In Uncategorized on 10/03/2018 at 16:11

Today’s installment of my “Don’t Ambush” series comes from Judge Cohen. Here’s Shane V. Robison & Robin S. Robison, Docket No. 25120-16, filed 10/3/18.

And as I’m about to go off to visit my nearest and dearest in the Bayou City, I wish Judge Cohen had designated this one, on a day when neither opinion nor designated hitter appears.

All y’all (I’m warming up) will remember Shane & Robin, of course. Well, if you don’t, see my blogpost “The ‘Goofy’ Regulation,” 6/19/18. Shane & Robin got tagged for passivity, so their heavy-duty ranching losses get suspended. Wherefore the deficiencies originally asserted by IRS get sustained.

But IRS claims they proved more on the trial, and want to conform pleadings to proof. IRS claims that Judge Cohen bought IRS’ alternative passivity (Section 469) argument, but not their hobby loss (Section 183), which was “unforeseeable.” Order, at p. 1.

No, says Judge Cohen, I did warn y’all that passivity was in play.

“That opinion was consistent with the Court’s comments and directions regarding briefing made at the conclusion of the trial on September 20, 2017, page 290 of the transcript of proceedings. Although the Court is not suggesting bad faith on the part of respondent, justice in this instance favors petitioners in that increasing the deficiency and the associated penalties unfairly and belatedly raises the stakes of the litigation.” Order, at p. 1.

So Shane’s & Robin’s numbers are what the decision says. And those numbers aren’t small, around $480K, without interest, even though IRS conceded the chops.

I can’t see why it’s “unforeseeable” that a court will buy any of your arguments, unless the argument is totally unsupportable. In which case you may have more problems than conforming your pleadings to the proof.

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