Judge Halpern and Ch J Foley each have a take on the title of this blogpost. But in each case, the upshot is the same: once you take a certain position, you can’t go back.

Judge Halpern opens with Claude Tate George, 2019 T. C. Memo. 128, filed 9/25/19, while I was high above the clouds homeward bound. Hence the late post.

Claude T, ex- NJ Net and Milwaukee Buck guard, is caught in a full-court press. While sitting in stir, he gets a $200K pension distribution from the NBA. Claude T files neither an automatic extension nor a return, so IRS gives him one for free. Plus a deficiency for whatever the NBA didn’t withhold, and additions for late filing and nonpaying.

“Petitioner’s principal defense to respondent’s additions to tax is that he has been incarcerated, so that documents evidencing deductible expenditures are unavailable to him, and it would be inadvisable for him to file a … return until he obtains documents that might evidence those deductible expenditures.” 2019 T. C. Memo. 128, at p. 9.

Well, being in the slammer is not necessarily an excuse for not filing. And Claude T’s papers are bereft of any specific deductions he might have had. Claude T’s claim that his family might suffer hardship is for another day.

“And while petitioner avers in the petition that paying the amounts owed under the notice would pose a hardship on him and his family, he has not responded to the motion with any specific facts showing that he exercised ordinary business care and prudence in providing for his … tax liability. Nor has he responded with specific facts concerning his financial situation while the failure to pay penalty accrued. While his incarceration may have hampered his ability to obtain documents establishing the relevant facts, petitioner admits to family but fails to explain why family members did not assist him in gathering documents not in his immediate possession.” 2019 T. C. Memo. 128, at pp. 11-12.

Most importantly, if you want to itemize deductions, you have to file a return and elect itemized deductions. See Section 63(e)(1). If you don’t file and elect, you can’t go back.

Briana Dawn Ho, Docket No. 12250-19, filed 9/25/19, seems to be unaware of my blogpost “Good Call,” 7/14/17. Briana Dawn sent in a letter, which Ch J Maurice B (“Mighty Mo”) Foley treated as a petition, but stiffed the Court for the sixty Georges. Ch J Mighty Mo, ever alert for freeloaders, ordered Briana Dawn to stump up or fold.

Briana Dawn replies that she’d rather work with IRS. So one would expect Ch J Mighty Mo would toss Briana Dawn on the spot.

Not quite.

“Yet the closing statement of her recent letter gives pause, as petitioner concluded: ‘However, I do not wish to close the door with the United States Tax Court in the event I might need to knock in the future.”” Order, at p. 1.

Ch J Mighty Mo tells Briana Dawn that’s exactly what she is doing.

“Once such a dismissal has become final, the Court would be unable to revisit the determinations regarding [year at issue] made by the IRS in the… notice of deficiency, either in this case or in a new case. Except in very limited situations, this Court lacks jurisdiction over a proceeding once a decision or dismissal for lack of jurisdiction becomes final within the meaning of section 7481, I.R.C. A reviewable decision of the Tax Court becomes final ‘Upon the expiration of the time allowed for filing a notice of appeal, if no such notice has been duly filed within such time”. Sec. 7481(a)(1), I.R.C. Section 7483, I.R.C., provides that a notice of appeal may be filed within 90 days after a decision is entered. A nonreviewable decision, such as a disposition in a small tax case ‘S’ proceeding, becomes final “upon the expiration of 90 days after the decision is entered’. Sec. 7481(b), I.R.C.” Order, at pp. 1-2. (Citations omitted).

In simpler terms, Briana Dawn, if you don’t pay (or plead and prove poverty and get a waiver), after 90 days, the door is shut. All IRS has to do is run out the clock, do nothing, and your only remedy is to pay, file for a refund, wait the six (count ‘em, six) months, and sue in USDC or USCFC. Assuming SOL hasn’t run by the time you file for the refund. And that will cost you a lot more than sixty bucks, trust me.