You really should make and enter your Rule 155 computation, even if you want to appeal from the decision which will follow and claim you owe nothing. And even if IRS is late with the 90 day requirement under Rule 155, Tax Court will give them a bye

So what have you got to lose? In the case of John Carter, Docket No. 30786-09, filed 4/14/14, the $71K reduction in what you owe, from that Obliging Jurist, Judge David Gustafson.

Remember John Carter? No? He was the first recipient of Judge Gustafson’s obliging nature to feature in a Taishoff blogpost, viz., as my high-priced colleagues would say, “We’ll Come To You”, 9/18/12.

In December of that year, Judge Gustafson did hold the trial at the Stony Lonesome wherein John then resided. A cursory review of Judge Gustafson’s 36-page off-the-bencher (available on the Tax Court website) shows John to be an inventive fellow.

After extensive backing and filling and swinging the lead (John was an erstwhile trustee of the Independence Maritime Museum), IRS finally puts in its computations of the wages of sin that wound up in John’s hands.

John files nothing, except a motion to default IRS for missing the 90 day deadline of Rule 155 and claiming that, since he’s going to appeal any decision, it doesn’t matter what the numbers are.

“Respondent complied with the rule after a lapse. Petitioner has complied with it not at all. The party that has arguably defaulted here is petitioner, by wholesale noncompliance with Rule 155.

“Petitioner was wrong in stating that ‘[h]is failure to agree with the 11/18/13 Order does not permit him to submit a computation’. His disagreement with the Court’s opinion, and his intention to appeal the eventual decision, did not prevent him from submitting a computation. On the contrary, he was required to do so. If the Court were to strike or disregard respondent’s computation, petitioner’s failure to submit a computation would theoretically leave the Court in a position to enter decision simply upholding the original (excessive) deficiencies for the six years, in the absence of demonstrated alternative deficiency amounts, which it was ultimately petitioner’s burden to show. It was therefore in a sense to petitioner’s benefit that we allowed respondent’s late filing. Without it, the only numbers in our record would be the uncorrected original numbers.” Order, at p.2.

So John was going to saw off the limb he was sitting on. But that Obliging Jurist still gave John his $71K break.

Takeaway- If you lost and got a Rule 155, remember my blogpost of 4/4/14: “If You Want Something, Say Something”. And say the right thing.