No, not another post-mortem of SuperBowl XLIX (or whatever the number of this latest iteration).

Rather, this is the story of Estate of Rodrigo F. Fenta, Deceased, Carlos Fenta, Trustee of The Rodrigo Fenta Trust, 2015 T. C. Sum. Op. 4, filed 2/2/15, as told by The Judge With a Heart, STJ Armen.

The late RodFen ran a bar and restaurant, but most of the gross came from the sale of alcoholic beverages, paid for “in green”, as we say. The sales tax crew from the Golden State descended upon the late RodFen, but the late RodFen never produced the “Z tape”, only a handwritten summary thereof.

No, the “Z tape” is not what cooked President Nixon. It is the duplicate tape created by the cash register (and required of all retail establishments) for each transaction. And the late RodFen had neither books nor records to hand.

So when the CA Board of Equalization finished equalizing the late RodFen, the IRS came aboard and smacked the late RodFen with a deficiency.

And IRS followed the CABOE by using the percentage-markup method. Both took the late RodFen’s inventory and invoices from suppliers of the good news he served up, and took a percentage over for income, deducted cost of goods sold, and nailed the late RodFen for the overage.

After the SNOD, petition and answer, the “Z Tape” is produced. After some backing-and-filling, the parties resolve income, deductions and loss from theft and spillage for a figure much lower than the SNOD.

CarlFen, trustee of the RodFen trust, seeks Section 7430 legals and admins. CarlFen prevailed, right enough, but IRS was justified.

IRM 4.10.4.3.3.5(6) (Aug. 9, 2011) specifically blesses the use of the percentage-markup method where taxpayer produces no records. And that applies whether or not fraud is in play.

The “Z tape” didn’t show up until after SNOD, petition and answer. IRS was justified at the magic moment.

Nothing novel here besides the “Z tape” and percentage-markup discussion.

But I really liked CarlFen’s claim for $26K in legals: “This amount includes a request for ‘student attorney fees’ of $17,025 for the services of a student at the Santa Clara University School of Law Low Income Taxpayer Clinic and a request for counsel fees of $9,595 for the services of the clinic director.” 2015 T. C. Sum. Op. 45, at p. 2, footnote 3.

I think I might go back to law school if I could bill $17K, especially when I had a clinic director to do all the work.