Just Get The Boss Hoss To Sign Off First

The Palmolives really have taken a licking, and Judge David Gustafson won’t let up. Having toasted their façade write-off (see my blogpost “No Joy Forever – Because Golsen,” 10/11/17), and thrown shade on their good-faith reliance on Mike Ehrmann’s dodgy appraisal (see my blogpost “Gude Faith, He Maunna Fa’ That,” 12/14/18), today he sustains alternative 40% substantial overvaluation penalty and 20% chops for negligence or disregard of rules, understatement of tax, or substantial valuation misstatement, even though awarded six (count ‘em, six) years apart, at Examination and at Appeals, and on different forms.

You can read all about it in Palmolive Building Investors, LLC, DK Palmolive Building Investors Participants, LLC, Tax Matters Partner, 152 T. C. 4, filed 2/28/19.

To begin with, nobody mentioned chops to the Palmolives before the Boss Hosses had signed something. “Section 6751(b)(1) includes no requirement that all potential penalties be initially determined by the same individual nor at the same time. “ 152 T. C. 4, at p. 16. And the Palmolives’ reliance on IRM §20.1 gives them no rights.

“On the issue of section 6751(b) compliance, the IRS’s use of a form other than the one prescribed by internal administrative regulations does not preclude a finding that the supervisory approval requirement has been satisfied. See PBBM- Rose Hill, Ltd. v. Commissioner, 900 F.3d 193, 213 (5th Cir. 2018) (‘The plain language of § 6751(b) mandates only that the approval of the penalty assessment be “in writing” and by a manager’). Section 6751(b) does not require written supervisory approval on any particular form.” 152 T. C. 4, at p. 17. For a glimpse of PBBM pre-5 Cir, see my blogpost “Thanks A Lot, Judge,” 10/11/16, where Judge Morrison piles it on.

And who cares if the RO or the AO didn’t sign the right paper? “What must be ‘in writing’ to satisfy section 6751(b)(1) is the supervisor’s approval. The statute does not require any particular writing by the individual making the penalty determination, nor any signature or written name of that individual.” 152 T. C. 4, at p. 17.

And as long as the Boss Hoss signed something to which the initial determination was manifested, that’s A-OK with Judge Gustafson.

The Palmolives claim that negligence and disregard are two separate penalties, but even if they are, the Exam Boss Hoss signed off on one and the Appeals Boss Hoss signed off on the other.

The Palmolives lose again.

For the Judge who kicked off the epic Boss Hoss silt-stir with his famous dissent (see my blogpost “The Money Back Guarantee Meets The Boss Hoss,” 11/30/16), Judge Gustafson cuts the IRS plenty of slack in the Boss Hoss corral.

The Section 170(h) regs, specifically Reg. 1.170A-14(g)(6)(ii), the split-the-proceeds-if-the-easement-craters variation on the “joy forever” rule, is getting hammered in Oakbrook Land Holdings, LLC, William Duane Horton, Tax Matters Partner, 5444-13, filed 23/27/19.

It seems Billy D and the Oakbrooks claim the reg is invalid, because apparently IRS skipped a couple steps (note this is Judge Holmes’ order, so a dissed partitive genitive or two is de rigueur) when first they put it forth.

But first there’s the Case of the Missing Comments.

“It appears to be the first case in which there is a possible challenge to the validity of 26 C.F.R. §1.170A-14(g)(6)(ii). The Court has recently become aware that there may have been comments submitted to the Treasury Department during the course of considering this regulation, but its attempts to find the text of those comments using normal legal research resources have failed.” Order, at p. 1.

It seems that the Notice of Proposed Rulemaking that kicked off this reg, found in 48 Fed. Reg. 22940-01 (May 23, 1983), can’t be found online, not from Cornell, the Federal Register site, nor yet from Library of Congress’ website. And where these public comments might be, and what they might say, if anything to the point, can only be produced by IRS.

So IRS, go fetch, and when produced, both sides write fifteen (count ‘em, fifteen) but no more, pages saying what they have to do with this case.

In any case, thereafter the parties each have a shot at a twenty (count ‘em, twenty) page memo “to analyze whether the donor’s reserved right to make improvements in the conservation area created by the deed in this case is distinguishable from the similar rights reserved in the deeds at issue in Pine Mountain Preserve, LLLP v. Commissioner, 151 T.C. No. 14 (Dec. 27, 2018).” Order, at p. 2.

Y’all remember Pine Mountain, no? If not, check out my blogpost “Perpetually Swiss,” 12/27/18 BS (Before Shutdown).

Sounds like whether the divvy of the boodle at crater regs are valid won’t decide the case if Judge Holmes decides the Oakbrooks cut the cheese.

I’m going back a way here, but when I read Judge Paris’ exoneration of Laura Denise Contreras, 2019 T. C. Memo. 12, filed 2/26/19, when IRS tried to toss her innocent spousery based on fraudulent conveyance of assets from her deadbeat abusive ex-spouse, a distant bell sounded.

I remembered my blogpost “Even If You Tell ‘Em, It’s Fraud,” 10/22/12, wherein Judge L Paige (“Iron Fist”) Marvel fraud-chopped John Allen Hatling, even though John Allen claimed he filed Forms 8275 and 8275-R saying the claim of right deduction he was taking was a phony. At the time, I wondered if John Allen was going to 8 Cir, so we could get appellate learning.  This didn’t happen.

Of course Laura’s facts are different. Her deadbeat abusive ex conveyed his share of two lots in Liberty County, TX, both subject to filed NFTLs, in satisfaction of the judgment she got against him for unpaid child support. On one of them sits the underwater (economically) mobile home wherein Laura cares for her children and tries to live on government assistance and whatever child support deadbeat abusive ex coughs up.

IRS, all heart, tries to knock out Laura’s innocent spousery for the joint returns she signed under duress post-divorce, when both she and ex were represented by the same attorney and she was prevented from speaking to the IRS examiner at the audit. IRS claims the conveyance of deadbeat abusive ex’s interest was fraudulent.

I hope Laura’s pro bono counsel, to whom I’ll give a shoutout hereinbelow, have moved for legals and admins.

Judge Paris: “Respondent contends that Lots 12 and 13 were transferred between petitioner and Mr. Contreras as part of a fraudulent scheme.  Petitioner argues that the assets were transferred pursuant to a court-ordered divorce decree judgment subject to the IRS liens of record and were therefore not part of a fraudulent scheme.

“Section 1.6015-1(d), Income Tax Regs., states that a ‘fraudulent scheme includes a scheme to defraud the Service or another third party”.  The basic badges of fraud include an intent to misrepresent, conceal, or hide information from a party.  See Spies v. United States, 317 U.S. 492, 499 (1943); Recklitis v. Commissioner, 91 T.C. 874, 910 (1988).  This Court has previously found there to be a fraudulent scheme when spouses transferred property with the intent to hide such transfers.  See Chen v. Commissioner, T.C. Memo. 2006-160, 2006 WL 2270402, at *5 (finding that transfers to ‘hide the trail of fraud’ and fraudulent intent precluded relief under section 6015(f)).  Here the transfer was made to satisfy a judicial foreclosure due to Mr. Contreras’ failure to pay petitioner $127,050 as awarded in the divorce decree.  The transfer was made with the assistance and guidance of petitioner’s divorce attorney.  It was recorded publicly in Lincoln County and was subject to public inspection.  The Court finds there was no intent to misrepresent, conceal, or hide this transaction from the IRS.  Rather, the intent of the transfer was to satisfy a court-ordered judgment pursuant to the divorce decree and subject to the IRS liens of record.” 2019 T. C. Memo. 12, at pp. 14-15. (Footnote omitted, but it says the present IRS guidelines for Section 6015(f) equity don’t define “fraudulent scheme.”)

A Taishoff “good job” and shoutout to South TX Law School pro bonos Bruce A. McGovern, Esq., Jeffery A. Gold, Esq., and Heidi A. Weelborg (student).

You’ll remember back last May the question of dodging the Boss Hoss sign-off by calculating the penalty on the computer came up, and STJ Diana L (“The Taxpayer’s Friend”) Leyden suggested a reopener. See my blogpost “I Sing the Penalty Electronic,” 5/16/18.

Turns out the reopener was unnecessary, because on the trial (which I did not blog) the petitioner showed good faith, so the Section 6662 chops were off the table.

So we still didn’t know the answer on the electronic Section 6662 chops.

But today we have a clear-cut case and a full-dress T. C., Craig S. Walquist and Maria L. Walquist, 152 T. C. 3, filed 2/25/19.

Craig and Maria are frivols, who got ACEd (Automatic Correspondence Examination, via the Correspondence Examination Automated Support software, untouched by human hands) with substantially understated tax. The software sent a 30-day letter to Craig and Maria, which they ignored. The electrons then fired off a Letter 3219 SNOD.

It was only when Craig and Maria petitioned that human beings got involved, and Craig and Maria got inventive. “Petitioners appended various documents containing assertions commonly advanced by tax protesters, including assertions that U.S. currency is not ‘lawful money’ and that they ‘have no obligations or liability to even file a return’ because they ‘intend to only handle legal money.’  Petitioners also advanced the more novel (but equally frivolous) argument that this Court should garnish the wages of the Secretary of the Treasury for an amount equal to petitioners’ outstanding tax liability.” 152 T. C. 3, at pp. 5-6.

Craig and Maria were told to amend, and they did, but it was still frivolous and they were still after Steve Mnuchin’s paycheck.

Craig and Maria next went to USDCMN, who tossed them as frivols.

Then, when Judge Scholar Al told them to play nice or get tossed, they went on a tear.

“By way of response petitioners submitted…a document captioned ‘True Bill of Indictment–Testimony Inherent.’  In this document they again demanded garnishment of the wages of the Secretary of the Treasury, stating incoherently that ‘demand is made for redemption of central banking currency in Lawful Money in all transactions pursuant to * * * the Federal Reserve Act.’  They asserted that this Court lacks authority to decide this case, alleging that ‘the “Chief Justice” of the US Supreme Court is only pretending to be a judicial officer [and] there is no competence to be found in the US Tax Court.’

“Elaborating on the latter theme petitioners continued as follows:

“Any and all utterances by ‘Judge’ Lauber are Refused for Cause timely as expressed herein with the first pages of [this Court’s orders marked] ‘Refusal for Cause’ conspicuously across their face.  Mr. Lauber is no judicial officer and the US Tax Court * * * is not a court of record and therefore not a court of competent jurisdiction.  * * * [Petitioner husband] is excused from tax liability through law about his redemption and the redemption of lawful money.  All agents and Principal Steven Terner Mnuchin as US Governor of the International Monetary Fund are notified. * * *  Therefore the US Tax Court is notified there will be no trial.  Thank you for your testimony, everybody.’” 152 T. C. 3, at pp. 9-10.

There was no trial, of course; Craig and Maria got tossed, and Judge Scholar Al gives us the answer we’ve all been waiting for.

“For individual taxpayers, the substantial understatement penalty applies if the understatement of income tax for a particular year ‘exceeds the greater of- (i) 10 percent of the tax required to be shown on the return * * * , or (ii) $5,000.’ Sec. 6662(d)(1)(A).  The penalty (as relevant here) is calculated at a flat rate of 20% of the ‘underpayment of tax required to be shown on * * * [the] return.’  See sec. 6662(a).  This penalty is thus calculated mathematically, both in terms of whether it applies and the rate at which it is imposed.

“The IRS processed the examination of petitioners’ … return through its ACE system, employing its CEAS software program.  This software program ascertained through third-party document matching that petitioners had total income of $95,327. The program computed a tax liability of $13,832 and calculated a penalty equal to 20% of that sum ($13,832 × 20% = $2,766.40).  When petitioners failed to respond to the computer-generated 30-day letter, the CEAS program automatically generated a notice of deficiency setting forth a deficiency and penalty in these amounts.  Because the penalty was determined mathematically by a computer software program without the involvement of a human IRS examiner, we conclude that the penalty was ‘automatically calculated through electronic means,” sec. 6751(b)(2)(B), as the plain text of the statutory exception requires.” 152 T. C. 3, at pp. 14-15 (Footnote omitted, but it just explains that Craig and Maria made a rounding error on their return).

An automatic machine-generated chop is not the “bargaining chip” Section 6751(b) was designed to take from the hands of over-zealous examiners.

And there is no Boss Hoss for a computer running standardized software. If this needs a Boss Hoss sign-off, then there can’t be any exceptions, and that makes hash of the statute.

Judge Scholar Al gives Craig and Maria a $12,500 Section 6673 chop at no extra charge.

Take Heed

That long-running saga, Eaton Corporation and Subsidiaries, 152 T. C. 2, filed 2/25/19, has Judge Kerrigan marrying Section 964 to Section 312, to nail Eaton’s upper tier CFC partners with the earnings and profits (E&P) of the partnership dragged in by Section 951(a).

The Uppers claim Section 964 just requires them to adjust their balance sheets and profit and loss statements to US accounting standards, rather than that of their home countries. Eaton had an LLC box-checked as a partnership, in which were members (partners) who were CFCs.

IRS wanted to bootstrap Section 312 corporate concepts onto Section 964 foreign concepts.

“We must first decide the universe of regulations to which the phrase ‘under regulations prescribed by the Secretary’, as used in section 964(a), refers.  That phrase, as enacted in 1969, is naturally read to refer to any regulations that the Secretary might later promulgate under section 964(a).  But given the statutory text, we believe that this phrase also refers to regulations that the Secretary had previously promulgated, or might in the future promulgate, under section 312.

“The phrase ‘under regulations prescribed by the Secretary’ immediately follows the phrase ‘rules substantially similar to those applicable to domestic corporations’.  Section 964(a) provides that the same general rules apply to E&P computations for domestic and foreign corporations.  Since those rules are set forth both in section 312 and in the regulations interpreting it, the reference to ‘regulations’ in section 964(a) is reasonably read to include regulations promulgated under section 312 as well as under section 964(a).  There is nothing in the text of section 964(a) that limits the scope of ‘regulations’ to regulations that might later be promulgated under that specific provision.” 152 T. C. 2, at pp. 12-13. (Footnotes omitted, but the second one says when Treasury wanted to limit the regulations to a specific subsection, they said so.).

Eaton claims Section 964 is a stand-alone. When they conformed the Uppers’ books to US GAAP, that was it. If Treasury should have gone farther, that’s Treasury’s problem.

Judge Kerrigan and the majority say that makes Section 964 meaningless. Why adjust your books if the adjustment has no tax consequences.  “Without reference to the detailed rules of section 312 and the regulations interpreting it, it would be without meaning–employing the section 964 regulations alone–to perform an E&P computation for a foreign corporation.  As noted earlier section 312 and the regulations thereunder explain how numerous corporate transactions and events affect E&P.  These include distributions of property, distributions of appreciated property, distributions of property subject to indebtedness, distributions of stock and securities, tax-free distributions, redemptions, corporate separations and reorganizations, discharge of indebtedness income, depreciation, installment sales, and LIFO inventory adjustments.  See sec. 312.  The section 964 regulations do not address or even mention any of these things.  This makes it clear that the E&P of a foreign corporation must be determined by applying the general rules of section 312 that govern E&P computations for a domestic corporation.” 152 T. C. 2, at pp. 23-24.

Judge Morrison concurs, but says the majority missed a step by not factoring in Reg. Section 1.964-1(a)(1), which requires CFC to compute E&P like a domestic.

Ch J Maurice B (“Mighty Mo”) Foley, joined by that Obliging Jurist Judge David Gustafson, says the majority got it backwards. Section 964 incorporates only the depreciation rules of Section 312(k)(4), nothing else. Judge Kerrigan is reading everything else in.

But the Section 964 regs only require the onshore recomputation. The phrase “under regulations prescribed by the Secretary” did not mean anything other than the Section 964 regs, not any other Regulation, past, passing or to come, that IRS or Tax Court might see fit to throw into the mix.

And Ch J Mighty Mo leaves a good argument in a footnote. “In 2009 the Secretary identified transactions similar to the transaction at issue as a ‘Transaction of Interest’ that had the ‘potential for tax avoidance.’  See Notice 2009-7, 2009-3 I.R.B. 312.  In 2010 the Secretary stated he would promulgate regulations to address these purported ‘tax avoidance’ transactions. See Notice 2010-41, 2010-22 I.R.B. 715.  He has not.  Curiously, respondent now asks the Court, rather than his Office of Tax Policy scriveners, to interpret sec. 1.964-1, Income Tax Regs., to halt a transaction similar to those he has for a decade deemed problematic.” 152 T. C. 2, at pp. 30-31.

“The Secretary is bound by the terms of the rules he created.  Similarly, taxpayers are bound by the applicable rules, but they are not required to employ their imagination to divine them.  Petitioner may have found a hole in the dike, but the closing of the hole ‘calls for the application of the * * * [Secretary’s] thumb, not the court’s.”  Fabreeka Prods. Co. v. Commissioner, 294 F.2d 876, 879 (1st Cir. 1961), vacating and remanding 34 T.C. 290 (1960), Friedman v. Commissioner, 34 T.C. 456 (1960), and Sherman v. Commissioner, 34 T.C. 303 (1960).  In short, we must interpret, not make, the law.” 152 T. C. 2, at p. 31.

Given Judge Gustafson’s monumental silt-stir with Section 6751(b), don’t bet this is the last word on this subject. Especially when tax on $187 million is on the table.

Rarely do I get personal on this site. I save my personal thoughts (as opposed to strategic, tactical or policy comments) for another place.

The event (or nonevent) of Sunday, February 24, 2019, gave me reason to take an exception. This my blog got exactly three (count ’em, three) views that day. Only three; the fewest for any day since February, 2011. I did better even when Tax Court was shut down (both times) or I was in the hospital.

Hence the title of this blogpost.

Employ Someone Who Knows What They’re Doing

I proffer the title hereof to Ch J Maurice B (”Mighty Mo”) Foley, to use if he needs again address the various missteps and miscues that bedevil the IRS staffer in Jeffrey M. Devries & Debra R. Kirshner Devries, Docket No. 21822-18S, filed 2/22/19.

It’s a run-of-the-mill motion to toss for want of jurisdiction, the stuff Ch J Mighty Mo handles by the ton. IRS’ problem is certifying they served Jeff. I’ll let Ch J Mighty Mo tell the tale in propria persona, as my expensive colleagues say.

“…respondent filed a Motion To Dismiss for Lack of Jurisdiction. Respondent did not attach to that motion a certificate of service for petitioner Jeffrey M. Devries. The Court issued a Notice of Docket Change…stating: ‘No certificate of service for Jeffrey M. Devries. You must file a Certificate of Service for Jeffrey M. Devries.’ Rather than filing only the certificate of service for Mr. Devries, as directed by the Court, respondent filed a second Motion To Dismiss for Lack of Jurisdiction, with a certificate of service for Mr. Devries attached.

“…the Court struck the second Motion To Dismiss for Lack of Jurisdiction from the Court’s record in this case and directed respondent to file a certificate of service for petitioner Jeffrey M. Devries, demonstrating that the first Motion To Dismiss for Lack of Jurisdiction was properly served on Mr. Devries. … respondent filed a Certificate of Service Motion To Dismiss for Lack of Jurisdiction demonstrating that the first Motion To Dismiss for Lack of Jurisdiction was properly served on petitioner Debra R. Kirshner Devries. … the Court struck respondent’s Certificate to Service…and directed respondent to file a certificate of service for petitioner Jeffrey M. Devries, demonstrating that the first Motion To Dismiss for Lack of Jurisdiction was properly served on Mr. Devries. Respondent failed to do so. … respondent filed a status report in which he incorrectly asserts that respondent filed a certificated [sic] of service as to Mr. Devries [for the second motion]….” Order, at p. 1.

I have served in offices where such a performance would earn a sulfurous rebuke from the high command.

Ch J Mighty Mo, exhibiting extraordinary patience and limitless forbearance, merely orders IRS to serve a certificate of service on Mr Jeffrey M. Devries of the first motion, the one they filed “November 27, 2018, at 8:11 a.m.” Order, at p. 2.

No, not cookery. I’ve been following Tax Court extra-territoriality lately, and today Judge Albert G (“Scholar Al”) Lauber is dealing with the deposition of a citizen of the Peoples’ Republic of China. Said citizen is not likely to show for trial in WT Art Partnership LP, Lonicera, LLC, Tax Matters Partner, Docket No. 19604-16, filed 2/22/19.

Without ruling whether any or all of the testimony thus elicited might be admissible on the trial, Judge Scholar Al lets the deposition go forward on Monday.

Rather a quick kick, as the order granting the deposition is to be sent to Mr. Guanghua Yin, apparently at his office in Wangfujing Street, Dongcheng District, Beijing.

He is directed to appear on Rhode Island Street in The City By the Bay, and tell his tale to a Certified Shorthand Reporter and Registered Professional Reporter. Oh, and the parties better have a translator on hand.

How exactly Mr. Yin is to be compelled to attend is not addressed. Tax Court’s mandate may run “from sea to shining sea,” but Beijing seems a stretch.

If you are going thus to describe the USDCJ who presided over your (losing) trial, whereat you went down for fraud per Section 7206(1) and Section 7206(2), please allow me to suggest that you (a) don’t do it in writing, (b) don’t send that writing to IRS Appeals as a prelude to your supplemental CDP hearing on the NFTL IRS laid upon you for the Section 6663 fraud chops, (c) don’t attach the writing to a status report you file with Tax Court, and (d) especially don’t do it with Judge James S. (“Big Jim”) Halpern.

Read and heed Harjit Bhambra, Docket No. 1395-16L, filed 2/22/19. Judge Big Jim has obligingly laid out the whole nine yards in a designated hitter.

IRS already won summary J for the court-ordered restitution. The only thing left is the Section 6663 fraud chops. Bham hadn’t a chance to contest these, so he gets a supplemental CDP to try.

But instead of offering evidence when Appeals offered Bham a telephone hearing, he “…responded by letter…, in which he demanded an in-person hearing that he would record and made inflammatory statements; e.g., ‘that the IRS agents are well qualified liars and cannot be trusted for any reason’ and the District Court judge in his criminal trial is a ‘reckless buffoon.’ Order, at p. 2.

Well, Bham got no in-person, but he did get a supplemental NOD saying that Bham had proffered no evidence to rebut Appeals’ determination.

Judge Big Jim, desirous of doing justice, tries to get Bham and IRS on the blower to discern a path to resolution.

“Following receipt of the supplemental determination, we reached out to the parties to discuss how to proceed. We were unsuccessful in our attempts in December 2018 and, following the government shutdown, in February 2019, in arranging a conference call with petitioner. For example, on February 11, 2019, petitioner did not answer at the time he had previously agreed to. In response to our attempts to reschedule the call at 5:00 P.M. on February 13, 2019, petitioner responded: ‘I’m working on February 13, 2019, and vacationing from 2-14-19 to March 8, 2019, please send me in writing whatever the [judge] has for this case.’” Order, at p. 3.

I do not recommend this as a response to a judge who is trying to find some way to help you. I also remind you to be very careful of what you ask for; you might just get it.

Bham certainly does.

“We will take petitioner up on his invitation. We assume that, in asking for us to send whatever we have in writing, petitioner seeks no further hearing and has no argument to make. Considering the supplemental determination, [the SO’s] narrative, and the…letter, we do not think that Appeals erred in sustaining the NFTL and the assessment of civil fraud penalties. [The SO] reports that, during his September 11, 2018, telephone conference with petitioner, petitioner did not address the civil fraud penalties. Generally, we may not consider issues or arguments that a taxpayer does not raise as part of a section 6330 hearing.“ Order, at p. 3.

Fraud chops sustained.

Is Still Frivolity

Even The Judge With a Heart, STJ Rob’t N Armen, can’t find sympathy for Jeffrey P. Heist, Docket No. 8724-18L, filed 2/22/19.

Jeff ran a burglar alarm company and filed three (count ‘em, three) years’ worth of what appeared to be straight returns, reporting tax and underwithholding (Jeff never paid ES), but paying nought. IRS assessed and filed NFTLs and NITLs, to which Jeff riposted with 1040-Xs showing zeros. IRS countered with the Section 6702 frivolous return chops.

Jeff claimed he wasn’t running a trade or business, using the old protester jive from Section 7701(a)(26) “including-means-limited-to.”

Except of course it doesn’t.

“Subsec. (a)(26) defines ‘trade or business’ to include the performance of the functions of a public office. The argument that a ‘trade or business’ includes only a public office is baseless and frivolous. Eg.,[sic] Hill v. Commissioner, T.C. Memo. 2013-265 and T.C. Memo. 2013-264; Slingsby v. Commissioner, T.C. Memo. 2011-3.” Order, at p. 3.

STJ Armen proceeds with “somber reasoning and copious citation of precedent,” including without limitation “…Notice 2010-33, 2010-17 I.R.B. 609, at part (III)(1)(e), listing as frivolous the position that a taxpayer has the option under law to file a document or set of documents in lieu of a return or elect to file a return reporting zero taxable income and zero tax liability even if the taxpayer received taxable income during the taxable period for which the return is filed, or similar arguments described as frivolous in Rev. Proc. 2004-34, 2004-1 C.B. 619, discussing the ‘zero return position’.” Order, at p. 8.

He also shows Jeff the Section 6673 yellow card, at no extra charge.

Don’t try this at home (or anywhere else).