In Uncategorized on 03/19/2019 at 23:47

I will spare my readers any allusion to the 1976 Meredith Willson Broadway musical hit; it’s late, I had a fun-filled day of art and music, and I’m tired.

Bur I owe it to my readers to tell them about River City Excavation, Inc., Docket No. 22751-18L, filed 3/19/19. River City’s troubles have to do with the Section 6721 chops for filing messed-up information returns. There must be a ton of them, because River City is complaining about three (count ‘em, three) years’ worth.

IRS wants to toss all three for untimeliness, and River City folds as to two, but claims they got a NOD for the third year, and that one they timely petitioned.

It seems River City petitioned everything, and the SO considered it all, although not formally joining everything. River City argues that Reg. 301.6330-1(a)(3), Q&A-D2, obliges Respondent to combine CDP hearings where practical, and deal with everything.

But if the NITL and NFTL for the two untimely years were joined with the timely year, doesn’t that oust Tax Court of jurisdiction? Isn’t the NOD for the timely year a supplemental NOD?

Ch. Judge Maurice B (”Mighty Mo”) Foley wants to know. After all, remember LG Kendrick, LLC. What, you don’t? Then see my blogpost “Be Careful What You Ask For – Part Deux,” 1/21/16. Now LG Kendrick LLC involved Form 941s, and the forms in this case are information only, not payment.

But maybe the rules are the same.

Let both sides discuss, but let IRS tell Ch J Mighty Mo if they’re going to issue a new NOD for the one open year.



In Uncategorized on 03/18/2019 at 17:52

That Obliging Jurist, Judge David Gustafson, provides a really simple guide to the seeker for a piece of the action she stirred up, in Suzanne Jean McCrory, Docket No. 11798-18W, filed 3/18/19, a day when the two designated hitters concern only lost-in-the-woods pro ses.

Suzanne Jean starred in my blogpost “Remand? You Can Whistle For It,” 1/31/18, a T. C. Memo. Now she’s down to an undesignated order.

Suzanne wants a continuance for “formal and informal evidence gathering.” Order, at p. 1.

No dice.

“…when reviewing respondent’s determinations under section 7623(b), we limit the scope of our review to the administrative record, see Kasper v. Commissioner, 150 T.C. No. 2 (Jan. 9, 2018), so that, in the ordinary course, there will not be a trial in a whistleblower case. Rather, the parties will stipulate the contents of the administrative record (or, if they cannot agree, then a hearing might be held to determine the contents and sufficiency of that record), and the Court will order the filing of whatever briefs are appropriate to resolve the issues in dispute.” Order, at p. 1.

As for Kasper, see my blogpost “Two Old Cases,” 1/10/18. Chenery-style review is all a blower gets.

All that the administrative record should show is what Suzanne gave IRS, what they did with it (and why), and how much IRS collected (if anything).

If IRS looked over Suzanne’s proffer, either pursued or didn’t pursue, and if pursued got nothing, game over. If IRS looked and did nothing, or did something and got nothing, no second-guessing by Tax Court.

But if IRS got money, and claims they didn’t use Suzanne’s stuff, there’s more.

See my blogposts “Trust Me – It Wasn’t Yours,” 3/12/19, and “Qui Tam,” 9/12/12.

I’ve said this before. If the blower connected the dots, even though every dot was in plain sight, unless anyone could have connected them, the blogger is entitled to something. Edgar Allan Poe’s classic “The Purloined Letter” is a perfect example; the police spent time tearing up floorboards, sticking long needles into upholstery, waylaying and searching the thief, and found nothing. It took Dupin, who used his head and left preconceived notions behind, to find it, pinned to a wall in front of their noses.

Absent someone connecting the dots, nothing will be found.


In Uncategorized on 03/18/2019 at 16:41

You Still Have to Ask

The usual three-and-two lookback on refunds for overpayment (Section 6511) may be suspended by an informal claim per Section 6015(g). But you still have to ask.

Even that Obliging Jurist Judge David Gustafson can’t find that Jim Stuart Brooks, 2019 T. C. Sum. Op. 5, filed 3/18/19 asked. Judge Gustafson revisits Palomares, which I’d almost forgotten, until I looked back my own self and found my blogpost “8379 Does Not Equal 8857,” 12/2/14“8379 Does Not Equal 8857,” 12/2/14. And even though 9 Cir. generously reversed Tax Court to allow Teresa Palomares to recover the overpayments she made (but which were applied to the tax liabilities of nogoodnik ex), she did file the 8379. Jim Stuart only filed his returns, his Form 8857, his Form 656 OIC, and his petition.

Jim Stuart never showed what part of the overpayments were made by him and which from Mrs. Jim Stuart. Jim Stuart lived in SC; I doubt 4 Cir. is as generous as 9 Cir.

Jim Stuart entered into an IA,  but defaulted after one payment. He got an inheritance and didn’t pay any part of his liability. True, his tax problems arose from one very good year, but Judge Gustafson finds he didn’t set anything aside to pay his taxes. Mrs. Jim Stuart seems throughout to have contributed about 17% of the family’s income, and though they weren’t extravagant, Judge Gustafson finds that 83% of the problem is Jim Stuart’s.

And Jim Stuart’s statement of his living expenses was a ballpark guestimate, so no showing of economic hardship..

“Four factors favor retained liability:  Mr. Brooks lacked a reasonable expectation that the liability would be paid when he signed the [year it issue] return (and when he later entered into the installment agreement); he failed to prepay or set aside tax money during a ‘bumper year’; he chose to live off his inheritance rather than paying the liability; and Mrs. Brooks’s approximate share of the liability is relatively small.  Four factors are neutral (marital status, economic hardship, legal obligation, and subsequent tax compliance).  Only two factors weigh in favor of granting relief–Mr. Brooks’s physical health and the lack of significant benefit.” 2019 T. C. Sum. Op. 5, at p. 27.

Jim Stuart loses.