We got a T. C. Opinion today (Vidal Suriel, 141 T. C. 16, filed 12/4/13), but it’s about the tobacco settlement agreement, and therefore unlikely to occur in the world in which my readers and I practice. In short, “economic performance” means something that changes your bank balance, and Vidal’s jousting with the Master Settlement Agreement Fund didn’t get there until Vidal’s Sub S wrote the check.

But we did get an order out of Ch J Thornton, J S Karaoke, LLC and John E. Strauser, Docket No. 17867-13, filed 12/4/13, that brings out a point we ordinary practitioners might consider.

IRS moves to toss J S Karaoke, LLC, from John’s petition and from the caption of the case, because they never issued a SNOD or NOD to, about or concerning J S Karaoke, LLC.

John objects. “Although petitioners object to the motion, petitioners state in the motion that John E. Strauser is the sole owner of J S Karaoke, LLC.” Order, at p. 1.

There should be a racehorse named “readtheregulations” (wow, just 18 characters!).

Ch J Thornton: “The ‘check-the-box’ regulations contain provisions concerning a business entity’s classification for Federal tax purposes. See Medical Practice Solutions, LLC v. Commissioner, 132 T.C. 125 (2009); sec. 301.7701-3(a) and (b)(1), Proced. & Admin. Regs.” Order, at p. 1.

So IRS, read the regulations, and Ch J Thornton will give you an open-book quiz.

“…respondent [IRS] shall file a Supplement to his motion to dismiss. In that Supplement respondent shall set forth and discuss fully respondent’s position as to classification of J S Karaoke, LLC for Federal tax purposes and Mr. Strauser’s ownership interest in petitioner J S Karaoke, LLC.” Order, at p. 2.

Disregard the disregarded at your peril.