Attorney-at-Law

THE JUDGE BOOTS HIS “S”

In Uncategorized on 04/26/2017 at 14:57

Kevin DeWitt Skaggs’ case is now Docket No. 15944-16S, filed 4/26/17, but it won’t be 15944-16S for long. Judge Buch is booting Kev D’s “S”.

Now usually it’s gambler’s choice when the deficiency and add-ons are under $50K, and Kev D’s are. So why should Kev D have to play strict rules when Section 7463 option was designed for just such cases as his, and he properly elects to go small-claimer?

“Small tax cases are not appealable. Section 7463(b) provides that a decision in an S case ‘shall not be reviewed in any other court’. Neither the taxpayer nor the IRS can appeal a decision in an S case.” Order, at p. 1.

OK, but so what? If the only ones who care are Kev D and IRS, let them try the case smally, or dispose of it on papers, and be done.

Well, there are other parties involved.

“But there is also a cost for the Court and the public, because that same provision also says that a decision in a small tax case ‘shall not be treated as a precedent for any other case.’ Sec. 7463(b). This effectively prevents the Court or parties in future cases from relying on opinions in S cases, which we designate as ‘Summary Opinions’.

“It is perhaps for this reason that the Court has a gatekeeper role to play. Although opting into the small tax case procedure is ‘at the option of the taxpayer’ it must also be ‘concurred in by the Tax Court.’ Sec. 7463(a). Under our rules, if a taxpayer makes a small tax case election and the Court takes no further action with respect to that election, then ‘the Court shall be deemed to have concurred’ with the election. Rule 171(d). Conversely, ‘[t]he Court, on its own motion or on the motion of a party to the case, may, at any time before the trial commences, issue an order directing that the small tax case designation be removed and that the proceedings not be conducted as a small tax case.’ Id. In doing so, we consider whether ‘the orderly conduct of the work of the Court or the administration of the tax laws would be better served by a regular trial of the case.’ H.R. Rep. No. 951800, pt. 4 at 277 (1978). Congress specifically noted in its Conference Report to the 1978 amendments to section 7463 that:

‘removal of the case from the small case category may be appropriate where a decision in the case will provide a precedent for the disposition of a substantial number of other cases or where an appellate court decision is needed on a significant issue.’ Id. at 278.” Order, at p. 2.

But isn’t Kev D going to have a much heavier burden in trying this case, with FRE and Tax Court Rules and all kinds of heavy artillery?

No, says Judge Buch, because this is a motion for summary J, and involves an issue of first impression (although Judge Buch coyly doesn’t tell us what it is). If summary J disposes of the case, Kev D need do no more than he’s already done.

And we’ll have a precedent everybody can cite.

Except.

Kev D is pro se. My rapid Google search does not indicate Kev D is an attorney, a CPA, EA or RTRP, or has any litigating credentials whatsoever. IRS has a gunner from Office of Chief Counsel on this case. This is less a situation for getting a useful precedent for the public at large than a chance for IRS to shoot some poor fish in a barrel, incidentally (or maybe not so incidentally) picking up useful ammo for the next fish-shoot.

A proper precedent, arising out of summary J, should result from a matter fully papered and argued. On both sides.

Remember the Judge with a Heart, STJ Armen, when he had a big case of first impression. He held the S case short, and let a full dress T. C. go through, which was thoroughly argued, appealed, remanded. See my blogposts “Va-T’En, Enfants de la Patrie,” 4/2/14, and  “Revenez, Enfants de la Patrie,” 9/21/16. And that case is still before Tax Court on the remand.

That’s how to establish a precedent.

Footnote: Kev D was doing time, and claimed EITC for his wages as an orderly in the State hospital for the mentally-ill. He tried to argue the hospital wasn’t a jail and he wasn’t an inmate. And lost. See 148 T. C. 15, filed 4/26/17.

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