The prelude to a bunch of papers in litigated cases gets transformed, as Judge Goeke unloads eight (count ‘em, eight) pages of undesignated order on this poor, hard-laboring blogger and Estate of Richard L. Marshall, Deceased, Patsy L. Marshall, Personal Representative, and Patsy L. Marshall, Transferees, et al., Docket No. 27241-11, filed 6/30/17, just as I was thinking of taking off for the three-day weekend. And I bet Patsy and the als aren’t best pleased either, although this is going to smart for them more than a wee bit.

This is the dénouement of a Section 6901 transferee case, as you’ll deduce from the caption. For an ultra-brief synopsis of the backstory, see my blogpost “Schooled and Unschooled,” 6/20/16.

The dust has settled, the Section 155 beancount is almost done, the lawyers are packing the lit bags, the accountants are shutting the adding machines and folding two miles of tape, when someone says “prenotice interest.”

That’s when the fight starts.

Transferee liability cases compute interest in two parts: first, no earlier than date of transfer up to, but not including, and not after, the date of notice of liability. Next, interest from notice to payment.

State law determines the prejudgment interest (in Tax Court “prenotice”), and here it’s OR. Judge Laro dealt with the TX version in my blogpost “Deep in the Heart of Texas – Part Deux,” 7/8/15.

Anyway, the long and short of it is that the start date for prejudgment interest depends upon knowing the amount due and the date when it became due. That the number is difficult to ascertain and may involve mathematical complexity doesn’t stop the start date if the debtor-taxpayer knew they owed something.

And here the date’s certain, when the Marshalls got the boodle from the mix-and-match Midco.

I’m not quoting Judge Goeke’s law review article here, so he can publish it afresh in the University of Oregon Law Review. After all, that illustrious institution describes itself thus: “(W)e don’t view law school as ruthless competition. We view it as a way to make a positive difference. We’re known for a friendly, supportive, and collaborative environment—and any of our students will tell you this.”

Makes me weep.

Howbeit, the Marshalls get mulcted for $8 million in prejudgment interest. And their shot at equitable recoupment, OR State law or anything else was shut down last June.

“Second, petitioners are not entitled to reductions in judgment based on Or. Rev. Stat. sec. 95.270(3), the doctrine of equitable recoupment, or any other offsets. In Estate of Marshall, we determined that petitioners were not entitled to any offsets, adjustments, or other reductions to the amount of their transferee liability under Or. Rev. Stat. sec. 95.270(5) because they had at least constructive knowledge that MAC’s tax liability would not be paid. Petitioners are now attempting to reduce their transferee liability by making the same arguments under Or. Rev. Stat. sec. 95.270(3) and the doctrine of equitable recoupment in their Rule 155 computations that they presented in their briefs.” Order, at p. 5.

The Marshalls knew the deal was a tax dodge, got the boodle, and moreover got the boodle with a premium of 60% over what anyone else would pay because they knew the Midco was going to walk on the tax liability.

OR statutes talks about “equities,” but the Marshalls have none. For equitable recoupment, use Section 1341, not a Rule 155 beancount. And the Marshalls got whatever credit to which they were entitled under equal access to justice for their fight with the Bureau of Reclamation; no more here.

Have a great weekend.

At odd intervals, I get correspondence from litigants and participants asking me to redact information that appeared in the orders, opinions and decisions I blog.  Section 7461 says everything is public unless the Court otherwise orders. Few be the exceptions.

So removing something from this blog removes nothing from public view; it’s still all on the internet via www.ustaxcourt.gov.

But there is a remedy for the shy, and Bradley Birkenfeld, Docket No. 9896-17W, filed 6/29/17, will show you shy people how it’s done.

Actually, it seems that his trusty attorney, to whom I’ll herein refer as DZ, has the right stuff.

Here’s Ch J L Paige (“Iron Fist”) Marvel to tell y’all all about it.

Pursuant to Rule 27(d), “petitioner’s Motion for Protective Order and To Seal Reference List…is granted in that petitioner’s State of residence and mailing address are sealed.” Order, at p. 1.

And there’s even a sixty-day out for an inadvertent lapse in Rule 27(h).

So, all shy people, bang out your Rule 27 motion to seal, and ship it in with your petition, place of trial and check for the sixty bucks. And tell ‘em Brad and DZ sent you.

Though Judge James S. (“Big Jim”) Halpern hides this whistleblower’s name for thirty days so s/he can take an interlocutory appeal from this order, s/he’d better move fast, or Judge Big Jim will spill the clichés all over the lot.

Here’s 148 T. C. 25, filed 6/28/17, the story of presently anonymous Whistleblower 14377-16W (hereinafter “716 Whiskey”). And the interlocutory appeal from unveiling caselaw is found at 148 T. C. 25, at p. 3, footnote 2.

716 Whiskey is a registered investment adviser. When not working with spouse in spouse’s registered investment advisory business, 716 Whiskey overhauls EDGAR for corporate skullduggery, and has 11 cases before Tax Court petitioning the Ogden Sunseteers’ shoot-downs of his/her blows.

Judge Big Jim is a wee bit skeptical of 716 Whiskey and others of his/her ilk. It came out in a phone-a-thon that “(T)he 11 cases involve in excess of two dozen taxpayers, and all appear to have resulted not from petitioner’s employment by, or other close relationship to, the target taxpayer but from his examination of publicly available materials, such as Securities and Exchange Commission (SEC) Forms 10-K.  We informed petitioner that the public has an interest in knowing the identity of persons using the courts, and that, in deciding motions to proceed anonymously, the Court must resolve the competing societal interests at stake.” 148 T. C. 25, at p. 4. (Emphasis by the Court).

So Judge Big Jim asks 716 Whiskey to dish why he’s afeart of going public. But neither life nor limb is at stake, unlike some other blowers catalogued by Judge Big Jim and whose stories I have blogged. 716 Whiskey neither works for nor has any relationship with the blown, can’t identify any clients of self or spouse who might walk away, or political figures who might retaliate against 716 Whiskey or spouse. 716 Whiskey gave up a CPA license and keeps only the Series 65 wherewith to advise.

Nevertheless, Judge Big Jim might be willing to give 716 Whiskey the benefit of the doubt.

Except.

716 Whiskey seems to be a Serial Blower.

“He has so far brought 11 whistleblower cases in the Tax Court.  He has in his supporting papers identified 21 numbered whistleblower claims (whistleblower claims with a separate processing number assigned by the IRS), and he has in those papers identified by name 26 taxpayers and included by reference (without naming them) 24 more.  He also has pending before respondent four ‘submissions’ (involving, it appears, six numbered whistleblower claims and six taxpayers).  He also admits that he has before respondent 51 numbered claims supplemental to claims in cases already before the Court.  Each of those as-yet-unresolved supplemental claims is potentially the source of another adverse determination and a resulting petition to the Court.  Petitioner’s recourse to publicly available materials to identify supposed tax abuses imposes no natural limit other than his own industriousness on the number of cases he could bring.  His lack of an employment or other close relationship to the taxpayers he identifies suggests that he has no familiarity with a taxpayer’s basis or rationale for taking what petitioner considers an abusive position.  For those reasons, serial claimants of whistleblower awards may disproportionately burden the Court with petitions only superficially meritorious.” 148 T. C. 25, at pp. 13-14. (Footnotes omitted).

The public has a right to know who’s flooding the zone.

Judge Big Jim is also aware that when a Swiss swindler hit a $104 million jackpot whistling from the slammer, a “cottage industry” sprang up.

“Apparently, a cottage industry has sprung up involving mining publicly available documents for the chance to claim a bounty from the IRS. Unless we identify serial filers by name, the public will be unable to judge accurately the extent to which the serial filer phenomenon has affected the work of the Tax Court because the public would not know whether any particular petitioner of an adverse whistleblower determination had filed petitions appealing other adverse whistleblower determinations.” 148 T. C. 25, at p. 15. (footnote omitted).

Now I’m prepared to wager a few bobs that the public couldn’t care less. But I’ll bet the Ogden Sunseteers and the battalion of letter-writers appurtenant thereto, and Tax Court Judges who have to deal with this, care a lot.

And there is no Section 6673 chop for bringing Section 7623s, even if public info is grounds for an immediate toss. Anyway, 716 Whiskey admits all this info is public.

Blowers get special handling if anonymous. “for example, the record is sealed temporarily, the normal procedures for electronic filing and electronic service cannot at this time be used, the case must be assigned to a judicial officer earlier than normal in order to address the motion, and, in some cases, trials and hearing may need to be closed to the public to protect the whistleblower’s anonymity.  The public may wish to know the extent to which petitioners with numerous whistleblower claims require such special handling.” 148 T. C. 25, at pp. 15-16. (Footnote omitted). See my comment supra, as my high-priced colleagues say, concerning public interest.

So if you want to go for the boodle, blower, be prepared to get your name in the papers and in the blogosphere. Along with everybody else who shows up in Tax Court, even those who are shy.

Now lest anyone suppose I’m anti-blower, read my blogposts about the cases Judge Big Jim cites. And remember Harry M. (“The Mark”) Markopolos, who blew the doors on Bernie Madoff years before the SEC awoke to the massive swindle. Harry The Mark was systematically ignored and belittled as a nut, until long after the stable door was unbolted and Bernie Madoff made off with a cavalry division.

But this looks like those prisoner EITCs. See my blogpost “Oversoon,” 4/26/17. So it takes a full-dress T. C. to take them down.

Turns out Judge Ruwe used IRS’ 50% numbers for the Boston Bruins’ snacks and chow-downs yesterday. See my blogpost “Feed Those Bears!” 6/27/17. So today we get Jeremy M. Jacobs and Margaret J. Jacobs, Docket No. 19009-15, filed 6/28/17.

Judge Ruwe modifies his opinion thus: “On page 12 [last sentence], line 19, ‘$127,877 and $142,223, respectively.’ is deleted and ‘$255,754 and $284,446, respectively, for pregame meals provided to the Bruins’ traveling employees while at away city hotels.’ is substituted therefor.” Order, at p. 1.

So Jer and Marg get 100% for feeding the Bruins.

Notwithstanding the words of Jessie J, Dr. Luke, Claude Kelly and B.o.B. from their 2011 hit “Price Tag,” it is about the money, and IRS wants to amend its petition to claim judicial estoppel against Moneygram International, Inc. and Subsidiaries, et al., Docket No. 12231-12, filed 6/27/17.

Y’all will remember Moneygram, having been stomped in Tax Court back in January, 2015, took the Fifth (that is, the United States Court of Appeals for the Fifth Circuit), and scored a per. cur. remand back to Judge Lauber.

And if you didn’t remember, see my blogpost “Maybe You Can Bank On It,” 2/15/17.

Well, aside from giving discounts (which doesn’t mean what most people think it means, when you’re dealing with banks), the question remains whether Moneygram and the subs make loans to their agents, the floggers of Moneygram’s payment instruments, when the agents get money but don’t forward same to MoneyGram forthwith.

Banks make loans, and Moneygram needs to be a bank to get $82 million of Section 581 offsetting capital losses. Moneygram charges no interest, but banks don’t have to charge interest to be banks (although find me a bank that will lend me money at no interest, please).

Now judicial estoppel means that you took one position in a litigation and now want to backtrack when it suits you. Judge Lauber lets IRS amend, claiming Moneygram knew for three years that IRS would take the position that Moneygram wanted it both ways, and amendment is liberal if no prejudice. There are no disputed facts.

If Moneygram made loans to agents by letting them hang onto Moneygram’s money, the relationship between Moneygram and agents is creditor-debtor.

But here’s the kicker: “Respondent contends that petitioner has successfully argued in other courts, including bankruptcy courts, that it has a fiduciary relationship, not a debtor-creditor relationship, with its agents. Respondent wishes to amend his answer to assert judicial estoppel as an affirmative defense.” Order, at pp. 1-2. Neither Tax Court nor Fifth Cir. had considered this before now.

It’s pretty obvious when you think about it. If an agent is holding Moneygram’s cash, and if the cash is a loan, should the agent tank and file Chapter, Moneygram is just another unsecured general creditor, likely to get a scanty serving of cold bortscht when the goodies are doled out. But if the agents are trustees or fiduciaries, the cash always belongs to Moneygram and hands-off to the creditors, secured, unsecured or otherwise.

This is not a tangential issue. Banks make discounts, but they also make loans without discounting commercial paper.

Should be interesting reading when this all sorts out…if they don’t settle.

So often do ex-spouses whose divorce decrees specify the other spouse must pay all income tax liabilities discover the hard way that IRS doesn’t enforce divorce decrees. That the ex-spouse so obligated stiffs both the loved-once and the IRS is unfortunate, but STJ Diana L. Leyden is no more sympathetic than any other judge: the law is what it is, and the State court decree cuts no coarse-grain Dijon in the USTC.

I’ve given up citing to the large number of such cases I’ve blogged, and the unblogged substantially exceed the blogged.

Today, however, Patrice Anna Butsko, Petitioner and Geoffrey W. Butsko, Intervenor, Docket No. 17147-16S, filed 6/27/17 show how to save a Section 6015 innocent spousery when it’s about to crater.

Patty Ann petitions a NOD dumping her innocent spousery, even though Geof was supposed to pony up the tax, add-ons and chops, because he didn’t. It’s a “stand alone,” that is, an application for innocent spousery without a SNOD involved.

Patty Ann wasn’t done, though. She haled Geof into the Circuit Court of Loudoun County, VA.

STJ Di picks up the tale. Patty Ann sends STJ Di a billet doux: “Please find the following documents that relate to the satisfaction of the IRS outstanding taxes and responsibility. The matter was tried, in Loudoun County… and resolved in court… with proof of payment. Please let me know if there is any other documentation that is needed for the closing/withdrawing of the above mentioned Docket number (removal from the case).

“Petitioner attached to her letter a copy of an order from the Circuit Court of Loudoun County… finding that intervenor was found in willful contempt for his failure to pay the 2010 tax liability and ordering him to either pay in full or establish an installment agreement with the IRS to pay the entire tax liability for 2010…. Petitioner also attached to her letter a copy of correspondence from intervenor’s attorney in that case… stating that intervenor had paid, among other tax liabilities, the 2010 tax liability and including a copy of the check as proof of payment.” Order, at pp. 1-2.

Now Patty Ann wants STJ Di to toss without prejudice. While petitioners can move to dismiss a “stand-alone,” if the 90-day clock has run, so has petitioner’s chance to contest afresh.

“However, dismissal without prejudice is not possible at this stage of the proceeding. Because petitioner will be outside of the 90-day window for filing another stand alone petition challenging the IRS determination, dismissal of this case will preclude her from further contesting in this Court her entitlement to section 6015 relief for the tax year at issue.” Order, at p. 2 (Citations omitted).

So, since neither Patty Ann, nor Geof, nor IRS objects, petition dismissed.

Takeaway- If one spouse agrees but welches, sue early and sue often.

There is any number of sad tales to be found on the Tax Court’s website. Here’s one, where a husband, seeking an amicable, decent parting of the ways from his loved-once, and unwilling or unable to bear the price of a practitioner with Section 72(t) hyper-awareness, gets hit with the 10% “additional tax” on an IRA distribution.

Jeremy Ray Summers, 2017 T. C. Memo. 125, filed 6/26/17, has three (count ‘em, three) IRS lawyers confronting him over $1700. And while Judge Lauber is all kinds of sympathetic, Jeremy still takes the hit.

Jeremy and the about to be former Mrs Jeremy part ways, agreeing on child support, visitation, property, and trying to do the right thing. The about to be former Mrs Jeremy needs cash, so Jeremy liquidates his IRA (all $17K worth), gets a check from the trustee, deposits same in his checking account and writes a check for half to the about to be former Mrs Jeremy.

I say “about to be former” because Jeremy and the about to be former Mrs Jeremy don’t bother to put their agreement into divorce court and get it so-ordered until after Jeremy gives the about to be former Mrs Jeremy her half. And, of course, having divvied up the IRA, Jeremy puts in the so-ordered agreement that there aren’t any IRAs. Jeremy claims the QDRO exception to the 10% hit. Qualified Domestic Relations Order, except this one isn’t.

I’m sure my readers are face-palming Jeremy’s generosity. So is Judge Lauber.

“The exception on which Jeremy relies appears in section 72(t)(2)(C).  It applies to a distribution that is made ’to an alternate payee pursuant to a qualified domestic relations order (within the meaning of section 414(p)(1)).’  Section 414(p)(8) defines an ‘alternate payee’ as ‘any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant.’  Section 414(p)(1)(B) defines a ‘domestic relations order’ as a ‘judgment, decree, or order relating to ‘the provision of child support, alimony payments, or marital property rights’ that ‘is made pursuant to a State domestic relations law.’

“[About to be former Mrs Jeremy] indirectly received half the value of Jeremy’s IRA account, and respondent readily agrees that the transaction could likely have been organized so as to entitle Jeremy to a section 72(t)(2)(C) exception for her 50% share. (Jeremy concedes that he erred in claiming this exception for his own 50% share.)  As it is, respondent contends persuasively that Jeremy does not qualify for this exception for two reasons.” 2017 T. C. Memo. 125, at pp. 5-6.

I’m sure my readers know the two reasons. One, Jeremy got the distribution, not about to be former Mrs Jeremy. It doesn’t matter that she wound up with the cash, she has to get it to begin with. Second, the payout wasn’t pursuant to a QDRO; the DRO said there wasn’t an IRA. That was true, because when the agreement was so-ordered and became a DRO, there was no IRA to distribute “pursuant to” that DRO.

Now Section 72(t)(2)(c) requires strict compliance, because the QDRO has to drive the whole deal; there’s no “substantial compliance” out.

So although Judge Lauber has “considerable sympathy” for Jeremy, a decent guy in a tough situation, “…we are not at liberty to add equitable exceptions to the statutory scheme that Congress enacted, and we thus have no alternative but to sustain the 10% additional tax that respondent has determined.” 2017 T. C. Memo. 125, at p. 8.

I will forbear to comment on some of the “statutory schemes that Congress has enacted,” lest this blog become unfit for family reading round the dinner table.

No, I am not advising visitors to Yellowstone to ignore the warnings of the National Park Service Rangers, nor am I again making promises of home cooking to certain of my nearest and dearest; Bear BnB will always be open.

Rather, I am referring to Judge Ruwe’s direction to IRS in Jeremy M. Jacobs and Margaret J. Jacobs, 148 T. C. 24, filed 6/26/17.

Jer and Marg cause me to break yet again the Tenth Commandment. They own the Boston Bruins NHL team. How I covet the chance to own an NHL franchise! Alas, nevah hoppen, GI.

Anyway, Jer and Marg, zealous to provide for those who cause the Boston faithful to fill the seats at the TD Garden, contract with various caravanserais to provide bed, breakfast, snacks and pre-game chow-downs for the chaps in yellow and black, while the Bruins are on the road. Jer and Marg pick up the tab.

Jer’s and Marg’s corporate set-up is a bunch of pass-throughs, ending in a Sub S owned by Jer and Marg, who write off 100% of road room and board.

IRS says “no, 50% for meals.”

Judge Ruwe must be a die-hard hockey fan, because he does a play-by-play, with pictures, descriptions and accounts, of every away-day event, from boarding the plane the night before to the moment when the announcer at the away arena shouts “And now, the starting line-up for the Boston Bruins” accompanied by the “horrid shapes, and shrieks, and sights unholy” of the home team fans.

Bruins fans, read this. NHL fans, read this, as your faves might be doing likewise.

BTW, the meal tabs for the years at issue run around $150K. The Bruins like to eat.

IRS sends to the face-off circle at center a player wearing number 274(n)(1).

Jer and Marg send out D. Minimis, wearing number 132. D. wins the face-off, hits the open forward down the left-side boards, who shoots and scores, high on the glove side.

As Jer and Marg’s three attorneys on the forward line raise their sticks in the air and pound each other on the back, Judge Ruwe picks up his spilled popcorn and opines as follows.

“Section 274(a)(1)(A) disallows a deduction for certain meal and entertainment expenses otherwise deductible under section 162 unless the expenses are associated with the active conduct of the taxpayer’s trade or business.  Respondent does not challenge that the Bruins’ pregame meal expenses are associated with the active conduct of petitioners’ trade or business. If the deduction for meal expenses is not disallowed by section 274(a)(1)(A), then section 274(n) imposes a 50% limitation on the deduction for meal expenses unless an exception applies.” 148 T. C. 24, at pp. 14-15.

Whatever should we do without exceptions?

“Petitioners argue that the Bruins’ provision of pregame meals to traveling hockey employees at away city hotels qualifies for the de minimis fringe exception under section 274(n)(2)(B)….” 148 T. C. 24, at p. 15.

Section 132, the de minimis fringes to employees, requires that the benefits not be restricted to highly-compensated (over $110K annually for years at issue; check your local listings for current rate) types. OK, Jer and Marg let everyone on the road crew dine with the stars.

“Petitioners provided credible testimony that the pregame meals were made available to all Bruins’ traveling hockey employees–highly compensated, nonhighly compensated, players, and nonplayers–on substantially the same terms. Petitioners also provided testimony, which we find credible, that any discrepancy between anticipated and actual meal attendees was a function of cost reduction concerns and not discrimination.  We therefore hold that the Bruins’ provision of pregame meals to traveling hockey employees satisfies the nondiscriminatory manner requirement of section 132(e)(2).

“Employee meals provided in a nondiscriminatory manner constitute a de minimis fringe under section 132(e) if:  (1) the eating facility is owned or leased by the employer; (2) the facility is operated by the employer; (3) the facility is located on or near the business premises of the employer; (4) the meals furnished at the facility are provided during, or immediately before or after, the employee’s workday; and (5) the annual revenue derived from the facility normally equals or exceeds the direct operating costs of the facility (the revenue/operating cost test).” 148 T. C. 24, at p. 17.

While the eating room is not leased specifically by the Sub S, it is exclusive to the Bruins, and that’s good enough. The Bruins contract with the hotel to provide the goodies, and that satisfies Reg. 1.132-7(a)(2)(ii). Now the messhall has to be on “business premises,” but Tax Court takes a broad view; the Bruins’ business premises are not only in TD Garden, but on the road where they play half their games. Their NHL franchise requires them to play the other teams home-and-home, and Jer and Marg could lose the third-oldest NHL franchise if they don’t (and the City of Boston would go into perpetual mourning). So the Bruins business premises is “where the boys are.” Check the caselaw Judge Ruwe cites, if your clients are running field kitchens.

IRS, scrapping against the Bruins like the old Broad Street Bullies, claim that the business is on the ice, not the hotel room. But Judge Ruwe says health and rest are essential to a winning team.

And it’s quality time, not just hours. “Furthermore, respondent provides no precedent to support the argument that business premises are limited to the location where the most qualitatively significant business activity occurs. We also disagree with respondent’s argument that away city hotels cannot constitute the Bruins’ business premises because the team spends quantitatively less time at each individual away city hotel when compared to the team’s time spent at its Boston facilities.  Although the Bruins do spend quantitatively less time at each individual away city hotel than they do in Boston, this goes to the unique nature of a professional hockey team that is required to play one-half of its games away from home.  It is therefore illogical for respondent to ignore the nature of the Bruins’ business and the NHL and analyze the amount of time spent at each away city hotel in isolation.  Respondent also provides no precedent to support the proposition that a quantitative comparison of time is critical to determining business premises.” 148 T. C. 24, at p. 28 (Citations omitted).

The meals are furnished near worktime and for noncompensatory reasons. The food is specially designed to nourish the players of a rough, physical game, and the off-ice people are hardworking and can’t hunt up the local Burger King in each city.

The Section 274(c)(8) entertainment issue goes away, because the meals are de minimis.

Now the fans can file out of the TD Arena, as the Bruins have won another one.

In my young day, back in New York State court, when a motion, or an entire case, was disposed of, the judge often would not write more than an opinion, and direct the parties each to submit an order or judgment effectuating the terms of the opinion (which we State courtiers called a “decision”).

The opinion ended with the words “settle order on notice.”

So we’d draft an order or judgment, and our adversary had the chance to do likewise. We’d send our order or judgment to the judge, with a copy simultaneously to our adversary, in a blueback (pardon the ancient terminology) with something on the back like this: “PLEASE TAKE NOTICE that the within judgment will be submitted to Judge X for entry on the blank day of blank.”

The judge would sign ours or theirs, or mix-and-match.

I recommend this procedure to Tax Court in non-arithmetic cases.

In fact, it seems that Judge Holmes (honorifics omitted, as I have to catch a flight home shortly) has already caught on.

Here’s Greenteam Materials Recovery Facility PN, Greenwaste Recovery, Inc., Tax Matters Partner, et al., Docket No. 423-11, filed 6/23/17*. You’ll recall Judge Holmes decided yesterday that the Greenteam gets capital gains on their franchise sales. Well, the parties promptly continued the face-off.

“It would be helpful to the Court if the parties were able to agree on the language of the decisions, and it is therefore

“ORDERED that on or before August 21, 2017, the parties submit agreed decisions or file their own with explanations of any points of disagreement.” Order, at p. 1.

How about ending the opinion with “settle decision on notice”?

*Greenteam materials 423-11 6 23 17

No, I have not turned this blog into an advice for the lovelorn, or otherwise romantically disadvantaged. Today’s story involves two separate and distinct SNODs for the same year.

One just covers a single year, but the other covers six (count ‘em, six) different tax years, although the single year aforesaid is included in the six-pack SNOD.

Now there’s plenty of caselaw saying that when a SNOD has been issued but the taxpayer doesn’t timely petition, IRS can hit the taxpayer with another SNOD for the same year in order to assert a greater tax liability.

The theory behind the Section 6212(c)(1) single-shot rule (one SNOD per year) is to prevent a multiplicity of proceedings. If IRS wants to up the ante, claiming a SNOD was too low, and a petition was timely filed, IRS can assert increased deficiency in its answer and get the burden of proof thrown in at no extra charge. If the SNOD was too low and no timely petition filed, IRS can go again with a higher SNOD. Still only one proceeding.

But how if there are two SNODs for one year, and both were petitioned timely?

In today’s installment, IRS first moves to dismiss for duplication, but then withdraws, because it got the SNODs backwards.

SNOD No. 1 was for a smaller amount for year in question, but was petitioned after SNOD No. 2, which was for a higher amount for that year, but both SNODs were timely petitioned. So IRS wanted to drop SNOD No. 1.

No, says Ch J L Paige (“Iron Fist”) Marvel. The case is Azita J. Larijani, Docket No. 4966-17, filed 6/22/17, and I cite that docket no. because that’s the one that stays in for the year at issue.

IRS relies on caselaw where the first SNOD was never petitioned, so in the interest of judicial economy the second SNOD avoids the Section 6212(c)(1) hammer.

Here, even though SNOD No. 2 for the higher amount was timely petitioned before SNOD No. 1 was timely petitioned, the essentials for Tax Court jurisdiction were there for both: a SNOD facially valid and a timely petition.

The first SNOD is the lead.

So Ch J Iron Fist denies IRS’ motion to dismiss petition from SNOD No. 1, and instead sua sponte tosses so much of SNOD No. 2 as deals with the year in question.

So IRS can try to assert the higher deficiency in its answer, and bear the burden of proof if they do.