No, not the USC fight song, which many of us have heard booming from the television surround-sound, amidst popcorn, peanuts, nachos et hoc genus omne, as the football went sailing through the uprights.

No, this is the apparently unending story of James (“Little Jim”) Haber, Tax Court perennial and master immunologist, this time in a continuation of Humboldt-Shelby Holding Corporation and Subsidiaries, Docket No. 25936-07, filed 7/16/17.

Little Jim wants a Rule 161 reconsideration, and Rule 162 vacation, claiming Judge Goeke didn’t properly Golsenize his previous opinion. What previous opinion, you ask? Well, check out my blogpost “Immunology”, 3/18/14, and enlightenment will be yours, at no extra cost.

Little Jim claims that if his deal could have made money (and everyone agrees it could have yielded a pittance, provided one disregards the fees Little Jim paid to acquire this bargain), game over, and economic substance, sham and all that nastiness are off the table.

Unhappily, the case Little Jim relies on is a broken reed.

First, the obligatory bow to Golsen v. Com’r, 54 T. C. 742, at p. 757 (1970). Tax Court must follow controlling Circuit Court of Appeals precedent.

Here, it’s our own Second Circuit, up the street from me at Foley Square. And Second Circuit has two prongs, rather than unitary, when dissecting the economics of a deal. First, could it make a profit? Judge Goeke agrees it could, if he left out the acquisition fees aforesaid, but whether he counts the fees or not, mox nix (as we say).

“However, the effect of that finding [that Little Jim might have made maybe a few bucks] was tempered by the significant tax savings the transaction was sure to generate. Our analysis was consistent with the Second Circuit’s economic substance approach. Although the Second Circuit has not before compared a transaction’s tax benefits to its profit potential, it has indicated that all facts and circumstances are relevant in determining whether a transaction has economic substance. The disparity between the guaranteed tax savings and the potential profit in this case was a relevant fact and convinced us that petitioner engaged in the transaction solely for tax reasons.” Order, at pp. 2-3. (Citations omitted).

Little Jim does have one last down, and he throws the usual “Hail Mary”.

Little Jim has a 1991 Second Circuit case called Gilman where the Court only analyzed whether the deal could make a profit, however minimal.

OK, says Judge Goeke, but “(T)he Second Circuit held that the transaction in Gilman presented no reasonable opportunity for profit. Therefore, the court did not have to consider whether, if it did, the profit was sufficient to give the transaction economic substance. The Gilman court’s analysis did not foreclose our consideration of additional facts once we determined petitioner’s transaction had profit potential. The Second Circuit has not decided an economic substance case under such circumstances, so the Golsen rule did not prevent us from looking to cases in other jurisdictions for guidance. Respondent’s notices of objection to these motions further expound on this matter, and we agree in whole with their analysis.” Order, at p. 3.

Wanna bet that Second Circuit will get the chance to decide “an economic substance case under such circumstances”, Judge, if Little Jim has a shot at getting there?

Little Jim may or may not have gone to USC, but he’s sure singing their fight song.

Now I’ve got as bone to pick with Judge Goeke, and it’s a tale I’ve told before. Specifically, I’ve told it in my blogpost “And Waste Its Sweetness On The Desert Air”, 5/8/14. To quote me quoting Tommy Grey, “But too many Judges are wont to issue orders to fortune and to fame unknown. And I’ve blogged these.” Op. cit., as my high-priced colleagues would say.

Have I ever. This Order has some important learning in it. But Judge Goeke hasn’t designated it. It’s sitting, in the words of Bartolomeo Vanzetti, “unknown, unmarked, a failure,” amidst six pages of soul-destroying banalities.

Today, 7/16/14, we have three small-claimers with unsupplied 433-As or missing documentation, and three designated hitters with absolutely nothing new in any of them. And we have this gem from Judge Goeke, that alone is worthy of my time, effort, and wordprocessor.

I know the judicial mill has little grist to spare for us bloggers. But gee, Judge Goeke, cut me a wee bit slack, huh? If it’s worth three pages, it should be worth a DH.

UPDATE

I got so wound-up with Judge Goeke’s modesty that I plumb forgot the partitive genitive. Should be “But gee, Judge Goeke, cut me a wee bit of slack, huh?”