Attorney-at-Law

NO DO-OVER

In Uncategorized on 10/26/2015 at 16:41

Unlike The Judge With a Heart, STJ Armen, Judge Lauber won’t give a do-over to Anonymous, 145 T. C. 10, filed 10/26/15.

You’ll no doubt recall STJ Armen’s largesse to Pete Disimone, more particularly bounded and described in my blogpost “A Do-Over,” 1/11/13.

Well, Judge Lauber says he can’t do that, confined as Tax Court is by the strictures of Section 6110(a).

This case is so anonymous that even counsel’s names (both sides) are sealed.

Anyway, Anonymous got its Section 501(c)(3) qualification revoked retro to Date One, IRS claiming inurement among other delicitons. Anonymous sued, and IRS settled, withdrawing Revocation One and substituting Revocation Two.

Oh yes, Anonymous stumped up an agreed amount to cover tax liabilities.

Now Anonymous wants Tax Court to order IRS to delete Revocation One from public view. Both sides admit that the statutory redactions were made to Revocation One, and have agreed to the statutory redactions for Revocation Two.

“Congress mandated in section 6110(a) that ‘the text of any written determination and any background file document relating to such written determination shall be open to public inspection’ except as otherwise provided in section 6110.” 145 T. C. 10, at p. 9.

It’s true that IRS has to give 60 days’ notice of its intent to make the written determination public, and the aggrieved party can petition Tax Court. But Section 6110(f)(3)(A) only lets the aggrieved party get “…a determination with respect to that portion of such written determination or background file document which is to be open to public inspection.” 145 T. C. 10, at p. 11.

Hence Judge Lauber’s handcuffs. “By limiting our role to the making of a determination ‘with respect to that portion of such written determination,’ that shall be disclosed, the statute restricts our jurisdiction to deciding the propriety of the Commissioner’s proposed deletions. This limitation on our jurisdiction is confirmed by section 6110(m), which provides that the Commissioner ‘shall not be required by any Court * * * to refrain from disclosure’ of any written determination whose disclosure is mandated by section 6110(a).” 145 T. C. 10, at p. 11.

You can see it’s not looking good for Anonymous.

Revocation One was clearly a written determination, with all the right redactions. And it was “issued,” because mailed to Anonymous.

Anonymous’ claim that Revocation One was erroneous, citing IRM pt. 32.3.1.12.1 (Aug. 11, 2004), cuts no ice. Even if IRM had the force of law or regulation (it doesn’t of course), there’s no obvious error or omission. IRS settled to avoid hazards of litigation (and judges love settlements), and so did Anonymous.

“Neither the statute nor the regulations provide any support for petitioner’s submission that a written determination that has been properly ‘issued’ can be ‘un-issued.’ Indeed, the regulations create a strong inference to the contrary. They provide that ‘background file documents,’ which normally are disclosable under section 6110(a), do not include ‘a request for a ruling or determination letter that is withdrawn prior to issuance thereof.’ Sec. 301.6110-2(g)(2)(v), Proced. & Admin. Regs. This regulation shows that the Department of the Treasury knew how to exclude a ‘withdrawn’ document from disclosure when it so intended, and it made this exclusion available only when the document is withdrawn ‘prior to issuance’ of the ruling or determination letter. The regulations contain no provision that would exclude from disclosure a ruling or determination letter, or background document relating thereto, that is withdrawn after the written determination has been issued. 145 T. C. 10, at pp. 18-19.

We come to the real point–Anonymous wants the inurement part out, lest their donors should feel they were swindled and sue.

“…respondent [IRS] has admitted that, at some point during the ensuing negotiations, it ‘withdrew the inurement grounds for revocation.’ In light of this admission, petitioner urges that respondent be restrained from disclosing the section of the examination report discussing private inurement in order to prevent ‘public confusion.’” 145 T. C. 10, at p. 20.

Tough. “There is no legal basis for this argument. Section 6110(c) specifies seven categories of information that must be deleted from documents made available for public inspection under subsection (a). The parties have stipulated to the deletions that section 6110(c) requires, including the deletions that are required to the ‘private inurement’ section of the examination report. The statute authorizes no further deletions…. And to the extent petitioner is arguing for an equitable exception based on the supposed risk of public confusion, ‘[s]ection 6110(f)(3)(A) is a precise grant of jurisdiction and does not allow for additional general remedies.’” 145 T. C. 10, at p. 21. (Citation omitted).

I will not cite to the several cases I have heretofore blogged, which convey the warning that a stipulation “is not by any to be entered into unadvisedly or lightly; but reverently, discreetly, advisedly, soberly,” to use words suitable for a much more solemn occasion than this blogpost.

You have been warned.

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