by a NOPPA, followed by an FPA. Accordingly, any agreed-upon extension under section 6235(b) would necessarily extend the limitations period for making adjustments, and any extension must be taken into consideration in determining the latest of the periods found in paragraphs (1), (2), and (3).” 167 T. C. 10, at pp. 7-8. (Footnote omitted, but it says that though there’s a statutory 60-day window wherein IRS may issue an FPA, that doesn’t preclude a later issue, provided the limitation period is still open.)

I feared that the BBA regime might deprive me of the great TEFRA blogfodder, despite my much-publicized protestations that I wouldn’t mourn TEFRA. Once again I failed to reckon with the inventiveness of my colleagues. Good try to Katanga’s trusty attorneys.