In Uncategorized on 09/14/2018 at 16:35

A Tax Court Judge, be she or he a Judge, Senior Judge, or STJ, must be many things to many people (the post of being all things to all people having been taken by an even more exalted personage). Like Shakespeare’s man on the stage of life, the Tax Court Judge must play many parts.

She or he must be learned in law generally; an unrivalled untangler of the IRC, the Regs, caselaw and legislative intent; a quick study of complex businesses (e. g., used airplane parts dealer, tugboat operator, flour miller, real estate developer, Mississippi riverboat pilot, airline pilot, fine artist, professional golfer, popular entertainer, medical practice operator, brand ambassador and Global Icon); social worker; past-master analyst of human behavior (“the daily grist that comes to the judicial mill,” as Judge Vasquez puts it), able to distinguish and deal with the true deer-in-the-headlights petitioner, good of faith but ignorant of law and procedure, and distinguish same from the gamester, the rounder, the wag, wit and wiseguy, and the endlessly inventive counsel of all the foregoing; master lexicographer and linguistician (a word I just invented, meaning one combining the science of Chomsky and Hayakawa with the nuanced approach of a poet); and  a skilled arithmetician withal.

I must acknowledge both the high standard and how well the Tax Court bench rises to the occasion, despite the cavilings of bloggers like me, to say nothing of disappointed litigants and litigators.

But there must come a time, even to such as The Judge with a Heart, STJ Robert N Armen, when even the ability to perform all the foregoing is insufficient to take a marlinspike to the Gordian knot in which taxpayers and IRS can enwrap themselves.

Case in point: Mary A. Zegeer & M. Scott Zegeer, Docket No. 25533-17SL, filed 9/14/18. IRS wants summary J (vuss noch? as Grandma would have said), but STJ Armen will none of it.

Mary and M Scott can’t pay, but they claim IRS messed up the results of a seven-year-old decision, misapplied a refund back five (or maybe six) years ago, and ignored that they paid the old years off years ago, but STJ Armen finds IRS might have gotten some other offsets right.

“It is unclear from the record exactly how much Ms. Zegeer might owe for 2001 and 2002 if the adjustments called for by the Court’s August 31, 2011 Decision were properly reflected in her transcripts for those years. For that reason it is also unclear from the record whether any portion of the 2015 or 2016 overpayments would remain as offsets for petitioners’ 2010 and/or 2011 joint Federal income tax liabilities.” Order, at pp. 4-5.

There’s more. The record doesn’t show whether Mary separately paid the liabilities for which IRS grabbed their joint refund (M Scott claims injured spouse, as he and Mary weren’t married back in 2001 and 2002). IRS, of course, maybe got that one wrong also.

“As previously stated, petitioners also contend that Mr. Zegeer is not responsible for Ms. Zegeer’s 2001 and 2002 separate Federal income tax liabilities and that, for such reason, Mr. Zegeer is entitled to an allocable portion of petitioners’ 2015 (and 2016) overpayments. Although the Attachment to the notice of determination states that ‘[t]he [SO] investigated the issue of the overpayment/refund offset from 2015 applied to the 2002 balance’, the record does not include what analysis, if any, the SO performed in evaluating Mr. Zegeer’s injured spouse allocation claim. The record includes Mr. Zegeer’s 2015 Form 8379, Injured Spouse Allocation, but the record suggests that the SO may not have considered it or did not otherwise take any action. Finally, although the record does not include a Form 8379 for 2016 for Mr. Zegeer, the record suggests that a claim for an injured spouse allocation was also made for that year.” Order, at p. 5.

Again to quote Grandma, “From this you want summary judgment?” The problem, of course, is that the cold print on the page cannot evoke the impassioned inflection of the word “this,” worthy of Sutherland at her peak, with which the foregoing was delivered.

So STJ Armen, with pardonable patience, takes two pages to school IRS’ counsel how to supplement her motion papers, including “plain-English and current transcripts of account (Forms 4340).” Order, at p. 6. And Mary & M Scott shall trot out and lay bare all “…documentation such as cancelled checks, invoices, acknowledgments, statements of account, etc., demonstrating the payment, as alleged by them, of all or any part of Ms. Zegeer’s 2001 and 2002 separate Federal income tax liabilities.” Id., as my high-priced colleagues would say.

STJ Armen even warns Mary & M Scott against being a wee bit casual in producing same. “Petitioners are advised that without such documentation, any allegation regarding full payment of Ms. Zegeer’s 2001 and 2002 separate liabilities carries little, if any, weight.” Id.

Finally, and it should be enough for a humid Friday afternoon, to justify the headline of this little opusculum, STJ Armen tells Mary & M Scott, and IRS’ counsel, to “…each, separately and on or before October 12, 2018, show cause in writing why the Court should not, on its own motion, remand this case to respondent’s Appeals Office for the purpose of addressing the proper application of petitioners’ subsequent-year overpayments, the adjustment of Ms. Zegeer’s 2001 and 2002 separate account balances, and Mr. Zegeer’s injured spouse claims, as well as further consideration of petitioners’ interest in a collection alternative in the form of an installment agreement.” Order, at p. 6.

Job has nothing on STJ Armen.

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