In Uncategorized on 02/04/2019 at 12:38

Today we return to Hurford Investments No. 2, Ltd., Hurford Management No. 2, LLC, Tax Matters Partner, Docket No. 20317-11, filed 2/4/19, another good source of blogfodder. See my blogpost “You Just Can’t Win With TEFRA,” 12/21/18 BS (Before Shutdown), and my blogposts cited therein.

Now y’all recall that, although the Hurfords won, they didn’t prevail, and Judge Holmes disqualified their qualified offer even though the laundry list of cases prohibiting a Section 7430 qualified offer doesn’t include TEFRA FPAAs, which this case is.

Well, the Hurfords riposte that Fed Cir is fixing to deal with the BASR case, cited in my above-cited blogpost, so they want to hold off until Fed Cir has decided whether the qualified offer is allowed in a TEFRA FPAA.

IRS says that there are independent grounds for denying the Hurfords the admins and legals they’re claiming, so it’s dubious Fed Cir will deal with those, hence waiting on Fed Cir doesn’t help resolve this motion.

Judge Holmes agrees with IRS, and tells both sides to “settle order on notice.” See my blogpost thus entitled if you don’t know what that means.

But Judge Holmes has had his pate whanged by the Pelicans (appellate courts are sometimes thus described) before now, so he pays them obeisance.

“…there is much to be said for the efficiency of waiting for a higher court to rule — this division of the Court being especially aware of the definition of the law as a prediction of what an appellate court says it is….” Order, at p. 1.

Still, no go for the Hurfords.

I understand Judge Holmes wants to clear his docket, and this is a quick way to do it. Even more to the point, TEFRA has gone the way of all clichés, so any judicial ruling on “When TEFRA meets Section 7430” can only affect a limited, minuscule number of litigants. And the Hurfords likely can afford an appeal, since with no tax due they needn’t post a bond.

So while Judge Holmes has solved one problem, I must remind him of his celebrated remark in Thompson: “The silt we stir today will cloud the cases we plunge into tomorrow.” 137 T. C. 17 (2011), at p. 61. However few such cases may be.


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