Attorney-at-Law

PLAY IT NOW, PLAY IT NOW, PLAY IT NOW

In Uncategorized on 05/19/2017 at 15:04

I take my text for today’s sermonette (a Friday when nothing much happens at Tax Court) from Neil Diamond’s 1970 serenade to a vinous by-product that has never appeared upon my table (and hopefully never shall).

Here’s the story of Steven L. Ertelt, Docket No. 10739-14L, filed 5/19/17.

Steve wants to play the Leroy Muncy gambit, but ex-Ch J Michael B (“Iron Mike”) Thornton upbraids Steve for waiting too long.

And ex-Ch J Iron Mike throws in a $1K Section 6673 chop for lagniappe.

It seems like only yesterday I mentioned the Leroy Muncy gambit. But it wasn’t; it was the day before yesterday. See my blogpost “Delegati Non Potest Delegare, – Part Deux” 5/17/17.

Steve waited until he had run out the clock on his “I never got the SNOD so I can contest liability de novo” opener. He went the Rule 122 route, but that got bounced. Then there was a remand to Appeals to see if the SNOD was mailed to last known address.

The supplemental NOD said it was. Trial was set, IRS moved for summary J, but that was denied because of issues with the PS3877.

Trial was finally held. Steve wanted another remand, but didn’t get it.

Tax Court sustained IRS.

Steve now wants a vacation, to put in the Muncy Eighth Circuit remand discussed in my above-referenced blogpost.

Too late, Steve. Vacations (Rule 161 or Rule 162 variations) aren’t for coming up with could’a would’a should’a theories. As the title of this blogpost says, play it now, play it now, play it now.

That is, if you can.

“Unlike the taxpayer in Muncy, petitioner did not raise in his pleadings, at trial, or on brief the issue he has raised in these motions. Petitioner’s case was before the Court on a notice of determination concerning collection action and in his amended petition petitioner alleged he never received of [sic] a notice of deficiency for the years in issue and ‘therefore has never had a chance to challenge the liability of the proposed tax.’ At trial and in his brief, petitioner’s only argument was that respondent could not prove that he received the notice of deficiency, not that the notice of deficiency was improperly issued. See Rule 331(b)(4) (‘Any issue not raised in the assignments of error shall be deemed to be conceded.’).

“Moreover, petitioner had multiple opportunities to raise the delegation of authority issue presented in Muncy and he failed to do so. The Eighth Circuit decided Muncy on March 2, 2016, and through and until the date of the decision in this case on March 1, 2017, petitioner filed several documents including an objection to respondent’s motion for summary judgment, a motion to remand, a post-trail [sic] brief, and a motion to reopen the record, in addition to a trial that was held on June 20, 2016.” Order, at p. 5.

Anyway, says ex-Ch J Iron Mike, these delegation arguments are frivolous.

Well, if they’re so frivolous, how come Eighth Cir reversed and remanded in Muncy?

Steve’s problem is that, even if he had timely raised the delegation issue, he’s a Californian, and Ninth Cir blew off that argument in Banister v. Commissioner, T.C. Memo. 2015-10, at *9, aff’d, 664 F. App’x 673 (9th Cir. 2016).

“In Banister, T.C. Memo. 2015-10, at *7, the taxpayer argued, among other things, that the notice of deficiency was invalid because it was not signed by an authorized person; the Court dismissed the taxpayer’s arguments as frivolous and imposed a penalty under section 6673. On November 16, 2016, the Ninth Circuit, Banister, 664 F. App’x 673, affirmed the Court’s decision and imposed an additional penalty under section 6673.” Order, at p. 6.

And of course Steve the Californian is Golsenized to Ninth Cir. Ex-Ch J Iron Mike blows off Eighth Cir’s learning in a footnote. True, Ninth Cir themselves gave Banister the brush-off in a memorandum opinion, of which the Court said “This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.” Banister, at p. 1, footnote 2.

Now ex-Ch J Iron Mike might argue that the Ninth Cir Rule 36-3(c)(ii) “sanctionable conduct” exception lets Banister in. But it’s a really thin twig upon which to hang, compared to what Eighth Cir did in Muncy.

Granted, Steve may be every bit as great an obstructionist as ex-Ch J Iron Mike says he is. And maybe Ninth Cir is right and Eighth Cir is wrong, although why this point should depend on arbitrary lines on a map eludes me. We’re dealing with a national tax code, that affects all American taxpayers, and a lot of people and entities who aren’t Americans or aren’t taxpayers. Is it so much to ask for a forum to interpret one uniform rule, right or wrong, for all the aforementioned? And isn’t Federal tax law sufficiently complex to require disputes thereunder to be appealed to a national bench with the requisite expertise, rather than the multiplex-cinema approach that has served us so ill up to now?

All that said, IRS’ counsel certainly didn’t cover themselves with glory, either.

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