The only opinion out of Tax Court in the last two days is a fact-specific Section 6404 abatement of interest decision, which doesn’t much enlighten the in-the-trenches practitioner, except as a reminder that Section 6404(e) applies to income taxes, not employment taxes. See my blogpost “A Case of Interest”, 8/9/12, for more about this subject than you probably want to know.

The reminder about the non-applicability of Section 6404(e) to employment taxes is to be found in Jorge Paneque and Leobigilda Paneque, 2013 T. C. Memo. 48, filed 2/13/13, Judge Gale providing the reminder at p. 21: “Mr. Paneque contends that respondent abused his discretion in disallowing his request for abatement of the interest that accrued on his unpaid employment tax liabilities during the period October 21, 2005, through August 3, 2007. Respondent contends that assessments of interest on employment tax liabilities are not eligible for abatement under section 6404(e)(1). We agree.

“Respondent lacked authority to abate interest under section 6404(e), and his failure to do so could not constitute an abuse of discretion. See Woodral v. Commissioner, 112 T.C. at 25; see also Scanlon White, Inc. v. Commissioner, 472 F.3d 1173, 1177 (10th Cir. 2006), aff’g T.C. Memo. 2005-282; Miller v. Commissioner, 310 F.3d 640, 645 (9th Cir. 2002), aff’g T.C. Memo. 2000-196.”

Now that we’ve gotten that out of the way, here’s the real news from Tax Court.

Y’all will remember the Estate of Ileana Sonnabend, Docket No. 649-12. This was the $65 million misunderstanding, involving the late Bob Rauschenberg’s masterpiece “Canyon”, a 1959 masterpiece of post-modern something-or-other, starring a stuffed bald eagle, that was part of the late Ileana’s billion-dollar art collection.

Now we all know that since 1918, or maybe 1940, it’s been a one-way get-into-jail-free (do not pass “Go”) card to possess, sell, barter, import or export any part of a bald eagle, dead or alive.

So the executors valued the collage at zero, because it can’t be sold, bartered, etc., without the seller or barterer heading for the hoosegow, but IRS claimed you could sell it surreptitiously to a hypothetical collector beyond the grasp of the Federales, and didi-mao (an arcane technical term) with the boodle.

The art world gasped, the bloggers got weaving, and the New York Times, Forbes magazine, et hoc genus omne joined the fray, all excoriating IRS for their extreme position.

And of course the executors girded their loins for battle, with the whole art world watching.

Well, looks like we’re going to miss the trial, guys. Judge Wells, whether relieved or regretful he doesn’t say, has issued the following Order of Continuance, served 2/13/13:

“This case was called from the calendar for the Trial Session of the Court at New York, New York on January 28, 2013. There was no appearance by or on behalf of petitioner. Counsel for respondent appeared and was heard. A case conference call with counsel for both parties was held on January 29, 2013 in which counsel indicated that a basis of settlement had been reached between the parties and that additional time was needed to prepare the stipulated decision. The counsel agreed that a continuance of this case would be in order. After due consideration, it is

“ORDERED that this case is continued pending further direction by this Division of the Court. It is further

“ORDERED that on or before February 28, 2013, the parties shall submit to the Court a stipulated decision for this case or file with the Court written status reports as to the then present status of this case. It is further

“ORDERED that jurisdiction of this case is retained by Judge Thomas B. Wells.” Docket No. 649-12, at p. 1.

Tough luck. The opinion would have made a red-hot blogpost. And so, maybe, the eagle sleeps tonight. You could write a song….