Attorney-at-Law

CHOPFALLEN – PART DEUX

In Uncategorized on 08/28/2018 at 17:52

Ol’ Noah W., the dictionary dude, says it means “dejected, depressed, cast down in spirit.” And after finally having run down Ernie Ryder and his traveling show, IRS sees their Section 6662 accuracy, and Section 6663 fraud, chops go “slip slidin’ away,” as a much finer writer than I put it.

The problem is Graev and Chai. If you don’t know those cases, you haven’t been reading this my blog. Ernie’s little show has been running for more than eight years, and IRS was a wee bit casual with documenting Boss Hossery back then, so when they throw in a couple “redacted Examination Case Processing Sheet (Form 3198)” they need to have some declarations from IRS personnel to backstop their claim that the 3198s somehow are Section 6751(b) sign-offs.

Well, what about res gestæ? The Form 3198 is offered for the fgact that it exists, not that it’s true.

Maybe, but that doesn’t solve the problem. Certainly not for Judge Holmes, the Mixmaster of Silt Stirring.

“In some earlier orders, we found that penalty-approval forms were admissible under the business-records exception to hearsay, see Fed. R. Evid. 803(6); more recently, we’ve found that the forms were verbal acts, admissible to show that the supervisor approved the penalty, not that the penalty was justified or even what the supervisor was thinking when he approved it, see Fed. R. Evid. 801(c) advisory committee’s note (‘[i]f the significance of an offered statement lies solely in the fact that it was made, no issue is raised as to the truth of anything asserted, and the statement is not hearsay”). We can’t say that the verbal-act analysis applies here. While the Examination Case Processing Sheet does appear to be signed by Ms. P’s manager and does have penalty amounts listed on it, the document itself doesn’t give any indication on its face that it has anything to do with a supervisor approving Ms. P’s initial determination of penalties. Indeed, if it wasn’t for Ms. P’s declaration, it would be entirely unclear to us why the Commissioner wants the Examination Case Processing Sheet in the record.” Ernest S. Ryder & Associates, Inc., APLC, et al., 14619-10, filed 8/24/18, at p. 6. (Footnote and name omitted).

For both sets of chops, IRS has the same problem. As Mama said, “Don’t know anybody who needs to be explained.” The declarations explaining the Forms 3198 aren’t contemporaneous (they’re made years later), and the forms mean nothing without the declarations. The declarations aren’t records kept in the ordinary course of business by one required to do so, so they’re hearsay and inadmissible.

Once again, IRS is Graevly chopfallen. Sorry, guys.

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