The lead case in a five-way agreement to be bound was taken off the trial calendar based on a signed settlement letter between IRS and TMP of the lead petitioner. IRS moved to enter decision based thereon, but wanted it held until the Rule 248(b) 60-day window for nonparticipating partners to weigh in had run. Before that clock had run out, TMP moved to hold the EoD in abeyance pending TMP talking to IRS’ Office of Conservation Easements (OCE), or alternatively objecting to EoD.

Judge Rose E. (“Cracklin'”) Jenkins won’t have it.

“Petitioner’s change of heart does not retroactively void the agreement on which respondent’s Motion for Entry of Decision under Rule 248(b)(1)(B) was predicated, and the Court may enter decision in this case under Rule 248(b)(4). Notwithstanding petitioner’s reply protestations, petitioner’s motion does seek unilaterally to renegotiate its settlement with respondent through the proposed discussions with the OCE. The Court has held that ‘prior representations to the Court about the status of the settlement’ preclude attempts to invalidate a settlement. And the Court has granted motions for entry of decision based on settlements that taxpayers have subsequently sought to repudiate, rejecting the notion that the fact that a settlement was not filed as a stipulation precluded its enforcement. The Court has looked with particular disfavor upon attempts to renege on settlements after a trial in the case had been cancelled on the basis of the settlement. Although trial was not scheduled in this case, trial in a case to which this case was stipulated to be bound was cancelled, on the understanding that all of the related cases would be settled pursuant to the settlement initiative referenced in the settlement letter in this case. Petitioner may not now withdraw the agreement on which basis a trial was cancelled and respondent filed the Motion for Entry of Decision.” Yacht Creek LLC, Yacht Creek Investments LLC, Tax Matters Partner, Docket No. 504-23, filed 10/23/26, at pp. 2-3. (Citations omitted).

Note that the TMP said it “has no interest in trying the case and ‘does not repudiate the basis for the settlement it reached with Respondent.’ It further states: ‘The entry of the proposed decision submitted with Respondent’s Motion, over objection, remains preferable to restoration of this case to the trial calendar.’” Order, at p. 2.

Taishoff says all TMP wants to do is renegotiate the deal, or buy time before the partner-level computational adjustments hit the investors in this dodge (and the lawsuits start), or both.

No go.

I won’t be so bold as to assert that Judge David Gustafson reads this my blog. I doubt if he remembers that we met at the Tax Court Judicial Conference in Chicago eight (count ’em, eight) years ago. But he has taken up, with his usual diligence and obliging nature, the role of the Administrative Judge Tax Court ought to have.

Here’s a quote from my blogpost “Scrapbook 10/30/23. “Maybe the Ch J might adopt our State court procedure, whereby an administrative judge cracks the whip, requiring explanations why antiques are still in the shop, and bestirring the dilatory to stop dancing in the backfield, and move the football or eat the football.”

Judge Gustafson faces Robert Hersch & Katherine Hersch, Docket No. 13895-25, filed 10/23/26, head-on. “When the Tax Court ‘cuts’ a new trial calendar, it is appropriate for the assigned judge to look at the oldest cases on the calendar and to attempt to ensure that they are not allowed simply to languish. This case is one of the older cases on the calendar for the Tax Court’s upcoming session in Dallas beginning March 8, 2027. It concerns tax year 2019, for which the IRS issued a notice of deficiency more than three years ago on September 28, 2023 (Doc. 1, Ex. A).” Order, at p. 1.

After a trudge through the nearly-impenetrable procedural morass, Judge Gustafson observes that holding this case for eventual consolidation with a couple related cases (hi, Judge Holmes) involving later years won’t work because Section 6663 fraud chops in the relateds but not here.

So he directs the parties to stipulate whatever they can.

“It seems that this earliest case has had full consideration by Appeals, is unlikely to settle, and has had more than adequate time to be developed for trial. We would not expect to continue this case upon the vague ‘anticipat[ion]’ of a motion to consolidate, and we would not summarily grant any motion to consolidate but would evaluate it in light of the concerns expressed above.” Order, at p. 2.

Ch J Patrick J. (“Scholar Pat”) Urda doesn’t have to run the withering gauntlet of criticism that the late Judge Richard Posner of 7 Cir unleashed on poor Judge Wherry for “lame attempts at humor.” And I’m not saying Ch J Scholar Pat’s jibes are lame. But as a target for sarcastic laughter, Lontrac Enterprises, LLC, Lontrac Investors, LLC, Tax Matters Partner, T. C. Memo;. 2026-108, filed 10/22/26, bids fair.

It’s copybook Dixieland Boondockery, mining variation. The Lontracs have a piece of TN where a river runs through it and a scenic railway crosses it, which they had on the market for $2.9 million for five (count ’em, five) years without a nibble. Suddenly, a bunch of dodgefloggers decide that the rock the railroad dug up a century ago (metagraywacke) is worth millions, and syndicate the Section 170 SCE for $74 million in writeoffs, promising highrollers three-for-one.

Of course, one of petitioners’ experts takes the Fifth. No adverse inference, but his report gets tossed.

The valuation skirmish is a nonevent. The property produced no income, so DCF is pure speculation. And there’s plenty of comparables.

“We have found that the easement here was worth $500,000 on… the date of grant. The value reported on Lontrac’s return, i.e., $74,507,000, was 14,901% of the value we have determined. The valuation misstatement was, to put it mildly, ‘gross.’” T. C. Memo. 2026-108, at pp. 44-45. (Footnote omitted).

Koner disposes of Boss Hossery. No assessment has yet been made because Section 6213(a) automatic stay, so if RA and supe are still around, signoff can be obtained.

I’ll conclude with Ch J Scholar Pat’s summary.

“This case stands apart only for the sheer audacity of the numbers involved—the partnership here claimed a deduction of $74.5 million for an easement (i.e., a restriction on use) on property that had been sitting on the market for years, failing to find a buyer willing to pay $2.9 million. The stratospheric number was based on the claim that the property was suddenly very valuable as a mine although the rocks underlying the purported mining strategy were visible to the naked eye and the area was well mapped by the U.S. Geological Survey (USGS). Of course, the idea of mining was chimerical, simply a way to get at a wholly unmerited tax deduction.” T. C. Memo. 2026-108, at pp.1-2.