Attorney-at-Law

CHOP EARLY, CHOP OFTEN

In Uncategorized on 02/28/2019 at 19:22

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.

 

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