In Uncategorized on 05/24/2018 at 16:09

Y’all will remember the excise tax on tanning parlors that featured in the much-contemned-but-still-unrepealed Affordable Care Act. The tannery operators collected same from the tanned, and were required to remit to the Federales posthaste. Failing the which, the tannery’s responsibles got their hides tanned with TFRPs.

Well, what is a penalty of any kind without a Boss Hoss Section 6751(b) sign-off?

I’ll tell you: it’s an occasion for a silt-stir by none other than that Master Silt Stirrer, Great Dissenter/Concurrer, and Old China Hand, Judge Mark V Holmes.

Judge Holmes is back at the Graev in a designated hitter, Daniel James Humiston, 25787-16L, filed 5/24/18.

DJ’s tannery went mechulah (please pardon arcane technical term from the old Mesopotamian) and the bankruptcy liquidation hadn’t yet occurred, when IRS slugged DJ with the TFRPs. DJ claims he told the SO at Appeals that the cash on hand in the now defunct tannery would pay off some of the excise taxes, so he never handed over personal info.

The SO checked out the Forms 4340 for the relevant period.

In support of its motion for summary J IRS handed up the “…Forms 4340, Certificates of Assessments, Payments, and Other Specified Matters, for each tax period. This would ordinarily be enough for us to move past the verification requirement of § 6330(c)(1) and (3)(A). See, e.g., Dinino v. Commissioner, 98 T.C.M. 559, 564 (2009) (‘The appeals officer would have seen th[e] entries [on the Forms 4340] when he consulted [IRS] records before the notice of determination was issued’). But the parts of the administrative record that accompany the Commissioner’s motion say nothing about the SO verifying that the Commissioner complied with § 6751(b)(1) when he assessed the TFRPs against Humiston — the SO doesn’t say anything about the requirement in the notice of determination, and there are no Forms 4183 attached to his declaration. Cf Blackburn v. Commissioner, 150 T.C. __, __ (slip op. at 9) (Apr. 5, 2018). And the Forms 4340 themselves don’t give any information about the Commissioner’s compliance (or lack thereof) with § 6751(b)(1).” Order, at p. 3.

Remember Scott Blackburn? No? Then dig my blogpost “Robosigner? – Part Deux,” 4/5/18. Scott was involved in FICA-FUTA-ITW TFRPs, but what’s the diff?

With pardonable understatement, Judge Holmes’ll tell ya.

“Our Court’s spent a lot of time lately thinking about I.R.C. § 6751(b)(1), which says that “[n]o penalty under [the Code] shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination.” Indeed, the Second Circuit — to which this case is presumably appealable — told us last year that ‘the written-approval requirement of§ 6751(b)(1) is appropriately viewed as an element of a penalty claim.’ Chai v. Commissioner, 851 F.3d 190, 222 (2d Cir. 2017), aff’g inpart, rev’g inpart 109 T.C.M. 1206 (2015). We’re dealing here with a liability that consists only of penalties — TFRPs under § 6672(a) — so we don’t immediately see why § 6751(b)(1)’s penalty-approval requirement wouldn’t apply, and the Commissioner hasn’t argued that it doesn’t.” Order, at p.3 (Footnote omitted, but read it; Judge Holmes is at it again, jousting with the “automatically calculated by electronic means” gambit.)

It’s true DJ didn’t raise the Boss Hoss sign-off opposing summary J, but he’s pro se (of course), and can raise the issue on the trial (nudge nudge, wink wink).



In Uncategorized on 05/24/2018 at 15:41

The second is counting someone else’s money for them. The third, at least for us attorneys, is second-guessing another attorney’s litigating strategy.

It’s so much fun that I did so today, in another online venue, and in a non-tax matter that has received considerable attention in political circles. It’s like eating peanuts; only the strongest can stop at one.

So I bow to my weakness and hereby second-guess the distinguished practitioners who represent Celia Mazzei, et al., Docket No. 16702-09, filed 5/24/18.

All y’all (just booked our tickets for the semi-annual flight to The Magnolia City to see our nearest and dearest) must remember Celia and the et als, no?

What, no? Well, see my blogposts “Foolish Consistency – Redivivus,” 4/1/14, “Caligula in Tax Court?” 3/5/18, and “Substance vs Smell,” 4/19/18.

So my second guess has to do with the reconsideration or vacation motions, both of which are rejected by ex-Ch J Michael B (“Iron Mike”) Thornton.

Ex-Ch J Iron Mike patiently wades through a new legal theory (raised for the first time in this Rules 161 and 162 motion), and petitioner’s strongest point (Congress intended that foreign sales corporation money should be directly-guided largesse to its shareholders, who should face no tax consequence whatever), and the 1 Cir and 6 Cir glosses, and 2 Cir (but concludes that since this case is Golzenized to 9 Cir, who cares?).

And of course denies the motion. You can read it for yourselves.

Now for the second guess. Unless the client is trying to save money and says “go for it!”, notwithstanding that most reconsiderations and vacations are losers, I say it is  better to take an appeal directly. CCAs don’t worry about Golsen. Tax Court has put the slug on Roth-stuffing by DISCs and FSCs consistently; the CCAs seem to be more sympathetic.


In Uncategorized on 05/23/2018 at 16:16

It seems like yesterday when now-ex-Ch J Michael B (“Iron Mike”) Thornton took the salute from Ch J L Paige (“Iron Fist”) Marvel, and marched off at the change-of-command ceremony at the Glasshouse at 400 Second St, NW almost two (count ’em, two) years ago. It’s a shame Tax Court hasn’t a parade ground for such things.

With scarcely more than a week to go before we see command change again and Judge Maurice B (“Mighty Mo”) Foley receive the salute; with a holiday weekend looming and today’s only designated hitter the dreary tale of a non-filing, nonpaying protester, Ch J Iron Fist provides a checklist for the late petitioner.

And since it is literally the late petitioner, Walter Gorsica, Index No. 1764-18, filed 5/23/18, Ch J Iron Fist’s good advice is addressed to the unnamed administrator of the late Walter’s estate.

“… although this case may not be prosecuted in the Tax Court, the administrator of petitioner’s estate may continue to pursue administrative resolution of the … tax liability directly with the IRS. Another remedy potentially available is for the administrator to pay the determined amounts, then file a claim for refund with the IRS. If the claim is denied or not acted on for six months, petitioner may file a suit for refund in the appropriate Federal district court or the U.S. Court of Federal Claims. The administrator also may contact the Taxpayer Advocate Service (TAS), an independent organization within the IRS that assists taxpayers. The contact information for TAS is available at” Order, at p. 1.

Save the list for your clients who show up on or after day 91 or 31 (or 151, as the case may be).