Archive for July, 2017|Monthly archive page


In Uncategorized on 07/25/2017 at 16:56

I’ve made my political comments on today’s events elsewhere, so I’ll turn to a designated hitter off the bat of that Obliging Jurist and puzzlemaster Judge David Gustafson. Today Judge David Gustafson is confronting IRS looking for mootness in ASG Services, LLC, Docket No. 14945-16L, filed 7/25/17.

It’s a CDP, and ASG paid up, so why not just toss the petition?

Well, ASG wants to fight about liability. You remember it was only yesterday that Dean Matty Vigon sent that hare through the thicket; well, if you don’t remember, see my blogpost “Crafty – Akin to the Weasel,” 7/24/17.

But ASG isn’t quite in Dean Matty’s mukluks. So Judge Gustafson, always a man for a bargain, poses three questions, rather than the customary four.

First, IRS isn’t playing cagey when it comes to withdrawing a lien or forswearing future collection action. ASG just coughed up. So isn’t that like Greene-Thapedi, where, the liability being satisfied, Tax Court has nothing to adjudicate?

Second, “Without the existence of any possible prospect of future collection activity as to the liabilities at issue, this case would seem to become a mere suit for refund of the taxes alleged to have been overpaid. In further entertaining the case, we would be determining liability not incident to proposed or possible collection, as section 6330(c)(2)(B) contemplates, but solely for deciding whether ASG is entitled to a refund. Pursuant to section 6512(b), such a refund claim might be pursued in a deficiency case even after the IRS had conceded the deficiency that was the jurisdictional foundation of the case; but in the CDP context, no equivalent statute exists to permit the Tax Court to entertain a refund claim even where all collection issues have been conceded or have become moot.” Order, at p. 2. (Citation omitted) (Emphasis by the Court.). So how can Judge Gustafson keep this case alive?

Third, even supposing all we have here is a refund case, isn’t ASG wanting Judge Gustafson to assume facts not in evidence? “Section 7422(a) would seem to require the filing of a timely administrative claim for refund, and section 6532(a)(1) would seem to require the petitioner to await the IRS’s issuance of a notice of disallowance (or the passage of 6 months)-but ASG has not alleged compliance with either of these jurisdictional prerequisites. (And once ASG had met those prerequisites, it could presumably file a conventional refund suit in U.S. District court, pursuant to 28 U.S.C. sec. 1346(a)(1), or in the U.S. Court of Federal Claims, pursuant to 28 U.S.C. sec. 1491.)” Order, at p. 2.

So let ASG go file the refund claim and, if they don’t get it,  sue in USDC or USCFC, right?


ASG claims the payment wasn’t a payment, but a deposit to stop interest.

OK, says Judge Gustafson, go for it, ASG. But make it good.

“ASG shall file a supplemental response to the IRS’s motion, in which ASG shall state whether it persists in opposing the IRS’s motion to dismiss on grounds of mootness and, if it does so persist, shall (1) respond to the hypotheses stated above, (2) explain whether it contends the…remittances were ‘deposits’ (and, if so, shall explain the effect on mootness), and (3) make any other response it wishes to make.” Order, at p. 3.



In Uncategorized on 07/25/2017 at 15:55

No, this is not a re-make of the 1437 Scots ballad about brave Catherine Douglas and the slain King James I. This is the unavailing argument of the FedEx driver that he couldn’t enter the Glasshouse on the Magic Day to deliver the petition in Organic Cannabis Foundation, LLC. d.b.a. Organicann Health Center, Docket No. 10593-15, filed7/25/17.

And the Organicanns aren’t just blowing smoke; there’s better than a million bucks’ worth of deficiencies here. Source unspecified, but maybe business deductions potted by Section 280E.

First the Organicanns claim the SNOD was sent to the wrong address, because the P. O. Box number was omitted. The ZIP+4 puts paid to that one, as the USPS website says the SNOD got to the P. O. Box with 78 of the 90 days remaining. Plenty of time to file a petition.

Next is the hook for today’s sermonette, the mailed-is-filed, or maybe not, rule.

The Organicanns overnighted their petition via FedEx “First Overnight.” FedEx “First Overnight” is now one of the “blessed communion, fellowship divine,” anointed by John (“Kosi”) Koskinen, Boss Hoss at 1111 Constitution Ave., NW. Except it wasn’t when the Organicanns sent in their petition. FedEx “First Overnight” didn’t make the cut for another two weeks thereafter.

So the Organicanns are out? Yes, but. They have one last dive at the goal line. But Judge Pugh stifles that one too.

“Petitioner urges the Court apply Guralnik v. Commissioner, 146 T.C. 230 (2016), to conclude that the petition was timely filed because the Clerk’s office was not accessible to the FedEx delivery driver on the last day for filing. In Guralnik, the taxpayer’s statutorily prescribed filing deadline ended on a day the Court was officially closed due to a snow emergency. Id. at 233-234. We concluded that the ‘timely mailed, timely filed’ rule did not apply because the taxpayer used the FedEx First Overnight service (as petitioner used here), which service was not then listed among the designated private delivery services under section 7206(f). Id. at 240-241. We also declined to give Notice 2015-38 retroactive effect. Id. at 241. However, we applied Rule 6(a)(3), Federal Rules of Civil Procedure, to hold that when the Clerk’s office is inaccessible because of inclement weather, government closings or for other reasons, the time for filing is extended to the first accessible day that is not a Saturday, Sunday, or legal holiday. Unlike the snow emergency closing in Guralnik, here, the Court’s Clerk’s office was open during its normal business hours and was not inaccessible the entire day due to inclement weather, government closings, or other reasons. We, therefore, find Guralnik distinguishable and we decline to expand our holding in Guralnik to cover circumstances where an unspecified event may have blocked access for a period of time but the Clerk’s office is not inaccessible due to closure for the entire day.” Order, at p. 5.

Y’all will remember Felix Guralnik from my blogpost “Neither Equity Nor Designation,” 6/2/16. As usual, you read it here first.

Takeaway 1- Get the current list of the “blessed communion, fellowship divine” private delivery services and post a copy on every flat surface you can find.

Takeaway 2- Upon receipt of SNOD or NOD, pull a Form 2 petition off the Tax Court website, fill in a barebones “I object to everything” and send in same with a check. By the time you get the motion to strike for failure to state a claim, you’ve bought enough time to amend.

Takeaway 3- Unless it’s a DC public holiday or the Glasshouse is totally inaccessible all day, keep banging on the door. Katie Barlass is long gone.


In Uncategorized on 07/24/2017 at 16:16

A phrase that brings back happy memories of my little girl laughing as she describes some story takes me to the present with Dean Matthew Vigon, 149 T. C. 4, filed 7/24/17.

IRS is being very crafty, and definitely kin to the weasel.

But Dean Matty is no angel, either; apparently he’s currently in a Canadian slammer.

Surely you remember Dean Matty and his Forms 1041, each of which IRS claims should get the $5K Section 6702 chop? What, no? See my blogposts “Robosigner?” 6/23/16, and “Not Moot Court,” 5/17/17. There now, you’re all caught up.

Once again that Obliging Jurist David Gustafson upends IRS. IRS seems to be trying to do an end-run around a bunch of missing Section 6751(b) Boss Hoss signoffs. These should have been obtained before IRS chopped Dean Matty. First IRS asked for and got a remand back to Appeals to get the Boss Hosses. IRS came back from Appeals and claimed they had them, but Judge Gustafson wasn’t convinced. My blogpost “Robosigner?” above-cited delves into the dubiety of the Boss Hosses asserted.

Remember Judge Gustafson trashed IRS’ summary J motion and ordered a trial.

So IRS gets truly crafty, akin to the weasel. “Instead, the Commissioner moved for a continuance, explaining:  that the IRS would abate the penalties at issue; that the process of abating those liabilities is almost complete; that the process of releasing the liens at issue has been initiated; and that once those processes have been completed, the IRS intends to file a motion to dismiss the case on grounds of mootness.” 149 T. C. 4, at pp. 6-7.

OK, says Judge Gustafson, that’s cool, but what about underlying liability? Isn’t Dean Matty entitled to a finding on underlying liability, as Section 6702 chops are non-assessible and he didn’t get a prior chance to contest?

No sweat, says IRS, there’s no statute of limitations on Section 6702 chops, so when we chop Dean Matty again, he gets another CDP. And we aren’t saying we won’t chop Dean Matty again.

And the famous release of lien says “With respect to each assessment below, unless notice of lien is refiled by the date in column(e) [i.e., dates in 2021 and 2022], this notice shall constitute the certificate of release of lien as defined in IRC 6325(a).” 149 T. C. 4, at p. 8.

So IRS claims it can refile four years from now, and go after Dean Matty, no doubt after it has gotten Section 6751(b)s from every Boss Hoss up to and including Com’r John (“Kosi”) Koskinen or his successor.

Tax Court review of a CDP determination is exactly that..,.the determination, not the NITL or NFTL, but what Appeals did and what Appeals found. And that means the underlying liability, if appropriate. Abating penalties and releasing the lien is all very well, but liability wasn’t determined.

Tax Court’s jurisdiction is determined when it is first invoked. Of course, circumstances may have changed since then. If a tax is paid, or if a lien is released and the statute of limitations has run such that the lien cannot be refiled, then the case is moot and should be dismissed.

Except here it isn’t.

“The Commissioner asserts, however, that the section 6702 penalty for ‘Frivolous Tax Submissions’, unlike the income tax, cf. sec. 6501(a), has no statute of limitations in the Code.  For purposes of the Commissioner’s motion to dismiss, we so assume.  The Commissioner has abated the previous penalty assessments against Mr. Vigon; but, as the Commissioner observes, if this case is dismissed, the IRS claims the right to reassess against and collect from Mr. Vigon identical section 6702 penalties for the same nine alleged frivolous submissions. Here, abatement is a tactical retreat but not a surrender.” 149 T. C. 4, at p. 19.

IRS says, “yeah, but Dean Matty gets the whole NFTL and right to a new CDP, so he can fight it out again.”

Judge Gustafson assumes for the purposes of this case that there is no SOL for Section 6702 chops.

“We assume this is true, but we see in the Commissioner’s position no reason that he could not do it again–abate the second set of assessments, moot the second CDP case, and lie in wait.  Mr. Vigon’s supposed remedy depends on his recognizing the second lien notice, timely requesting a CDP hearing before IRS Appeals, challenging the liability in that hearing, and then timely filing a Tax Court suit when IRS Appeals issues an adverse determination–all while he is incarcerated.  Our CDP jurisdiction is littered with the sad tales of taxpayers who, even when not in prison, stumble on one or more of those requirements.  But if Mr. Vigon did succeed in putting his reassessed liabilities before this Court in a future, second CDP case, the Commissioner has, in his view, the unilateral power to render the second case moot by abating the penalties, while retaining the prospect of reassessing yet again at any future time.” 149 T. C. 4, at pp. 20-21. (Footnote omitted, but IRS might be right about this one, because 6702s are about filings, not about “taxable periods to which the filing relates.”)

Don’tcha just love this stuff? It’s like the endless epistolary volleying between blowers and the Ogden Sunseteers. This could go on for decades.

Except Judge David Gustafson says “enough already.”

IRS’ weasel-wording and sleight-of-hand merely left the case sleeping, not dead. IRS doesn’t say they irrevocably release the lien or say they will not ever again assert the Section 6702 chops.

IRS, the case is not moot. Tax Court has jurisdiction.

Now about those Section 6751(b) Boss Hoss signoffs….



In Uncategorized on 07/21/2017 at 18:33

I had a word or two with a fellow practitioner (CPA-type) at the Jersey Boys’ CPE-on-CDP confab yesterday, as we sipped soft drinks during a break. I mentioned my view on unciteables, namely T. C. Sum. Op.s and orders.

These should be read, marked and inwardly digested; while Rule 50(f) bars citing orders for anything but preclusion and law of the case in the particular case wherein the order was issued, and Section 7463(b) says Sum. Op. small-claimers can’t be cited as precedent, you can copy any statute, reg, T. C. or T. C. Memo cited in any thereof, and lift the reasoning, even by cut-and-paste. It’s not allowed to be cited, so you can’t. But the reasoning and the law, regs, etc., from whatever source derived, are either valid or invalid. And if naught else, you can see how a Judge will decide an issue, maybe so.

My colleague was dubious at first, but I think I persuaded him. And if my powers of persuasion were insufficient advocacy, here’s that Obliging Jurist, Judge David Gustafson, with a designated hitter, second-seating me.

“…petitioner filed a motion to compel production of documents. We will order respondent to file a response and petitioner to file a reply. In preparing that response and reply, the parties may wish to reflect on our non-precedential orders addressing motions to compel in another whistleblower case—Insinga v. Commissioner, No. 9011-13W (July 27, 2016 (Doc. 109), and January 27, 2017 (Doc. 161)). These orders are not precedential, see Rule 50(f); we do not expect the parties to cite them, distinguish them, or rely on them; and we have not considered petitioner’s instant motion sufficiently to conclude that they actually involve the same questions. However, the orders may be helpful to the parties in showing the undersigned judge’s thinking about this area. The parties are invited to correct that thinking where they think it may be in error.” Order, at p. 1.

Y’all surely remember Fighting Joe Insinga. What, no?! Well, scope the old chap out on this my blog. I think I posted Fighting Joe’s set-tos with the Ogden Sunseteers ten times over the last four years.

And this order involves a newcomer to my blog, who came on the scene just two weeks ago. It’s Loys Vallee, Docket No. 13513-16W, filed 7/21/17. See my blogpost “General Knowledge, Private Information,” 7/7/17.

Thanks, Judge Gustafson.


In Uncategorized on 07/20/2017 at 15:54

Part Deux, Or, The Swap Meet

Once again the match-and-mixmasters are at it, and Judge Morrison is looking for enlightenment, in Salt Point Timber, LLC, John B. Hood, Tax Matters Partner, Docket No. 18057-14, filed 7/20/17.

I don’t know if the TMP is related to the celebrated General and namesake of the Killeen fortification, but he’s in a battle with IRS over the Reg. section 1.170A-14(c)(2), transfer-by-donee.

The Salties donate easement to a concededly qualified organization for preservation purposes. So far, so good.

Here’s what’s troubling Judge Morrison: “Part 6.22 of the easement provides that if (1) any of the land protected by the easement is transferred to the owner of adjacent land, (2) the adjacent land is encumbered by a comparable conservation easement, and (3) the owner of the adjacent land and holder of the adjacent easement agree to modify the easement on the adjacent property to encumber the transferred property, then the conservation easement will be amended by the landowner and the Berkeley land trust to release the transferred property from the conservation easement.” Order, at p. 2.

Sound vaguely familiar? If not, see my blogpost “A Thing of Beauty – Accept No Substitutes,” 1/28/13. And if it does, read my blogpost anyway.

Here’s Judge Morrison’s exam questions for the Salties and IRS, who are fighting about perpetuity.

By the terms of the aforesaid Part 6.22, must the transferor-donee insist that the conservation purpose be maintained by the incoming transferee-donee? And if not, what happens to deductibility? Cite appropriate law and regulations.

Must the donee-transferee be an eligible donee, or just a qualified organization? What difference does it make? Cite law and regulations, and maybe check out the case I discuss in my above-cited blogpost. A full-dress T. C., by the way.

Exam papers due by 9/18/17, and can criticize Judge Morrison’s approach and even object to facts as stated in this order.

Cain’t hardly wait.


In Uncategorized on 07/20/2017 at 14:02

Just back from an enlightening CLE/CE, courtesy of The Jersey Boys and a well-known law firm that is anything but sad (despite the contrary suggestion in its name), I want to thank the Boss Hoss of The Jersey Boys for plugging this my blog, and hasten to add that no goods or services were provided in exchange therefor. And thanks to said law firm for their bagels and hospitality.

Now I turn to a couple practice tips (hi, Judge Holmes).

First up, Jessica A. Gant, Docket No. 11677-17, filed 7/20/17. IRS initially wants to toss Jess’ petition on what the cricketers would call “leg before wicket.” Jess dropped a petition on Bankruptcy Court, and thereafter petitioned Tax Court. Well, we all know the saver clause in Section 6213(f)(1) tolls Jess’ time to petition until she’s out of Bankruptcy Court, so no biggie.

But IRS gets creative, and subsequently moves to hold the Tax Court proceeding in abeyance until IRS vacates the automatic stay in 11USC§362(a)(8). The problem is that anything that violates the automatic stay is void, not voidable; thus, there is no proceeding to stay, because the petition is a nullity.

Ch J L. Paige (“Iron Fist”) Marvel is much kinder than I would be, if I were a Tax Court Judge (which I thank whatever gods may be that I’m not). She tells IRS’ counsel to brief what effect IRS’ motion, should it succeed, would have on jurisdiction. My suggestion to counsel, and anyhone else similarly situated: Just cite Section 6213(f)(1).

Next we have Richard A. Winter, Docket No. 21429-13W, filed 7/20/17. Obviously a whistleblower case, but here both IRS and Rich blew it. “…the parties electronically filed a Joint Stipulation, which was in fact a proposed Stipulated Decision. Stipulated Decisions cannot be filed electronically.” Order, at p. 1.

This is yet another in my ongoing series “Stipulate, Don’t Capitulate.” I won’t cite to my numerous blogposts on the subject. But when you stipulate, be extra careful; to what are you agreeing? Check out “The Practitioner’s Guide to Electronic Case Access and Filing.”  Especially page 97.

And tell ‘em Ch J L. Paige (“Iron Fist”) Marvel sent you.


In Uncategorized on 07/19/2017 at 16:07

If you, the cash-basis type, got income but have to give it back, make sure it’s given back the same year. Or, if you don’t, at least, recognize you have to pay and make provision to pay (whatever that means). I’ve blogged this before. See my blogpost “The Course of True Love,” 1/4/16.

And that case, the name of which I’ll spare here, is cited in Michael S. Yoklic and Kay E. Ross, 2017 T. C. Memo. 143, filed 7/19/17, the end of this year’s Palindrome Week.

Mike got unemployment that he wasn’t entitled to. And he didn’t bother to include it in his 1040, because shortly after he got the unemployment, he got a couple letters (hi, Judge Holmes) from the State saying he wasn’t entitled.

But he did nothing else until the following year, when he paid back the money he got plus interest. He claims rescission.

No good, says Judge Ashford.

“The doctrine of rescission represents an exception to the claim-of-right doctrine.  Pursuant to this exception, income received under a claim of right need not be included in gross income if, in the year of receipt, the taxpayer (1) recognizes an existing and fixed obligation to repay the amount received and (2) makes provisions for repayment. 

“On the basis of the record before us, we find that petitioner’s obligation to repay the unemployment compensation he received from DES in 2012 became fixed in that same year.  However, petitioners do not contend, nor is there any evidence in the record indicating, that they made provisions for repayment also in that same year.” 2017 T. C. Memo. 143, at pp. 5-6. (Citations omitted).

If you got to give it back, make sure you do something to show you’re giving it back.



In Uncategorized on 07/18/2017 at 16:29

A couple old favorites show up in today’s T. C. Memo. No. 142, filed 7/18/17; it’s Block Developers, LLC, William J. Maxam, APC, Tax Matters Partner, et al., and once again it’s The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Inveterate, Industrious, Indefatigable, Irrefragable, Incontrovertible, Ineluctable, and Illustrious Foe of the Partitive Genitive, Old China Hand and Master Silt Stirrer, Judge Mark V. Holmes, back with our friends the Blocking Janssons, casting a sidewise glance at the Repettos.

Ah, the Janssons, inventors and vendors of concrete blocks that stop Californian landslides and sprout vegetation at the same time. You’ll find more about them in my blogposts “A Trust Is a Trust Is a Trust,” 2/26/14, and “Block That Motion,” 10/16/14. The Repettos show up in my blogpost “Waxing Roth,” 6/15/12.

Today it’s form over substance, as the LLC set up by the abovementioned William J. Maxam, now or formerly an attorney, is nothing but a conduit for shoveling money from the Janssons’ cash cow to their Roth IRAs.

IRS mucked up the NBAPs, the FPAAs, and the various SNODs, but Judge Holmes put them all right. And he winds up with the Janssons’ S Corp and the LLC as the only petitioners in this case.

“[S Corp]’s sale of the Verdura Block patents to [LLC] had no substantive effect on how Jansson operated his businesses.  Jansson’s companies continued to produce the blocks, test the blocks, and make sure the blocks were certified.  The Jansson family continued to attend trade shows and take on clients without any mention of [LLC]s.  And the expense of performing these tasks remained on Jansson–he was never reimbursed by [LLC].” 2017 T. C. Memo. 142, at pp. 28-29.

The LLC’s recordkeeping was spotty at best, it had no employees, and the excuse that it was meant to raise cash for the Janssons’ S Corp was “illogical” because the cash to pay for the Block patents came from the Janssons’ S Corp in the first place. 2017 T. C. 142, at p. 30.

And notwithstanding all the mathematical backing-and-filling about valuing the patents supposedly sold to the LLC, the figure for the price of the patents came months before the backing-and-filling. And whatever the price, there was no real sale.

“Even if the Janssons correctly valued the sale of the patents on paper, and even if they correctly set the royalty rates that they charged [S Corp] on paper, we cannot ignore the underlying reality of the transaction.  We find that [LLC] was just a conduit to shunt money to the Janssons’ Roth IRAs and was not engaged in any real business activity.  We therefore find that [LLC]’s transfers to the Janssons’ Roth IRAs were excess contributions that triggered the excise tax the Commissioner seeks.” 2017 T. C. Memo. 142, at p. 30.

However, lest IRS get too pixilated, Judge Holmes points out that not every Roth IRA tax dodge is a prohibited dodge. He cites Summa Holdings Inc., 848 F.3d 782 (6 Cir., 2017). But there the Roth-pumping dodge is legitimate because Congress said so. Summa was a DISC, and that’s a special case.

At the end for the Janssons, the LLC is just a conduit, and the 6% per year excess Roth contributions hit is sustained, plus the additions to tax.


In Uncategorized on 07/17/2017 at 19:26

Notwithstanding the exalted status of the speaker of the captioned phrase, the first in is the first out, when it comes to sellers of securities.

Here’s Kenan Turan, 2017 T. C. Memo. 141, filed 7/17/17, real estate agent, paid tax return preparer and day trader, who claims his broker did him wrong by not letting him use LIFO.

Judge Nega: “As a general rule, when taxpayers hold multiple lots or shares of identical stock, they must compute their gains or losses against the basis of those shares actually sold, not the shares the taxpayer intended to sell.  As this rule may prove onerous for high-volume or high-frequency traders, regulations have been promulgated to provide relief.  Under the regulations, by default, taxpayers owning blocks of identical stock acquired on different dates or for different prices determine their stock’s basis by using the FIFO method.  Sec. 1.1012-1(c)(1), Income Tax Regs.” 2017 T. C. Memo. 141, at pp. 4-5. (Citation omitted).

Kenan is an in-and-out trader. Even though he has only 51 trades for the year at issue, IRS lets him stay a day trader. Kenan claims he told his broker he wanted LIFO, but the broker’s website played him false.

So Kenan never bothered to disclose the trades, or the gains therefrom, on his 1040.

“Petitioner argues that respondent and [broker] both erred in failing to use the last-in-first-out (LIFO) method to determine the bases of his FNMA shares. Petitioner testified that in mid-2013 he attempted to inform [broker] of his desire to use LIFO instead of FIFO, by way of their internet client portal, but was unable to do so because of an error on [broker]’s website.  He stated that he phoned the firm in an attempt to work around this error, but received no assistance.  Petitioner did not testify as to whether he ever again attempted to make this election for [year at issue] or otherwise contacted [broker] during the seven months that followed his initial attempt.

“Petitioner offered no documentation or other objective indicia to corroborate his claim of a computer error or any misfeasance on the part of [broker].”  2017 T. C. Memo. 143, at p. 6. (Name omitted).

I can’t say I’m surprised. The broker in this case is a well-known online outfit, and even though Judge Nega seems to think the FIFO rule was promulgated for the trader’s benefit, my bet is that the brokers wanted a hard-and-fast rule, so they could deal with the multiple customers, all trading their heads off at seven bucks a throw, on a one-size-fits-all basis. I’m no day trader, but I doubt anyone who isn’t a mega-whale can get an online broker to modify their software so as to switch from FIFO to LIFO just for him/her.

Howbeit, I’m open to correction if anybody has written evidence.

But Kenan’s little omission doesn’t sit well with Judge Nega. He doubts the credibility of Kenan’s testimony about his interaction (or lack thereof) with the broker. And Kenan’s argument about using average basis falls flat, as he wasn’t trading mutual fund shares or shares from a dividend reinvestment plan.

Finally, “When we consider his sophistication and–more concerning–his training and employment as a paid preparer of income tax returns, we find his failure characteristic of an unreasonably insufficient effort to ascertain his proper tax liability.“  2017 T. C. Memo. 143, at p. 10.


In Uncategorized on 07/17/2017 at 18:30

The latest issue of our New York State Bar Association Journal’s cover story involves the anomalous status of the law of domestic companion animals; these enjoy an ability to confer immunity upon their human companions from liability, even when they “weaponize” a bicycle rack and drag it like a great trawl down a street. No cow, calf or bull has the like cloaking device.

Anomalous or not, and though the tortists gnash their incisors, each domestic companion animal (the word “pet” is so demeaning and politically-incorrect) is entitled to one bite.

Well, today Judge Gerber extends an animal companionship cloak over Mark S. Siegel, 2017 T. C. Sum. Op. 53, filed 7/17/17.

Mark S., like Michael Craig Worsham, star of my blogpost “Pay the Man,” 7/31/12, found without seeking the reasons why the income tax does not apply to him.

Generally (love that word!), in such a voyage of discovery that comes ashore at 400 Second Street, NW, there’s a quick cite to Crain or Wnuck, and march out petitioner.

Judge Gerber gets absolutely chummy.

“Petitioner has been formulating his position with respect to the income tax laws over a period of years on the basis of his personal research.  Each time he approaches respondent with his ideas, his position is perfunctorily labeled ‘frivolous’ and he receives no response.  Petitioner believes that average American citizens should be able to question their Government about the tax laws, and he refuses to give up merely because he did not receive a response to his questions.” 2017 T. C. Sum. Op. 53, at p. 5.

“Somber reasoning and copious citation of precedent” are avoided, however, as Judge Gerber cuts to the clichê. “More than 100 years of tax jurisprudence refute petitioner’s position that he is not a taxpayer who is required to file a return and/or pay tax.” 2017 T. C. Sum. Op. 53, at p. 6.

Still, Judge Gerber gave Mark S. a chance. But he gets only one.

“Petitioner has been given an opportunity to present his position in court, and we hold that it is without support in the cases or statutes proffered.  We hold that respondent’s determination was not in error and that petitioner is liable for the income tax deficiency and section 6651 and 6654 additions to tax as determined. We caution petitioner that future advancement of this or similar arguments may well result in penalties of up to $25,000 under section 6673.” 2017 T. C. Sum. Op. 53, at p. 8.

One bite, Mark S.