Attorney-at-Law

PAY THE POSTMAN

In Uncategorized on 08/21/2012 at 17:12

And Cut to the Chase

It’s the dog days of summer, and Tax Court is somnolent; nothing but unsubstantiated deductions and loss carryforwards, with the odd protester thrown in.

So I’m reduced to reading Undesignated Orders. Those mostly tell litigants to serve and file responses, sign their petitions, or report the status of their cases.

However, today, 8/21/12, we have two orders that go a little farther.

First is Charnae Mattrice Hester, Docket No. 10495-12. Charnae’s petition is bounced for late filing, even though she claims she did file timely under Section 7502. The bad news for Charnae is that she didn’t put enough postage on the envelope.

Chief Judge Thornton has a certain quantum of pity for hapless Charnae, but that won’t get her into Court: “Petitioner appears to rely on the ‘timely mailing is timely filing’ rule of I.R.C. section 7502, however, the benefits of that rule are unavailing here because when the petition was initially mailed, it did not bear proper postage. Accordingly, the date the petition was re-mailed with sufficient postage applied controls.

“The record establishes that the petition was not filed within the applicable statutory 90- day period. This Court has no authority to extend that period provided by law for filing a petition “whatever the equities of a particular case may be and regardless of the cause for its not being filed within the required period.” Axe v. Commissioner, 58 T.C. 256, 259 (1972). Accordingly, this Court lacks jurisdiction to redetermine the deficiency determined in the notice of deficiency for 2010.” Order, at p. 2. (Citations omitted.)

But of course Charnae can petition IRS for an audit redetermination (good luck with that, Charnae), or pay the tax and sue in District Court or Court of Federal Claims (supra).

Charnae, next time pay the postman; it’s cheaper than the filing fee in USDC.

Next up is Jane E. Zdunek, Docket No.27966-10S. Jane wants to introduce evidence on the trial that “… the correspondence examination did not properly handle the audit prior to the notice of deficiency and that the case could have been resolved at the examiner’s level with no adjustment to the interest expense and therefore no need to take the matter to Tax Court.” Order, at p. 1.

IRS files a Motion in Limine to forbid the introduction “of evidence relating to the communications between petitioner and respondent prior to the issuance of the notice of deficiency on the grounds that such evidence is neither relevant nor material and is an attempt by petitioner to go behind the notice of deficiency.” Order, at p. 1.

STJ Armen sets the motion down for hearing next week, rather than going on the papers, because Jane hadn’t stated what evidence she means to submit. But he reminds the parties to stick to the facts of the deficiency: “…unless the parties settle this case, the issue at trial for decision by the Court will be whether the amount claimed was interest expenses and, if so, whether it was paid. The issue will be decided based on the relevant facts as adduced at trial and the applicable law, i.e., Internal Revenue Code, applicable Treasury regulations, and prior judicial cases. Events that occurred during the administrative stage of this case are generally irrelevant, as such events have nothing to do whether petitioner is entitled to the deduction claimed. Further, the Court will decide the disputed issue de novo, i.e., without regard to a prior administrative proceeding, if any. [Emphasis added.]”. Order, at pp. 1-2 (Emphasis by the Court).

So, Jane, the past isn’t even prologue. Prove you paid a deductible expense, and you’re good to go.

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