I should be pleased that Section 6751(b) Boss Hossery furnishes so much blogfodder and such ample opportunity for scouting (pejorative: look it up) the wretched drafting of the statute. But the enormous waste of judicial resources and litigants’ effort is headshaking material. The statute doesn’t accomplish what Congress intended; even if it could, the ensuing jurisprudence has made it worse than useless. 

Here we go again. Harvey Birdman & Diane Birdman, Docket No. 28897-10, filed 9/18/26, make their third appearance in this my blog. Harv & Di are leads in six (count ’em, six) cases, all old Section 932 Virgins, Congress’ unguided largesse to Our Insolvent Islands in the Sun.

IRS wants Boss Hoss summary J only as to Harv & Di, but trusty attorneys list all six docket numbers in their opposition papers, earning a reproof from Judge Cary Douglas (“C-Doug”) Pugh. Order, at p. 1, footnote 1.

But IRS’ paperwork is far from exemplary. I won’t attempt to condense, much less set forth in full, the Penalty Approval Form, more particularly bounded and described at Order, at p. 2. It tops Bud Abbott and Lou Costello’s celebrated “Who’s-On-First?” routine.

Judge C-Doug Pugh manages to rescue the Section 6663 fraud and the Section 6662(b)(1) negligence chops from under the hooves of this staggering Boss Hoss, incidentally reiterating everything wrong with the statute.

“The statute requires approval ‘in writing’—it does not prescribe a particular form that writing must take. See § 6751(b)(1); Belair Woods, 154 T.C. at 17. Likewise, this Court has consistently declined to prescribe a particular format or style for a supervisor’s written approval under section 6751(b). See, e.g., Palmolive Bldg. Invs., 152 T.C. at 86 (2019) (citing Deyo v. United States, 296 F. App’x 157, 159 (2d Cir. 2008) (requiring ‘only personal approval in writing, not any particular form of signature or even any signature at all’)); Belair Woods, 154 T.C. at 17. Because petitioners fail to raise a material factual dispute regarding supervisory approval of the section 6663 fraud and section 6662(b)(1) negligence penalties, we will grant respondent’s motion in part.” Order, at p. 4.  (Footnote omitted, but it says deposing the RA adds nothing to her declaration for the purposes of this motion; presumably petitioner can get their whack at trial, see Order at p. 4.)

One final reproof to petitioners’ trusty attorney, and this is one we had ding-dinged into our heads in Civil Procedure One (thanks Dean Warren). ” We note that Mr. D’s declaration contains many pages of legal argument. We address his legal argument as if it were contained in petitioners’ Opposition brief because it is argument only and not factual support. We caution counsel that arguments do not belong in declarations.” Order, at p. 2, footnote 3. (Name omitted).

Once again, memory drifts me back to the Hill Far Above and a former millennium, more particularly bounded and described in my blogpost “The Battle of the Forms,” 11/16/17. Now, however, there’s a clear winner, as Form 872-M o’ercrows Form 8981, bringing DIBC Buffalo Hills Ranch, LLC, LC Fulenwider, Inc., Partnership Representative, Docket No. 13369-25, filed 9/18/26, squarely within Tax Court jurisdiction.

The Buffalo hillbillies claim 3SOL, but the designated hitter of their PRep, duly designated in Form 8979, Partnership Representative Revocation, Designation, and Resignation, duly signed two (count ’em, two) successive Forms 872-M, Consent to Extend the Time to Make Partnership Adjustment, during which second extension IRS dropped their NOPPA and FPA.

Judge Christian N. (“Speedy”) Weiler takes up the story.

“Petitioner did not request any changes or modifications in response to the. NOPPA; however, …petitioner electronically submitted Form 8981, Waiver of the Period under IRC Section 6231(b)(2)(A) and Expiration of the Period for Modification Submissions Under IRC Section 6225(c)(7). A representative of IRS, however, never countersigned Form 8981 nor sent an executed copy of the Form 8981 back to petitioner.” Order, at p. 3. (Footnote omitted, but it says IRS sent the FPA after the 270 day cutoff.)

So battle is joined. “Petitioner contends that since it submitted Form 8981 … under section 6235(a)(2), the IRS was required to issue the FPA within 270 days from the date of submission of Form 8981…. Respondent contends that since the partnership never submitted a request for modification or changes, section 6235(a)(2) has no application; moreover, even if there was a valid Form 8981 executed by the parties, the parties had previously agreed to extend the limitations period under Form 872–M.” Order, at p. 5.

For those who remember my blogpost “A New Day – Extended,” 9/9/26, the outcome is no surprise.

“In any event, ‘any agreed-upon extension under section 6235(b) would necessarily extend the limitations period for making adjustments, and any extension must be taken into consideration in determining the latest of the periods found in paragraphs (1), (2), and (3).’ Katanga Properties, LLC, 167 T.C. slip op. at 7–8. In this case the parties agreed to extend the limitations period under section 6235(a)(1) on two separate occasions: the first Form 872–M extended the adjustment limitations period until December 31, 2024, and the second Form 872–M further extended the adjustment limitations period until December 31, 2025. Both periods were extended prior to the expiration of such period.” Order, at p. 6. (Footnote omitted, but it says Extension One was timely.)

The Buffalo hillbillies’ trusty attorney cannot be faulted for not foreseeing Katanga at the hearing of the summary J motion back in June. He gets a Taishoff “Good Try, third class.”

The famous eleven (count ’em, eleven) badges of fraud get a workout in Dawn Chappelle Cottman, T. C. Memo. 2026-88, filed 9/17/26, since her fall in USDCDMD for 14 (count ’em, 14) counts of filing false returns and other delictions didn’t estop her contesting the Section 6663(a) fraud SOL extender. Her Section 7206(1) fall doesn’t establish fraudulent intent, only intent, and her 18 USC §286 conspiracy fall has never been considered by Tax Court as establishing tax fraud and wasn’t briefed by the parties here.  

So Dawn loses seven of eleven badges, and I’ll spare you the details.

Two are neutral: failure to cooperate because Dawn was in the slammer when IRS asked for documents (even though after she was out she clammed up). And her testimony, though it strained, it did not break, her credibility, as it squared with her trial position and confirmed IRS’ bank deposits analysis.

But the two I want to stress are the two that she won. Dawn did file returns, true or not, for the years at issue; filing returns count. And Dawn’s explanations and litigation conduct have been consistent and not incredible.  “Although this Court finds that certain aspects of petitioner’s story lack credibility, there have been no major inconsistencies in petitioner’s legal arguments or factual allegations.” T. C. Memo. 2026-88, at p. 13.

Judge Kashi (“My or the High”) Way unpacks a lot of issue preclusion and Federal criminal law here.