John Melvin Corker & Lisa Ann Adame-Corker, Docket No. 19090-16, filed 12/2/16, are pardonably peeved with having missed the cutoff due to the standard pro se conflation of IRS with Tax Court. John & Lisa apparently mailed all sorts of paperwork all over the lot, but missed the Glasshouse at 400 Second Street, NW, by 19 days.

Ch J L Paige (“Iron Fist”) Marvel gives John & Lisa the bad news sympathetically.

A sad tale, but what else is new? This happens almost every day. Notwithstanding all the political chatter about amending Title 26, I have yet to hear anyone suggesting a rule of reason for filing Tax Court petitions.

Well, John & Lisa want their sixty bucks back, especially since Ch J Iron Fist ordered them to send it in before telling them they were late.

Too bad, so sad, John & Lisa. “…, insofar as petitioners have suggested a degree of dissatisfaction with having been directed to pay the filing fee for a case subject to dismissal, they are advised that the filing fee is intended to defray the administrative expense of filing and processing a petitioner’s paperwork, without regard to whether such paperwork establishes a valid basis for jurisdiction and/or a continuing action. Subsequent dismissal or resolution does not affect the fact that a case was begun. Consequently, the filing fee is not refundable by the Court.” Order, at p. 4.

I’ll try again, as I am a man of great patience.

So what price Ethel M. Stewart, Docket No. 9223-16, filed 9/27/16?

Because it looked like John & Lisa wanted to start the case, and Ethel seemed uncertain (or maybe Ch J Iron Fist couldn’t figure out what Ethel wanted), Ethel gets her money back and John & Lisa don’t? But in both cases there was paperwork, a docket number assigned, and an order issued. And the sixty bucks is owed “without regard to whether such paperwork established a valid basis for jurisdiction,” right?

So what’s the rule?

And this is not just another irrelevant rant. More people are involved at the sixty-buck-ticket-to-justice phase than anywhere else. Every Tax Court case starts with something, be it even an unaccompanied money order, a partial copy of a NOD or SNOD, one or more of IRS’ multifarious billets doux that look like a SNOD but aren’t, or even a letter from a confused pro se without a clue.

If there’s a rule, let it be consistent. And let it be known.

Judge Chiechi, Meet Judge Holmes

The issue here involved shows up in a bushelbasketful of orders, but for ease of reference, let’s eyeball Edward J. Tangel & Beatrice C. Tangel, et al., Docket No. 27268-13, filed 12/2/16.

Judge Chiechi has a bushelbasketful of protective order requests from the Tangels and the als, apparently due to IRS subpoenas served on third parties pursuant to Rule 147.

Y’all remember Rule 147, eh what? Well, as a great American once remarked, “you could look it up.”

Rule 147 don’t say nothin’ ‘bout tellin’ the other side.

Judge Chiechi: “A party that issues a subpoena under Rule 147(a) and/or (b) is not required to give prior notice to the other party.” Order, at p. 1.

Moreover, the IRS was genteel. “The Court finds under the facts and circumstances presented that respondent did not issue the subpoenas in question to harass, annoy, embarrass, oppress, or cause an undue burden on petitioners.” Order, at pp. 1-2.

So what?

FRCP 45 does require notice. And Rule 147 hasn’t been touched since 1973, long before the 1991 amendment to FRCP 45.

Gentility has nothing to do with it.

See my blogposts “Judge Holmes’ Vendetta,” 7/8/16, and “The Stealth Subpoena,” 7/16/15.

Maybe Judge Holmes and Judge Chiechi ought to get together for a cup coffee and a piece pie, and peradventure discuss bringing Tax Court into the last decade of the Twentieth Century, if not into the second decade of the Twenty-First.

Innocent spousery is multiform. Today we deal with apportionment, or rather Judge Lauber, recovered from unscrambling defective lodgings and filings, takes up that task in Dwight McDonald and Donna McDonald, 2016 T. C. Sum. Op. 79, filed 12/1/16.

Apportionment falls under Section 6015(c). So let’s go down the checklist. Dwight and Donna filed jointly for years at issue. Check. Dwight and Donna are now divorced and living apart. Check. Donna seeks to bail not later than two (2) years after IRS starts to collect. Check.

So Donna’s cleared the bar.

Now what does she get?

Well, the State tax refunds (unreported) get split 50-50, as the returns that generated same were joint.

And Donna’s unreported wages are all hers.

The biggest items are current losses and carryforwards arising from Dwight’s real estate operation. Though Dwight had a full-time job in RI, both Dwight and Donna owned ten (count ‘em, ten) rental real estate parcels in FL and AL. And Donna did answer the phone when the managing agent called for Dwight’s decisions. She knew Dwight spent a lot of time on the real estate, but he kept all the records in a locked room, to which Donna did not have the key. Donna knows nothing of tax law and relied on Dwight and their CPA.

The CPA figured Dwight was a real estate pro, and told Donna so, but didn’t go over the tax returns with her.

IRS says Dwight “actually participated,” so he gets the $25K of losses, but did not “materially participate,” so loses the rest. Hence Dwight’s tears.

IRS says Donna is innocent, but Dwight disagrees.

Judge Lauber: “The statute does not address burden of proof in the situation we face here, where the IRS supports relief from joint and several liability and the nonrequesting spouse opposes it.  In such cases we ‘inquire whether actual knowledge has been established by a preponderance of the evidence’ presented by all three parties.

“’Actual knowledge’ means ‘an actual and clear awareness (as opposed to reason to know)’ about the item giving rise to the deficiency.  A taxpayer lacks actual knowledge if she ‘is unaware of the circumstances that give rise to error on the tax return.’  In the context of a disallowed deduction, the relevant question is whether the requesting spouse ‘had actual knowledge of the factual circumstances which made the item unallowable as a deduction.’”  2016 T. C. Sum. Op., 79, at pp. 9-10. (Citations omitted, but look them up for your next memo of law).

Quite Cartesian.

Dwight argues Donna knew about the real estate business, answered the phonecalls of the managing agent, and was told by the CPA that either she or Dwight or both were real estate pros. Therefore Donna knew about the dicey deductions.

No, says Judge Lauber. Yes, she knew about the real estate business. But that’s not enough.

Since the distinction between actually participating and materially participating means counting hours, knowing who did what and whether all activities were treated as a single activity (and appropriate election filed), and since Dwight called all the shots and kept the records locked away, no way could Donna know that Dwight was a short-timer. Especially when the CPA said he was the real deal.

The accuracy chops will follow the erroneous items.

I’m only an obscure old-time, beaten-down and beaten-up single-shingle, “with very limited experience and mediocre qualifications,” as a much finer writer than I put it.

But take a look at what an unkind Fate has bestowed upon that Phi Beta Kappa graduate of Yale University, M. A. Clare College Cambridge, and Note Editor of Yale Law Review, now Tax Court Judge Albert G. Lauber.

Here is but one instance wherein he employs his formidable talents and jurisprudential gravitas, namely, viz., and to wit Martha G. Smith & George S. Lakner, et al., 8847-12, filed 12/1/16*.

“…the parties filed a First Stipulation of Facts and exhibits. However, in accordance with the Court’s… Order this document should have been lodged, rather than filed. …the parties called the chambers of the undersigned and informed the chambers administrator that the First Stipulation of Facts and exhibits… had errors in the page numbering and the parties intended to lodge an amended copy. … the parties filed a First Amended Stipulation of Facts and exhibits. Again, this document should have been lodged. In consideration of the foregoing, it is

“ORDERED that the Clerk of the Court shall; (1) change the docket entry for the parties’ First Stipulation of Facts and exhibits to reflect that the First Stipulation of Facts and exhibits was lodged…; (2) add a cover sheet to the parties’ First Stipulation of Facts and exhibits that bears an eLodged stamp…; (3) change the docket entry for the parties’ First Amended Stipulation of Facts and exhibits to reflect that the First Amended Stipulation of Facts and exhibits was lodged…; (4) add a cover sheet to the parties’ First Amended Stipulation of Facts and exhibits that bears an eLodged stamp….” Order, at pp. 1-2.

Da capo al fin.

Edited to add, 8/30/21: Scholar Al did get a chance to show off his considerable judicial expertise in Martha G. Smith and George S. Lakner, et al, 2018 T. C. Memo. 127, filed 8/13/18**, which for some inexplicable reason I did not blog. The issue of Section 104(a)(2) physical injury is interesting here, as George did suffer physical injury, but that was in the year after the $328K settlement Col. Lakner got for employment discrimination. See  T. C. Memo. 2018-127, at pp. 15-19. And Judge Scholar Al was affirmed in USCADC.

*Smith Lakner 8847-12 12 1 16

**Smith Lakner 2018 T C Memo 127 8 13 18

Today I really need white trousers and a striped shirt, and a loud whistle, so that I might continuously rotate my forearms before me after having deafened all within earshot.

Once again IRS deploys the SNOD-after-petition formation. This deft but slimy move has IRS bombarding taxpayer with a bunch of form letters, which elicit a petition, and then claiming there never was a SNOD (notwithstanding that there is no standard form of SNOD, and don’t hang by anything tender until IRS promulgates such a form), moving successfully to dismiss the petition, and then dropping the real SNOD.

Usually by the time the taxpayer (pro se) gets word of the fake, the 90 days has run on the real SNOD.

See my blogposts “Fake Out,” 12/16/14, and “Fake Out – Part Deux,” 6/23/15.

Today’s victim is Gilson Alexander Tallentire, II, Docket No. 19435-16, filed 12/1/16.

Ch J L. Paige (“Iron Fist”) Marvel kicks Gil to the cliché, without mentioning that Gil has time to refile if he files anew at once, or even sends in a letter, which can be characterized as an imperfect petition from the “real” SNOD.

I call illegal procedure! Tweet!

Footnote- Ch J Iron Fist’s predecessor ex-Ch J Michael B. (“Iron Mike”) Thornton rightly tipped off the taxpayer in the second of my blogposts abovecited.