In Uncategorized on 02/22/2018 at 15:09

Fraud serves more than one purpose, for IRS as well as for the fraudster. That Obliging Jurist, Judge David Gustafson, revisits fraud as a tool for IRS, not only as grounds for the Section 6663 chop, but also to toll the statute of limitations, in Johannes Lamprecht & Linda Lamprecht, Docket No. 14410-15, filed 2/22/18.

Y’all will recall Judge Gustafson having Graev second thoughts about the Section 6751(b)Boss Hoss sign-off last September. No? See my blogpost “Misplaced Modesty,” 9/26/17.

Well, IRS let Judge Gustafson off the hook when they conceded they didn’t have the Boss Hoss for the fraud chops. But IRS does claim they have the Boss Hoss for the Section 6662 accuracy chops.

Except Jo & Lin claim SOL ran on years for which IRS issued the SNOD.

IRS wants to run a slalom, skirting the fraud chops for want of Boss Hoss, but nevertheless proving fraud to get around SOL, and hitting the finish line with the Section 6662 accuracy chops.

“Fraud was the main argument advanced by the Commissioner (among other alternatives) for why the statute of limitations remained open through the time that the IRS issued the NOD, pursuant to section 6501(c)(1). (ECF 30 at 7, ¶20(a).) Section 6501(c)(1) provides that the statute of limitations is extended indefinitely if a return is false or fraudulent, meaning that ‘the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.’” Order, at pp. 2-3.

In today’s episode, IRS is seeking responses to interrogatories and document production, but is a wee bit coy. Judge Gustafson wants some more candor.

“The Commissioner stated that in the event he ‘does not prove that petitioners’ returns were false or fraudulent, the Commissioner’s alternative position [among others], is that the accuracy-related penalty applies in each year as set forth in the statutory notice of deficiency.” (ECF 30 at 7-8, ¶ 20-21). While the Commissioner’s [latest] status report concedes that the requirements of section 6751(b) were not met with respect to the section 6663 fraud penalty, the status report is silent as to whether the Commissioner intends to concede the issue of fraud in its entirety, or if he still plans to argue fraud for purposes of the statute of limitation issue (i.e., section 6501(c)(1)).” Order, at p.3.

Now civil procedure 101 taught us that discovery is used to ferret out information germane to the issues of the case. But IRS wants information without telling Judge Gustafson and Jo & Lin’s attorneys whether they’re going to try the fraud issue or not.

So Judge Gustafson holds onto IRS’ discovery motions until IRS fesses up. If IRS isn’t going to try to prove fraud, the SOL puts paid to their case.

I beseech Judge Gustafson to call a Statutory Notice of Deficiency a “SNOD” for short, to distinguish it from a Notice of Determination (for example, in a Section 7428 tax-exempt, a Section 7436 EE-vs-IC, or a ticket to a CDP), which is properly a “NOD.”


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