One of the problems with blogging US Tax Court is an impetus to ascribe to the pro se litigant a tactical perspicacity that the pro se does not have. So if I ascribe a cute tactical move to Sanford M. Kirshenbaum & Sally Kirshenbaum, Docket No. 10135-17S, filed 7/16/19*, that they never thought of, I apologize. Chronicling the moves of wits, wags and wiseacres over the years makes me do it.

Sandy & Sally petitioned a SNOD arising from their underreporting of a couple IRA distributions (hi, Judge Holmes) on their unexcused late-filed MFJ, with a knock-on effect on their taxable Social Security and medical expense deduction.

The SNOD also got the numbers wrong, but IRS counsel concedes the error by letter, and trial is continued (that’s adjourned, for you State courtiers) for a year. Ten days before trial, IRS counsel sends Sandy & Sally a stip to settle everything, and two days before trial the signed stip is filed.

But the stip never includes the final numbers, so two weeks after the nontrial, IRS sends a proposed decision document to Sandy & Sally, embodying the numbers resulting from the stip. Nothing happens for two (count ‘em, two) months, so IRS moves for entry of decision.

Sandy & Sally oppose, with a brand-new set of numbers, neither explained nor substantiated.

That Obliging Jurist, Judge David Gustafson, is anything but obliging. Sandy & Sally had a chance to try all the numbers, and prove whatever they could.

“That … trial was to be their opportunity to prove any error in the IRS’s SNOD. If income adjusted on the SNOD was not really paid to them or was not taxable, then the trial was their opportunity to so demonstrate. If any deductions were wrongly disallowed, then the trial was their opportunity to so demonstrate. If their return was not untimely (or if they had reasonable cause for the untimeliness), then the trial was their opportunity to so demonstrate.” Order, at p. 7.

Remember, Sandy & Sally had their trial continued for a year. And they apparently weren’t ready to go to trial when the trial date came around, so they stiped out.

“But when the time came to prepare (as they had agreed) ‘a decision to be executed by the parties and entered by the Court in this case’, they attempted to backtrack and dispute matters that they had resolved. We will not honor that attempt. They entered into an agreement, and we will hold them to their word.” Order, at p. 7.

Note that the stip let Sandy & Sally off from any Section 6662(a) chops, although the Section 6651(a)(1) addition is there for late filing.

So maybe a good way to dodge Section 6673 is to continue trial, stip out, and play around with the decision documents. Don’t try this at home.

*Kirschenbaum 10135-17 7 16 19