In Uncategorized on 11/14/2017 at 17:37

Isn’t Impressed

Back for a second swing at the cliché are Benyamin Avrahami & Orna Avrahami, et al., Docket No. 17594-13, filed 11/14/17, via a Rule 161 Reconsideration of Facts, a/k/a Mulligan.

All y’all will remember Beny & Orna. You don’t? Well, check out my blogpost “The Selfies – Eclipsed,” 8/21/17, and my other and further blogposts therein cited. Beny & Orna were running sketchy captive insurance operations to funnel deductible cash to themselves, and came unglued in 149 T. C. 7.

Well, instead of the Rule 155 beancount and disgorgement, Beny & Orna want The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Indomitable, Indefatigable, Ineluctable, Incontrovertible, Implacable, Illustrious, Industrious and Ineffable Foe of the Partitive Genitive, Old China Hand and Master Silt Stirrer Judge Mark V. Holmes, to recognize that his experts really put on a grand show of running an insurance company, and that the policies Beny’s & Orna’s shackled outfit were claims-made and not when-occurred.

Well, never one to overlook a shot at kicking a partitive genitive to the curb, and in such cases he’s a captive audience, Judge Holmes blows off Beny & Orna in a designated hitter with these gems.

Beny & Orna claimed they hired qualified professionals to set up and run their little roundy-round.

“The question of whether an arrangement looks like insurance doesn’t depend on whether those appearances flowed from professional advice but what actually happened. Here, some of the key facts were the extreme illiquidity of [Beny’s & Orna’s ‘insurer’]’s investment portfolio — so skewed toward flowing funds back to the Avrahamis that it had no other significant investments — and the very telling pattern of receiving claims only after the IRS started an audit. Petitioners cite to no law that says there’s a reasonable-reliance defense on the natural consequence of such activities — namely, a more-likely-than-not finding that this was less insurance as that term is commonly understood and more a way of generating tax-deductible financing for the Avrahamis’ other investments.” Order, at p. 2.

Or as G. B. Shaw put it, you can’t grow roses on concrete by dint of hiring expensive gardeners.

And now that he’s warmed up, Judge Holmes has a partitive genitive lined up.

“Petitioners’ second argument is that ‘there should be no reasonable dispute  that] the policies at issue were claims made policies, not occurrence policies.’ Some were, but as we pointed out, at least one policy was so ill-drafted that it was both a claims-made and an occurrence policy. Id. at __ (slip op. at 82). That was an illustration of a couple more general points — sloppy drafting of policy language and actuarial calculations that did not reflect in all cases the actual policy language — that then buttressed the finding of fact that [Beny’s & Orna’s outfit] was not operating like an insurance company.” Order, at p. 2. (Emphasis by the Court.)

“A couple more general points.” Judge Holmes is on the case.

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