Judge Emin (“Eminent”) Toro, having disposed of deemed distributions, now ascends to the heights hereinabove set forth at the head hereof, as my Grey-Goose-guzzling former colleagues might say, as he does the numbers for Varian Medical Systems, Inc. And Subsidiaries, 166 T. C. 8, filed 4/8/26.

For the mise-en-scène, see my blogpost “We Don’t Need No Stinkin’ Distributions,” 8/26/24. This was an unscramble of the gyrations which TCJA imposed to try to territorialize our worldwide tax system for CFCs by imposing modest tax on stashes of post-1986 offshore E&P, both cash and noncash varieties.

But now the numbers, brushing aside both parties’ arguments that their calculations raise issues conceded because never before raised. 

“In particular, the parties agree that the Deemed Paid Foreign Tax Credits should be the amount of Varian’s deemed paid foreign taxes after reduction by section 965(g)(1)—i.e., after the reduction that corresponds to the section 965(c) deduction. Similarly, the parties agree that the section 78 gross-up should be the amount of Varian’s gross-up under section 78 after reduction by section 965(g)(4)—again after the reduction that corresponds to the section 965(c) deduction.

“The parties disagree, however, on the meaning of the ‘net section 965 inclusion.’ Varian argues that it should equate to the section 965(a) inclusion amount (the earnings determined under section 965(a) less the E&P deficits determined under section 965(b)).

“The Commissioner contends that, consistent with the other amounts in the formula, the net section 965 inclusion should take into account the section 965(c) deduction. In other words, the Commissioner argues that the net section 965 inclusion should equal the section 965(a) inclusion amount reduced by the section 965(c) deduction.

“The Commissioner is correct.

“Returning to the text of the statute, the point of the formula is to identify ‘taxes paid or accrued (or treated as paid or accrued) with respect to any dividend for which a deduction is allowed under [section 245A].” I.R.C. § 245A(d)(1). In other words, the point of the formula is to allocate foreign taxes to the underlying earnings that were subject to foreign tax and identify the portion of those taxes that were attributable to a deductible dividend (here, the section 78 dividend).” 166 T. C. 8, at p. 28. (Footnotes omitted).

As Mark Twain remarked, “Well you’ve got to admire men that deal in ideas of that size and can tote them around without crutches.”

Continuing this series, and again acknowledging that master communicator Art Linkletter, I proffer Matthew Bruns, Docket No. 15540-24, filed 4/7/26. 

Matthew and IRS stip this case out, with a huge deficiency offset by withholding and payment, but that’s not the point.

Before the stiped decision of even date herewith is entered by Judge Kashi (“My or the High”) Way, there is an Order, wherein is stated: “… the Proposed Stipulated Decision contains an evident typographical error.” Order, at p. 1.

Often happens, when parties are beaten down by prolonged negotiations and just want the pain to end. Just strike the proposed stip and have the parties try again.

Instead, Judge Way orders thus: “…the above-referenced proposed stipulated decision is hereby deemed stricken from the Court’s record in this case and shall be sealed from the public and the parties in this case.” Order, at p. 1.

From the parties? Didn’t they see this before they sent it to the Judge?

Judge Adam B.(“Sport”) Landy gives the Ogden Sunseteers another win (I wonder if the WBO is getting tired of winning) in William Pratt, T. C. Memo. 2026-31, filed 4/6/26. The OS sent William’s claim to SB/SE classifier, who brushed it off as too small ($10K in dispute) to pursue. In a five-page rehash of Li, Lissack, Meidinger/Kennedy, all of which I’ve blogged, Judge Sport Landy finds no jurisdiction. I suppose this merits a T. C. Memo. to show whistleblowers are taken seriously, despite their minimal success rate. But why IRS had to put three (count ’em, three) lawyers on this case, when a first-year law student could have won this, eludes me.

A couple years ago (hi, Judge Holmes), a pro se inspired me to revisit The Rock of Svithjod; see my blogpost “Svithjod Revisited,” 5/10/24. I lamented yet again the waste of scarce Tax Court judicial resources in busywork orders, which any judge’s clerk could handle, freeing the judges to cut down the dockets. The protagonist of that blogpost has departed this vale of tears, so we get Richard W. Medley, Docket No. 13611-22, filed 4/6/26. Judge James S. (“Big Jim”) Halpern, hearing from IRS’ counsel that neither spouse nor child of the late Richard could be found to take up his quarrel with the foe, invites them in.

Freya Pearson, Docket No. 4536-21, filed 4/6/26, ties my personal record for stalling a case that I had to lose on the law, but I was in State court and so actually had to oppose summary J and take an appeal to do it. Freya just stalled for five (count ’em, five) years, with continuance after continuance.  Exasperated, Judge Rose E. (“Cracklin”’) Jenkins fires an eight-page barrage of somber reasoning and copious citation of precedent, tossing the petition and excoriating Freya for repeated disregard of this Court’s orders, so that another continuance would simply reward her for her conduct, such that any sanction short of dismissal would be insufficient, and would simply reward her for her conduct.