In Uncategorized on 10/26/2016 at 15:53

Well, no old-time theatre buff has ever corrected my assertion that the title hereof derives from George Kelly’ s 1924 comedy The Show-Off, whose lead character Aubrey Piper solemnly intones those words with a flourish of an ebony walking-stick.

But those words should mean a lot to Clyde A. Arashiro, 2016 T. C. Sum Op. 70, filed 10/26/16. And Judge Gale goes to some lengths to tell him why.

Clyde got lassoed by the cattle sheltering of Walter J. Hoyt III. Hoyt III was quite a promoter, eventually getting nailed for “fraud, mail fraud, bankruptcy fraud, and money laundering.” 2016 T. C. Sum. Op. 70, at p. 4, footnote 2.

Clyde kept taking the phony deductions thrown off by Hoyt III even after IRS fired a couple warning shots (hi, Judge Holmes), telling Clyde he was up for some chops.

Clyde got chopped, but is fighting about additions to tax and penalties.

And Judge Gale agrees that the only issue here is the chops.

Clyde puts in a Form 906, Closing Agreement on Final Determination Covering Specific Matters, saying he’ll get a loss for the money he gave Hoyt III, and is off the hook for additions to tax and penalties arising from the Hoyt inflicted upon him (sorry, guys).

Problem: “The copy of the closing agreement in the record is not signed by petitioner or a representative of respondent.” 2016 T. C. Sum. Op. 70, at p. 7.

So Clyde’s reliance on the unsigned copy of the closing agreement is out.

“We reject petitioner’s contention.  The only copy of the closing agreement petitioner produced is not signed by either petitioner or a representative of respondent.  Thus, accepting petitioner’s contention requires us to believe that he signed the closing agreement without making a copy of the signed version and instead–quite implausibly–made a copy of the agreement before signing it and retained that version.  We are unpersuaded by petitioner’s self-serving testimony in this regard… and find that he did not return a signed copy of the closing agreement to respondent.” 2016 T. C. Sum. Op. 70, at p. 13 (citations and footnote omitted, but see the following takeaway).

Takeaway—By Judge Gale in the omitted footnote: “See Rev. Proc. 68-16, sec. 6.07, 1968-1 C.B. 770, 780 (a closing agreement is always signed first by the taxpayer and ordinarily constitutes an offer to agree, while the signature for the Commissioner constitutes acceptance); see also Smith v. Commissioner, T.C. Memo. 1991-412.” 2016 T. C. Sum. Op. 70, at p. 13, footnote 8.

Make three copies, sign all three on the dotted line, keep one, send in the others to IRS, and make sure you get back a fully-signed duplicate original. Keep it in a safe place.

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