Or Maybe Not
This is the answer to the Car Werks conundra, for which see my blogpost “Is An LLC a Person?”, 9/11/15.
Well, STJ Armen, The Judge With a Heart, doesn’t have to go there, as IRS unscrambles the omelet it created in Car Werks, LLC, David M. Palmer Sole Member, Docket No. 12067-15L, filed 10/30/15.
IRS filed a lien naming both the LLC and Dave. Dave claims he was wrongfully liened, as he never got a NFTL, but after the doings reported in my aforementioned blogpost, IRS pulled the recorded lien and filed anew only against the LLC, not Dave. And the only NOD issued is against Car Werks, LLC, not Dave.
IRS wants TFRPs from Dave, but ever since 9/14/09, TFRPs in respect of LLCs are assessed and collected as if the LLCs were corporations, notwithstanding the check-the-box regulations. But so far Dave got neither a SNOD nor a NOD for those.
So STJ Armen, after wading through the papers both sides laid on him after his earlier order, straightens everyone out.
First, a NOD is the ticket to Tax Court, and here the only NOD was issued to Car Werks, LLC.
“Further, as discussed at length in the Court’s Order dated September 11, 2015, the instant case resembles more a case commenced and prosecuted by David M. Palmer than it does a case commenced and prosecuted by Car Werks LLC. Under the circumstances present here and as discussed, the Court lacks jurisdiction over David M. Palmer. Likewise, and as the parties were advised in the September 11, 2015 Order, the Court’s jurisdiction does not extend to awarding damages for ‘malicious lien filing’ and that any remedy for damages that may exist for ‘malicious lien filing’ lies in another court. See, e.g., I.R.C. secs. 7432, 7433.” Order, at p. 2.
Car Werks, LLC, can, if it wishes, get into the act by ratifying Dave’s petition (manually signed by Dave on behalf of the LLC, and not by his attorney), but dropping the malicious lien stuff.
If Car Werks LLC does, then “…this Court would most likely, by subsequent Order, require (1) counsel seeking to represent Car Werks LLC to file an entry of appearance for Car Werks LLC if counsel wished to represent Car Werks LLC in the instant action; (2) Car Werks LLC (acting on its own behalf or through counsel if the requisite entry of appearance were to be filed) to file an amended petition that is responsive to the April 16, 2015 Notice Of Determination that was issued to Car Werks LLC (but not to assert any claim for damages for “malicious lien filing”); and (3) Car Werks LLC to comply with the Court’s May 15, 2015 Order For Ownership Disclosure Statement.” Order, at p. 4.
STJ Armen did such a good job clearing up IRS’ initial blunder that it seems an unfair quibble to suggest that, whether or not counsel wishes to represent Car Werks LLC, the wishes of Car Werks LLC through its member-manager are paramount.
On another topic, Peter Reilly, CPA, Forbes’ formidable blogger, asked if I had any comment on Estate of Edward S. Redstone, Deceased, Madeline M. Redstone, Executrix, 145 T. C. 11, filed 10/26/15.
I replied I did not, as the case is fact-specific and, to the extent Sumner Redstone, the Viacom King, was involved in this transaction, I have blogged that in my blogposts “The Flavor Du Jour,” 12/9/13, and “Bonanza,” 1/3/14.
Reflecting, it might just be that Edward’s favorable result bails out Sumner as well, as IRS’s case depends upon various stock transfers being gifts, and Edward beat that one. But I’d need to see more facts before coming to that conclusion. And that’s why I’m reserving comment at this time.