The old cliché of the shoemaker’s children going shoeless should be retired on account of age. But when a tax preparer gets chopped for fraud like Jack Goodwill-Oikerhe, T. C. Memo. 2026-18, filed 2/11/26, maybe it’s the clients who are the real targets.

Judge Nega’s 37 (count ’em, 37) pages of prose tell the story, so I won’t cut-and-paste or paraphrase, except for his peroration. 

“Petitioner is a well-educated businessman and an experienced tax return preparer, and yet he significantly overstated the deductions to which he was entitled on his and [Sub S]’s returns for each of the years in issue. During the examination, he required RA C to summon his bank records, failed to provide promised documents and meetings, and ultimately provided RA C with only minimal documentation to support the claimed deductions. And during trial petitioner provided the Court with no documentation or other corroborating evidence at all with respect to his testimony.

“Petitioner also made implausible and inconsistent statements throughout the course of the examination and trial, as repeatedly demonstrated throughout our analysis of the disputed deductions…, including statements surrounding his employee business expenses that were refuted. And we have found incredible his assertions that whatever books and records he did maintain were destroyed in a flood or absconded with by RA C.” T. C. Memo. 2026-18, at p. 36. (Name and citations omitted).

I wonder how many of the 700 returns that Jack prepared for his cash-paying customers, and how many thereof he signed as preparer, over a three-year span (see T. C. Memo. 2026-18, at p. 5) were of the same quality as the returns he prepared for himself and his Sub S. IRS might want to get a list from Jack, and audit a few those returns (hi, Judge Holmes).

I cannot think many, if any, of my readers are hanging breathless on the outcome of the trial in Lola Marie Hussey, Docket No. 5981-24L, filed 2/11/26. Few, again if any, will remember STJ Lewis (“Whatever Shall I Do When He Retires?”) Carluzzo’s rejection of IRS’ summary J motion for confirmation of Appeals’ NOD, so, if you care, check out my blogpost “Milk Run,” 11/26/25 for the scanty backstory.

STJ Lew has two (count ’em, two) questions to resolve, even though Lola Marie thoroughly defaulted (no briefs, no appearance). Was what Lola Marie filed a “return” within the meaning of Section 6702? And was the issuance of the NOD ustaining the collection process an abuse of discretion? Yes and no.

Yes, it was a return, but it was an “all-seros.” She also claims Section 6702 is unconstitutional, but provides no argument in support.

Yes, the chops were Boss Hossed, and Lola Marie’s insistence at the CDP that only liability should be considered is a nonstarter. Anyway, “(B)ecause petitioner refused to have such issues considered at the administrative hearing, we will not consider her challenge to the process here. But if we did, we would find that respondent’s evidence shows that in all respects respondent proceeded as required by section 6320 and section 6330.” Transcript, at p. 8.

This blogpost appears as a matter of record. I can find better subjects for this blog; I don’t want to be accused of milking the milk run.

Juliet R. El, T. C. Memo. 2026-17, filed 2/10/26, got her year-at-issue 1040 right, thanks to her trusty electronic preparer. She claimed an Additional Child Tax Credit of $4K, to which she was indisputably entitled. Whereupon IRS’  creaky hardware gave her a $15K refund because it transposed her earnings as reported on her Schedule 8812 to the credit due line. IRS woke up before the SOL and gave Juliet a $15K deficiency.

Juliet’s trusty attorney claims this is a nonrefundable rebate because IRS didn’t recalculate Juliet’s tax due, hence Section 6212 is out and IRS must sue in USDC per Section 7405. IRS says yes we did recalculate.

Judge Nega says that’s not the issue.

“Respondent and petitioner both make a fundamental error in analyzing whether a ‘substantive recalculation’ occurred in this case. Both incorrectly direct their attention to whether the error (substituting $17,164 for the ACTC) was a ‘substantive recalculation’ instead of whether the error led to a substantive recalculation of petitioner’s tax imposed. Petitioner argues that a simple substitution error does not involve calculation at all and cannot be a ‘substantive recalculation.’ Respondent defends his mistake as a recalculation without offering any explanation more plausible than its being a mistaken transposition of numbers on the return (the $17,164 being listed elsewhere by petitioner as her earned income).

“Without reaching the question of whether a transposition or substitution error is a ‘substantive recalculation,’ the record amply supports the position that respondent substantively recalculated petitioner’s overall tax imposed. And this is the only correct place to direct the analysis: whether the taxpayer’s tax imposed was recalculated.  A refund is a rebate refund if it is based on a ‘substantive recalculation’ of the tax imposed that shows the taxpayer owes less tax than the amount shown on the taxpayer’s return. In this case, the refund is a rebate refund because the rebate was based on a substantive recalculation of petitioner’s tax imposed.” T. C. Memo. 2026-17, at p. 7. (Citations and footnote omitted).

The issue isn’t how the mistake occurred, it’s what impact the error had on tax due. Now Juliet admittedly owed nothing on her return. But Section 6211(b)(4) was amended in 1988 to deal with refundable credits when tax due was zero, so taxpayers could challenge erroneous disallowances in Tax Court. Hence this is a deficiency case, and Juliet owes the incorrect overpayment.

If this sounds familiar, see my blogpost “The Rebate Debate – Innocent Spousery,” 7/17/24.