In Uncategorized on 06/08/2016 at 17:14

I would have taken a pass on James Clement Powell and Lucy H. Powell, 2016 T. C. Memo. 111, filed 6/8/16.But there’s a twist, although it isn’t at first apparent.

It was another run-of-the-mine unsubstantiated deductions (hop-farming in Hillsborough, NC, and Section 274 car mileage, of which Judge Pugh allows JC a pittance) deficiency with an arithmetic (transposition) error thrown in.

Footing errors usually don’t figure in Tax Court cases, but since the error was mentioned in the SNOD, Judge Pugh decided she had jurisdiction. And since IRS didn’t claim the number that gave rise to the transposition error was bogus, Judge Pugh corrected the mistake. The Rule of 9 saved JC and Emily.

JC and Emily had twice been to Tax Court before, so Judge Pugh admonishes them. “Petitioners have appeared before the Court on two previous occasions and are aware of the rules requiring substantiation of their expenses.” 2016 T. C. Memo. 111, at p. 16.

It’s nice when you’re a frequent flyer and aircrew recognize you, as happened recently to a certain Principal-to-be in a Big Four accounting firm. It is less good when Tax Court Judges give you the “Here comes the Rounder” look.

But the best is saved for last.

JC and Emily want to sue IRS for damages. And in the words of a certain elected official, “Yes We Can.”

See Section 7433. Judge Pugh explains.

“Petitioners seek $25,000 and $10,000 in damages for tax years 2011 and 2012, respectively, from respondent under section 7433.  Section 7433(a) provides that a taxpayer may bring a civil action for damages against the United States in a U.S. District Court if an officer or employee of the Internal Revenue Service recklessly or intentionally or by reason of negligence disregards any provision of the Internal Revenue Code.  This Court therefore lacks jurisdiction to hear petitioners’ section 7433 claim.  See, e.g., Petito v. Commissioner, T.C. Memo. 2002-271.” 2016 T. C. Memo. 111, at pp. 19-20.

And for readers with exceptional memories, petitioner in the Petito case aforementioned appeared in my later blogpost “Save the Cutesy,” 7/1/14.

So now it’s off to The Hill Far Above, and the semicentennial gathering of a class of distinguished attorneys (not including me) who passed through that illustrious institution so long ago.

And to drink to absent friends.

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