The 1964 Lennon-McCartney trainshaker from “A Hard Day’s Night” might well suit MA. MA (name suppressed), who holds a degree in business administration, management and accounting, is managing director of an eponymous tax prep corporation, and incidentally is corporate secretary of Babak Roshdieh, M.D. Corp., a Sub S in trouble for late filing its Form 1120S in the year at issue.

The whole story is found at Babak Roshdieh, M.D. Corp., 2014 T. C. Sum. Op. 113, filed 12/29/14.

Apparently BabRosh Corp. is a chronic late filer, but whether the blame lies on MA’s desk is only at issue for the one year.

MA claims he mailed a Form 7004 request for extension timely, and filed the 1120S timely, but IRS says (a) they never got the Form 7004, and (b) they did get the 1120S the following January 31, much later than MA claimed he sent it.

MA testifies he requested extensions every year, but IRS has record of extensions for only half the years MA claims, and MA has documentary proof of nothing.

“MA testified further that he rarely, if ever, used certified or registered mail.” 2014 T. C. Sum. Op. 113, at p. 5. (Name omitted).

Now this was a petition from a NOD, and BabRosh never had a chance to contest liability, so this is de novo review.

MA didn’t seem to understand that the penalty is not a passthrough. It’s not a tax incident that passes through to the sole shareholder, but rather it’s the late filing chop. See Section 6699(a), and my blogpost “I Find I Cannot Do Justice”, 5/23/14.

But Appeals informally suggested a 25% discount, which MA didn’t take. Bad move.

MA has no reasonable cause, because BabRosh was late even in the years when MA  filed 7004s that IRS actually got.

Finally, MA has an argument he had better have left alone.

Here’s STJ Armen, The Judge With a Heart, only not today: “Finally, petitioner contends that (1) it was not properly informed of the specific Code section, i.e., section 6699, that gave rise to the penalty at issue and that (2) it was therefore not aware of the statutory basis for the liability at issue. However, the record reflects that petitioner was advised (1) that the underlying liability was attributable to a penalty for petitioner’s failure to timely file its 2010 Form 1120S and (2) the manner in which the penalty was calculated. Moreover, petitioner sought abatement of the penalty throughout the administrative hearing. Even if petitioner was not aware of the specific Code section, it was aware of the return involved, the nature of the error charged, and the amount of the assessment. Finally, given MA’s educational background and profession, it strains credulity that he was somehow unable to fathom what was at issue and proceed accordingly. In short, the Court rejects as unfounded the suggestion that petitioner was somehow denied due process or that the SO failed to verify that all requirements of applicable law and administrative procedure were satisfied.” 2014 T. C. Sum. Op. 113, at pp. 11-12 (Citations omitted).