But You’re Not Dismissed

That pawky humorist George Schussel is back, with a novel question: can a petitioner successfully move to dismiss a Section 6901 transferee liability petition?

Remember George? No? Then see my blogpost “An Unexpected Vein of Pawky Humor,”1/31/13. George has finally settled everything with IRS, he says, as well as other unspecified claims, and wants to pack them all up and go away.

So here’s George Schussel, Transferee of Driftwood Massachusetts Business Trust, f.k.a. Digital Consulting, Inc., 149 T. C. 16, filed 10/5/17.

Not so fast, says Judge Ashford. East meets West in Ming v. Wagner, and Ming wins. Ming is the classic case that says you can’t dismiss a petition from a SNOD except for want of jurisdiction; Tax Court must enter judgment for IRS in the full amount of the deficiency as stated in the SNOD. So if you want out, stipulate with IRS and move for entry of decision.

Wagner is the dismiss-petition-from-CDP case, where there is no decision required, because no Section 7459. Likewise one can move to dismiss a petition from innocent spousery or whistleblowing, as there’s no dollar amount to enter or statute preventing dismissal.

The key to the Wagnerian cases is FRCP 41(2), which allows dismissal if no prejudice to the other side other than the prospect of another lawsuit. Remember, no statute mandates entry of decision for IRS in any Wagnerian.

But Section 6901 and the Regs say “…regardless of the nature of a transferee’s liability under section 6901(a)(1) (i.e., whether it is for income, estate, or gift tax self-assessed by the taxpayer-transferor or a deficiency in income, estate, or gift tax determined by the Commissioner), it shall be ‘assessed’ against the transferee ‘and paid and collected in the same manner and subject to the same provisions and limitations as in the case of a deficiency in the tax with respect to which such liability is incurred’.  Sec. 301.6901-1(a)(1), Proced. & Admin. Regs. (emphasis added).  Paragraph (a) of the regulation further provides that in the case of transferee liability for the income, estate or gift tax of the taxpayer-transferor, the Internal Revenue Code provisions made applicable by section 6901(a) include those relating to “the filing of a petition with the Tax Court of the United States and the filing of a petition for review of the Tax Court’s decision.”  Sec. 301.6901-1(a)(3)(iv), Proced. & Admin. Regs.” 149 T. C. 15, at pp. 8-9. (Footnote omitted).

Note it’s the same as a deficiency, not as if, Judge Lauber.

Anyway, though George wanted dismissal with prejudice and Ming wanted dismissal without, mox nix, says Judge Ashford. The SOL has run on any further attempts to litigate George’s delictions, so any dismissal must be with prejudice, as any new proceeding will fail.

That George’s transferee beef is mixed in with other, different points of contention doesn’t help him.

“Finally, also ill-conceived is petitioner’s contention that because we are not privy to the parties’ comprehensive settlement and therefore cannot glean from the record the agreed amount of his transferee liability, we are relieved of having to enter an order and decision specifying the amount of the liability (as is provided in section 7459(d)).  The amount of petitioner’s liability, albeit as determined by respondent, is very clear from the record as it is stated in respondent’s notice of liability, which is attached to petitioner’s petition.  Because the parties have apparently agreed on a different amount for which petitioner is liable, it is incumbent upon them to stipulate a decision reflecting that amount.” 149 T. C. 16, at p. 12.

A Minor Rant

As all y’all well know, the next United States Tax Court Judicial Conference (sometimes hereinafter referred to as “The Chicago Jamboree” or “Tango Charley Juliet”) will take place from and including March 26 to and including March 28, 2018, in obeisance to the new Section 7470A. Be prepared to ante up an estimated $450 cover charge, plus room and board in the vicinity of the Pritzker School of Law at Northwestern University, if you want in, and get your application in prontito.

I’ve got my application in, but the title of this blogpost derives from the fact that the United States Tax Court has no press office, no press officer, and will not issue press passes for Tango Charley Juliet.

So I’m depressed. I have no press pass.

The application, as all y’all who’ve applied have noticed, has a check-the-box for “Press.” Exactly what that confers upon any who checks it is a wee bit unclear. I did get a reminder from one of the organizing squad that panel statements and discussions were on the record, but cocktail and dinner chats were not for attribution. I took that to mean “deep background,” just like last time.

So if I make the cut for The Chicago Jamboree, I’ll just be me, not the (credentialed) press.

Now you may say that as a solo blogger, a beaten-down, beaten-up, old-time single-shingle, “general practitioner with very limited experience and mediocre qualifications,” as a much better writer than I put it, should hardly presume to demand equal treatment with the dispensers of paper and broadcast whose names are household words and whose exhalations provoke twitterstorms.

Well, maybe so.

But here’s a snippet from my blogpost “Je Suis Charlie,” 1/9/15, arising out of a minor massacre in Paris, by no means on a par with what happens here every day.

“I am a journalist. The Cyber Age has made every blogger a journalist, quite as much as our colleagues of the hard copy and radio/television. Without meaning to boast, this blog has been read in over 130 countries, commonwealths, dependencies, trust territories and all like that. And these blogposts have been read more than 42,000 times in the three years of this blog’s existence.”

United States Tax Court, hand out that pass.

And the Tools of the Trade

IRS seems to have a problem of perception when it comes to the support leg of the qualifying child test in Section 152(c)(1)(D). But here’s CSTJ Lewis (“Ta Da! Hail to the Chief!”) Carluzzo to set IRS straight in Raymond Ochoa, 2017 T. C. Sum. Op. 78, filed 10/4/17.

Ray lives with qualifying child’s grandma (mommy lives across the country, and only ponies up modest sums to keep the family going, and Daddy is out of the play for whatever reason). Ray is qualifying child’s uncle. Ray claims he pays more than grandma or mommy.

IRS says, “you’re timely but several dollars short, as you don’t provide more than half of non-qualifying child’s support. Have a SNOD.”

Ray petitions, and CSTJ Lew lays it on IRS.

“Respondent takes the position that H.O. cannot be treated as petitioner’s qualifying child because petitioner has failed to show that he provided more than one-half of H.O.’s support.  Respondent’s focus on the source of H.O.’s support, however, misses the mark.  For purposes of determining a taxpayer’s qualifying child it matters not how much support a child receives from others so long as the child did not provide more than one-half of his or her own support.  See sec. 152(c)(1)(D).  We are satisfied that H.O. did not contribute more than one-half of her own support during 2013, so the support test does not, as respondent suggests, preclude her treatment as petitioner’s qualifying child during [year at issue].” 2017 T. C. Sum. Op. 78, at p. 6.

IRS isn’t through. Rummaging through little H. O.’s school records, they find only mommy listed and not Ray. As mommy lives on the other coast, they claim Ray didn’t live with H. O. for the half-year-plus-1-day safe harbor in Section 152(c)(1)(B).

CSTJ Lew finds the rummaging trashed by Ray’s testimony.

“Relying entirely upon the reference to H.O.’s mother on the records of the school district, respondent would have us find that H.O. and [mommy] resided in the same household during [the year at issue] and that the household did not include petitioner for most of the year.  However, petitioner and [grandma] credibly testified that they, along with H.O., shared the same residence during [the year at issue] and that [mommy] did not live with them for most of the year.  We find their testimonies more persuasive than the inference respondent draws from the records of the school district.” 2017 T. C. Sum. Op. 78, at p. 6.

Even if mommy was around for the whole year, the tiebreaker rule in Section 152(c)(4(A)(ii) awards little H. O.’s tax bennies to the taxpayer with the higher AGI for the year at issue. Grandma has only three-figure Social Security, and Ray has a job.

CSTJ Lew conveniently ignores whatever AGI mommy had, but believes she wasn’t around and therefore sends only Ray and grandma to the blueline for the shootout.

Ray gets HOH, and all the child care good stuff.

Now Ray claims American Opportunity Tax Credit because he’s going to trade school by night. The school gave Ray the 1098-T, based upon which CSTJ Lew gives Ray his allocable credit. But IRS gigged Ray for the tools he bought from an outside supplier.

“Although we find petitioner’s testimony credible and have no doubt that he expended amounts for tools and/or equipment used in his weekly workshop at [trade school], the expenses do not constitute fees paid to [trade school] and therefore are not included in the definition of qualified tuition and related expenses.  See id.  Accordingly, petitioner is not entitled to an AOTC for [year at issue] in an amount greater than the amount respondent now concedes.” 2017 T. C. Sum. Op. 78, at p. 10 (Citation omitted).

Hold it a second, Chief. Remember Djamal Mameri? No? Well, ask your predecessor ex-CSTJ Panuthos. Or better yet, read my blogpost “Computational,” 11/4/16, wherein IRS magnanimously conceded Djam’s computer for his English class. IRS’ largesse came off of proposed Reg. 1.25A-1(d)(3) issued August 2, 2016.

Here’s what ex-CSTJ Panuthos said, as reported in my aforementioned blogpost: “The proposed regulation interprets the meaning of ‘required for enrollment or attendance’ as set forth in section 25A(f)(1)(A) and (i)(3) to mean that ‘the course materials are needed for meaningful attendance or enrollment in course of study, regardless of whether the course materials are purchased from the institution’.”

Djam needed a computer for English class, but Ray needed his tools for his electrician’s class. Whatever a student needs, and the school requires, to better him/herself, should be credited to the extent Congress allowed.

Ray ought to ask for a Rule 161 reconsideration, based on what IRS did for Djam. And IRS should cut Ray the same slack they did for Djam.

What happens if you don’t? Ask Eric Alan Harris, 2017 T. C. Sum. Op. 77, filed 10/3/17. Or better still, don’t; read STJ Panuthos’ opinion.

Mrs Eric Alan Harris did their taxes (MFJ, of course), didn’t withhold or pay ES for four (count ‘em, four) years, tried three IAs but got bounced each time for not paying ES in the next year, and entered into an OIC. IRS bought the OIC, and Mrs Eric Alan Harris walks.

Eric Alan is left holding the cliché. Or as STJ Panuthos puts it, “For reasons unclear from the record, petitioner was not included as an applicant on Mrs. Harris’ Form 656 or the addendum despite the fact that she included the 2012 joint income tax liability in her offers.” 2017 T. C. Sum. Op. 77, at p. 7.

Eric Alan wants out for 2012, the last year in the stack, and seeks Section 6015 relief after IRS bounces his OIC of zero, as he claims he was let out along with Mrs Eric Alan Harris on her OIC. He claims his income and expenses were included in the numbers Mrs Eric Alan Harris included in her OIC application.

Section 6015(f) inequity is all that is left to Eric Alan, as the unpaid tax results from tax self-reported on a joint return.

Eric Alan meets the first seven hurdles. Eric Alan is still married to Mrs Eric Alan Harris, wherefore streamlining is a nonstarter.

As for equity, Mrs Eric Alan Harris had an unbroken four-year record of not paying the taxes due. Eric Alan knew this and knew she was seeking an OIC. Eric Alan claims hardship, but has plenty of assets. The rest of the factors don’t help Eric Alan.

But Eric Alan claims that someone at the IRS suggested adding 2012 to the other years, and settling everything at once. Even so, Eric Alan never signed aboard, and joint return means joint and several liability. Discharge of one co-obligor doesn’t let the other off the hook.

“Considering the circumstances of Mrs. Harris’ OIC, we are not persuaded that petitioner is entitled to relief under section 6015(f). Petitioner testified that Mrs. Harris prepared the Form 656 and the addendum herself, with no IRS employee present. It is not fully clear why petitioner was not included as an applicant on Mrs. Harris’ Form 656 and addendum, but he has not asserted, nor is there any evidence of, fraud or deceit on the part of Mrs. Harris or the IRS. It is also not clear the extent to which petitioner was involved in Mrs. Harris’ preparation of her Form 656 and addendum; for example, it is not clear whether petitioner reviewed either document before its submission to the IRS.

“The Court further notes that under ‘Offer Terms’ on page 4 of the Form 656 signed and submitted by Mrs. Harris, the terms listed for an OIC include the following:

I am submitting an offer as an individual for a joint liability * * * I understand if the liability sought to be compromised is the joint and individual liability of myself and my co-obligor(s) and I am submitting this offer to compromise my individual liability only, then if this offer is accepted, it does not release or discharge my co- obligor(s) from liability. The United States still reserves all rights of collection against the co-obligor(s).” 2017 T. C. Sum. Op.77, at pp. 19-20.

But STJ Panuthos is not hard of heart. “We are not unsympathetic to petitioner’s plight; however, we are bound by the statute as written and the accompanying regulations when consistent therewith. The simple facts are that petitioner elected to file a joint 2012 Form 1040 with Mrs. Harris, and he was not a party to Mrs. Harris’ OIC. Accordingly, we sustain respondent’s determination.” 2017 T. C. Sum. Op. 77, at p. 21. (Citations and footnote omitted.)

Here’s the omitted footnote. “It appears that petitioner did not realize the implications of electing joint filing status for 2012 combined with the failure to include himself as an applicant on Mrs. Harris’ Form 656 and addendum. Petitioner testified that he and Mrs. Harris elected joint filing status for their 2012 Form 1040 because it was ‘appropriate to our end of the year end status.’ Mrs. Harris did not testify, and some of the circumstances surrounding the OIC, including the specific advice she received from IRS employees while preparing her Form 656 and addendum, are unclear. It certainly would have been reasonable and appropriate for the IRS to advise Mrs. Harris of the possible consequences of submitting an OIC without petitioner as an applicant when a joint return was filed for 2012. See IRS Publication 1, Your Rights as a Taxpayer; I.R.S. News Release IR-2014-72 (June 10, 2014).” 2017 T. C. Sum. Op. 77, at p. 21.

Judge, who knows what, if anything, the IRS told Mrs Eric Alan Harris? And if they had given her legal advice, what if she never told Eric Alan, for reasons best known to herself? Or even if she had, remember poor Maria Sanchez? What, no? Then see my blogpost “‘I’m From the Government, and I’m Here to Help’ – Part Deux,” 3/19/15. I repeat my comment therefrom: “Listening to an IRS RA can be hazardous to your tax health.”

Wait a minute, didn’t IRS already get Zip? Well, yes. Y’all will doubtless recall Judge Lauber’s detailed instructions to IRS and Zipora Klein’s lawyers to brief most particularly whether IRS might mulct Zip and husband Sam for interest and additions to tax. No? Well, check out my blogpost “Als Ob,” 11/22/16, wherein Judge Lauber channels early Twentieth Century German philosopher Hans Vaihinger in a prolonged discussion of “as if.”

In today’s episode, IRS is after Zipora Klein. 149 T. C. 15, filed 10/3/17, and husband Sam for additions and interest on their $562K tax-loss restitution for their various delicitons.

I must say the gang did their homework, laid it on Judge Lauber, and at close of play IRS gets zip, and Zip wins.

“The cases present a question of first impression in this Court:  whether the IRS may assess and collect interest and additions to tax on amounts assessed under section 6201(a)(4)(A).  That provision authorizes the Secretary, following a taxpayer’s criminal conviction for failure to pay any tax imposed by title 26, to ‘assess and collect the amount of restitution’ ordered by the sentencing court ‘in the same manner as if such amount were such tax.’”  149 T. C. 15, at pp. 2-3.

After much argy-bargy about what they owed the fisc, Zip coughed up the whole $562K, as IRS threatened her with the hoosegow. Now when Zip took the fall, she signed a closing agreement that said IRS could audit, and notwithstanding anything in her plea agreement, could visit Zip with fire and slaughter. This IRS does, as they seek interest and additions. IRS never audited Zip and Sam for six years after the years at issue.

IRS wants interest from the due dates of the returns at issue, not from when restitution was ordered, and for the full amount of the $562K tax loss for each year. And IRS hits Zip with a NFTL. And Sam, too, so he won’t feel left out.

“We gave at the office,” says Zip. Judge Lauber treats that as a cross-motion for summary J, because IRS wants summary J too.

Zip and Sam got a CDP with no collection alternative on offer. “The SO acknowledged that the restitution portion of the assessment ‘appear[s] to have been paid but noted that the assessed interest and additions to tax (he called them ‘penalties’) had not been paid.  Petitioners during the hearing did not request a collection alternative, but the SO allowed them two weeks to seek one.” 149 T. C. 15, at p. 10.

Zip and Sam stood pat, the SO hit them with a NOD, and Zip and Sam petitioned.

Standard of review? De novo. There never was an examination (audit) of Zip’s and Sam’s  returns for the years at issue, and the USDCCDCA said the exact amount of the tax loss was indeterminate; IRS used a bank records reconstruction to come up with the number, but Sam claimed some deductions he had weren’t reckoned in. So no SNOD, and Zip and Sam did not have a chance to contest at the CDP.

“Section 6601(a) provides that interest shall be paid ‘[i]f any amount of tax imposed by this title * * * is not paid on or before the last date prescribed for payment.’  Section 6651(a)(3) imposes an ‘addition to tax’ in case of failure to pay timely ‘any amount in respect of any tax required to be shown on a return   * * * which is not so shown.”  The question is whether these provisions authorize the Secretary to assess and collect interest and additions to tax on amounts of restitution ordered by a sentencing court and assessed under section 6201(a)(4).” 149 T. C. 15, at p. 15.

So Judge Lauber finds a counterfactual hypothesis. A dive into the grammar book (and what would a full-dress T. C. first impression extravaganza be without at least a bite into the stuffin’ of some linguistic exegesis?) shows that a counterfactual hypothesis is treatment of something that isn’t as if it was. Like taxing a non-resident alien as if they were a US citizen, although they’re not.

“Respondent acknowledges that restitution is not literally ‘a tax.’  See Staff of J. Comm. on Taxation, General Explanation of Tax Legislation Enacted in the 111th Congress, 461 (J. Comm. Print 2011) (noting that ‘restitution is not itself a determination of tax,’ so that before the enactment of section 6201(a)(4) the Code ‘d[id] not provide a basis on which tax may be assessed’). And the courts have recognized that ‘[c]riminal restitution, even as a penalty for a failure to pay taxes, is not a tax.’  United States v. Tilford, 810 F.3d 370, 372 (5th Cir. 2016).  Rather, Congress adopted in section 6201(a)(4) the counterfactual hypothesis that restitution is a tax for the limited purpose of enabling the IRS to assess that amount, thus creating an account receivable on the taxpayer’s transcript against which the restitution payment can be credited.” 149 T. C. 15, at p. 18.

Now the IRM is full of good language about how IRS can get the interest and additions no matter what the sentencing court decides. But the IRM doesn’t bind the courts, and “(T)hese IRM provisions, while long on instructions, are short on analysis.” 149 T. C. 15, at p. 20.

“The respect that courts accord an agency manual is limited to its ‘power to persuade’ by its ‘thoroughness, logic, and expertness.’  United States v. Mead Corp., 533 U.S. 218, 234-235 (2001).  On a question of statutory construction such as this, IRM provisions would have limited power to persuade, even if they evidenced ‘thoroughness, logic, and expertness,’ which these do not.” 149 T. C. 15, at p. 21.

And remember those high school grammar classes we all slept through? Well Leroy Muncy didn’t. He played that gambit (see my blogpost “Delegati Non Potest Delegare – Part Deux,” 5/17/17), and lost. His restitution was assessed as a deficiency, not as if it were a deficiency. Oh, that subjunctive mood.

IRS expends much paper and wind on what Congress intended, but the statute speaks for itself, or at least it does to Judge Lauber. Congress needed to give IRS a quick bookkeeping method to get restitution applied to what was owed the fisc, and the “as if” solution was the quickest.

And the Section 6305 child support collection provisions expressly exempt interest and penalties. The restitution calculation is not an audit. It’s a quick-and-dirty way to get money to where it belongs, and is more to do with unreported income than a fine-tuned substitute for a Rule 155 beancount.

“If the IRS wishes to collect interest and additions to tax, it is free to commence a civil examination of those returns at any time.  Upon final determination of petitioners’ 2003-2006 civil tax liabilities, interest will arise automatically under section 6601(a), and additions to tax (if appropriate) may be imposed under section 6651(a)(3).  But the interest and additions to tax would then be computed, not by reference to the $562,179 tax loss, but by reference to whatever petitioners’ actual tax liabilities are ultimately determined to be.” 149 T. C. 15, at pp. 34-35.

Might could be a wee SOL problem here, IRS.

It was “imitation,” at least in my younger day, that was the sincerest form of flattery. But the internet changed all that, as it changed so many things, “Some forever not for better/Some have gone and some remain” as an immortal put it.

I’m sure John welcomed Tom into the poets’ corner of Heaven.

Meantime, I return my gaze from heaven to earth.

It seems now that theft is the sincerest form of flattery.

My blogpost “He Lied – So What?” 9/29/17 was stolen by one who calls him/her/itself “Milo,” styled a “well-known member” of some website called lipstickalley.com.

I guess its name tells the story. Alleys are usually places where thieves hang out and people get mugged.

“Milo” might at least have credited me, before lifting my blogpost bodily without even erasing the links to this my blog or removing my Taishoff “Oh Please” which I awarded to Judge Holmes.

“Milo,” if you’re going to steal, do it right. I can’t bear to be robbed by an incompetent, sloppy thief.

Oh, I know. 17USC§411 prohibits any action in respect of a work when it hasn’t been registered and the fee paid. And none of my blogposts is copyrighted, because I am not paying the fees, and anyway, I can’t copyright my extensive quotes from caselaw.

But I can call out thieves, and I will.

Today it’s Judge Wherry who touches his head and whistles the play dead in Cambridge Partners, L.P., Kenneth I. Nowak, State of New Jersey Appointed Receiver, et al., 2017 T. C. Memo. 194, filed 10./2/17.

Ken is the ineligible receiver. He got appointed to wind up a couple NJ limited partnerships whose erstwhile general partner and tax matterer took a big fall for a couple felony fraud counts (hi, Judge Holmes). Seems that ex-gen’l partner gave some limiteds big distributions, reported as taxable, but he was running a Ponzi scheme and there were no profits, only losses. So the NJ authorities tossed the ex-gen’l partner, and sent to the bullpen for Ken, who files for refunds for the partners, using Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).

But Section 6228 and Rules 240 and 241 say only the tax matterer may do so, and Ken isn’t. IRS tried to find a swindled limited to step up as tax matterer, but all demurred.

Ken never was a partner. NJ can’t give Ken powers that Congress didn’t give him, even though the NJ Superior Court order that appointed Ken was modified to give him those powers.

And Tax Court has no inherent non-statutory power to appoint a non-partner tax matterer unless it has jurisdiction. Which it doesn’t.

Judge Wherry notes that the individual limiteds can file their own AARs.

I note with gratification that the amended Section 6223 (a) (the result of the Bipartisan Budget Act of 2015) creates a “partnership representative” who need not be a partner. This would obviate the problem encountered here.

That’s the bad news for Pei Fang Guo, 149 T. C. 14, filed 10/2/17. Pei got unemployment compensation from the State of Ohio after she lost her job as a post-doctoral fellow at the University of Cincinnati.

Pei was in the USA as a nonimmigrant professional, and never claimed US citizenship, being a Canadian citizen all the while. Pei claims Article XV of the Convention With Respect to Taxes on Income and on Capital, Can.-U.S., Sept. 26, 1980, T.I.A.S. No. 11087 (the “treaty”) exempts the payment from US income tax (and Pei’s below the radar for Canadian income tax).

Well, the magic language for exemption in Article XV is “Dependent Personal Services,” which Pei claims her unemployment compensation is. IRS claims that this is “Other Income,” per Article XXII, thus US taxable.

Judge Lauber has this one.

“Nonresident alien individuals generally are taxed on their U.S.-source income. See secs. 871, 872. The parties agree that petitioner’s unemployment compensation, by analogy to other items of income specified in section 861, was U.S.-source income. They agree that ‘gross income includes unemployment compensation,’ section 85(a), and that this income was ‘effectively connected’ with the conduct by petitioner of a U.S. trade or business, see section 871(b). The sole question presented is whether petitioner’s unemployment compensation was exempt from Federal income tax under the treaty.” 149 T. C. 14, at pp. 5-6.

This is a case of first instance, thus it gets a full-dress T. C. opinion.

Treaties get broadly interpreted, as they are deals between sovereigns. Dictionary approaches are out, although plain meaning is in. See my blogpost “Revenez, Enfants de la Patrie,” 9/21/16.

The treaty never mentions unemployment compensation, except to say that it isn’t social security. Article XV, the underpinning of Pei’s argument, talks about “remuneration,” but the treaty doesn’t define that word. So the general rule of Art. III(2) that the definition comes from the government that taxes the income applies.

“Remuneration” is mentioned only twice in the IRC, and then in connection with FICA. There, it’s any payment for labor or services, with 23 (count ‘em, 23) exceptions.

Ya gotta love this stuff, you really do.

Pei didn’t get unemployment compensation from her former employer, U of Cincy. She got it from the State of Ohio.

“Even if unemployment compensation were thought to be ‘remuneration derived * * * in respect of an employment,’ article XV(1) would not help petitioner. Paragraph 1 thereof provides that ‘salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State.’ If the employment is so exercised, ‘such remuneration as is derived therefrom may be taxed in that other State.’ Ibid.

“If petitioner’s unemployment compensation were thought to be ‘remuneration derived * * * in respect of an employment,’ it would have to be regarded as remuneration derived in respect of her former employment with UC. See ibid. That employment was ‘exercised’ in the United States. Paragraph 1 accordingly provides that such remuneration may be taxed in the United States.” 149 T. C. 14, at p. 10.

Pei is over the $10K limit for the exception in Art XV(2), and anyway she wasn’t paid by a Canadian entity, but by Ohio.

This is a deficiency case, so Tax Court can’t abate interest, as Pei asked. Section 6404(a)(1)(E) bars that door.

Canada can allow Pei a deduction or credit for the US income tax she pays, per Article XXIV(2)(a), but as this is the US Tax Court, Judge Lauber can’t tell Canada Revenue Agency, a/k/a Agence du Revenue du Canada, to do anything.

US unemployment compensation may be compensation, but it isn’t remuneration.

Judge Carolyn P. Chiechi is far too cultured and well-bred to use such a boisterous, “yeehaw” word as “absquatulate.” After all, Judge Chiechi was first in her undergraduate class, and stood ninth in her law school class, at Georgetown.

But this blogger is nowise so constrained. I, much less gifted, did well enough (although unranked) as an undergraduate at a local City school, but barely evaded the cellar On The Hill Far Above.

Howbeit, the title of this opuscule accurately describes the proper procedure when stipulating and seeking a continuance (what we State courtiers call an “adjournment”).

Here’s You De Li & Biyan Liang, Docket No. 19748-16, filed 10/2/17, to tell you all about it.

“…respondent filed a motion for continuance (respondent’s motion). In that motion, respondent represents that the parties will be filing soon a stipulation of settled issues relating to certain issues in this case. The Court will not act on respondent’s motion until that stipulation of settled issues is filed.” Order, at p. 1.

So if you mean to stipulate as the thirty-day cut-off per Rule 133 is bearing down on you, stipulate first, and send in the stip with your motion for a continuance.

Or maybe, if you’re particularly adventurous, you can try for a continuance without talking about stipulations. But I don’t recommend this. Judges get very testy with those who are parsimonious with the truth.