Archive for March, 2016|Monthly archive page


In Uncategorized on 03/24/2016 at 16:00

It’s appropriate that my fifteen hundredth (count ‘em, 1500!) blogpost should be a designated hitter from…drumroll…The Great Dissenter, s/a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Implacable, Indelible, Irrefragable, Indefatigable, Illustrious, Indomitable, Ineluctable, and Incontrovertible Foe of the Partitive Genitive, and Old China Hand, Judge Mark V. Holmes…cymbal clash…

And it’s our old friends claim preclusion and issue preclusion revisited, in Linda J. Martin & John A. Martin. Docket No. 11015-15, filed 3/24/16.

Lin & John claimed they settled out two tax years on the key issue raised in the latest go-round, the stipulated decision was entered, and so it’s res judiciata (that is, claim preclusion). Or “rees judy-cater,” as a professor remarked on The Hill Far Above, so long ago.

Judge Holmes: “And so it is — but only for their 2007 and 2008 tax years, not their 2009 and 2010 tax years that led to this case.” Order, at p. 1.

Every year is a brand-new year. What was decided in the past for a year no longer at issue doesn’t apply, except….

Don’t you just love exceptions? Makes my day.

“The doctrine that the Martins might plausibly invoke is collateral estoppel, which bars re-litigation of an issue that was tried and decided in a previous case. But ‘decided’ here means decided by a judge — they settled their earlier case and that means that they do not got [sic] the benefit of collateral estoppel.” Order, at p. 2.

Entering a decision off a stipulation is only a pro forma agreement to what the parties agreed.  It invokes neither claim preclusion nor issue preclusion.

It’s not the fifteen hundredth time I’m saying it; it only feels that way.

Stipulate, don’t capitulate.


In Uncategorized on 03/24/2016 at 15:36

This coming Sunday marks Anniversary 49 of my admission to the Courts of The Empire State. While I have not quite followed the words of the late great Woody Guthrie, it sometimes feels like “my poor feet have traveled a hot, dusty road.”

And here’s the name of one with whom I dealt on a deal on East 25th Street here in the Apple some thirty-six years ago, Earle Altman. It’s Annabelle Limited Partnership, Earle M. Altman, Tax Matters Partner, et al., Docket No. 17523-13, filed 3/24/16.

Earle claims he’s tax matterer for Annabelle and a sibling, but Judge Kerrigan finds Earle wasn’t. Earle might be a partner for FPAA purposes, but that doesn’t make him either tax matterer or notice partner. Earle’s individual name never shows up on the partnership list. But in reviewing all the documents, Judge Kerrigan finds that “”915 Broadway Realty Associates, C/O Earle Altman” is listed as tax matterer.

IRS says, ”dismiss for no jurisdiction, as Earle is neither tax matterer nor notice partner.”

Judge Kerrigan won’t do it.

915 Broadway Realty Associates was the TMP for the years at issue, Earle is TMP for 915, so Judge Kerrigan orders the caption amended to put in 915 and take out Earle, but Earle can, if he wishes, ratify the petition (blue ink, old man). If he doesn’t ratify, he’s out.

Another stroll down the hot, dusty road of Memory Lane.


In Uncategorized on 03/24/2016 at 15:13

No, not my fellow Phi Beta Kappa member Nathaniel Hawthorne’s 1837 short story collection, rather this is the story of Jason M. Scheurer, Docket No. 25308-14, filed 3/24/16.

Judge Lauber tells the story. J is trying to prove some partnership deductions passed through to him on the ordinary-and-necessary track, but IRS claims these were contributions to capital or loans. And there’s also the question whether J, Louis and Manny were partners carrying on a trade or business.

J claims he needs the testimony of Kevin Zinn, who ran an outfit with which J and partners did business. J also asks a wee bit late, although he did try on the trial to get Kev’s testimony in. It was ruled cumulative at the time; it would only prove (or not prove) what had already been proven (or not proven) by other testimony and documents.

J tries again. But there’s a hitch. Kev was in the slammer in MS when the trial took place last November. Kev has since moved to the Federal Correction Facility at Ft Dix, NJ.

As one who has visited Ft Dix (but not, definitely not, the Federal Correction Facility there, or anywhere else), I cannot recommend it to the tourist.

So J wants to get Kev’s testimony, and claims the Ft Dix guardians would let Kev talk. But four (count ‘em, four) months have gone by since the record was closed on the trial.

No, says Judge Lauber, Kev’s testimony does nothing.

“Reopening the record for the submission of additional evidence lies within the sound discretion of the Court. A court will not grant a motion to reopen the record unless, among other requirements, the evidence in question is not merely cumulative; the evidence is material to the issues involved; and the evidence probably would change the outcome of the case.” Order, at p. 2. (Citations omitted).

J had to keep records, and he claims he put in whatever he had. He had three witnesses testify about his business dealings. What Kev knows about how J’s alleged partnership worked doesn’t add to what has already been testified.

Besides, IRS already has done their post-trial brief. Taking Kev’s deposition would impose additional work on IRS, and nothing J has suggested Kev might say could justify doing that.


In Uncategorized on 03/24/2016 at 14:23

That’s the story of STJ Diana L. Leyden, who comes out of the Taxpayer Advocate role at the New York City Department of Finance (and man, do the New York City taxpayers need an advocate!), headed for the STJ platoon at 400 Second Street, NW.

STJ Leyden’s distinguished cursus honorum is available for inspection at

I have no doubt STJ Leyden will give the taxpayers a fair shake in Tax Court.


In Uncategorized on 03/23/2016 at 17:18

See my blogpost “Yes In Deed,” 7/15/12. Then read, and weep if you must, Bayne French and Christine French, 2016 T. C. Memo. 53, filed 3/23/16.

Judge Marvel has a word for the conveyancer, when dealing with the conservation easement.

State that the conservation easement deed embodies the entire agreement of the parties. Better still, drop the “good and valuable consideration” toxic boilerplate, and talk about how the grantors love the wide-open spaces and how they’re getting nothing but psychic satisfaction from the whole deal. Use the “no goods or services” language from Section 170(f)(8). Have grantor and grantee both sign and acknowledge.

Remember, without the “contemporaneous acknowledgment” from the donee, with all the magic language in it, no deduction.

Judge Marvel doesn’t even have to deal with whether Bayne and Chris actually owned what they claim they gave away, nor whether what they gave away (if anything) was worth what they claimed it was worth.

I’ll repeat what I said back in 2012, in the abovecited blogpost: “Note to dirt lawyers: Please don’t use boilerplate printed real estate forms for making a conservation easement. The old ‘ten dollars and other good and valuable consideration’ bargain and sale deed form, available at dime-store prices, might be good enough for a routine single-family house sale, but not for a big-time transaction with heavy-duty tax deductions on the table. Read the IRC; draft your language with great care. Have both grantor and grantee sign the deed. Use a proper integration clause.”

After Judge Marvel unloaded on Bayne and Chris, I wager someone is getting The Phone Call.


In Uncategorized on 03/22/2016 at 15:31

We get a short-and-sweet reprise of Rick Astley’s 1988 hit from Judge Foley, and it really helps Paul W. Grauer, 2016 T. C. Memo. 52, filed 3/22/16.

The issue, for you collection specialists, is the waiver of SOL, Form 900, fetchingly and tautologically entitled Tax Collection Waiver. IRS has one, and Paul is claiming SOL against an NITL thirteen years after Paul W. filed a return showing a balance due, which Paul didn’t pay.

Paul W. filed the Form 12153, and at the face-to-face CDP “…contended that a typographical error (i.e., the waiver’s ‘May 8, 20015’ expiration date) renders the waiver invalid; the waiver was not agreed to in connection with an installment agreement; and the period of limitation for collection relating to 1998 had expired before respondent issued the February 11, 2013, notice of intent to levy.” 2016 T. C. Memo. 52, at p. 3. I include the dates, because they’re relevant here.

Appeals gives Paul W. a NOD affirming the NITL, and Paul W. petitions.

IRS’ case rapidly becomes unglued.

IRS first claims this is a second NITL, and the only-one-swing-at-the-baseball rule applies. But then IRS concedes the account transcript, based upon which the first NITL is asserted, is wrong. So there is jurisdiction, and Judge Foley goes to it.

Paul W. claims he never entered into an IA, and Section 6502(a) links the Form 900 SOL waiver to an IA. Obviously, if there’s an IA, the clock is ticking while the taxpayer forks over the installments; if the taxpayer stops forking at any time, IRS has to be able to grab whatever wasn’t forked.

IRS forks over the Form 990 at the trial, but the IA to which it is referenced is nowhere to be found.

Judge Foley: “In fact, respondent’s [IRS’] only evidence that such an agreement exists is an account transcript that he concedes is inaccurate and an indecipherable and unconvincingly explained collection of numerical codes. Accordingly, we find that an installment agreement was not agreed to in connection with the waiver, and the 10-year period of limitation for collection has expired.” Order, at p. 5.

Paul W., time for a Section 7430 motion?


In Uncategorized on 03/22/2016 at 07:27

Here in the Big Apple, we have endless tour busses traversing our streets and byways, whereon cicerones enlighten the visitor in all the tongues of Babel. For some time a favored version thereof is the “hop on, hop off.”

As a native I have never boarded such as they, but I am reliably informed that one’s ticket entitles one to get on or off the vehicle at selected points, to ogle and selfie ad lib., rejoining when another of that ilk arrives.

Looking at the number of those who follow this blog (few in number though they be), I note that over the last couple months (good morning, Judge Holmes, how are ya?) the number reported by varies from 180 to 179, changing daily, without apparent explanation.

Perhaps I have unknowingly crafted the first hop on, hop off, blog.


In Uncategorized on 03/21/2016 at 15:05


No, I am not yet taking my current fight with The Empire State’s Attorney General to the Internet just yet, although I reserve all my rights.

Today’s story has to do with the date-stamping procedures of Tax Court’s e-filing mechanism, as explained by that technologically-challenged yet still The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Implacable, Ineluctable, Irrefragable, Indefatigable, Incontrovertible, Illustrious and Industrious Foe of the Partitive Genitive, Judge Mark V. Holmes.

And this one involves our old chum Ernest S. Ryder. Remember him? What, no? Then check out my blogpost “Privileged Characters,” 5/21/15.

There, now. So today it’s Ernest S. Ryder & Associates, Inc., APLC, et al., Docket No. 14619-10, filed 3/21/16.

IRS wants to amend its pleadings. Judge Holmes says OK, but January 29 is the last day.

The 1111 Constitutional Ave, NW, team expend some midnight fossil fuel, and the fruits of their nocturnal labors get date-stamped by the electronic flailer at 400 Second Street, NW, on January 30, between 3:44 a.m. and 3:59 a.m.

Ernest of course yells “foul!”

Judge Holmes: “All ready to pounce on dilatory counsel, the Court set up a conference call…. Respondent’s [IRS’] counsel patiently pointed out to us and petitioners’ counsel the Court’s own website, where we have posted the Practitioners’ Guide to Electronic Case Access and Filing. Page 32 plainly states that ‘A document is considered timely filed if it is electronically transmitted no later than 6:00 a.m. Eastern time on the day after the last day for filing.’ United States Tax Court, access.htm (last visited March 21, 2016).” Order, at pp. 1-2.

So, duly chastened, “this somewhat technologically backward division of the Court” lets IRS file its amended stuff.

Takeaway—As a much more exalted Personage remarked, “Stay awake, for you know not the hour.”


In Uncategorized on 03/18/2016 at 15:04

The IRS has the perfect formula for denying a taxpayer any recovery when they grab a State income tax refund, or, in today’s slice-of-life from The Glasshouse on Second Street, NW, grab the taxpayer’s Social Security benefit.

Grab and do nothing.

All David B. Rabbani, Docket No. 1100-16S, filed 3/8/16, got was “…the letters dated November 10 and December 9, 2015, issued to petitioner by the United States Department of the Treasury, Bureau of the Fiscal Service, advising of the reduction in Social Security benefits through the Federal Payment Levy Program pursuant to ‘a ‘tax levy’.” Order, at pp. 1-2.

IRS says there never was a SNOD or a NOD, that the liabilities had to do with TFRPs from 2007 for an employer either Dave or Mrs Dave was running.

Dave agrees. “…(P)etitioner did not directly dispute the jurisdictional allegations set forth in respondent’s motion, stating: ‘As of the present time, petitioner has not received a single notice of deficiency, notice of intent to levy, notice of the right to a hearing, notice of federal tax lien filing, notice of the right to a hearing, the year(s) of deficiency or the amount of deficiency or a single document for that matter.” Rather, petitioner emphasized the lack of such a notice as one of his primary complaints, and he reprised contentions from his earlier filings regarding lack of ownership of the purported underlying business entity. He also reiterated his extensive efforts to clarify or resolve the matter administratively with the IRS.” Order, at p. 2.

But even The Judge With a Heart, STJ Armen, is helpless.

“Critically, no communication reflected in the record of this case constitutes, or can substitute for, either a notice of deficiency issued pursuant to section 6212, I.R.C., or a notice of determination issued pursuant to section 6320 and/or 6330, I.R.C. Only a narrow class of specified determinations by the IRS can open the door to the Tax Court. Letters regarding the Federal Payment Levy Program, the sole documentation offered by petitioner to date, do not fall into that class. Regardless of the merits of petitioners’ complaints, nothing in the record of this case suggests that the Tax Court is a forum where those merits may be heard or redressed. Congress has granted the Tax Court no authority to afford any remedy in the circumstances evidenced by the record in the instant proceeding.” Order, at p. 3.

And the restraint on enforcement and collection only applies while there’s a valid SNOD or NOD, and timely-filed petition.

Dave is out.


In Uncategorized on 03/17/2016 at 17:36

Judge Gerber sends the message to Estate of Sarah D. Holliday, Deceased, Joseph H. Holliday, III, and H. Douglas Holliday, Personal Representatives/Executors, 2016 T. C. Memo. 51, filed 3/17/16. And the only pot of gold in this tale is the one IRS grabs from Joseph H. and H. Douglas, with $785K in it (plus interest).

The late Sarah and her even later husband were “frugal and accumulated substantial assets,” 2016 T. C. Memo 51, at p. 2. Joseph H. and H. Douglas wanted to make sure the late Sarah’s frugality descended to her descendants without the IRS’ shortstopping.

So although later husband set up trusts, Joseph H. and H. Douglas flipped for a FLP. And their Tennessee approach gives the game to IRS.

“Section 5 of… limited partnership agreement, however, provides, in part: ‘To the extent that the General Partner determines that the Partnership has sufficient funds in excess of its current operating needs to make distributions to the Partners, periodic distributions of Distributable Cash shall be made to the Partners on a regular basis according to their respective Partnership Interests.’ 2016 T. C. Memo. 51, at pp. 5-6.

The late Sarah has a 99.9% limited partner’s interest in said FLP, and did get a check. Once.

Mox nix, argue Joseph H. and H. Douglas. “When asked at trial what he believed the term ‘operating needs’ meant, Mr. Holliday [Joseph H.] testified: ‘[I]t seemed to me when I reviewed this document, when it was signed, that it was created, that this seemed to come from some sort of boilerplate for Tennessee limited partnerships, this sort of gave you broad powers to do anything you needed to do, including make distributions. But that wasn’t necessary. No one needed a distribution.” 2016 T. C. Memo. 51, at p. 10.

Sorry, Joseph H., that’s enough to sink you.

“Section 5 of [FLP’s] limited partnership agreement unconditionally provides that decedent was entitled to receive distributions from [the FLP] in certain circumstances. Further, Mr. Holliday’s testimony makes it clear that had decedent required a distribution, one would have been made. On the basis of the facts and circumstances surrounding the transfer of assets to [FLP], we believe that there was an implied agreement that decedent retained the right to ‘the possession or enjoyment of, or the right to the income from, the property’ she transferred to [FLP]. See sec. 2036(a)(1).” 2016 T. C. Memo. 51, at pp. 10-11.

And of course the late Sarah never got full and fair consideration for the millions in marketable securities she handed over to the FLP.

Joseph H.’s and H. Douglas’ claim of theft prevention and caregiver abuse go by the boards, as one of them saw the late Sarah weekly. And the late Sarah held onto a lot of assets that never made it into the FLP, so protection from predatory tort lawyers is a wee bit far-fetched. And trusts would have worked as well, since the late Sarah’s even later husband’s trusts worked fine. The only reason for a FLP was to dodge taxes.

Takeaway—Remember the “TEN DOLLARS and other good and valuable consideration” blowing up a conservation easement deduction. Watch those boilerplate provisions. Boilerplate can be hazardous to your tax health.