Judge Dawson, a busy jurist just now, paraphrases Walt Whitman in Grace Foundation, R. S. Ohendalski, Trustee, 2014 T. C. Memo. 229, filed 11/6/14. And I apologize for the late posting, but I was engaged all day at the Fourth Annual Tax Structuring seminar, given by a Big Four accounting firm.

And a very fine presentation was given by a Director thereof, who would be subject to the ownership attribution rules of Section 318(a)(1)(A).

Anyway, R.S. Ohendalski is a generous soul, who is a wee bit tardy with filing a Form 990-PF for his Section 4797(a)(1) non-exempt charitable trust (private foundation). No doubt R. S. as trustee gave generously to various churches and charities, but an eight-year delay in filing a required return triggers a Section 6652(c) delinquency penalty, and $10K is the max. R.S. hits the max.

R.S. claims he relied on a professional, but proffers no evidence as to who was the professional in question, or why it took him eight years to file the return.

R.S.’s trump takes no tricks, although R. S. plays the Section 6751(b) card. Remember the Section 6751(b) trump? No? Then see my blogpost “Penalty Kick”, 7/17/14, when Larry and Lorna Graev played the card and slowed down a 40% overvaluation chop.

R.S. says IRS never had the appropriate supervisor sign off on the penalty.

No need, says Judge Dawson. “In considering Mr. Ohendalski’s argument the SO determined that although section 6751(b) generally requires the approval of a supervisor before assessment of a penalty, the section 6751(b)(2) exception to this requirement is applicable for penalties automatically calculated by electronic means. In reviewing the account transcript for the Foundation’s … liability, the SO determined that the assessment of the delinquency penalty was a transaction code 238, which according to the IRS’ automated data processing book is a computer-generated assessment based on the Foundation’s failure to timely file the required return. After further verification the SO concluded that assessment of the section 6652 delinquency penalty did not require management approval pursuant to section 6751(b)(2)(B).” 2014 T. C. Memo. 229, at pp. 6-7.

And that Appeals cited to the wrong Code section in the NOD avails R.S. naught. “Although Mr. Ohendalski correctly argues that the ‘Attachment to Notice of Determination’ erroneously refers to ‘Section 6552’ rather than ‘Section 6652’, we view it as simply a typographical error. We note that Mr. Ohendalski was not misled by the typographical error. In fact, Mr. Ohendalski’s … letter correctly refers to section 6652 (and not section 6552) and clearly indicates his understanding that section 6652 was the statutory provision at issue.” 2014 T. C. Memo. 229, at p.13.

Takeaway– The IRS’ computer trumps IRS’ personnel.