Attorney-at-Law

GALVESTON, OH GALVESTON

In Uncategorized on 06/19/2018 at 22:07

Another Jimmy Webb classic sung by Glen Campbell gives me the headline for today’s blogfodder, Hampton Software Development, LLC, 2018 T. C. Memo. 87, filed 6/19/18, with Judge Chiechi decomposing almost as many electrons as did Judge Goeke did three years ago.

See my blogpost “Nothing Succeeds,” 2/26/15, the story of TFT Galveston Portfolio, Ltd, 144 T. C. 7, which Judge Chiechi quotes in extenso.

IRS won a Phyrric victory back in ’15 in Galveston, getting one quarter of FICA/FUTA plus chops, when they were trying for numerous years’ worth.

But yesterday’s scratch win is today’s complete win, as the property manager gets nailed as an EE, not IC, for all periods at issue.

The interesting thing about this fact-bound reprise is that petitioner gets whanged for not seeking discovery concerning the Section 6751 Boss Hoss, just protesting that it’s too burdensome to get IRS’ documents.

“The parties agree in their respective filings that sec. 7491(c) applies only ‘with respect to the liability of any individual’ for, inter alia, any penalty and that therefore respondent does not have the burden of production under sec. 7491(c) for the penalties under sec. 6656(a) that respondent determined. The parties also agree in their respective filings that petitioner has the burden of proof and the burden of production with respect to the penalties under sec. 6656(a). Petitioner nonetheless argues that ‘[r]espondent would be the only party with access to these records [any records regarding the approval that sec. 6751(b)(1) requires] and, therefore, it would place an undue burden on * * * Petitioner to be required to produce internal documents of the Internal Revenue Service to prove a penalty assessed against them [sic] was proper.’ We agree with petitioner that ‘[r]espondent would be the only party with access to these records [any records regarding the approval that sec. 6751(b)(1) requires]’. We disagree with petitioner that ‘it would place an undue burden on * * * Petitioner to be required to produce internal documents of the Internal Revenue Service to prove a penalty assessed against them [sic] was proper.’ That is because petitioner did not ask us to allow it (1) to conduct discovery in order to ascertain whether respondent has any records regarding the approval that sec. 6751(b)(1) requires with respect to the penalties under sec. 6656(a) and/or (2) to reopen the record in order to dispute that that approval occurred.” 2018 T. C. Memo. 87, at pp. 42-43, footnote 22.

Takeaway- Demand discovery unless the signed Boss Hoss document is on the table. The burden is not only on the taxpayer-petitioner, but also on the taxpayer-petitioner’s lawyer.

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