In Uncategorized on 08/24/2018 at 16:38

It looked like a simple off-the-bencher. The unsubstantiated charitables got blown off. Thereafter, the usual Rule 155 led to a computation from IRS, and petitioner didn’t furnish another.


There were two (count ‘em, two) Sched As with charitables. The first, attached to the 1040 that IRS processed, showed $7K, and so did the SNOD. The second, furnished with a 1040X that IRS didn’t process, showed $4K. The evidence IRS put in on the trial was the wrong Sched A, from the unprocessed 1040X.

Judge Gustafson’s off-the-bencher cut the $7K SNOD amount down to the wrong Sched A ($4K) amount. As usual, Judge Gustafson was trying to help out the taxpayer. See my blogpost “The Reopeners’ Checklist, 2/7/18.”

Judge Gustafson sorts out the Boss Hoss Section 6751(b) problem from that blogpost in a companion case, which I’ll get to when I’ve finished with Abdul M. Muhammad, Docket 23891-15, filed 8/24/18.

Judge Gustafson, pardonably, couldn’t sort out the evidentiary miscue from the Rule 155 beancount.

“Expecting to enter decision without the benefit of Mr. Muhammad’s views, we reviewed the computation and discovered that it seems to reflect no reduction–by $3,366 [the difference between the SNOD and the wrong Sched A] or any other amount—of the charitable contribution disallowance….That  is, the computation does not comply with our bench opinion; but that non-compliance is not easy to discern.

“The Commissioner’s Rule 155 submission, like most such submissions, is a document with very little narrative. It consists of a cover page, a case caption and short preamble, a signature page, a proposed ‘Decision’ document, and a 23-page “Computation Statement” consisting of terms and numbers. The Commissioner’s Rule 155 submission does not state that it corrects an error in the Court’s opinion, nor does it mention explicitly that it is not reducing the disallowance. Rather, one can infer this fact only by comparing the relevant entries in the Rule 155 computation to the entries on the equivalent documents in the SNOD and seeing that the disallowance for ‘Itemized deductions’ is unchanged.” Order, at p. 3.

Playing detective, Judge Gustafson finds the mistake.

“The Rule 155 submission may–as it did here–conceal a correction rather than revealing it. We confidently assume that concealment for partisan advantage was not the aim of the Commissioner’s counsel here, since the Rule 155 submission also reflects the Commissioner’s (unannounced) concession of penalty… (as we explain in our order dated August 23, 2018), which concession naturally benefitted petitioner. But even in the instance of a concession benefitting the other party, best practice would certainly be to make the concession explicit and clear, so that neither the Court nor one’s opponent will need to take the time (as we did) to try to figure out whether a concession was really being made and, if so, why. And where the Rule 155 computation embodies, without notice and explanation, a party’s intended correction in his own favor of the Court’s supposed error, it is a most serious violation of Rule 155.”

Rule 155 is no substitution for Rule 161 (no new matter, no “time yet for a hundred indecisions, And for a hundred visions and revisions,” as a much better writer than I put it).

What IRS wants is reconsideration.


There’s the 30-day “quick kick” to move for reconsideration. And IRS is well over the mark.

“It is possible that we misunderstand the Commissioner counsel’s intention and submission. It is possible that his non-reduction of the disallowance was a mere oversight and that our apparent error involving Exhibit 8-P [the wrong Sched A], recently discovered by us, had nothing to do with his computation. If so, he can explain the situation in his response to this order. But if he did use the Rule 155 computation in a misguided attempt to fix an error in our decision, then we must disallow that attempt. Counsel appearing before this Court should understand that we rely on them to perform their Rule 155 computations without making any corrections to our holdings, whatever might be the motivation and justification for such corrections. Requests for reconsideration must be filed as such.” Order, at p. 6.

And obliging as he is, Judge Gustafson refuses to exercise whatever discretion he might have to unscramble IRS’ frittata sua sponte “…on the procedural facts of this case.” Order, at p. 6. Maybe he’s afraid IRS’ will take this beneficence as an excuse to mess up their trial evidence and trial prep, hoping Tax Court judges will bail them out.

So let IRS show cause “…why we should not order him to file a supplement to his computation, in which supplement he would recompute Mr. Muhammad’s 2013 liability by reducing to $4,377 (rather than $7,743) the disallowance of charitable contributions.” Order, at p. 6.

Abdul can reply to IRS’ response, of course.

Judge, with respect, I’ll show cause on behalf of the American taxpayer, of whom I am one (oh, yes, am I one!), why Abdul shouldn’t get a free ride. Yes, ding IRS’ counsel for the foul-up, but why give Abdul a pass at the expense of us innocent bystanders just because IRS’ counsel messed up? The SNOD was correct, and Abdul had only the Michael Corleone gambit on the trial. Let IRS’ counsel come up with the tax on the differential, pour encourager les autres. Or let IRS Acting Com’r Kautter, or Sec’y Mnuchin come up with the pocket change. Rest and move for decision, Your Honor.


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