Here’s Judge Ashford with a designated hitter, the rookie showing the old pros how to do it. The case is Roderick M. Campbell & Sandra Campbell, Docket No. 30224-12, filed 6/12/15.

IRS wants partial summary J against Rod and Sandy on the issue of the noncash charitable deduction they want to carry over, as apparently they couldn’t exhaust the deduction previously. And maybe the earlier years are now closed, but the carryover is still on the table.

Howbeit, Judge Ashford tells IRS to follow, in substance, the advice I gave John Crimi and the et als in my blogpost “Stick It,” 2/14/13. More about Crimi infra, as my expensive colleagues say.

IRS claims Rod and Sandy’s appraisal was non-complaint with the Section 170 rules of engagement.

“In particular, respondent [IRS] asserts that the appraisal suffered from at least three defects: (1) the appraisal failed to adequately describe the physical condition of the appraised property (section 1.170A-13(c)(3)(ii)(B), Income Tax Regs.); (2) the appraisal failed to describe the appraised property in sufficient detail to link the appraisal with the property donated by petitioners (section 1.170A-13(c)(3)(ii)(A), Income Tax Regs.); and (3) the appraisal failed to include the taxpayer identification number of the appraiser (section 1.170A-13(c)(ii)(E), Income Tax Regs.).” Order, at pp. 1-2.

Now remember, summary J is issue-finding, not issue determination. So Rod and Sandy get to spill.

“…petitioners argue that they have substantially complied with those requirements, and assuming arguendo, they have not substantially complied, petitioners argue, relying on section 170(f)(11)(A)(ii)(II) and Crimi v. Commissioner, T.C. Memo 2013-51, that their noncompliance was due to reasonable cause and not to willful neglect. Respondent’s motion, as amended, is silent as to these points.” Order, at p. 2.

That’s enough to defeat partial summary J.

But since trial is approaching, let Rod and Sandy, and IRS, put in their facts and then brief substantial compliance and all that other good stuff.

Better Have Evidence and Reasons

As my elder granddaughter has been heard to remark, “because reasons.”

Two out of Tax Court on June 11, 2015, to show that picking up the burden of proof (or showing legally acceptable bases for action) can be more than IRS (or Appeals) can handle.

First up, Denise Celeste McMillan, 2015 T. C. Memo. 109, filed 6/11/15. DC is a horsey type, dressage being her thing, but doesn’t make any money at it.

IRS originally sticks DC with a $457 deficiency based on a retirement account distribution DC took. DC petitions, but later concedes. Meanwhile, IRS unloads $6700 worth of additional deficiency, some of it based on her horsey losses and the rest on her legal fight with her HOA.

But IRS raises the increased deficiency via its answer to DC’s petition. And thereby hangs the tale.

By upping the ante by way of its answer, IRS takes up the burden of proof.

DC spent over $26K tussling with her HOA over misbehaving dogs, and defending herself against criminal charges in connection therewith. And she got off cheap; I’ve seen such fights cost a lot more, even without the criminal charges.

Judge Halpern gives DC half the legals. DC claims 50% home office use of her condo unit (DC is running an IT business that does make money), and IRS didn’t challenge that. And the dog wars did impact DC’s use of the condo unit both for living and working.

IRS wins on the horse, but it’s a squeaker. IRS bested DC in prior years, but can’t use collateral estoppel, as the burden of proof has shifted from DC to IRS. Failure of one side’s proof in a prior case doesn’t give the other side a win in a subsequent case.

I won’t weary you (or me) with Judge Halpern’s trudge through the Section 183 hobby loss factors. Most are neutral, because IRS can’t tip the scales with the evidence it has. Judge Halpern seems to go with DC’s substantial income from her IT business coupled with how much she loves horses. See my blogpost “Too Much Fun, “ 12/31/13.

Next is Quality Software Systems, Inc, 2015 T. C. Memo. 107, filed 6/11/15.

QSS had an OIC that it potentially breached a few times, and finally breached to the extent of a late Form 941 filing, and late payment of a $344 penalty, in the last year of its five-year term.

The OIC was based on collectibility, and IRS took a $208K hit. The deal was that QSS remained current for five years on all 941 filings and payments.

Except QSS didn’t. Judge Halpern has a table showing various QSS miscues over the years, that earn QSS various types of  “default letters”.

Judge Halpern expatiates: “With respect to OICs, the IRS uses the term in two different ways: (1) as modified by the adjective ‘potential’, to signify that a taxpayer is not in compliance with his obligations under an accepted OIC but that the IRS is not ready to terminate the agreement, see, e.g., Internal Revenue Manual (IRM) pt. 5.8.9.3(1)(b) (Jan. 1, 2015), and (2) to signify the termination of the agreement, see, e.g., id. pt. 5.8.9-4 (Sept. 23, 2008) (Default Letter).” 2015 T. C. Memo. 107, at p. 4, footnote 1.

Finally, IRS pulls the plug on QSS’s OIC, and hits QSS with a NFTL for the $208K.

QSS claims it didn’t get the default letter that triggers the NFTL. QSS later comes clean with the Form 941 it missed and the $344 penalty associated therewith, after the NFTL and their CDP request.

The only issue at the CDP was whether nonfiling one quarter and late paying a $344 penalty should torpedo the OIC.

The SO found that all technical requirements were met, but thought it excessive to cancel the OIC just because of the one quarter and the penalty.

QSS says it’s an abuse of discretion to dump the OIC for one little misstep.

IRS says they and Appeals have a consistent policy that once an OIC is breached, they won’t reinstate. Even though they could as a matter of contract law, they don’t have to.

And the OIC says it can be terminated without notice, so whether QSS got notice is immaterial.

QSS breached four times before, and got qualified default letters. Five times is enough.

Judge Halpern agrees. IRS was within its rights to terminate the OIC.

OK, but what about reinstatement?

“The notice of determination states only: ‘Your request for reinstatement of your offer in compromise has been denied. It was determined that you did not comply with the compliance terms and provisions of Form 656, Offer in Compromise.’ The [SO] attachment to the notice offers no further explanation. Mr. [SO] ‘s case activity record, part of the administrative file, indicates his sympathy for reinstating the agreement. …he recorded: ‘I agree that a reinstatement of the TP’s offer is a viable resolution’. Shortly thereafter, on the basis of a discussion with someone in the COIC Unit, he recorded his conclusion that, because the agreement had been terminated, there was no procedural basis for reinstatement.” 2015 T. C. Memo. 107, at p. 18.

But the SO really wasn’t happy about dumping the OIC. “It had been terminated during the last year of petitioner’s five-year compliance term because petitioner had been assessed a Federal tax deposit penalty of $344, which it had paid, and it had not timely filed Form 941, for one quarter, which it had subsequently filed. He recorded his concerns that those breaches of the agreement were de minimis and had been rectified. He worried that, for those reasons, the Tax Court would find that Appeals had abused its discretion in not reinstating the agreement. He concluded his [case activity summary]… entry with a rhetorical question (which he answered): ‘Essentially, would it be fair to reinstate the TP’s offer? In this instance I believe it would be.’ On further consultation with an Appeals colleague, he concluded that reinstating the agreement was not an option since the agreement had properly been terminated. The determination followed.” 2015 T. C. Memo. 107, at p. 19.

You can see where this is going.

“While there may be good reason for Appeals’ blanket rejection of the reinstatement of OIC agreements in cases of breach, we cannot tell that from the record or from respondent’s argument. It is not even clear such a policy exists despite Mr. [SO]’s determination and respondent’s contentions on brief. Cf. Trout v. Commissioner, 131 T.C. at 255 (‘The Appeals officer understood * * * that he had the discretion to excuse the breach of the express condition and reinstate the OIC. He chose not to.’).

“If such a policy does exist, it is not readily apparent what reasons or principles justify the lack of an exception to reinstatement in all circumstances of breach, especially given the individualized analysis afforded the initial termination decisions of breached OIC agreements. See, e.g., IRM pt. 5.8.9.3 (Jan. 1, 2015) (procedures for handling breached but not yet terminated OIC agreements, referred to as ‘Potential Default Cases’); supra pp. 4-5 (petitioner breached several times yet respondent did not terminate the agreement). And if there are no reasons or principles justifying the policy, we point out that one definition of ‘arbitrary’ is, ‘determined by chance, whim, or impulse, and not by necessity, reason, or principle’. The American Heritage Dictionary of the English Language 91 (5th ed. 2011). By having discretion to reinstate OIC agreements, but choosing never to exercise that discretion, without providing any sort of justification, Appeals may be abusing its discretion. In this instance, Appeals has excused itself from stating facts and reasons that respond to the evidence and arguments of petitioner and has deprived us of the opportunity for thoughtful judicial review.” 2015 T. C. Memo. 107, at pp. 20-21.

So, Appeals, it’s back to you. Tell us why you have an inflexible rule, or why this case deserves the treatment it got.

Oh, by the way, didn’t the SO talk to COIC? Isn’t that a prohibited communication per Rev. Proc. 2000-43, sec. 3, Q&A-6, 2000-2 C.B. 404, 406, amplified, modified, and superseded by Rev. Proc. 2012-18, sec. 2.03(10)(a), 2012-10 I.R.B. 455, 460?

Clearly today is a one-off in Tax Court.

Just as Ch J Michael B. (“Iron Mike”) Thornton deals with Rhonda D. Harrell’s amendments (to her untimely petition and her 1040), q.v. my blogpost “I Must Make Amends,” 6/10/15, here’s The Great Dissenter (honorifics omitted as it’s been a long day), His Honor Judge Mark V. Holmes, with Scott Kimrey Goldsmith, et al., Docket No. 13335-12, filed 6/10/15, a designated hitter also dealing with an amendment.

Scott Kim is just as far out of luck as poor Rhonda, although Scott Kim’s medical situation is not at issue.

Trial is set for June 15. Scott Kim moves to dismiss and to amend (there are two companion cases by the way, involving Scott Kim and his company).

“The proposed amended petitions are very similar to the current petition. Respondent [IRS] points out that they add no new issues, but do change some of the amounts that petitioners claim that they can prove. Tax Court Rule 41(a) provides that when more than 30 days have passed after an answer has been served, ‘a party may amend a pleading only by leave of Court or by written consent of the adverse party, and leave shall be given freely when justice so requires.’ Respondent points out that granting the motion would restart the clock on another answer – requiring yet another continuance in these thrice-continued cases. He also states that the amended petitions raise no new issues, so the failure to allow the amendment will in no way impede petitioners from presenting their cases. The Court will therefore deny this motion.” Order, at p. 1.

Any thought to post-trial motion conforming pleadings to proof, if the only issue is the numbers? If IRS admits it’s not so ambushed by the new numbers as to be unable to defend, go for it. And remember Rule 41(b) tried-by-consent.

As for the motion to dismiss, that’s a head-scratcher. Nothing new here.

“Petitioners’ motion to dismiss for lack of jurisdiction is based on their assertion that ‘assessments by Respondent were made more than three (3) years after the applicable tax returns were filed,’ plus various doctrines of estoppel and preclusion. The statute of limitations and these other doctrines are all defenses to a determination of a deficiency (and oddly, defenses not pled by either petitioner), not a ground to dismiss for lack of jurisdiction.” Order, at pp. 1-2. (Citations omitted).

Bad day for Scott Kim.

Off-Topic

I’ve said often enough that this is a non-political blog. Partisan politics are so toxic that they have infected all political discourse, and I have no desire to pour more pollutants into an already filthy mix.

But I must again weary my readers with a political statement.

The assault on net neutrality goes on apace. The free and open and neutral internet is David’s slingshot against giants much more powerful than he who stood “six cubits and a span.”

We have lawsuits from those who would strangle free speech (and profit thereby), and “free trade” agreements (the most closely-guarded documents since the plans for the Normandy invasion) featuring international arbitral panels subject to no laws and no appeal (anyone remember “He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation”?).

I’m not picking on one party or bloc over another, as both major parties, and all, or almost all, blocs, are complicit.

But I am constrained to warn—those who do not defend their rights will soon have none.

No, not the last recorded words of the late great Janis Joplin from her 1970 appeal for divine transport. Rather, this is the story of Rhonda D. Harrell, Docket No. 21618-14, filed 6/10/15.

Rhonda had sent in an imperfect petition and no filing fee. When bounced for not responding to Tax Court’s order to file an amended petition and pay the sixty bucks (or get a waiver), Rhonda sent in an amended petition and the sixty bucks.

Rhonda was reinstated (the order dismissing for want of jurisdiction being vacated).

But Rhonda isn’t home-free. Though her reinstatement might be timely, her original non-petition was postmarked two days late.

Even though Rhonda said she had “a series of serious health issues involving hospitalizations and admission to a skilled nursing facility,” and even though Rhonda sent in an amended petition and a Form 1040X showing what she believed her correct tax to be, Rhonda is out of luck.

Here’s Ch J Michael B (“Iron Mike”) Thornton with the bad news.

“…while the Court is sympathetic to petitioner’s situation and understands procedural confusion that may have ensued here, and the challenges imposed by petitioner’s medical issues, the fundamental nature of the filing deadline precludes the case from going forward. As a Court of limited jurisdiction, the Court is unable to offer any remedy or assistance when a petition is filed late. Rather, the Court is barred from considering in any way petitioner’s case or the correctness of her claims. Unfortunately, governing law recognizes no reasonable cause or other applicable exception to the statutory deadline, and the allegation that the original petition… was sent two days late remains unrebutted.” Order, at pp. 2-3.

Moreover, “…the timely filing of an amended petition has no bearing on the timeliness of the original petition. While an amended petition can ratify or correct a timely but imperfect original petition, it relates back in time to the original petition. It cannot reach back farther than the original petition to some period before expiration of the statutory filing deadline. Unless that fundamental deadline is met by at least the original petition, the Court simply is unable to hear or otherwise consider the case, regardless of the timeliness of any subsequent documents filed in the matter.” Order, at p.3.

Ya can’t amend the clock back.

And while Rhonda is to be commended for trying to get right with IRS by filing an amended return, “…it must be stressed that the tax returns are required to be filed with the Internal Revenue Service (IRS) and not with the Tax Court. The Tax Court is entirely separate from the IRS, and no law grants the Court an ability to process returns. If petitioner has not already done so, she may wish to consider submitting her Form 1040X directly to the IRS.” Order, at p. 3.

So Rhonda is out.

I spoke of Tax Court practice as allowing IRS to shoot very large fish in a very small barrel. See my blogpost “Adelbert, Thou Should’st Be Living At This Hour,”4/5/13.

This is just one more instance of the sixty-buck-ticket-to-justice being anything but. What is supposed to be a court to help the small taxpayer find independent judgment turns out to be an ambush. Or, what is worse, a playground for rounders.

It’s not the Court’s fault, or IRS’s (although both take advantage of the situation). It’s Congress’s fix, if that institution is capable of any rational activity whatsoever.

Misquoting Shakespeare, Sivatharan Natkunanathan craves the bond he should have gotten, but didn’t, in the eponymous 2015 T. C. Memo. 106, filed 6/8/15. Judge Lauber admonishes Siv that, without a bond, IRS has a free-fire zone to lien and levy after Siv gets unhorsed in Tax Court, despite his numerous (and unavailing) appeals.

Siv loses in Tax Court on the SNOD for his various deficiencies, appeals to Ninth Circuit, but fares no better; Ninth Circuit affirms Tax Court.

In the meantime, IRS gives Siv a NITL. Siv files Form 12153, provides no collection alternative but claims “appeal pending.”

Siv is playing the Supremes variation on the appeal-and-stall gambit, petitioning for leave to file cert petition out of time. This, of course, is an old-time rounder manoeuvre. In fact, a lady I blogged sent me her petition to the Supremes to reconsider her own petition; I didn’t bother reading it. Her chances of success were slightly less than her chances of outrunning American Pharaoh barefoot in a five-furlong breeze.

Needless to say, Siv doesn’t bother with a bond. See Section 7485(a).

Appeals gives Siv a NOD, from which he petitions timely.

Judge Lauber: “The only question is whether petitioner at his CDP hearing raised any issue that has merit.

“The answer to that question is clearly ‘No.’ As his only basis for requesting a CDP hearing, petitioner stated that his 2003 tax liability was ‘on appeal in the United States Supreme Court.’ That statement was false. Petitioner did not file a timely petition for certiorari, and the Supreme Court denied his motions for leave to petition out of time.” 2015 T. C. Memo. 106, at pp. 6-7.

And Judge Lauber gives us the timetable: “When a taxpayer timely petitions this Court in response to a notice of deficiency, the IRS generally may not proceed to assess or collect the tax ‘until the decision of the Tax Court has become final.’ Sec. 6213(a). Where (as here) a decision of our Court has been affirmed on appeal, the decision becomes final ‘[u]pon the expiration of the time allowed for filing a petition for certiorari.’ Sec. 7481(a)(2)(A).” 2015 T. C. Memo. 106, at p. 7.

Siv’s first shot at the Supremes was nine months late, so the order of Ninth Circuit affirming Tax Court was long since final.

Anyway, Section 7485 (a)(1) is clear: “Section 7485 provides that, ‘[n]otwithstanding any provision of law imposing restrictions on the assessment and collection of deficiencies, * * * [appellate] review under section 7483 shall not operate as a stay of assessment or collection of any portion of * * * the deficiency determined by the Tax Court’ unless the taxpayer files a timely notice of appeal and, as relevant here, also posts a bond as provided in section 7485(a)(1). Petitioner did not post such a bond. If no bond is posted, the IRS may properly assess taxes and initiate collection during the pendency of the appeal.” 2015 T. C. Memo. 106, at pp. 7-8. (Citations omitted).

No bond, no stay, and Appeals is sustained if they give a NOD affirming IRS’s lien or levy.

So if you mean to appeal, crave the bond.

If you want the whole nine yards on collateral estoppel, nothing beats Judge Wherry’s lengthy footnotes, numbers 22 and 23, in 137 T. C. 1, Randall J. and Karen G. Thompson. See my blogpost “the Great Dissenter,” 12/28/11.

But if you want the quick-and-dirty, cheat-sheet, version, here’s The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being (and even designates orders to help out the hard-laboring blogger), s/a/k/a The Inveterate, Implacable, Illustrious, Indisputable, Irrefragable, Indefatigable Foe of the Partitive Genitive, and Old China Hand, His Honor Judge Mark V. Holmes.

This is the story of Edward J. S. Picardi, Docket No. 5753-14, filed 6/9/15.

Edward J. S. has had a rocky time of it. Convicted of Section 7201 tax evasion, his appeal to Eighth Circuit gave him no joy. So IRS moves for partial summary judgment on the fraud chops appurtenant to Edward J. S.’s bushelbasketful of deficiencies.

The caselaw, of course, says that criminal conviction for tax evasion may establish fraudulent intent.

But to have collateral estoppel get IRS there:

“The issue in the two suits must be identical;

“there must be a final judgment rendered by a court of competent jurisdiction;

“the parties must be identical or in privity with each other;

“the parties must actually have litigated the issue and the resolution of the issue must have been essential to the prior judgment, and

“the controlling facts and law must have remained unchanged.” Order, at p.2.

Edward J. S. claims his trial counsel was ineffective, and “…many of the controlling facts in his criminal case were not properly presented and thus collateral estoppel cannot apply. He has alternative pigeonholes for this argument — he contends that this is a case where the facts or the law has changed, or that the ineffective assistance of counsel creates a ‘special circumstance’ warranting an exception to the application of collateral estoppel.” Order, at p. 2.

Facts or law can change where there is a great lapse of time between case 1 and case 2, or where law can change from year to year (and tax law does that annually nowadays).

But that’s not the case here, says Judge Holmes, whether or not Edward J. S.’s trial counsel blew it.

“We don’t think ineffective assistance of counsel has anything to do with the facts and law. The caselaw has long held proof of fraudulent intent under § 7201 is the same as the intent that the Commissioner has to prove under § 6663. And the facts here are precisely the same — Picardi’s intent in filing his returns from 1999 through 2003 — no matter how bad his first trial counsel was.” Order, at p. 2 (Citations omitted).

And argue ineffective assistance of counsel on appeal of your criminal case, not in Tax Court. That argument is a nonstarter.

How often have I lamented the modesty of Tax Court Judges who, fearing the notoriety of the designated order, repeatedly hide their light under the cliché.

And Judge Marvel does it again, in Marvel H. Cosner, Docket No. 1480-14L, filed 6/8/15.

This is the case of the missing petition, which the 400 Second Street, NW, gang turns up and which Judge Marvel files nunc pro tunc. That means “retroactive to Day One” for you human beings out there.

But in the meantime, IRS, who has opposed everything in sight, levies on Marv’s payments from his employer, so the liability (uncontested) is fully paid.

IRS claims they didn’t know about the retro petition, and the leading case (Greene-Thapedi v. Commissioner, 126 T.C. 1) says “once paid in full, no lien necessary and case dismissed as moot.”

OK, Greene-Thapedi is to CDP what Gregory v. Helvering is to deficiencies; the authors thereof should get royalties.

So even though Marv got his petition filed retroactively, presumptively triggering the Section 6330 stay on collection, IRS still got the money, no? So Tax Court has no general refund powers, and case dismissed, right?

Not quite.

“’A nunc pro tune order retroactively corrects an original record which is erroneous through inadvertence or mistake.’ Turkoglu v. Commissioner, 36 T.C. 552, 554 (1961). The Court’s July 22, 2014, Order found that petitioner had timely filed a petition with respect to the March 2, 2012, notice of determination and ordered that the petition be filed nunc pro tunc as of April 5, 2012. Accordingly, although he did not then know it, respondent [IRS] was prohibited from serving the December 6, 2013, levy. See sec. 6330(e)(1). Pursuant to section 6330(e)(1), the Court may enjoin an unlawful levy notwithstanding the general prohibition on such injunctions under section 7421.

“Greene-Thapedi v. Commissioner, 126 T.C. 1, which did not involve a premature levy, does not appear to preclude the Court from taking appropriate corrective action following a premature levy….” Order, at p. 2.

I depart from my usual practice of omitting dates, because here it really matters. And read the whole order. It’s really good.

But wait, there’s more!

“The reasoning of Greene-Thapedi implies that the Court may order respondent to retum the proceeds of an unlawful levy action even if the unlawful levy fully satisfied the taxpayer’s theretofore unpaid tax liability. Indeed, in Greene-Thapedi the Court expressly observed that it had previously ‘exercised its inherent equitable powers to order the Commissioner to return to the taxpayer property that was improperly levied upon’. Moreover, any other conclusion would allow the Commissioner to moot any case brought under section 6330(e) by unlawfully executing a premature levy.” Order, at p. 3 (Citations omitted, but save them for your memo of law).

But remember, Marv petitioned NOD off a CDP. So Judge Marvel has to sort that out before deciding whether to order IRS to give Marv what they grabbed.

Game on for Helena, MT, June 15.

And Judge Marvel, if you worked this hard on this order, designate it. Please. I wish I could bill for the time I spent digging this gem out.

No, not the Beatles’ fifty-year-old soundtrack single from their 331st of Rolling Stone’s top 500 of all times albums, so entitled.

Rather, this is the plea of a Tax Court Judge for an expert witness who can “…help the Court in understanding the evidence or deciding a fact at issue. See, e.g., Sunoco, Inc. & Subs. v. Commissioner, 118 T.C. 1 81, 1 83 (2002); Hosp. Corp. of Am. v. Commissioner, 109 T.C. 21, 59 (1997).”

But an ERISA attorney who only can opine that “…that “[t]o disallow the deductions because of how the Plan was initially set up would be patently unfair and inequitable to Mr. Burbach” doesn’t do that.

It’s “…at best a legal conclusion of the sort that we routinely exclude on the ground that it does not help the Court in understanding the evidence or deciding a fact at issue.”

The designated hitter whence flows this learning is David F. Burbach, et al., Docket No. 12021-12, filed 6/8/15.

So the ERISA attorney isn’t an expert, although maybe so he could testify as a fact witness. But if he prepared or reviewed the blown-up pension plan funded with fees Mr. Burbach’s company paid his client, cross might be a wee bit tough.

And the Judge? Why, it’s The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Implacable, Irrefragable, Irrepressible, Illustrious, Indefatigable Foe of the Partitive Genitive, and Old China Hand, Judge Mark V. Holmes.

When I was a young man (and had, contrary to the late great Pete Seeger, been kissed), there were old-school judges, men (sorry ladies, this was in the Bad Old Days) who dragged into chambers and robing rooms recalcitrant litigants and badgered settlements out of them.

We called it “banging heads.”

And it saved a ton of time, money, vexation and effort, which otherwise would be wasted trying a case before a somnolent jury whose principal concerns were lunch and getting out of there.

Alas, Tax Court doesn’t do that.

Telling the sorry tale is The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Inveterate, Implacable, Irrefragable, Illustrious, Incomparable, Indefatigable Foe of the Partitive Genitive, and Old China Hand, His Honor Judge Mark V. Holmes.

Here’s the long and short (mostly short) of it, Kumar Rajagopalan & Susamma Kumar, et al., Docket No. 21394-11, filed 6/5/15, a designated hitter, no less.

Kum and Sus and two of their buddies are looking at a 40% substantial undervaluation chop, but that’s not the issue I’m focusing on here.

On background, “…petitioners moved in limine for an order to ‘mandate enforcement of the parties’ prior stipulations that the only issues remaining for trial are (1) valuation and (2) penalties; and further direct the parties to engage in good faith settlement discussions in accordance with the Court’s prior instructions.’” Order, at p. 1.

OK, play nice.

Except Tax Court judges can’t make litigants do that.

“One problem with this is that our cases that wax rhapsodic on the importance of stipulations to the Court’s practice all involve actual stipulations — statements that both parties agree to as true for the purpose of deciding a case and have been properly submitted to the Court. See Tax Court Rule 91(b)-(c) (stipulations must be signed and filed with the Court). Proposed stipulations are not actual stipulations, and the Court can’t enforce them by pretending they are.” Order, at p. 1.

OK so far; if the stips Kum and Sus want enforced aren’t properly-filed stips, but wishlists, there’s nothing Judge Holmes can do about that.

“The more serious point that the Court thinks petitioners are trying to raise is unreasonable behavior by respondent in not settling these cases. The Court doesn’t force parties to settle; it may impose a sanction if a party litigates unreasonably, see §6673, or it may award costs and fees if the government loses and its position was not substantially justified, see § 7430. But now, before there is a prevailing party, such actions would be premature.” Order, at p. 1.

Maybe I’m an old State-court fogey; maybe I’m too much an in-the-trenches, old-time solo practitioner; perhaps I lack the refinement of the corner office in the glass-and-steel highrise overlooking the park, and the ineffable bliss of Savile Row three-piece suits and spit-shined Bruno Maglis. And however many Martini lunches my aging liver can handle.

But I don’t get it.

If a baserunner knows the outfielder won’t throw, why not score from first base on a blooper?