In Uncategorized on 08/05/2019 at 17:28

I had suggested a year ago that Patrick Combs was “definitely not a keeper.” See my blogpost “Not A Keeper,” 8/3/18. But Judge Mark V. Holmes was prepared to drop the Section 6673 frivolity chop if Pat the Monologist came clean and settled with IRS.

Does Pat the Monologist straighten up and fly right?

Today, ex-Ch J Michael B (“Iron Mike”) Thornton gives me no reason to revise my earlier opinion.

Ex-Ch Iron Mike Thornton thinks Pat the Monologist hasn’t taken Judge Holmes’ advice to heart, so Pat the Monologist gets a $2500 Section 6673 on top of the deficiencies resulting from constructive dividends from his tax evasion game. For details, see my above-referred-to blogpost and Patrick Combs, 2019 T. C. Memo. 96, filed 8/5/19.

Pat the Monologist has a wholly-owned C Corp to funnel cash to him and significant other. The test is E&P plus payment to shareholder of non-deductible expenses with no expectation of repayment.

“Petitioner offered into evidence, without meaningful explanation, hundreds of pages of photocopied receipts, expense ledgers, spreadsheets, and various other unsorted documentation. These materials are not linked in any meaningful way to respondent’s adjustments. At trial petitioner attempted selectively to link a very few of these items to deductible expenses of [C Corp]. We did not find his testimony as to these few items credible or adequate to show that any particular item represented an ordinary and necessary business expense of [C Corp.].” 2019 T. C. Memo. 96, at p. 15 (footnote omitted, but it says that having used Holcomb’s dodge, Pat the Monologist’s testimony gets “heightened skepticism” from Ex-Ch J Iron Mike).

Moreover, Pat the Monologist persisted in his old ways, despite Judge Holmes’ yellow card.

“Throughout these proceedings petitioner has advanced frivolous and groundless positions. He has been warned repeatedly about the possibility of a penalty under section 6673(a). Nevertheless, he has persisted in his misguided course of conduct, causing this Court and respondent to waste significant time and resources. It appears to the Court that petitioner’s position in this proceeding is frivolous and groundless and that he has instituted and maintained these proceedings primarily for delay.” 2019 T. C. Memo. 96, at p. 22. (Footnote omitted, but it says Pat the Monologist put Holcomb’s arguments in on the trial).



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