In Uncategorized on 03/31/2017 at 16:06

Maybe this case should have gone to Appeals again to begin with. It certainly went nowhere since January.

What case is that, you may ask. Well, you came to the right place, because, as a much better writer than I put it, “I’m willing to tell you. I’m wanting to tell you. I’m waiting to tell you.”

It’s James L. McCarthy, Docket No. 21940-15L, filed 3/31/17, today’s designated hitter. Remember James L. (“Poor Jim”) McCarthy? What, you don’t? Well, check out my blogpost “The Twelfth of Never,” 1/18/17.

Now you recall that Judge James S. (“Big Jim”) Halpern blew off cross-motions for summary J.

So they went to trial. I did not attend, being out of the country. Even if I had attended, it was a game that ended in a scoreless tie. That helped neither side.  So Judge Big Jim suggested the parties go back to Appeals, so Appeals could consider Poor Jim’s alleged assets-in-trust, with whatever benefit the trial testimony might furnish, and also ponder the discretion question Judge Big Jim first posed back in January.

So Judge Big Jim, Poor Jim and IRS all agreed to put the following conundra to Appeals. Y’all can try to craft your own answers, but no prize for the correct answers.

“Does the IRM foreclose Appeals from accepting an OIC from petitioner that leaves in place the terms of the District Court’s restitution order requiring periodic restitution payments over a term in excess of 24 months?

“If so, how can a policy allowing for the exercise of discretion that, as a practical matter, will never be exercised, regardless of the surrounding circumstances, be other than arbitrary? Cf Quality Software Sys., Inc. v. Commissioner, T.C. Memo. 2015-107 at *21 (‘By having discretion to reinstate OIC agreements, but choosing never to exercise that discretion, without providing any sort of justification, Appeals may be abusing its discretion.’).

“If Appeals does have discretion to accept an OIC that leaves in place the terms of the District Court’s restitution order, did (or does) Appeals have any valid grounds on which to reject petitioner’s OIC other than those described in the attachment to Appeals’ Notice of Determination (i.e. ‘Attachment to Letter 3193’).

“If Appeals does have that discretion, and considering the evidence that petitioner previously presented to Appeals, the evidence received at trial, and any other evidence petitioner presents to Appeals on remand, does Appeals accept an OIC presented by petitioner or a partial payment installment agreement?

“If so, why?” Order, at pp. 2-3.

Of course I blogged Quality Software, supra, as my high-priced colleagues would say. See my blogpost “Who Would These Burdens Bear,” 6/12/15.

BTW, Quality Software went back to Appeals and Judge Big Jim entered a stipulated decision 1/21/16. While the decision states Appeals’ supplemental NOD is sustained, the decision doesn’t state what the supplemental NOD determined.

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