Long-time Tax Court observers snap up judicial conundra, admiring the intellectual sinuosities that befuddle counsel and make them yearn for any off-ramp they can sell the client. Judge James S. (“Big Jim”) Halpern is no slouch in that department, so trusty attorneys for both IRS and Todd A. Govig & April M. McGrath et al., Docket No. 22991-22, filed 7/1/26, can consider their July Fourth weekend ruined by the nine (count ’em, nine) pages of conundra Judge Big Jim bestows upon them.

After telling them to brief a Loper Bright attack on the SDLIA reg (Reg Section 1.61-22(d)(2)(ii)), he sends them down a briefing rabbit hole via Section 83(h) and Section 419, telling them to emerge with QinetiQ Holdings, Inc. & Subsidiaries firmly within their grasp.

For the QinetiQ backstory, see my blogposts “Truth or Forfeits,” 7/22/15, and “Unbonded,” 10/30/18.

Oh, and of course trusty attorneys may brief anything else they think is to the point.

Taishoff offers this translation from the Halpernese: “Settle this case, guys. If y’all keep this up, y’all will not like the opinion you will make me write.”

It’s such a cliché, but this is one on which I am prepared to wager an ale or two at Jake’s Saloon that you can’t make this stuff up. But let Judge Nega tell the story of Rosie K. Boparai, Docket No. 7789-25, filed 6/30/26.

“Petitioner’s tax return for 2019 was due (after the granting of an extension) on October 15, 2020. Petitioner did not file her 2019 return by that date. 

“On July 17, 2023, petitioner appeared in person at the Sacramento Taxpayer Assistance Center and attempted to hand-deliver her 2019 tax return. Respondent’s employees refused to accept her hand-delivered return without petitioner having first made an appointment for that purpose. That same day, petitioner sent an envelope containing her 2019 return that requested a refund and a check for $10,000 by certified mail to a no-longer-operated Internal Revenue Service (IRS) P.O. Box in San Francisco, California. She included the check despite claiming a refund on the return because she believed that the inclusion of a check would speed up the processing of the return.” Order, at p. 1.

Of course Section 7502 doesn’t help, because the mailpiece was misaddressed.  See Section 7502(a)(2)(B); see also Reg Section 301.7502-1(c)(1)(i). Had Rosie filed properly in 2023, she would have gotten the refund (IRS conceded the deficiency). The 2019 1040 instructions said for overdue returns, use the latest address, and the SF PO Box wasn’t it. 

“Had she consulted the instructions for tax year 2019 with the degree of detail that she claims, she would have seen the directive instructing her to refer to the tax year 2022 instructions to find the proper address for mailing her return.” Order, at pp. 3-4.

PS- IRS finally got Rosie’s return last May.

Two Sum. Ops., but each has a twist.

Gregory A. Rodrigues, T. C. Sum. Op. 2026-4, filed 6/29/26, is the usual story of insufficiently-documented Section 274 travel, meals, and entertainment expenses for his real estate operations with his Harvard B-School buddies.  

CSTJ Zachary S. (“High Rise”) Fried: “The trips included travel with petitioner’s business school friends and with Ms. George, with whom petitioner shares a residence and a child. Although petitioner maintains that Ms. George accompanied him in her capacity as his attorney, the record contains no documentary evidence of an attorney-client relationship, and under the circumstances, we reject that assertion.” T. C. Sum. Op. 4, at p. 7. 

Seems the reverse of the usual situation.

He does get a grand or two of business expenses.

Edmund Ha, T. C. Sum. Op. 2026-5, filed 6/29/26, is an even greater traveler, but his fiduciary duty to his clients (he’s a high-priced international broker) prevents him from doing the Section 274 number with his preparer.  This costs him deductions and chops.

But STJ Peter (“HB”) Panuthos bows to Cohan to allow Edmund his home office expense deduction.

“In support petitioner submitted a log, credit card statements, a floor plan of his apartment, and a receipt for eight rental payments at his home address…. 

“Petitioner’s log lists the expense, the amount, and the purpose of each item reported. Petitioner testified credibly as to his business as a real estate agent, and the Court is satisfied that petitioner operated exclusively out of his home, incurred the listed expenses, and that those expenses had a business purpose. Consequently, petitioner has provided sufficient evidence for the Court to rely on the Cohan rule to estimate petitioner’s home office expenses. 

“Accordingly, the Court concludes that petitioner is entitled to a deduction for his home office and related expenses.” T. C. Sum. Op. 2026-5, at p. 7.

It’s up to the Rule 155 beancount to see how heavily STJ Panuthos bears on Edmund for inexactitude of his own making.