Archive for April, 2015|Monthly archive page


In Uncategorized on 04/23/2015 at 16:05

Put away your bagpipes, kilts, claymores and sgian-dhubs, and leave some of that 15-yr old Glenfiddich for me. This is a different forty-five, namely, viz and to wit, the forty-five days within which IRS is deemed to have processed a tax return, so that the address shown thereon is the “last known address” of the taxpayer for Section 6212(b)(1) purposes.

What’s that, you may ask. And well you should, because it would be a great question for the Special Enrollment Examination.

And the answer is a winner for Marina Murashova, Docket No. 6460-14, filed 4/23/15.

Well, Section 6212(b)(1), though it mandates mailing of a SNOD to the “last known address”, doesn’t define the same. But bless their contrarian hearts, the Ninth Circuit in LaLa Land, has exhaustively delved into the topic.

And the magic answer is “when the return in question, which shows the address upon which IRS can rely (as there is neither a subsequent return nor written notice showing any other address) hits IRS’s computer, thereby allowing the IRS employee who mails the SNOD to check the address thereon.”

So Judge Goeke, punctilious as always, canvasses the caselaw and concludes: “We think the law is well-settled that, prior to Respondent’s regulations, Respondent was held responsible for addresses shown on federal income tax returns that were properly processed, and that processing the return meant that the information on the return was available in Respondent’s computer system.” Order, at pp. 8-9.

What’s this, you may ask, Treasury changed the rules after Ninth Circuit told them what the rules are?

Surprise, surprise. Treasury did, and here it backfires.

Reg. 301.6212-2(a) has the famous “last filed return unless clear notice given” language. But wait, there’s more! There are two Rev. Procs., Rev. Proc. 90-18 (1990-1 CB 491) and its successor, Rev. Proc. 2001-18, 2001 1 CB 708.

Note well that these were superseded in turn by Rev. Proc. 2010-16, IRB 2010-26, but this plays no part, as the year involved here predated the last revision.

Not only must the return have been “filed”, that is, in IRS’s hot little paws, it must have been “properly processed”, per the aforesaid Rev. Procs.

Judge Goeke:  “However, the Rev. Procs. both go further and provide in section 5.02(1) that, except as otherwise provided, a return will be considered properly processed after a 45-day processing period, which begins the day after the date of receipt of the return by the Internal Revenue Service Center.” Order, at p. 10.

So the return must have been properly processed, except if it wasn’t, it is deemed properly processed forty-five days after the return is filed.

And that’s Marina’s story.

Her return was in fact processed within the forty-five day time frame, but IRS mailed the SNOD before the forty-five days was up. And IRS mailed it to what was the old address, not Marina’s then-current address.

IRS claims that the forty-five days was a safe harbor for them, and if they mailed a SNOD before the forty-five days were up, their agent need not check to see if a filed return or notice had hit the computer sooner. But IRS’s attorney had no evidence to show what IRS did or didn’t do, or what was SOP.

Judge Goeke isn’t buying.

“We would have to presume that it was reasonable for them [IRS] not to look at the most recent information before sending out the notice, because it was simply something that had been done previously, when the notice was actually drafted. As I said, however, there is no specific evidence in the record about those circumstances or the normal procedures Respondent would have from the time a notice is reviewed and prepared until it is sent out. We will not presume that it was reasonable for the employees who sent the notice to Petitioner not to have accessed the computer records on… the day before the notice was issued, to determine the address that was available to them, which was not the address shown on the notice of deficiency.

“This creates the unusual circumstance where Respondent’s efficiency in processing the return served to Respondent’s detriment. However, we think the best course, based upon the limited record we have about the processing of Petitioner’s notice of deficiency, is to follow the case law that existed.” Order, at p. 12.

So, IRS, too soon may arrive as tardy as too late.

“The fact that the Revenue Procedure goes on to set a black line 45-day rule for that date does not, in our opinion, create a safe haven for Respondent when Respondent actually has the information available before 45 days.” Order, at p. 13.

Thus, no SNOD (because not mailed to last known address), so no jurisdiction. And Marina’s late petition doesn’t hurt her.

Takeaway–This case relies on pre-2010 law, regs and rev. procs. Beware! Current rev. procs., as well as your mileage, may (and will) vary.



In Uncategorized on 04/22/2015 at 16:09

Now who could that be? Why, that Obliging Jurist, Judge David Gustafson, friend of hapless Technophobe Al (hereinafter sometimes designated or described as “TA”), an attorney who shall remain nameless.

Last month neither TA nor client showed for calendar call. Judge Gustafson ordered client to file a response to IRS’s motion to dismiss for lack of prosecution. Neither TA nor client did.

Judge Gustafson thereupon issued an OSC for TA to show cause why he shouldn’t be sanctioned for failing to follow the Court’s rules and orders.

That woke up TA. So he responds on paper.

“Pursuant to Rule 26, Tax Court Rules of Practice and Procedure, electronic filing is generally required for all papers filed by counsel in open cases. In his response, [TA] claims that he did not ‘see or receive’ the Court’s order requiring petitioner to file…a response to respondent’s motion to dismiss for lack of prosecution. [TA] further contends that he did not appear at the Court’s Trial Session… because he had been informed that respondent intended to file a motion to dismiss for lack of prosecution and he did not have anything to produce.” Order, at p. 1.

Comment is superfluous, at least from me, so I’ll let Judge Gustafson tell the story.

“A practitioner before this Court is required to carry out his or her practice in accordance with the letter and spirit of the Model Rules of Professional Conduct of the American Bar Association. Rule 201(a), Tax Court Rules of Practice and Procedure. Tax Court Rule 202(a)(3) specifically identifies as a ground for discipline any conduct that violates the letter and spirit of the Model Rules. For example, Model Rule 1.1 requires a lawyer to provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. Model Rule 1.3 requires a lawyer to act with reasonable diligence and promptness in representing a client. Model Rule 3.4(c) prohibits a lawyer from knowingly disobeying court rules and orders. [TA]’s failure to appear and failure to comply with Court orders is inconsistent with the obligations imposed upon him pursuant to the Court’s Rules of Practice and Procedure and the Model Rules of Professional Conduct of the American Bar Association.

“[TA] is hereby advised that he should take whatever steps are necessary to avoid such deficiencies in the future, including appropriate continuing legal education courses.” Order, at p. 1.

Nevertheless and notwithstanding the foregoing, Judge Gustafson once again exhibits the quality of which the Sweet Swan of Avon rhapsodized thus: “It droppeth as the gentle rain from heaven/ Upon the place beneath. It is twice blest:/ It blesseth him that gives and him that takes.” (Citation omitted).

Well, Judge Gustafson orders the long-suffering Clerk of the Court to file TA’s screed as of date of delivery, even though it’s written on paper and not on electrons, and discharges the OSC, letting TA off the hook for the Rule 202(a)(3) chop. Indeed, it blesseth him that gives and him that takes.

PS- Per separate order under same date, TA’s client gets nailed for $161,596.00 in tax plus a Section 6662(a) five-and-ten chop of $32,319.20.

The orders, under the same Docket No. 30464-13, were filed 4/22/15. I omit names and links. TA and client have suffered enough.


In Uncategorized on 04/22/2015 at 15:27

That question, heretofore set to Handel’s imperishable music, is answered thus by Judge Nega: “Not here it isn’t” in Michael W. Denson, Docket No. 7491-13, filed 4/22/15.

The late Michael has departed this vale of tears, and his executor (unnamed) is trying to pry from the late Michael’s accountant the documents Judge Nega ordered said executor to obtain from said accountant by any means necessary.

Here’s IRS’s status report: “…he spoke with petitioner’s executor wherein he stated that he would contact petitioner’s accountant and encourage him to provide all available documentation immediately. Respondent further states that respondent has received no additional documentation from petitioner’s executor or accountant.” Order, at p. 1.

Judge Nega adjures the unnamed executor thus: “We again advise petitioner’s executor that (1) as a general rule, they have the burden of proof, (2) financial matters are usually proved with documentation, not with oral testimony alone, and (3) they must disclose their documents to respondent before trial.” Order, at p. 1.

Judge Nega is not unsympathetic to the executor’s plight. But move the case he must. And will.

“The Court is very sympathetic to Mr. Densen’s passing. Unfortunately, it is not a reason to defer indefinitely the resolution of a case. We again remind petitioner’s executor and accountant that the Court’s jurisdiction over a case continues unimpaired by the death of a petitioner, and even if there has been no administration of that deceased petitioner’s estate, this Court may formulate an appropriate procedure to bring such a case to a close.” Order, at p. 1. (Citation omitted).

But Judge Nega gives the executor until June to come up with the papers.

If not, “Petitioner is hereby advised that any failure to comply with this Order shall be deemed consent to or cause for dismissal of this case pursuant to Rule 123, Tax Court Rules of Practice and Procedure.” Order, at p. 2.

The sting of death stops at the doors of 400 Second Street, NW.



In Uncategorized on 04/21/2015 at 17:26

The perennial Section 274 substantiation jumpballs draw extensive attention, as preparers need to know “how much is enough?”

I’m a little late getting to this today, as I spent the morning with the Continuing Educators grabbing some hours.

Well, Judge Marvel has some good advice in Ricky Ray Ressen and Rosalind Ressen, 2015 T. C. Sum. Op. 32, filed 4/21/15.

It’s Ricky Ray’s story. He drove his Chevy to the levee (in fact he had two Chevys), but, unlike the hero of Don McLean’s 1971 classic, the levee wasn’t dry for Ricky Ray.

Here’s why. “Mr. Ressen maintained a calendar and a logbook to record his business activities and the business use of the 2007 and 2008 Chevys. Upon returning home at the end of each week he recorded the miles he drove during the previous week in the calendar. Additionally, as required by [his employer] he recorded in general terms his daily business activities and weekly travel in the logbook. He also recorded the beginning and ending mileage for the 2007 and 2008 Chevys in the logbook.” 2015 T. C. Sum. Op. 32, at p. 4.

Ricky Ray was an itinerant construction supervisor, who roamed the Midwest for his employer, who didn’t reimburse vehicle expenses.

Maybe Ricky Ray has a wee bit of a temper, because after “communication broke down between petitioners and respondent’s revenue agent”, the RA disallowed all of Ricky Ray’s vehicle expenses. 2015 T. C. Sum. Op. 32, at p. 5.

Even though Ricky Ray didn’t put every piece of paper he had into evidence, he put in enough to satisfy Judge Marvel.

“With respect to the portion of the disallowed deduction attributable to their claimed use of the 2007 and 2008 Chevys, petitioners introduced copies of the calendar in which Mr. Ressen contemporaneously recorded his weekly mileage as an employee…as well as some information regarding where he was working at various times. Petitioners also introduced copies of the pages in the logbook on which he contemporaneously recorded the beginning and ending miles for the 2007 and 2008 Chevys. Considering the facts and circumstances of Mr. Ressen’s employment arrangement…and his business use of the 2007 and 2008 Chevys we conclude that the calendar is a credible, adequate record of the amount of the business use of the property, the dates of such use, and the business purpose of such use, and the logbook pages are an adequate record of the total use of the property.

“Additionally, even if the calendar is for some reason not an adequate record of the amounts or dates of the business use of the 2007 and 2008 Chevys, Mr. Ressen credibly and with specificity testified as to the business use of the property and the dates of such use. Petitioners corroborated this testimony with the pages from the logbook.” 2015 T. C. Sum. Op. 32, at p. 11. (Citations omitted).

Even part of the logbook is enough.

“Although petitioners did not introduce the entire logbook into evidence, we conclude that the pages of the logbook that they did introduce are representative of contemporaneous, adequate records that Mr. Ressen maintained for the entire year and that they sufficiently corroborate his testimony with respect to the amounts and dates of the business use of the 2007 and 2008 Chevys for the entire year. We therefore conclude that petitioners satisfied the substantiation requirements of section 274(d) with respect to their claimed use of the 2007 and 2008 Chevys.” 2015 T. C. Sum. Op. 32, at p. 12.

Takeaway–A representative sample of adequate evidence may well carry the day–whether or not in a Chevy.


In Uncategorized on 04/20/2015 at 16:30

The lot of the lawyer (even the honest ones, Joan Farr baby) is often an unhappy one. One must sometimes make arguments that would yield an unfair result, provided the law can reasonably be read to permit the same. Two for the price of one today.

First up, David Eugene Yuska, 2015 T. C. Memo. 77, filed 4/20/15, with CSTJ Panuthos listening to IRS’s unfair but vaguely justified argument, but shooting it down on his own motion to bail out bankrupt Dave. Dave self-reported two years, didn’t pay, IRS gave him an NFTL, Dave asked for review, and then Dave filed Ch 13.

A week later Appeals gave Dave a NOD, and Dave petitions. IRS moves to dismiss the petition, as it violates 11 USC§362(a)(8).

No doubt, says CSTJ Panuthos, the petition is toast. But why it is toast is the whole story. IRS says Tax Court already decided that a NOD out of a levy, when taxpayer filed Chapter, is a continuation of administrative collection proceedings against the debtor, and that’s a no-no pursuant to 11USC§362(a)(1). But if that’s so, and the petition fails because no NOD, then when Dave’s Ch. 13 proceeding is over, he can’t go back to Appeals for a new NOD or petition from one if he doesn’t like what Appeals gives him. Unlike a SNOD, Dave doesn’t get the sixty-days-after-discharge-or-dismissal to refile his petition.

“When petitioner filed a petition in bankruptcy (after the request for administrative review under section 6320), it is clear that the commencement and/or continuation of collection activity was barred as a result of the stay provisions in 11 U.S.C. sec. 362(a)(1). Nevertheless, respondent issued the notice of determination sustaining the IRS collection action during the pending bankruptcy. We conclude that the notice of determination issued while the bankruptcy was pending was in violation of the stay and accordingly is invalid.” 2015 T. C. Memo. 77, at p. 8. (Footnote omitted).

Because it’s important, here’s the footnote. “If we were to hold otherwise, petitioner would lose the right of judicial review of the lien filing in this Court. We noted in Prevo v. Commissioner, 123 T.C. 326, 330 (2004), that Congress did not include in secs. 6320 and 6330 a tolling provision comparable to the tolling provision in sec. 6213(f) that would extend the period for petitioner to file a petition for lien or levy action with this Court.” 2015 T. C. Memo. 77, at p. 8, footnote 2.

Here’s the second, a small-claimer from CSTJ Panuthos, Tony Carrancho and Linda Carrancho, 2015 T. C. Sum. Op. 29, filed 4/20/15, but Tony makes out much less well than Dave.

Tony was disabled, so got Social Security, but that was offset by Workers’ Comp. CSTJ Panuthos explains: “Workers’ compensation is generally excludable from a taxpayer’s gross income. Sec. 104(a)(1). In contrast, Social Security benefits, including Social Security disability benefits, may be includable in a taxpayer’s gross income pursuant to a statutory formula that takes into account a number of factors, including the amount of Social Security benefits received, the taxpayer’s other income, and the taxpayer’s filing status. Sec. 86. If the amount of Social Security benefits that a taxpayer receives is reduced because of the receipt of workers’ compensation benefits, then the amount of the workers’ compensation benefits that causes the reduction is treated as though it were a Social Security benefit.” 2015 T. C. Sum. Op. 29, at p. 4 (Citations omitted).

Which means in English that what was tax-exempt is now taxable. What Tony got included payments for previous years, so there is an elective “out” per Section 86(e). I discussed that back in my blogpost “Disabled”, 1/4/13.

But of course Tony, who obviously is not an attorney, a CPA, nor an EA, doesn’t know about Section 86(e). Helpful as always (after all, they’re from the government), “Respondent [IRS] provided a computation showing that petitioners would not benefit from a sec. 86(e) election. Petitioners did not provide any such computation. We presume that petitioners would not benefit from a sec. 86(e) election.” 2015 T. C. Sum. Op. 29, at p. 5, footnote 2.

“When petitioner applied for Social Security benefits, part of his workers’ compensation benefits, which were otherwise excludable from gross income, were treated as Social Security benefits pursuant to the provisions of section 86(d)(3). This recharacterization caused petitioners’ tax to increase by more than the amount of increase in benefits received as a result of petitioner’s qualifying for Social Security benefits.

“While the result appears harsh, our role is to enforce the laws as written and interpreted. As the Supreme Court of the United States has instructed, the role of the courts is to apply the statute as written.” 2015 T. C. Sum. Op. 29, at pp. 5-6. (Citations omitted).

So Tony now knows how a National Fine Thread 5/16ths feels when put into place.


In Uncategorized on 04/20/2015 at 15:04

I was going to entitle this blogpost “Too Swift Arrives As Tardy As Too Late – Take Four”, but that wasn’t expressive enough.

I rarely let my own feelings obtrude here. This blog is to do with tax law, and more specifically Tax Court; though never shy when it comes to talking about myself, here it’s rather the reverse of the 1980s mini-hit “It’s The Singer, Not The Song”.

But I must express my personal vexation with Joan Farr f.k.a. Joan Heffington, Docket No. 2746-15, filed 4/20/15. Joan is apparently a politician in Kansas, but her politics are not what vexes me.

According to Ch J Michael B. (“Iron Mike”) Thornton, Joan started an outfit called Association for Honest Attorneys AHA [sic], a 501(c)(3) that gets its tax-exempt status revoked in January, retroactive to tax year 2010.

Now Ch J Iron Mike is concerned that Joan’s petition as to her own deficiency and the revocation of AHA’s 501(c)(3) postdates her deficiency but predates IRS’s revocation letter. So IRS wants to toss the petition as to AHA.

So he tells IRS to “…file a First Supplement to his motion to dismiss. In that Supplement respondent shall set forth and discuss fully respondent’s position as to whether this Court would have jurisdiction as to so much of this case relating to Association for Honest Attorneys (AHA) under I.R.C. section 7428 even though the petition in this case was filed on January 21, 2015, and the letter of revocation was issued to Association for Honest Attorneys (AHA) on February 3, 2015.” Order, at pp. 1-2.

Now this should at best evoke a reference to one of my three (count ‘em, three) blogposts about too soon or too late, but a cri de cœur?  Seems a bit much, nicht wahr?

But Association for Honest Attorneys AHA? And I wasn’t invited to join?!

As my daughters would have said twenty years ago, “Oooh, what a diss!”

I’m mortally offended.


In Uncategorized on 04/20/2015 at 13:27

Ordinarily, I use the term “rounder” to refer to a Tax Court litigator (usually pro se) who is seeking frequent litigator miles, generally (I love that word; don’t you?) repeatedly asserting frivolities, and off whose back flow the 6702s and the 6673s as water off a duck’s cliché.

But today The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Inveterate, Implacable, Irrefragible, Indefatigable, Illustrious, Irrefutable Foe of the Partitive Genitive, Judge Mark V. Holmes, has a new candidate for roundership (or rounderhood). And she’s a Bankruptcy Court customer.

The order in question (though it really doesn’t order much of anything) is Keith W. Pillich, et al., Docket No. 12002-14, filed 4/20/15, but it’s not to do with Keith. Rather, it’s to do with Mama Marsha Pillich, who has her own Docket No. 21577-14.

Judge Holmes unconsolidates Mama Marsha from the rest of la famille Pillich, but leaves Mama Marsha’s fate in the hands of no less than “U.S. government in its role as a potential creditor.” Order, at p. 2.

As this is, and shall remain resolutely, a non-political blog, I shall not remark on the prospects of the U. S. Government, whether in its role as a potential creditor or otherwise, accomplishing anything useful.

Returning to Mama Marsha’s claim to roundership, “Mrs. Pillich had filed for bankruptcy on April 6, 2015. See case no. 1-15- 10652 (Bankr. WDNY April 6, 2015). That means that the automatic stay is in effect for her and we must suspend her case; it also means that we will sever it from the consolidated group.” Order, at p. 1.

Nothing extraordinary here, so why am I telling you all this?

I’ll let Judge Holmes tell you.

“But her bankruptcy filing is a bit unusual in that it is the eleventh time that she has filed a chapter 13 bankruptcy petition in the last 10 years. In each and every one of those ten cases the Bankruptcy Court ended up dismissing her case for failure to prosecute or on her own motion. The pattern in these cases is for Ms. Pillich to file a petition but few or none of the detailed supporting schedules now usually required of bankruptcy petitioners when they file. The Bankruptcy Court or a creditor usually notices and after a few months (though in one case it took eleven) her case is dismissed without any benefit of discharge.” Order, at p. 1. (Footnote omitted).

Nothing like a TRO (that’s a temporary restraining order, or injunction) in Federal Court without having to show irreparable harm or likelihood of success, and making anything more than a minimal filing in support.

Judge Holmes again.

“The effect of these serial filings is that since December 14, 2005 Mrs. Pillich has been protected by the automatic stay for approximately 44 of 112 months — all without ever moving very far ahead in any particular case. A check of the Bankruptcy Court’s docket shows that this pattern seems to be recurring, as seen by its sending her a bankruptcy document called a ‘notice of deficiency.’ (Do not confuse this with tax law’s notice of deficiency — in bankruptcy jargon, such a notice is a form listing the missing documents that should have accompanied a bankruptcy petition.)

“What, if anything, to do about this is up to the U.S. government in its role as a potential creditor.” Order, at pp. 1-2.

Might want to check out Fed. R. Bankr. P. Section 9011(a) and Section 9011(c), potential creditor.

Meantime, Mama Marsha is a definitely going before the Taishoff promotion board as candidate for Rounder, First Class, Bankruptcy Division.


In Uncategorized on 04/17/2015 at 13:47

Those of us old enough to remember the young Olivia Newton-John and the even younger John Travolta in the summer nights of 1978 will remember the recurrent lyric “tell me more, tell me more.”

Well, today I’m directing those words to Judge Mary Ann Cohen, who has tantalized me with an order in a case I’ve blogged twice, Jason Chai, Docket No. 18330-09, filed 4/17/15.

You remember Jason and his erstwhile pal and Harvard buddy Andy Beer. What, you don’t? How fleeting is fame, A. Warhol to the contrary notwithstanding.

See my blogposts “‘The Silt We Stir’”, 2/13/15, and “The Front”, 3/12/15. There now, recollection refreshed? Great, so let’s go.

Here’s the whole story.

“On March 4, 2015, respondent’s Motion for Reconsideration of Order was filed. Petitioner’s Response to Motion for Reconsideration of Order Dated February 13, 2015 was filed April 14, 2015. Upon due consideration and for cause, it is hereby

“ORDERED that respondent’s Motion for Reconsideration of Order filed March 4, 2015, is denied.” Order, at p. 1.

As my beloved grandmother would have said “From this you make a whole Shabbos?” Note, all the astonishment and feigned disappointment is in the rising inflection as the sentence nears its end.

Well, what did IRS want to have reconsidered? And why did Jason object? Or must we stay forever in the dark?

I know orders aren’t precedent; can’t be cited as authority; are accorded less weight than a pinfeather on the Moon; but they tell us how the Court reasons, shows us pitfalls and maybe a path through the quagmire. And that’s why I read them.

So Judges, tell us more. Please.


In Uncategorized on 04/17/2015 at 13:21

Miro Vejchoda, Docket No. 13711-13S, filed 4/17/15, agreed with IRS’s motion to chop his “S”, that is, not to have his case proceed pursuant to Section 7463, the small case (or, as I prefer, the small-claimer) treatment, which status is denoted by the letter “S” added to the docket number after the year of filing.

Miro would then be sent up to the big time, a much tougher circuit.

Even though it’s a joint motion to deprive Miro of his “S”, the Judge With A Heart, STJ Armen, isn’t so quick to un-“S” Miro.

“ORDERED that the parties’ Joint Motion To Remove Small Tax Case Designation, also filed April 15, 2015, is denied without prejudice. Contrary to the parties’ apparent impression, the jurisdictional limit for small tax cases is defined on a per-year basis and not on an aggregate (per-notice) basis. See I.R.C. sec. 7463(a)(1).” Order, at p. 1.

I can understand pro se Miro not understanding the anfractuousities of Section 7463, but it’s interesting that IRS counsel was apparently unaware of the year-by-year provisions thereof.

Now as STJ Armen grants the “also-filed” joint motion for a continuance (that’s an adjournment for us State Court practitioners), maybe Miro and IRS were going to settle anyway. And if they do, it’s irrelevant if large or small.

But if not, having your “S” may matter a lot, tactically. And for pro ses like Miro, it’s easy to be mousetrapped into a bad tactical position.

Takeaway- Be careful not to give away your “S”. Unless it would be helpful.


In Uncategorized on 04/16/2015 at 16:34

No, not Franz Kafka (in the singular) nor even Publius Ovidius Naso (in the plural), rather, this is the ongoing saga of George H. Patton and Felomina F. Patton, now appearing in 2015 T. C. Memo. 75, filed 4/16/15.

And as I predicted in my blogpost “Be Bold, Be Bold”, 12/3/14, Judge Lauber finally ran out of patience with George and Fel.

Assiduous readers of my blog will note that George and Fel appeared in three (count ‘em, three) previous of my blogposts, making them well-known characters. See also my blogposts “Falling Behind”, 1/24/14, and “Raising Liability”, 7/1/13.

But George and Fel have metamorphosed from petitioners rightly contesting their liability in a CDP (generally a no-no, but George and Fel had no previous chance), to rounders getting a Section 6673 chop.

The “water flooded my basement and wiped out my records” excuse got them a CDP, a remand and many tries by the SO for a conference, but all George and Fel had was “we wuz flooded”.

That doesn’t get it with Judge Lauber.

“This Court and the IRS clearly informed petitioners that, in order to contest their 2005-2008 tax liabilities at the supplemental hearing, they needed to file amended returns and submit documentation substantiating any revisions to the amounts reported on their original returns. The SO provided petitioners with third-party information reports documenting their income for 2005-2008 and invited them to point out any discrepancies. Petitioners repeatedly ignored these overtures, despite the many opportunities the SO gave them and his (commendably patient) efforts to secure this information from them. Petitioners’ sole argument was that they could not calculate their correct tax liabilities because a ‘water trespass’ by local government beginning in 2001 had destroyed their tax records for 2005-2008. We have already found that this argument is frivolous and has been interposed primarily for delay. We will not address it again.” 2015 T. C. Memo. 75, at pp. 8-9.

Far from the SO abusing his discretion, Judge Lauber finds “quite the opposite was true.” 2015 T. C. Memo. 75, at p. 9.

So George and Fel never properly raised liability.

And since George and Fel kept on with the water music despite the warning in my blogpost “Be Bold, Be Bold” hereinabove cited, they get a $3500 Section 6673 chop.

And, at no extra charge, a position on my rounders list.