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I’m not revivifying the old advertising slogan in attempt to be coy. Of my many faults, being coy is not one. But when I saw Tramy T. Van, Docket No. 4460-17, filed 10/2/19, reprised as a designated hitter today, I did a double-take.

Only yesterday I blogged Tramy T. in my blogpost “A Snapshot in Time,” 10/1/19. And today’s version differs in no discernible respect from yesterday’s.

I had suggested as a tailpiece to my blogpost above-cited that this order should have been designated, as “(T)here’s stuff here that practitioners should know.”

Maybe somebody does read my blog.

It’s a rare article wherever sought for, but today we see common sense reappear in US Tax Court, in a designated hitter from Judge Gale.

Here’s Joseph Michael Balint, Docket No. 21452-16L, filed 10/2/19. Judge Gale is parsimonious with details, but I glean that Joe has a problem with a retirement plan distribution, which someone may have pinched unbeknownst to Joe.

I deduce that conclusion because Judge Gale, after checking out the stiped facts and settled issues, “…concludes that pretrial briefing addressing the impact of Roberts v. Commissioner, 141 T.C. 569 (2013), would aid the Court in analyzing the issues involved in this case.” Order, at p 1.

Now all y’all surely remember Andrew Wayne Roberts and his light-fingered ex Ms. Smith. No? Then scope out my blogpost “Common Sense?” 12/30/13, wherein ex-Ch J L Paige (“Iron Fist”) Marvel penned this memorable sentence: ““Common sense dictates that the answer must be no, and our findings of fact and analysis support that answer.”

I guess Judge Gale wants a proper take-out on Andy Wayne’s situation as it relates to Joe’s, so he suggests Joe sit down with one of the local LITCs, who might enlighten him.

STJ Daniel A (“Yuda”) Guy has a designated hitter that points up a real defect in the deficiency procedure that is a pillar of Tax Court jurisdiction. It’s the story of Rajan R. Kamath, Docket No. 5307-19S, filed 10/1/19.

Raj didn’t file returns for some four (count ‘em, four) tax years, until he got SFRs and 30-day letters. Whereupon Raj banged in the returns, which IRS processed. IRS assessed the taxes shown on Raj’s self-reported returns.

So, as IRS found no difference between what Raj belatedly reported and what Raj owed, no deficiencies. But not to leave Raj with nothing to show for his efforts, IRS did give him a couple additions to tax for late payment, late filing and failure to file estimateds (hi, Judge Holmes).

Raj petitions. STJ Yuda regretfully tosses Raj’s petition.

Check out Section 6665(b).

“…the additions to tax under section 6651 are not attributable to a ‘deficiency in tax described in section 6211’. Sec. 6665(b)(1). Likewise, the additions to tax under section 6654 are not subject to the deficiency procedures because petitioner filed delinquent tax returns for the years in issue. See Wilson v. Commissioner, 118 T.C. 537, 540-541 (2002) (the Commissioner may summarily assess additions to tax under section 6654 arising from delinquently filed tax returns). It follows that the notice of deficiency is invalid and we are obliged to grant respondent’s motion to dismiss.” Order, at p. 3.

So Raj is out, and has to go the file-for-a-refund-and-sue-in-USDC route. But in a small-claimer, even if the delinquent had reasonable cause and made a good-faith effort that in a tax deficiency case would carry the day, how many taxpayers have the wherewithal to do that?

STJ Yuda understands, but is helpless.

“As a final matter, petitioner asserts that it is inequitable to deny him the opportunity to petition this Court. As we have previously said in similar cases: ‘We recognize the difficult position in which petitioners are placed by not being able to come to the Tax Court to test the validity of the respondent’s action in asserting the penalty. Nevertheless, that is the law and we must take it as we find it.’ Wilson v. Commissioner, 118 T.C. at 541 (quoting Estate of Scarangella v. Commissioner, 60 T.C. 184, 186-187 (1973)).” Order, at p. 3.

It’s a forlorn hope, but maybe Congress could do something to help. Yeah, I know, but “hope springs eternal.”

Failing that, maybe self-reporters in such a situation as Raj’s might go a couple bucks short (hi again, Judge Holmes) on their belated returns, to draw IRS into a real deficiency, and get their day in court.

See my blogpost “Repeat Business,” 5/3/18. Once again my prediction comes true; I said then that I was sure these players would be back again, and Michael C. Worsham, 2019 T. C. Memo. 132, filed 10/1/19, certainly fills the bill.

Take a look at my blogpost above-cited, and the blogpost therein referred to, for the backstory on Mike.

Mike’s got the usual protester “basis in labor” and “undelegated signer” arguments, that fall flat. I won’t go over them here.

But Mike has a new one: Section 6673 is unconstitutional because, says he, it inhibits Mike’s free speech.

I’ll let Judge Colvin take this one.

“First, section 6673 does not apply to, and therefore does not discourage, legitimate arguments.  There is no constitutional right to litigate frivolous claims without being sanctioned. Banat v. Commissioner, 80 F. App’x 705 (2d Cir. 2003); Sterner v. Commissioner, 867 F.2d 609 (4th Cir. 1989); Dixon v. Commissioner, 836 F.2d 546 (4th Cir. 1987), aff’g T.C. Memo. 1986-563; Larsen v. Commissioner, 765 F.2d 939, 941 (9th Cir. 1985).  Second, petitioner cites no authority holding that it is unconstitutional for a sanction to apply unequally to taxpayers and the government, and section 6673(a)(2)(B) authorizes the Court to impose costs on Government counsel who engage in unreasonable and vexatious litigation. Section 7430 entitles taxpayers, but not the Government, to payment of litigation expenses under certain circumstances.  Petitioner cites some rules from other courts which apply to both parties, but the existence of those rules does not address the constitutionality of a statute which does not apply equally to both parties.  Thus, we hold that section 6673 is not unconstitutional.” 2019 T. C. Memo. 132, at pp. 14-15.

But stick around. IRS moved for Section 6673 chops, and Judge Colvin will deal with that separately.

Judge Elizabeth A (“Tex”) Copeland had a timeline to unravel in Tramy T. Van, Docket No. 4460-17, filed 10/1/19, and it’s quite a tangled one. Seems that there were three (count ‘em, three) separate SNODs, spread over two years. Only two of the SNODs touched the year Tramy is petitioning. But Tramy claims she’s petitioning all three years covered by the three SNODs, even though she never received any.

IRS sent them to Tramy’s last known address, which was the address only of ex-husband Danny Chan. Tramy filed two petitions, but the second of them was tossed because it petitioned the first of the three SNODs, which had been mailed to last known address two years before (although IRS couldn‘t find the certified mail list, claimed at first that the petition was valid, and tried to toss Tramy’s second petition as duplicative).

So Tramy’s petition 1, petitioning SNOD 3, is timely. Clear? Thought not.

But is it a petition? “To be treated as a petition from a particular notice of deficiency, the document filed by taxpayers within the 90-day period must contain some objective indication that the taxpayer contests the deficiency determined by respondent against the taxpayer.” Order, at p. 6. (Citations omitted).

And the petition (or an amendment thereof) must let IRS know something about what bœuf the petitioner has. “Further, our Court Rules provide a petition must be ‘complete so as to enable ascertainment of the issues intended to be presented.’ Rule 34(a). ‘[T]he propose [sic] of [a petition, along with other pleadings filed in this Court] is to give the parties and the Court fair notice of the matters in controversy and the basis for their respective positions.’ Rule 31(a).” Order, at p. 6.

“Propose”? Somebody needs to proofread these orders.

Well, Tramy seems to have got it right. “In paragraph six of Petition #1, petitioner contests ‘all’ changes to her [year at issue] return with respect to her as an individual and her two businesses, Tramy Beauty School (Partnership) and Tramy Beauty School, Inc. (S Corp).” Order, at pp. 6-7.

Now just because she didn’t get the SNOD in the mail doesn’t preclude Tramy from contesting the year covered by the SNOD, or any interrelated year (a NOL carryforward from the year at issue got disallowed in the SNOD she petitioned).

I’ll let Judge Tex lay it out.

“Under our precedent, Notice #3 was deemed to be received by petitioner because it was mailed in accordance with section 6212(b). This safe harbor, however, does not prevent petitioner from access to the Court because she was unaware of a deemed received notice when she filed Petition #1. Rather, we use a snapshot in time approach; petitioner explicitly contests any redetermination with respect to [year at issue] in Petition #1; she observed that a year at issue in the notice she actually received are interrelated to [year at issue], and as such, brought it to respondent and the Court’s attention. Stated differently, in the Petition #1 case, respondent’s Notice #3 is valid, petitioner contested respondent’s redetermination within 90 days of such notice, and although she asserts she did not receive a [year at issue] notice, in Petition #1 she explicitly contested ‘all the IRS’s changes to the tax returns examined for the applicable tax years ending [year at issue] through [year three].’ Thus, the Court has jurisdiction over the [year at issue] in the Petition #1 case because it satisfies the statutory requirements under sections 6212(b) and 6213(a), and contains an objective indication that petitioner asked us to redetermine the deficiencies respondent determined against her for the [year at issue.” Order, at p. 7.

Judge, I wish you’d designated this order. There’s stuff here that practitioners should know.