Archive for November, 2015|Monthly archive page


In Uncategorized on 11/30/2015 at 17:45

No, I’m not turning this blog into a chess discussion platform, rather I’m discussing a bushelbasketful of designated hitters from The Great Dissenter, a/k./a The Judge Who Writes Like a Human Being, s/a/k/a the Indomitable, Indefatigable, Illustrious, Implacable, Irrefutable and Indisputable Foe of the Partitive Genitive (although maybe he’s reformed a little lately), and Old China Hand, Judge Mark V. Holmes.

Now some of my readers, those “cool, clear-eyed seekers of wisdom and truth,” as Abe Burrows put it, might be wondering why I didn’t blog an opinion today, as there were four of them. Giving due heed to “the proper opinion of mankind,” I point out that one is the fact-specific tale of a would-be sandbagger, Ambawalage S. Silva, 2015 T. C. Memo. 229, filed 11/30/15, whom Judge Lauber excoriates in the following terms: “He appears to have intentionally filed imperfect petitions, in the form of letters dated December 15, 2006, and March 29, 2012, in order to lay the predicate for a subsequent motion to enjoin IRS collection activity as violative of an ongoing Tax Court proceeding. And his briefing tactics reveal a deliberate effort to sandbag respondent. Construing petitioner’s claims so liberally as to include a challenge to the timeliness of the notice of deficiency would reward these tactics and would not accomplish substantial justice.” 2015 T. C. Memo. 229, at p. 17, footnote 5. In short, Amba has concocted a rogue’s pot au feu. Practitioner, don’t do it.

And the story of Baudelio Lopez Ibarra, 2015 T. C. Sum. Op. 70, filed 11/30/15, would melt a heart of stone. The poor man has a friend in The Judge with a Heart, STJ Armen, who lets Baudelio off for everything but a $116 Section 6654(a) failure to pay estimateds chop, because there is no reasonable cause defense for that. Baudelio’s wife of more than 40 years, Cheryl, dies of pancreatic cancer, Baudelio lost his job, his health insurance is inadequate (I’ll make no political comments about this; I’ve made plenty elsewhere, and just spent a good chunk of my morning trying to get my wife properly enrolled. But this is nothing compared to Baudelio’s suffering), and in the midst of these he fails to pay $4100 in tax. IRS wanted to nail him for more, but admit he did have deductible mortgage interest; big of them.

Reinaldo Vargas, 2015 T. C. Sum. Op. 69, filed 11/30/15, is an example of the “gotcha” that is AMT. IRS agrees with Reinaldo’s T&E (mirabile dictu!), but the deduction is worthless for AMT, as are the personal exemptions for himself and his son. Reinaldo didn‘t have any Section 57 preference items, but that’s half the story. He filed MFS (why not explained; but this is a trap) so his reported income after the T&E and pers exempts go out put him in AMT. We’ve been yelling for years that the numbers from 1969, with the annual tweaks from Congress (when they remember to tweak), are a joke. Reinaldo is an airplane pilot who spends half the year living out of his Travelpro, but that doesn’t help. Be careful with MFS, practitioner; it’s a real boobytrap.

At last, Judge Holmes. And once again, it’s Caylor Land & Development, Inc., et al., Docket No. 17204-13, filed 11/30/15, the blogger’s pal. I won’t cite to the other posts this case has given me, but I hope for many more.

IRS claims three (count ‘em, three) pages out of the millions and thousands of e-discovered documents handed over by Artex Risk Solutions, Inc., are unprivileged, because they were prepared during, and therefore not in anticipation of, litigation. Wrong, says Judge Holmes. During means in anticipation of continuing litigation.

IRS next claims the dude at Artex who prepared the pages in question wasn’t an attorney getting ready for trial. So what, says Judge Holmes. “The plain language of Rule 70 and Federal Rule of Civil Procedure 26 — with their reference to “consultants” and “agents” who produce work product) refutes this.” Order, at p. 2.

Finally, IRS exasperates even the long-suffering Judge Holmes. Although there’s an exception for must-have documents without which the party seeking same can’t prepare without undue hardship (see Rule 70(c)(3)(A)(ii)), IRS doesn’t show anything close.

Worse, IRS claims because Artex turned the stuff over, they’ve waived privilege.

Judge Holmes: “These arguments are completely misguided after the promulgation of Federal Rule of Evidence 502 in 2007. The changes to that Rule eliminated the subject-matter waiver in most cases and created specific rules for inadvertent disclosure. Federal Rule of Evidence 502(b) now states that production is not a waiver if the disclosure is inadvertent; the holder of the privilege took reasonable steps to prevent disclosure; and the holder of the privilege took reasonable steps to rectify the error.

“And this is just what Artex has shown. Remember that Artex produced two of the documents in a massive production of millions of documents; the third was one page of thousands. That inadvertence, and not design, was the cause is confirmed by the inclusion of descriptions of two of the documents in a 1,400 page privilege log of documents that Artex stated it wasn’t producing.” Order, at p. 3.

Artex wants a FRE 502(d) general preclusion of waiver order, and gets it. “Such an order can reduce the costs of litigation by forestalling courts and litigants from scrambling into motions practice every time there is an inadvertent disclosure. That would seem to describe this case, in which not an enormous deficiency is at stake and yet one in which the Court has already described the parties as having ‘acted in ways that sometimes seem a parody of civil discovery.’ Caylor Land & Development, Inc., et al. v. Commissioner, T.C. Dkt. Nos. 17205-13 et al. (Aug. 13, 2014) (order denying petitioners’ motions for judgment on the pleadings, et al.). Order, at p. 5.

Here’s another example of How Not To Do It. IRS gets another Taishoff “Oh Please, First Class.”





In Uncategorized on 11/26/2015 at 16:05

I quote the translated words of Adrianus Valerius (1575 – 1620) from so long ago.

Of course, I bring y’all no case discussion today, and there will be none tomorrow as well, because Tax Court has announced that it will be closed Friday, November 27, 2015.

I hope the Judges and their law clerks will not be spending tonight in front of the big-boxes in the malls, trying to fight their way into the Black Friday sales.

It’s good that the hard-laboring intake clerks and the flailing date-stampers at 400 Second Street, NW, will be able to re-enact the celebrated words of Rudy the K: “Call a truce, then, to our labors/Let us feast with friends and neighbors/And be merry, as the custom of our caste.”

I hope all my readers are able to do likewise.

We all have so much to be thankful for.


In Uncategorized on 11/25/2015 at 16:48

I expect the practitioner representing petitioner in this designated hitter off the word processor of Judge James S. (“Big Jim”) Halpern doesn’t need the advice suggested by the title of this blogpost, but I put this here for the rest of us.

Judge Big Jim: “There is a genuine dispute as to material issues of fact, and, on that ground, we shall deny the motion for summary judgment. Perhaps on further consultation before trial, the parties will conclude that the record is inadequate to support the notice and that remand to Appeals is appropriate.” Order, at p. 4.

Perhaps the parties had best take Judge Big Jim’s advice, in the case of Lil Jon, or, as more particularly set forth in the subject Order, Jonathan Smith A.K.A. Lil Jon, Docket No. 23204-14 L, filed 11/25/15.

I had no idea why the petitioner was so designated (showing thereby perhaps my age) but I am informed as follows: “With his gleaming, bejeweled grill, dreadlocks, and growling, one-word party shouts, Lil’ Jon is one of the most recognizable figures in contemporary hip-hop.”

Notwithstanding the foregoing, Lil Jon seems to have problems with a CDP. The facts are a tangle, and I’ll let those of you who enjoy unraveling a chainstitch read the Order for yourselves. As for using anything therein contained in your own case, remember YMMV.

But when a Judge suggests you might think about a remand, do think, and think twice. You might reject the suggestion if you don’t want to give Appeals a second chance to sink your client. But you might take the hint if you think you have enough good stuff to win at Appeals.

So chew it over while you chew your turkey.


In Uncategorized on 11/24/2015 at 16:22

Words from a much more exalted personage even than Big Julie, His Honor Judge Julian I Jacobs, hereinafter HHBJJJIJ, are the keynote for Estate of Russell Badgett, Jr., Deceased, Bentley Badgett, Jr., Executor, 2015 T. C. Memo. 226, filed 11/24/15.

The late Russ died March 8. BB Jr., the fast-moving ex’r, filed an automatic extension and got the late Russ’ 1040 for the previous tax year filed in May. I have to say these dudes were organized.

The good news: the late Russ overpaid about $429K, of which $25K was to be applied to year of death and the balance refunded. Even better, the late Russ didn’t owe IRS anything from yesteryears.

The bad news: When the ex’r filed the 706 in December, he never mentioned the refund.

More good news: The late Russ’ short-year (year of death) 1040 showed a refund of $14K due the estate.

More bad news: the 706 didn’t show that either.

IRS wants a deficiency in estate tax, consisting entirely of the refunds.

The ex’r claims KY law (they’re all domiciliaries of The Bluegrass State) says that an expectancy isn’t property, and State law controls. After all, IRS could refuse the refund, even though it didn’t.

“The estate acknowledges that decedent overpaid his 2011 and 2012 income tax but posits that an ‘overpayment’ does not create a right to an income tax refund. The estate argues that there is no property interest until the refund has been declared by the Government. Continuing, the estate postulates that even if decedent had an expectancy to receive the income tax refunds, ‘under Kentucky state law, a mere expectancy is not the same as an interest in property.’” 2015 T. C. Memo. 226, at p. 5.

But in the cases the ex’r relies upon, there were unpaid tax liabilities. Here, there aren’t. Apparently the late Russ was up-to-date and upstanding, taxwise.

HHBJJJIJ cuts to the cliché: “Simply stated, if no offsetting liability exists, section 6402(a) is clear: The statute mandates that the IRS ‘shall’ refund any balance to the taxpayer. In the matter herein, there is no indication that decedent was subject to any liability or obligation against which the IRS could offset his overpayments. The status of the tax refund is more than a mere expectancy; the estate has the right to compel the IRS to issue a refund for the years for which decedent overpaid his tax. Thus, we hold that the overpayments in question attained the status of independent assets for estate tax purposes; they constitute decedent’s property for estate tax purposes.” 2015 T. C. Memo. 226, at pp. 8-9.

And it’s irrelevant whether the late Russ knew or didn’t know he was entitled to the refund, or when the ex’r (or the late Russ) could have sued for a refund.

The ultimate bad news: The estate owes the tax.


In Uncategorized on 11/24/2015 at 15:34

No, I’m neither being politically correct nor waging war on Christmas, I’m just echoing the sentiments of The Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, s/a/k/a The Irrefragable, Irreplaceable, Illustrious, Indefatigable and Industrious Foe of the Partitive Genitive, Judge Mark V. Holmes.

Judge Holmes is concerned with the meaning of the word “seasonable,” and he resolves the parties’ concerns in Caylor Land & Development, Inc., Docket No. 17204-13, filed 11/24/15.

Surely you remember Caylor Land & Development, Inc., and its host of et als. No? Then check out my blogposts “Is You Is Or Is You Ain’t?” 3/27/15, and “Don’t Suppose You Can Depose – Part Deux,” 9/2/14.

Well, apparently Ch J Michael B. (“Iron Mike”) Thornton sorted out the matters I raised in my first-above-referred-to blogpost, and Judge Holmes has this case.

He gave IRS until November 6 to identify their expert who would testify as to actuarial sciences. And on that very day IRS named the chosen one, giving as their reason that they had to satisfy the various bureaucratic obstacles to getting their expert paid.

The Caylor clan objects. “Petitioners argue that Rule 102 says that this duty is to seasonably supplement, and that waiting till the deadline that the Court set in its pretrial order for just this kind of supplementary response is not good enough.” Order, at p. 2. (Emphasis by the Court).

But this fails to answer Judge Holmes’ perfectly reasonable question: “So how does meeting a deadline become missing a deadline?” Order, at p. 1.

So Judge Holmes will tell them. It doesn’t.

“‘Seasonably’ is just an old-fashioned synonym for ‘timely.’ See, e.g., Georgianna Nadeau Henault & Sun Trust Co. v Commissioner, B.T.A.M. (P-H) P 33681 (B.T.A. 1933); Egan v. Commissioner,41 B.T.A. 204, 205 (1940). Rule 102(3) allows the Court by order to impose a duty to supplement, which is what we did and we included a more precise deadline than ‘seasonably.’” Order, at p. 2.

Seasonable greetings.



In Uncategorized on 11/23/2015 at 16:55

The veteran may be disabled, but his (or her) disability pension counts for household income when reckoning ability to pay for installment agreement (and presumably other collection alternative) purposes.

In fact, IRS area counsel laid it out for the SO in Frank D. Mathews, Jr., 2015 T. C. Memo. 225, filed 11/23/15, and Judge Chiechi quotes it with approval.

The SO couldn’t find anything in the IRM or anywhere else about the status of veterans’ disability payments. Yes, they’re tax-exempt all right, but the vet still has the money to live on.

As a veteran I will not make a political comment, nor mention the words “Pfizer” and “inversion.” At least, not on this blog, which is avowedly non-political.

Here’s IRS’ stalwart area counsel, whom I will hereinafter designate as “Jody.”

Judge Chiechi quotes from the SO’s Case Activity Record: “Call from Jody. He told me he was not able to find anything that specifically states a taxpayer must include on his Form 433-A Collection Information Statement exempt income. However, it is his opinion exempt income must be included in any calculation of a taxpayer’s ability to pay. The taxpayer has the income to live on. I said I would like to tell the representative that I spoke to IRS Area Counsel and they confirmed exempt income must be included on the Form 433-A Collection Information Statement. He said I can mention his opinion because he is confident it will stand up in court.” 2015 T. C. Memo. 225, at p. 9.

And the SO offered Frank a streamlined installment agreement, including the disability number. Frank says no, and petitions.

The IRM and the Form 433-A are misleading, but that’s unfortunate, because determining ability to pay means including all income, taxable or not. IRS agrees that Frank’s veterans’ disability benefits aren’t taxable. But ability to pay means all income, whether or not taxable.

“Indeed, the Internal Revenue Manual identifies certain payments that a taxpayer receives which are required to be included in determining the amount that a taxpayer would be able to pay each month to the IRS with respect to an unpaid tax liability, even though those payments are excludible from gross income. By way of illustration, IRM pt. requires certain child support payments that a taxpayer receives to be included in determining the amount that a taxpayer would be able to pay each month to the IRS with respect to an unpaid tax liability, even though the taxpayer may exclude from gross income under section 71(c) child support payments described in that section.” 2015 T. C. Memo. 225, at p. 19.

And both IRM and Form 433-A allow deductions from monthly income that would not be deductible for income tax purposes, like cellphone, cable and trash removal.

Finally, that a payment is exempt from levy doesn’t exempt it from inclusion in ability-to-pay calculations. Judge Chiechi cites the Ligman case. For details of that imbroglio, see my blogpost “I’ve Been Working On The Railroad,” 4/27/15.



In Uncategorized on 11/21/2015 at 00:07

Here’s a designated hitter from The Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, s/a/k/a The Implacable, Illustrious, Indefatigable, Irrepressible and Irreconcilable Foe of the Partitive Genitive, and Old China Hand, Judge Mark V. Holmes.

And there are no surprises, fair or unfair, here, but a good lesson on when Tax Court pleadings can be amended.

This is apparently a big-ticket case, Estate of Marion Levine, Deceased, Robert L. Larson, Personal Representative and Trustee, Robert H. Levine, Trustee and Nancy S. Saliterman, Trustee, Docket 9345-15, filed 11/20/15.

And it’s consolidated with another case so captioned at Docket No. 13370-13, which Judge Holmes says was on the 6/15/15 trial calendar in Minneapolis, MN, except the Tax Court docket search only shows the consolidation order on that date, and Judge Holmes’ order says there’s no trial date.

Be the procedural issue what it may, IRS wants to amend its answer to add Section 6501(c)(9) inadequate disclosure as a ground for blowing off the SOL altogether, in addition to the Section 6501(e) substantial omission IRS is using to try for 6SOL.

The Pers Rep and Trustees yell that they already moved for summary J so IRS is too late, IRS’ latest position contradicts their earlier position on SOL, and they’ve been ambushed (unfairly surprised).

First, the basics. “Whether a party may amend its answer lies within the sound discretion of the Court. In determining the justice of allowing a proposed amendment, the Court must examine the particular circumstances of the case, and consider, among other factors, (a) whether an excuse for the delay exists; and (b) whether the opposing party would suffer unfair surprise, disadvantage, or prejudice.” Order, at p. 2 (Citations omitted).

Next, delay. True, the answer was filed in June, but then there was informal discovery, followed by some stipulations. In a big-ticket, complex case, this isn’t unusual delay.

Now for contradictory pleading. “Petitioners objected, and argue that respondent wasn’t diligent in asserting this ground and that it’s inconsistent with the ground he’s already asserted in his answer. But, Tax Court Rule 31(c) allows for alternative arguments.” Order, at p. 1.

Or as the late great Gilda Radner was wont to remark: “If it’s not one thing, it’s another.”

Finally, unfair surprise. And I stress “unfair” because Judge Holmes does. “Unfair” doesn’t mean your adversary stumbles upon the theory that sinks your case without trace.

“The Court can see no unfair surprise, disadvantage, or prejudice to petitioners. There may well be prejudice or disadvantage in the sense of having to counter a new argument that might be difficult to argue against. But to justify not allowing an amendment, prejudice must be unfair, which in this context doesn’t mean lowering petitioners’ probability of success but rather means lowering the probability of reaching a just result in the case. This usually means an amendment filed so late that trial would be delayed… or the addition of a new theory of recovery. It doesn’t include circumstances where a summary-judgment motion prompts the Commissioner to come up with a new argument.” Order, at p. 2. (Citations omitted). (Emphasis by the Court).

And we’re not on the eve of trial, with discovery concluded, witnesses lined up and their stories tied down, exhibits at the ready and lawyers at the point of nervous collapse.

“There is no trial date, and the proposed amendment — if not quite purely legal (there must be proof of the return petitioners filed) isn’t a gateway to a vast new program of discovery.” Order, at pp. 2-3.

Go amend, IRS.




In Uncategorized on 11/19/2015 at 17:13

Another mix-and-match tax dodge of that accomplished immunologist Mr. Jim Haber gets unhorsed in AD Investment 2000 Fund LLC, Community Media, Inc., A Partner Other Than the Tax Matters Partner, 2015 T. C. Memo. 223, filed 10/19/15, Judge Halpern, who’s been there from the beginning, putting the hems on Jim’s inventiveness. I’ve blogged this case and its siblings, most of whom are quoted in Judge Halpern’s opinion, so I won’t reiterate them here.

Jim, of course, doesn’t testify, as his Fifth Amendment right had been earlier secured.

It’s the classic European digital option game, an offsetting gain being unrecognized while the guaranteed loss creates a bailout for corporations with big BICG. Jim Haber was flogging those deals even after IRS fired a warning shot in Notice 2000-44, 2000-2 C.B. 255, back in August, 2000. And misrepresenting facts to coax opinion letters out of various law firms upholding these shenanigans.

Even better was the way that Jim Haber guaranteed the options would never hit the “sweet spot,” whereat the heavy money would pour into the participants’ laps.

Lehman Bros., late but unlamented, was in on it. For a fee, Lehman acted as counterparty, calculation party, and execution party, resembling Poohbah of Mikado fame. And no, the execution party is not the firing squad, it’s the party who carried out the trades at the magic day when the options had to be exercised.

Lehman as calculation party could choose the strike price, and had a 3-pip leeway in making the election (which only had to be commercially reasonable, and everybody agrees 3-pips is reasonable). But the deal was structured so there was only a 1-pip leeway. And Lehman had no fiduciary duty to the “partners” in the deal. So Lehman could always be 1-pip high or 1-pip low.

This structure guaranteed this charade could never make money; in short, the perfect Bialystok (cf. Mel Brooks’ masterpiece The Producers).

Judge Halpern employs “somber reasoning and copious citation of precedent” to dash Mr. Haber’s brainchild to the ground.

IRS’s counsel fails to introduce evidence about $772 of interest deduction, so that gets allowed.

And as this is a FPAA, the impact on the “partners” themselves must abide further proceedings.

Of course, the 40% substantial undervaluation is in play, as is the 20% negligence chop.


In Uncategorized on 11/18/2015 at 15:35

Bruce Edward Haddix and Rae Ann Haddix, 2015 T. C. Memo. 220, filed 11/18/15, could sure use the Greek Deus ex Machina, but the machina they used, apparently a USPS self-service kiosk, dated their petition one day late (August 16 rather than, as Bruce and Rae Ann claimed, August 15, the last day of the thirty), and it arrived at 400 Second Ave in The City that L’Enfant Built eight days late. So Judge Vasquez must bounce Bruce’s and Rae Ann’s CDP review.

This is a variation on the Section 7502 mailed-is-filed gambit, and it’s warning to practitioners.

Just because the USPS owns and operates the postage meter, it’s still a postage meter, and you can’t control it. So the date that’s shown on the postage issued by USPS is the date you’re stuck with. And the date may change after the last minute that a piece of mail posted in the dropbox in the post office would be postmarked with the date you’re trying to establish. So remember, if the magic moment is 5 p.m., using the self-service kiosk at 5:01 p.m. may not help you. You’ll get the next day’s date on the machine-made postage.

Now Judge Vasquez is very careful. He’s not ruling on whether the self-service kiosk date is a Section 7502 qualifying postmark.

“We need not address whether the markings in question constitute a postmark for purposes of section 7502 because the existence (or nonexistence) of an August 16, 2013, postmark does not affect the outcome in this case. We must, in other words, dismiss the case for lack of jurisdiction under either scenario. For instance, if the markings constitute a postmark, section 7502 offers no comfort to petitioners because they failed to satisfy the threshold prerequisite to the application of section 7502—a timely postmark. If, on the other hand, the markings do not constitute a postmark, thereby opening the door for extrinsic proof by petitioners that their petition was mailed on or before August 15, 2013, petitioners have nevertheless failed to carry their burden of proving that the petition was timely mailed. Petitioners in fact chose not to attend the hearings or provide documentation from the U.S. Postal Service (i.e., certified mail receipt) or other persuasive evidence establishing that they mailed the petition on or before August 15, 2013. The only evidence of mailing that petitioners presented is a copy of a bank statement–attached to their response to respondent’s motion to dismiss–showing a credit card charge on ‘August 16, 2013 12:00 a.m.’ This evidence alone is clearly not sufficient to prove that they mailed the petition by the August 15, 2013, date.” 2015 T. C. Memo. 220, at p. 8. (Emphasis by the Court).

I need not elaborate. But if you’re really interested, see my blogpost “Stamp Out Stamps,” 10/23/14. Practitioner, read and heed.

Further to the foregoing, I received the following e-mail on 8/6/16, purportedly from Bruce Haddix, which I here reprint without comment:

Comment: You totally misrepresented the facts. The Petition was mailed within 30 days, the label was intentionally blacked out by a branch of the US Government. We now have 2 intentionally blacked out labels dated 2 years apart.

Judge Juan F. Vasquez cheated by ignoring the Order putting the MTD in Abeyance and for the case to be continued for trial.

Judge Juan F. Vasquez cheated by granting Motion(s) to Quash without affording the parties the right to challenge the truthfulness of the facts presented.

Judge Juan F. Vasquez cheated by denying Motions to Vacate Motions to Quash based on fact these motions were based upon bald face lies.

Have you ever heard of the right to a fair and speedy trial? This case is about exposing the corruption in Johnson County Texas. Watch Conan O’Brian gets Deputized.
You should have done a little more research before doing the story, we now have 2 blacked out mailing labels and 3 tax cases, with more added each year. Also civil case Jeremy Ryan Haddix v. State of Texas and the criminal conduct that occurred on that case.

Cheating is Cheating, get the story right!


In Uncategorized on 11/17/2015 at 17:08

Two little words spark a 108-page full-dress T. C. opinion from Judge Gale. The two little words? “Refers to.” The full-dress T. C. opinion? Loren E. Parks, 145 T. C. 12, filed 11/17/15.

And the two little words “refers to” refers to legislative proposals, as to which a private foundation attempts to influence legislation and/or the opinion of the general public, and thereby incurs sundry excise taxes. Of course, the degree of specificity of the reference is nowhere explicitly spelled out.

And the opinion spends a lot of time on one word: “educational.” What is “education” as opposed to advocacy?

Judge Gale is at pains to point out that this is not a Citizens United v. Fed. Elec. Comm., 558 U. S. 310 (2010) case, because the issue here is the excise tax payable by the tax-exempt private foundation and its manager, to discourage subsidies of political speech, rather than the outright prohibition thereof.

Specialists should read this case for Judge Gale’s lengthy exegesis of Rev. Proc. 86-43, 1986-2 C.B. 729. What is “educational,” rather than advocacy, gets a thorough going-over.

Finally, the Regs are not unconstitutionally vague. It’s true that the standard is somewhat looser than the strict scrutiny of Citizens United, but there direct regulation of speech and criminal penalties were involved. Here, only the excise taxes, and no subsidy for political speech.

Most of the private foundation’s radio blasts incur the excise tax, but three slip through the “educational” gate.

Me, I’m a simple guy, so I couldn’t tell the difference. Maybe that’s why I don’t give “a reasoned written legal opinion” to private foundations or their managers when these want to duck the excise taxes, per Reg. 53.4945-1(a)(2)(vi), of which sub-subsection’s existence and purport I was, until now, delightfully unaware.

But if you do give such opinions, practitioner, read this case. Mark, learn and inwardly digest it, because here be dragons.