I used to see this more often, but after a hiatus, the missing year-before-first-year-at-issue has come back to bail out Ann Dunlap, Docket No. 3729-22, filed 6/1/23.

There are two (count ’em, two) years at issue before Judge Elizabeth A. (“Tex”) Copeland, and Ann frivols both. Judge Tex Copeland gives Ann enough somber reasoning and copious citation of precedent to justify the sixty Georges Ann paid for this.

“Implicit in the statements relied upon by [the petitioner] to the effect that the system is based upon voluntary compliance is the known fact that, in spite of its extensive bureaucracy and technical equipment, the manpower and facilities of the IRS for policing compliance by every taxpayer are limited and that the effectiveness of the system depends upon the taxpayer’s voluntary obedience to the law. These statements certainly were never intended to suggest that the internal revenue laws were self-destructive. Yet, this is precisely what petitioner’s argument comes down to, for if [the petitioner was] correct,  Congress has supplied every taxpayer with a facile device for totally avoiding all liability by simply declaring that he does not choose to comply. We cannot find that Congress ever intended any such absurd result.

“The result would be absurd, and the very argument is absurd. Waltner, T.C. Memo. 2014-35, at *56–57 (footnote omitted).” Transcript, at pp. 9-10.

Ann is obviously a Hendrickson follower. For the Waltner story, see my blogpost “Cracking Up,” 2/27/14.

So Ann gets hit with tax, and the two Section 6651(a) add-ons, failure to file and failure to pay. But she only gets one Section 6654 adsd-on, failure to file ES, for nonfiling and nonpaying ES in Year Two. Now Ann had income beside salary and wages. She had nonemployee income (1099-MISC), interest, and royalties in both years. But IRS can prove only one year.

“However, section 6654(e)(2) exempts a taxpayer from the section 6654 addition to tax if the taxpayer did not have a tax liability in the preceding 12-month tax year and was a citizen or resident of the United States.  For this case, we will focus on subparagraph (B) of this exception, which requires Ms. Dunlap to not have a tax liability in tax years [Year Minus One] and [Year One] (the preceding tax years for the years in issue). The record is devoid of any evidence showing that Ms. Dunlap had a tax liability in [Year Minus One]. She does have a tax liability for [Year One]. Thus, respondent has met his burden of production as to tax year [Two], but not as to tax year [One]. We accordingly hold that Ms.Dunlap is not liable for the section 6654 addition to tax for tax year [One], but is liable for such addition to taxfor tax year [Two].” Transcript, at p. 17.

Lest Ann grow too elated, Judge Tex Copeland gives her a Section 6673 yellow card, at no extra charge.

Taishoff says it should be simple enough, even with the post-COVID logjams, for IRS’ counsel to pull a transcript of Ann’s Year Minus One. And 3SOL is nothing to the point; IRS wouldn’t be contesting any tax incident of that year, only that there was a liability reported.

Yes, I know, you can spare me the comments and e-mails: I know Bogie never said that line. Notwithstanding anything therein or elsewhere to the contrary or at material variance therewith (as my paid-by-the-word colleagues would say), that line has gone down as part of the canon, and my unhallowed hands shall not disturb it, or the country’s done for.

Come to think of it, the country may well…but this is a nonpolitical blog.

Anyway, coming to the point (and I can hear my readers saying “There is one? How quaint.”), yesterday’s Zoomstravaganza, under the masterful guidance of Judge Ronald L. (“Ingenuity”) Buch, was well worth the time spent by the panel and audience. In addition to a thorough discussion of the variations between USTC discovery and FRCP in the Art. IIIs, we got to hear the viewpoints of OCC, a white shoe, and LITC. The facial expressions of Golden Gopher LITC honcho Caleb (“The”) Smith alone were worth the time. I’d only suggest that The Smith not play poker, even with friends.

But seriously folks, I asked whether these webinars could be recorded and made available on the USTC website for future viewing, for the benefit of those unable to attend at this time. I inquired using the Q&A function while the program was going on. Ms. Siegel, the czar of Public Affairs, replied that the program was not being recorded.

True, but it should have been. The remote mock trials run on the website during COVID by CSTJ Lewis (“It’s That Name Again”) Carluzzo were an enormous help. They should be continued.

As for discovery, it’s an area where even seasoned attorneys have come seriously unglued; to say nothing of self-representeds who never heard of Branerton but have watched one CLE about “win your case at discovery” and blast off all kinds of impermissible demands ten seconds after they file their petition.

Anything that might educate the parties coming to The Glasshouse in The City That Avoided Default, to save even a few of the endless wasted replies and orders in response to endless wasted discovery motions, must be greeted with loud cheers. Especially by Tax  Court’s hardlaboring intake clerks and flailing datestampers.

Surely recording and making available these useful guides on the USTC website is not beyond the capacity of the Genius Baristas and 18Fs.

So how ’bout it, Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan?

Before you beat me up as a conspiracy theorist, I am aware that most if not all of what is ascribed to malice is actually stupidity. While one must assume that every adversary and counterparty knows everything one knows, one cannot assume that adversary or counterparty will draw the correct conclusion therefrom.

Which leads me to Salacoa Stone Quarry, LLC, Eco Terra 2017 Fund, LLC, Tax Matters Partner, T. C. Memo. 2023-68, filed 5/31/23. It’s the usual Dixieland boondockery, 106 acres of scrub bought for $304K, syndicated exactly a year later for $24.8 million. Love those dilithium crystals.

IRS moves for summary J on the 6751(b) Boss Hoss.

The Salacoa Stones want discovery, because the dates on the penalty lead sheet vary.

Judge Albert G. (“Scholar Al”) Lauber expends the usual somber reasoning and copious citation of precedent, both Tax Court and 11 Cir, to blow off the Salacoa Stones’ trusty attorneys’ attempt to freeze the puck. All that is necessary is the right signature from the right person in the right place before Word One of chops is breathed to the Salacoa Stones. As the Man from Mumbai put it, “The door is shut; we may not look behind.”

But why all these summary J cases to nail down Boss Hossery?

I posit that Section 6751(b)’s avowed purpose was to prevent the bludgeoning of taxpayers with the threat of penalties into unfair settlements. OK, but what happens after the Boss Hoss signs on the dotted line? Then the penalty jack is hoisted to the maintop. The Salacoa Stones are confronted with a 40% gross overvaluation misstatement chop, with the 20% five-and-ten as a fallback.

Remember, Hewitt put paid to IRS’ tactic of decapitating syndicated easements without expensive trials featuring expensive expert witnesses, by means of “highly contestable readings of what it means to be perpetual.”

So how to avoid said trials now? How about flaunting the aforesaid penalty jack early by way of summary J, to evoke a sense of dread in the hearts of the syndicated highrollers who wrote off telephonic gains based upon this marked-up mudflat?