Once again it’s the late great Kalin Twins 1959 hit, as Judge James S (“Big Jim”) Halpern wrestles with “when,” in James L. McCarthy, Docket 21940-15L, filed 10/31/18, and issues a designated hitter.

Jim had his PPIA and his OIC bounced by Appeals, as IRS Area Counsel claims Jim left out of his 433-A the land held by the Stavros M. Ganias Irrevocable Trust, which IRS claims Jim controlled when he incurred the tax liability at issue.

Jim’s wife had a corporation that IRS claims Jim really controlled, which leased the SMG Trust property. But the corporation was out of possession five (count ‘em, five) years ago, and there’s no evidence what happened with the property before or since.

IRS says “mox nix.” Judge Big Jim more delicately puts the proposition: “That would be so, respondent apparently claims, regardless of whether a change in circumstance caused the Trust no longer to hold the … property as petitioner’s nominee when Appeals made its decision to reject petitioner’s proposed collection alternatives.” Order, at p. 2.

I’m surmising here, and that of course is a judicial prerogative, but maybe IRS is claiming dissipation of assets, that by walking on the lease Jim got rid of a valuable right in property he could have sold and given the proceeds to IRS.

I’d give IRS a Taishoff “Good try, third class,” if that’s what they’re trying, but it’s useful to have some evidence.

Judge Big Jim isn’t convinced, and doesn’t feel like surmising.

“The temporal question, however, is not the only legal issue raised by respondent’s treatment of the…property. Even if we were to accept that the …property can be treated as an asset available to satisfy petitioner’s liability as long as the SMG Trust held the property as his nominee when that liability arose, it does not follow that the use of the property at that time supports respondent’s nominee analysis. As far as we know, petitioner himself did not use the … property at any time. It is thus not clear to us why [wife’s Corp]’s leasing of the … property means that the possession and enjoyment nominee factor weighs in favor of treating the SMG Trust as petitioner’s nominee in regard to that property during the term of that lease.” Order, at p. 2.

So both sides get two weeks to brief the matter.