After an epistolary exchange with my opposite number at Forbes.com, Peter Reilly CPA, which I thought about blogging but decided to leave in my inbox and “sent” folder, I was idly traversing today’s post-Papal Tax Court orders, when I spied a familiar name.

Any of y’all remember Barbara Jane Knudsen? No? Maybe you might remember her battling but unpaid attorney, Jan Pierce? Still no takers? Well, check out my blogpost “Concession Equals Settlement,” 4/1/13.

Now you’re on board? Cool. Well Barbara Jean and battling husband Kurt H. are back before Ch J Michael B. (“Iron Mike”) Thornton, because the Left Coasters at Ninth Circuit gave Ch J Iron Mike R&R. No, that’s not rest and recreation, that’s reversed and remanded.

Iron Mike asks IRS and Barbara Jean “whatever shall we do,” now that the Coasters have tossed him back the bundle.

I’ll bet Jan Pierce, Esq., echoes the words indited by Lydia Parrish in 1942 from the stevedores of the Georgia Sea Islands: “Pay me, pay me, pay me my money down.”

Turns out the concession by IRS, sparked by a Chief Counsel backdown memo, wasn’t a settlement after all.

You can read all about it in Barbara Jane Knudsen v Com’r., No. 13–72077, decided: July 15, 2015.

Here’s Senior District Judge Don (“The Donald”) Walter, a designated sitter: “A settlement is a contract, and its enforceability is governed by familiar principles of contract law. The formation of a contract generally requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration. Here, there was no exchange, and it is undisputed that there were no negotiations regarding settlement. Instead, Knudsen made a qualified offer to settle her tax liability for $50 per year for each of the four years at issue, which expired after ninety days when the IRS failed to respond. See 26 U.S.C. § 7430(g)(1)(D). Much later, and only after the case had been submitted to the Tax Court fully stipulated, did the IRS unilaterally concede the case. Even then, the parties never entered into a supplemental stipulation of settled issues, despite the fact that Knudsen had then succeeded on both the merits and the timeliness of her claim for equitable relief.

“Knudsen’s position is most similar to that of the taxpayer in Estate of Lippitz v. CIR, 94 T.C.M. (CCH) 330 (2007). In Lippitz, the IRS denied the taxpayer’s right to section 6015 innocent spouse relief, despite the CCISO having previously determined the taxpayer’s entitlement thereto. After the IRS refused the taxpayer’s qualified offer, the taxpayer moved for partial summary judgment, prompting the IRS to concede that the taxpayer was entitled to the requested relief. The Lippitz court held that the IRS’s concession was not a ‘settlement’ under section 7430. Because the IRS waited to concede the case until after the taxpayer had actively litigated to the point of filing a dispositive motion, the Lippitz court found this akin to a concession after trial. The court explained that it did ‘not believe Congress intended to grant [the IRS] the latitude to wait until just before the resolution of a dispositive motion, or the end of a trial to concede a matter and still benefit from the settlement exclusion of section 7430(c)(4)(E).’ Decision, at p. 2. (Some citations omitted).

So Ch J Iron Mike orders the parties to send him a joint report on what to do. It’s all in Barbara Jane Knudsen, Petitioner, and Kurt H. Knudsen, Intervenor, Docket No. 18048-09, filed 9/25/15.