No, this is not a rant about the recent shutdown; that subject has been dealt with extensively elsewhere, and this is not a political blog. I want to show two designated hitters out of Tax Court today, which illustrate (as if illustration were necessary) the cost of inaction.

First, that Obliging Jurist, Judge David Gustafson, throws a lifeline to Albert A. Seifert, Docket No. 24735-12L, filed 10/18/13.

Albert claims he e-filed for the year at issue, but IRS says he didn’t. Howbeit, Albert sold $114 million in stock (he claims he has a $113 million basis, and Judge Gustafson assumes he did), but the 1099s that IRS got say zip about Albert’s basis, so Albert gets hit with a $39 million deficiency. Albert admits he got the SNOD but says it was wrong, so he didn’t petition.

Of course, Albert gets nailed when he asks for a CDP; he had his chance, and he blew it. IRS followed the book, because Albert had a chance to contest but didn’t, and he never gave Appeals a Form 433-A or a Form 656.

Judge Gustafson: “When Mr. Seifert received the notice of deficiency, he had an opportunity to challenge that liability in Tax Court. He could have presented evidence of his cost basis in the securities and, depending on his proof, could have seen his liability reduced or eliminated. But he did not do so. Consequently, the IRS’s determination went unchallenged, and the IRS therefore had the right and the responsibility to assess and collect the tax it had determined. When the IRS undertook to collect the tax, then Mr. Seifert attempted for the first time to challenge that liability–in the CDP hearing.” Order, at p. 1.

Of course, contesting liability at a CDP, when you got the SNOD and did nothing, is a nonstarter. And trying to play lawyer when there are telephone numbers at risk is even worse. Paying a lawyer a few grand the minute Albert got the SNOD would have saved him a boatload of trouble.

Nevertheless, Judge Gustafson is obliging as always: “However, Mr. Seifert is strongly encouraged to consider accepting the invitation of the Commissioner (made at pages 2-7 of his reply filed September 30, 2013) either to request audit reconsideration or to submit an Offer in Compromise based on Doubt as to Liability, outside of the CDP context.” Order, at p. 2 (emphasis by the Court).

Albert, don’t drop the lifeline this time.

Next up is Edwin Madera, Docket No. 26314-12L, filed 10/18/13. Edwin mailed a letter that STJ Lewis (“Right Spelling”) Carluzzo treated as a petition, although “…the letter does nothing more that request the Court to ‘provide the necessary forms and rules for filing a petition to contest a determination’.” Order, at p. 1.

The trouble is, the letter was four years too late for the SNOD that IRS had issued. But it was timely, assuming Edwin properly amended it to state some kind of cognizable claim, for the NOD Edwin got concerning collection.

Of course, Edwin never amended or did anything else, despite STJ Lew having given Edwin three swings at the baseball.

So Edwin is out for failure to state a claim, and IRS can lien and levy.

I know the people who should read this won’t; the self-represented in Tax Court will continue to march, or dawdle, to disaster. But I suggest there should be at least a cigarette-pack warning on every SNOD–if you don’t petition Tax Court at 400 Second St, NW, Washington, DC 20217, you’re toast.