MOX NIX

I’m not sure if Adams Challenge (UK) Limited, 154 T. C. 3, filed 1/8/20, is related to Adams Offshore Services, Ltd., but they both seem to be dealing with Section 638(1) and the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Gains, UK.-U.S., July 24, 2001, T.I.A.S. No. 13,161 (entered into force Mar. 31, 2003), and its 1975 edition.

For Adams Offshore’s story, see my blogpost “Sea Hunt,”12/9/14.

Challenge time-chartered its specialty boat to a US outfit decommissioning damaged or played-out oil wells on the Outer Continental Shelf. This was some boat.

Judge Albert G (“Scholar Al”) Lauber: “The Challenge Vessel was equipped with state-of-the-art specialized systems. These included a ‘class 2 dynamic positioning system,’ a nine-man ‘saturation diving system,’ a helipad, and a hydraulic deck crane capable of lifting 100 tons. A dynamic positioning system enables a vessel to maintain a reasonably stationary position above an underwater worksite. The vessel plants transponders on the sea floor, then triangulates data from those transponders to keep its position stable over a particular spot. A saturation diving system enables divers to work at greater depths for longer periods. Divers live in a sealed, pressurized chamber that is lowered to working depth. This permits the divers to be ‘decompressed’ only once at the end of their tour of duty, thus reducing the risk of illness. Saturation diving is a highly specialized form of diving. In 2015 only 336 commercial divers were recognized by the U.S. Coast Guard as regulated saturation divers.” 154 T. C. 3, at pp. 4-5, footnote omitted.

Would you believe one of my nearest and dearest is one of the 336?

Well, the actual decommissioning was done by the US outfit. The Challenge claimed they had nothing to do with exploring or exploiting on the Continental Shelf.

Judge Scholar Al says Section 638(1) is broad enough to cover. And the treaty language and the Section 638(1) language mean the same thing.

Now before you all shout “effectively connected! Permanent establishment!” Section 638 makes Continental Shelf exploring and exploiting effectively connected, even if not anchored.

And exploitation includes decommissioning, because the oil leases under which the exploiters operate require them to clean up.

The Section 638 regs say the work of cooks on oil rigs and MDs who helicopter out to treat crew is “related to” exploitation. Definitely a purpose-built specialized boat fits in. Now there is a Fed Cir case that says foreign companies insuring the oil rigs aren’t liable for US tax, because insurance is too remote. And the one insurance example in the Section 638 regs doesn’t overrule Section 953. So Section 953, limiting effectively-connected US insurance business to dry land, is independent of Section 638(1). Taishoff notes that if it wasn’t, European companies, which insure and reinsure the huge oil rig exposure, would run away.

Judge Lauber cuts to the cliché.

“One does not need an advanced degree in linguistics to appreciate the similarities between the text of the statute, the section 638 regulation, and the Treaty. Section 638 extends U.S. tax jurisdiction over the OCS ‘with respect to mines, oil and gas wells, and other natural deposits.’ The regulation provides that U.S. tax jurisdiction extends over the OCS ‘to the extent * * * [that] persons, property, or activities are engaged in or related to the exploration for, or exploitation of, mines, oil and gas wells, or other natural deposits.’ Sec. 1.638-1(c)(4), Income Tax Regs. And the Treaty provides that an enterprise is deemed to carry on activities through a permanent establishment in the United States, and thus be subject to U.S. tax jurisdiction, where its activities are ‘carried on offshore * * * in connection with the exploration * * * or exploitation * * * of the sea bed and sub-soil and their natural resources situated in that State.’ Treaty art. 21(1) and (2).” 154 T. C. 3, at p. 40.

“Applying principles of U.S. tax law, we discern no appreciable difference between the terms “related to,” “connected with,” and “in connection with.” These terms appear throughout the Code and seem to be used interchangeably. Compare sec. 162(e) (denying deduction for expenses incurred ‘in connection with * * * influencing legislation’), with sec. 162(q) (denying deduction for payment ‘related to sexual harassment’). Both terms regularly appear close to each other in the same Code provision, with no apparent difference in meaning. Compare sec. 6103(h)(2)(A) (referring to a proceeding ‘in connection with’ determining a taxpayer’s liability), with sec. 6103(h)(2)(B) (referring to treatment of an item ‘related to’ resolution of an issue in such proceeding). “ 154 T. C. 3, at p. 42.

IRS wins, but any deductions or credits allowable to Challenge must await another day.

Yes, I know that the Year of the Rat begins January 25; I also know that the next Year of the Horse will not begin until February 17, 2026, to celebrate the end of the TCJA tax reshuffles.

But Tax Court is determined to rush the seasons, as we’ve seen with a couple recent full-dress T. C.s (hi, Judge Holmes) highlighting the Section 6751(b) Boss Hoss prerequisites. So maybe this is the Year of the Boss Hoss, 6751.

Howbeit, there’s a slew of Orders today, setting forth the checklist for IRS’ assertion of non-electronic chops.

One such is Alan Schwartz, Docket No. 1696-19S, filed 1/8/20. And even though this is a small claimer, Al is petitioning the chops in the SNOD. So IRS must play by the rules.

“Respondent cannot assess an accuracy-related penalty under section 6662(a) unless he has complied with the requirement of section 6751(b)(1), which provides:

“No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination….” Order, at p. 1.

Alright, already, STJ Diana L Leyden, we got the point. But maybe IRS didn’t, so STJ Di gives them a checklist.

“To show compliance with this provision, respondent must show (1) the identity of the individual who made the ‘initial determination’, (2) an approval of the penalty ‘in writing’, (3) the identity of the person giving approval and his or her status as the ‘immediate supervisor’ and (4) evidence that the supervisory approval was obtained no later than the issuance to petitioner(s) of the initial formal communication of proposed adjustments that includes penalties and provides the taxpayer the right to protest those proposed adjustments, such as a 30-day letter or Letter 525. See sec. 6751(b)(1); Clay v. Commissioner, 152 T.C. 223, 249 (2019).” Order, at p. 1.

For the Clay story, see my blogpost “Indians Not Taxed – Not!” 4/24/19.

So, IRS, here’s what you do.

“If respondent wishes to continue to assert the accuracy-related penalty under section 6662(a) in this deficiency case, he shall file a status report and attach thereto any relevant documents to demonstrate compliance with section 6751(b)(1). Alternatively, if respondent conclude that he did not comply with the requirement under section 6751(b)(1) with respect to the accuracy-related penalty under section 6662(a), he should consider conceding that penalty and notify the Court by filing a status report.” Order, at p. 2.

And IRS gets until January 29 to figure out how to proceed.

So get out those fireworks and put on your dragon suit. This is the Year of the Boss Hoss.

Judge Pugh unpacks another of the 6751(b) Boss Hoss conundra, which have taken over my blog and Tax Court’s opinions, in Charles L. Frost, 154 T. C.2, filed 1/7/20 (wasn’t his name all over those old American Express card advertisements? The specimen cards all bore the name Charles L. Frost).

Judge Pugh seems to echo a much more exalted authority who inveighed against experts in the law, who loaded people with burdens heavy to bear.

IRS hit Charles L. Frost with SNODs for three (count ‘em, three) years, but had a CPAF for the last such year only. Thus, chops for Years One and Two are off the table per Graev. Charles L. Frost had his share of LLC operating losses denied for want of proof of basis in his membership interest, and his travel expenses for want of Section 274 substantiation. Although an EA who qualified based upon prior IRS service, Charles L. Frost had recordkeeping problems.

The issue today is Section 7491(c) burden of production.

No question the CPAF was duly Boss Hossed long before IRS breathed Word One of penalty to Charles L. Frost. And IRS trotted out the CPAF on the trial. So what happens next?

Judge Pugh: “We hold that the Commissioner’s introduction of evidence of written approval of a penalty before a formal communication of the penalty to the taxpayer is sufficient to carry his initial burden of production under section 7491(c) to show that he complied with the procedural requirements of section 6751(b)(1). Because the Civil Penalty Approval Form indicated approval of the penalty for a substantial understatement but not for negligence, respondent has not satisfied his burden as to the penalty for negligence.” 154 T. C. 2, at pp. 21-22.

Now what? Must IRS prove they never communicated with Charles L. Frost prior to getting the Boss Hoss sign-off?

No, you can’t prove a negative.

“The burden now shifts to petitioner to offer evidence suggesting that the approval of the substantial understatement penalty was untimely–e.g., that there was a formal communication of the penalty before the proffered approval. If a taxpayer makes that showing, we will weigh the evidence before us to decide whether the Commissioner satisfied the requirements of section 6751(b)(1). This rule is faithful to the requirement that the Commissioner come forward initially with evidence of written penalty approval. By shifting the burden to the taxpayer after the Commissioner makes the initial showing, we avoid imposing the burden of proving a negative (i.e., that there were no prior formal communications). If the taxpayer introduces sufficient evidence to contradict the Commissioner’s initial showing, then the Commissioner can respond with additional evidence and argument, and the Court can weigh all of the evidence (that is after all the business of judging). And evidence of prior formal communication (if it exists) would be available to the taxpayer since he would have received such a communication and therefore could introduce it to challenge a claim that the supervisory approval was timely. In other words, the rule we articulate today will not require the Commissioner to show that there was no prior formal communication as part of his initial burden.” 154 T. C. 2, at pp. 22-23.

The beloved bright-line test is triumphant. There must be a duly documented Boss Hoss sign-off before a formal consequential communication from IRS manifesting a clear intention to chop the taxpayer. Then the taxpayer must come forward with evidence (another pet peeve of mine is the phrase “credible evidence”; can there be incredible evidence?) that there was earlier formal communication. Then the Court can decide.

Of course, if any of the bullying/bludgeoning so deplored by Congress has taken place, the RA did it without “formal communication” long before the Boss Hoss sign-off, which in any case was superfluous, as the bullied/bludgeoned taxpayer signed the Statement of Agreed Changes conceding their meritorious case, which never reached Tax Court.

As the players say, “If the ref don’t see it, the ref can’t call it.”

The Chicago White Sox are playing in the 6751(b) league today, but they strike out on the Notice of Proposed Adjustments (NOPA).

It’s not a “determination,” says Judge Buch. Here’s Tribune Media Company f.k.a. Tribune Company & Affiliates, 2020 T. C. Memo. 2, filed 1/6/20.

The magic language? “Based on the information we now have available and our discussions with you, we believe the proposed adjustment listed below should be included in the revenue agent’s report. However, if you have additional information that would alter or reverse this proposal, please furnish this information as soon as possible.” 2020 T. C. Memo. 2, at p. 20.

But there was no 30-day letter, giving the Sox a chance to appeal. So once again, the silt becomes Clay.

“The first formal communications of the initial determinations of the penalties to which section 6751(b)(1) applied were the notice of deficiency… and the FPAA …. The Commissioner did not send … any document that conferred the opportunity for an administrative appeal, which can be one of the important indicia of formality. Nor did the Commissioner send any other written communication purporting to determine a penalty with any sense of finality. As a result, the notice of deficiency and the FPAA were the Commissioner’s first formal written communications … informing them that the Commissioner had determined to assert penalties.” 2020 T. C. Memo. 2, at p. 17.

And that was what got the Boss Hoss sign-offs.

We all want certainty, bright lines. The issue is what goes on between the lines.

The Silt Becomes The Clay

Again the raspy nasal invitation from the late Joan Rivers rings out in Belair Woods, LLC, Effingham Managers, LLC, Tax Matters Partner, 154 T. C. 1, filed 1/6/20, as Tax Court splits four ways over when an IRS Rivers-style invitation triggers Section 6751(b) Boss Hossery.

And once again I note, with dismay and perplexity, the absence of Judge Mark V. Holmes, the J. J. Watt of silt-stirring, from the line of scrimmage here. (Of course, being the Court’s Buffalo representative, he may still be in mourning; it is different here in the Bayou City).

Judge Albert G (“Scholar Al”) Lauber has this one. Of course, it’s a busted conservation easement with the usual negligence, five-and-ten substantial understatement, and alternative 40% overvaluation chops in play. The invite was the Letter 1807 audit closing invitation to discuss proposed FPAA adjustments. Belair showed up, but no deal was made.

Before sending the 60-day Letter advising of changes and right to appeal, the RA got the CPAF (Civil Penalty Approval Form) signed off. But the 60-day letter asserted the Section 6662(e)(2) 200% kicker, for which no CPAF was obtained.

Judge Lauber allows the Letter 1807 to pass muster. Our old pal “initial determination,” that hapax legomenon (that’s a one-time-only, for those of us who, unlike Judge Scholar Al, are without a Cambridge M. A. in Classics), takes center stage.

“The ‘initial determination’ of a penalty may occur earlier in the administrative process, but it still must be a formal act with features resembling those that a ‘determination’ itself displays. Like the 30-day letter involved in Clay, the ‘initial determination’ of a penalty assessment will be embodied in a formal written communication to the taxpayer, notifying him that the examination division has completed its work and has made a definite decision to assert penalties.” 154 T. C. 1, at pp. 15-16.

And remember Gwen Kestin, she of the multiple photocopies. No? Then see my blogpost “From the Serious to the Frivolous,” 8/29/19. Judge Gustafson, always ready to call IRS offside when determination of chop precedes Boss Hoss sign-off, said the fix-it-or-fight Letter 3176 IRS sent to Gwen wasn’t an “initial determination,” because Gwen could still correct her return. Chai teaches that there must be a “consequential moment” of IRS action.

What happened here was prologue. Belair had a chance to discuss, argue, or submit more information. In fact Belair met twice with IRS. The RA shouldn’t need Boss Hoss sign-off to attempt to elicit further facts.

And there’s the practical consideration: who can tell when the RA subjectively decided to go for chops? If no mention of penalties to taxpayer without Boss Hossery, “…a strategically minded taxpayer could seek to insulate himself from penalties by initiating a discussion of that subject at an early stage of the examination, conscious that the examining agent most likely would not have secured supervisory approval of any penalties by that time.” 154 T. C. 1, at p. 23.

There’s no magic in who the Boss Hoss doing the sign-off is, but only that the Boss Hoss was the RA’s Boss Hoss at the material time. And Tax Court isn’t going into the depth of the review the Boss Hoss gave the CPAF.

Yes, the statute is ambiguous, but Tax Court must do its best. Judges Thornton, Paris, Kerrigan, Buch, Nega, Pugh, and Ashford are down with this.

Judge Morrison concurs. “However, I do not agree with any suggestion in the opinion of the Court that the initial determination to impose the penalties may only be ‘a formal written communication to the taxpayer, notifying him that the Examination Division has completed its work and has made a definite decision to assert penalties.’ See op. Ct. p. 16.” 154 T. C. 1, at p. 29.

And here’s where I wish Judge Holmes would weigh in. See my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17. He knew that the bludgeon of penalties gets shown to the hapless taxpayer long before formal notifications get sent, and what happens at examination is irrelevant at a deficiency trial, which is de novo. Except the bludgeoned, terrorized taxpayer never gets beyond examination, where s/he folds a meritorious case.

Ex Ch J L Paige (“Iron Fist”) Marvel dissents. “While the opinion of the Court does yeoman’s work in its attempt to identify the initial determination that requires written approval, the text of section 6751(b) simply cannot bear the weight. Instead, I contend that the Letter 1807, dated December 18, 2012, and the attached summary report on the examination (collectively, Letter 1807) set forth the initial determination in this case. In that letter, the Internal Revenue Service (IRS) informed petitioner in writing that it intended to impose a penalty in petitioner’s case. Because written supervisory approval was not obtained before the IRS mailed Letter 1807, I would hold that respondent has failed to meet his burden of production as to the penalties asserted.” 154 T. C.1, at pp. 30-31.

Tax Court has been going back to ever-earlier timeframes to find the magic moment. But one thing has consistently come out of these walks down memory lane: the first time the IRS puts the word “penalty” on a paper the taxpayer sees is when they need the Boss Hoss sign-off. That’s what Congress intended: to prevent the penalty bludgeon from being waved in taxpayers’ faces, to coerce premature and unjust settlements. Technical dissection of the word “determination” is beside the point.

Judges Gale, Copeland and Jones agree.

Judge Holmes may be sitting this one out, but Judge David Gustafson is vying for the title of Great Dissenter. The Letter 1807 had a Form 4605-A statement of proposed changes attached, which mentions “penalties.” Moreover, that form says the IRS has determined to apply them.

“In my judgment, that letter with its attachments embodied an ‘initial determination’ that required written supervisory approval. It is true that the letter did not reflect ‘the Examination Division’s definite decision to assert the penalties.’ But this will be true of many–perhaps all–initial penalty determinations by an agent who has failed to comply with section 6751(b)(1) by getting supervisory approval. That very failure makes it impossible to characterize the unapproved act as ‘the Examination Division’s definite decision’; but today the Court perversely relieves such an unapproved ‘initial determination’ of the consequence that Congress intended. The Court effectively holds that the letter did not require supervisory approval because the letter lacked supervisory approval.” 154 T. C. 1, at p. 36.

Section 6751(b) speaks of a determination by “an individual,” not by Exam Division.

“Section 6751(b)(1) was enacted to undo the determinations of individual agents who make unapproved assertions of penalty liability, but the opinion of the Court today seems to hold that these assertions may not need supervisory approval and may not be undone by section 6751(b)(1). I would hold otherwise.” 154 T. C. 1, at p. 37.

Judges Foley, Gale, Marvel, Urda, Copeland, and Jones agree with this dissent.

So does Lewis C. Taishoff. If ever an opinion needed reargument, this is it.

No, not the Marvel Comics classics of my youth. Rather, today we have STJ Diana L (“The Taxpayer’s Friend”) Leyden refusing to lift the Section 6330(e)(1) suspension of collection in Percy Squire, Docket No. 13308-19L, filed 1/3/20.

IRS is once again somewhat parsimonious with detail. See my blogpost “The Uncertainty Principle – Redivivus”), 7/15/16, which involved an LLC bearing Percy’s name. IRS argues that Percy’s prior trips to Appeals and The Glasshouse at 400 Second Street, NW, manifest a desire to delay.

“To support this argument, respondent points to the fact that petitioner has filed four petitions, including this case, in the last eight years, all of which have disputed Notices of Determination Concerning Collection Action. Respondent relies on the outcomes of two of petitioner’s prior cases and the fact that petitioner did not make the required estimated tax payments … to support his contention that petitioner is exploiting the collection review procedure to unreasonably delay respondent from collecting taxes from petitioner.” Order, at p. 2.

To lift the suspension, Section 6330(e)(2) requires a showing by IRS that there’s no dispute about liability and IRS has “good cause shown” for the lift.

Percy claims he did dispute liability at the CDP. IRS says Percy didn’t, and also didn’t offer information to justify a collection alternative and wasn’t current with his 1040-ES.

But IRS is cutting corners again, and just as with the LLC in the blogpost above cited, the record shows it.

There’s no declaration supporting IRS’ motion, so STJ Di finds herself teaching a class in procedure.

“Respondent’s motion is supported only by one exhibit, Exhibit A. That exhibit does not support respondent’s assertion that petitioner did not challenge the underlying liability in a CDP hearing. The Court has generally considered a motion to permit levy at the same time as a dispositive motion, such as a motion for summary judgment. A motion for summary judgment is usually filed with a declaration of the settlement officer and includes documents that support the arguments made in the motion for summary judgment, including whether petitioner challenged the underlying liability in a CDP hearing.” Order, at p. 2, footnote 2.

IRS should always seek summary J sustaining the NOD simultaneously with seeking a suspension lift. And remember always: marshal and lay bare your proofs.

“Section 6330 does not include a definition of the term ‘good cause’. The Court has held, however, that respondent may show good cause that a levy should not be suspended where the taxpayer has used the collection review procedure to espouse frivolous and groundless arguments and otherwise needlessly delay collection.” Order, at p. 2. (Citation omitted).

What the record shows is that the taxes at issue were self-reported, and that Percy participated in the CDP hearing at Appeals. What the record also shows is no evidence that Percy filed the CDP primarily to delay collection.

IRS doesn’t tell a believable tale of suspense, but they can try again. With the right proofs.

Note, which I didn’t know before: Percy is an attorney, admitted in Tax Court.

All y’all (I’m in the Bayou City, y’all) tell war stories about clients, or have heard them ad nauseum. Today we have an addition for the war stories of the Lead of The Jersey Boys, who got trounced by Judge Halpern for trying to help.

See my blogpost “No Good Deed,” 5/5/17.

Today I withdraw the reticence I manifested in that blogpost. Today we have Clark J. Gebman and Rebecca Gebman, leading off the 2020 T. C. Memos. with 2020 T. C. Memo 1, 1/2/20.

I bet you didn’t know Rebecca was a lawyer. And still is, according to Our Fair State’s Office of Court Administration website. But she was admitted to the Bar in 2004, Judge Nega, not 2000, according to the same source. I wonder if the Jersey Boys knew it; somehow I doubt it.

Judge Nega thoroughly shreds the Gebmans’ claimed deductions and exclusions, and NOL carryforward.

Of course Rebecca wants innocent spousery, but she was the only one with income for the years at issue. “Mr. Gebman did not have a paying job during the years at issue and earned no income. He managed, controlled, and collected rent from their jointly owned properties.” 2020 T. C. Memo. 1, at p. 7.

So Section 6015(b) apportioned relief is out of the question. The items are all Rebecca’s. And 6015(f) equity is a laugher. “…it would not be equitable to relieve Mrs. Gebman from liability on her own items of income while leaving Mr. Gebman responsible for paying the tax. Nor would it be equitable to have respondent try to collect the joint liability only from Mr. Gebman, who has professed his intention to file for bankruptcy.“ 2020 T. C. Memo. 1, at p. 15.

Judge Nega isn’t through.

“Although Mrs. Gebman argues that Mr. Gebman was in charge of filing the tax returns and that he assured her that he was taking care of the cases before this Court, she did not provide any additional evidence that she is entitled to relief. Mrs. Gebman does not allege that Mr. Gebman, in any way, prevented her from reviewing the tax returns, was not interested in her views about the cases, or otherwise discouraged her participation in the cases. Moreover, she admits to voluntarily delegating tax return preparation to her husband. Mrs. Gebman’s actions lead to the conclusion that she may have simply chosen to turn a blind eye to the tax returns. Furthermore, there is nothing in the record that indicates Mr. Gebman tried to deceive or hide anything from Mrs. Gebman. He never concealed any financial dealings, bank accounts, or business operations from her. Finally, Mr. Gebman and Mrs. Gebman are still married and have continuously lived together. Mrs. Gebman did not provide any evidence that persuades us that she meets the requirements for relief.” 2020 T. C. Memo. 1, at pp. 16-17.

But neither are Clark nor Rebecca through. They’re in the zone for a Section 6673 frivolity chop.

“The Court has provided ample warnings to petitioners of the potential implications of continuing to assert frivolous and groundless arguments. For example, petitioners’ various frivolous arguments include that they are victims of criminal conspiracies and that they request alleviation of restraint of trade. During trial petitioners persisted in asserting frivolous and groundless arguments, despite previous warnings from respondent’s counsel and this Court.” 2020 T. C. Memo. 1, at p. 20. (Footnote omitted, but I’m coming to it; it’s really the Luxardos in the Manhattan).

“At trial, with Mrs. Gebman’s silent assent Mr. Gebman spoke about the Federal Reserve; spoke about the activities of Benjamin Strong, who directed the original World War I gold transfer to London; told the story about America’s economic hedging; requested that this Court refer these cases to the Federal Bureau of Investigation; addressed the Federal Election Committee and the State Board of Elections; and talked about the Supreme Court and Teddy Roosevelt. Mr. Gebman advanced many other similar arguments during trial.” 2020 T. C. Memo. 1, at pp. 20-21, Footnote 9.

$2500 to Clark and Rebecca.

I’m sure the Jersey Boys will be well pleased to have gotten rid of those clients.

Finishing up the title of this blogpost, if you have lots of time, I’ll tell you about the Swedish Joan of Arc and her larcenous husband, or about the landfill in Richmond County and the respected gentlemen who oversaw the same. And how glad I am that I survived them, with life, liberty and license intact.

I didn’t blog Ames D. Ray, Docket No. 14051-16, filed 1/2/20, when he starred in 2019 T. C. Memo. 36, 4/15/19. It was another activity-for-production-of-income masquerading as a trade-or-business. I’ll spare you the account of Ames’ domestic upheavals and his fruitless and bootless trudge through the Courts of my Native State; Judge Nega has it in extenso in his opinion.

Ames’ trusty attorney is a wee bit late with his Rule 161 reconsideration motion…like 189 days late. Rule 161 gives 30 days “unless the Court shall otherwise permit.” And apparently trusty attorney never asked. So Ames could be out on time alone.

But clearly there’s more, or I wouldn’t be wasting your time or mine. Since Ames’ trial came during the great Graev hiatus, IRS needed (and got) a reopener to put in evidence of the Section 6751(b) Boss Hossery.

Ames wants to challenge the credibility of the IRS’ declarant, whose declaration was given to support the wild-carded Boss Hossery.

Except.

“…the Court issued an Order affording petitioner the opportunity to serve on respondent interrogatories consistent with Rule 71….That Order also directed respondent to serve on petitioner answers to such interrogatories and file with the Court a status report indicating the then current status of this case….” Order, at p. 4.

But neither Ames nor trusty attorney served such interrogs. IRS stated in its status report that they had asked trusty attorney if he was going to serve interrogs, and trusty attorney said “no.”

“We are unpersuaded by petitioner’s credibility argument, especially in the light of petitioner’s decision not to engage in additional discovery with respect to that issue.” 2019 T. C. Memo. 36, at p. 25, footnote 6; see also Order, at p. 4.

Takeaway- If you get a chance for more discovery, and there’s any chance that chance could help your case, take it. And tell ‘em Ames sent you.

As I struggle through this year’s bout with the flu while visiting nearest and dearest in The Bayou City, it seems another condition, which I had long lamented, turns out to be contagious.

I regret to report that Ch J Maurice B. (“Mighty Mo”) Foley has contracted the letter-motion from ex-Ch J L Paige (“Iron Fist”) Marvel. Here’s William A. Jacob & Rita V. Jacob, Docket No. 18269-19S, filed 1/2/20.

“Susan L. Crum filed a Letter on Behalf of William A. and Rita V. Jacob, and attached thereto a copy of a ‘No Change’ letter… issued to petitioners for [year at issue]. Since, by law, the Court cannot close a deficiency case over which it has jurisdiction without entering a decision as to the amount due, if any, we shall recharacterize the Letter as a Motion for Entry of Decision.” Order, at p. 1.

A quick docket search shows Bill & Rita are pro sese, and there’s no entry of appearance for any attorney or USTCP. It is just possible that Susan L. is an attorney awaiting Tax Court admission (although an internet search shows no attorney by that name). Possibly Susan L. is one of the few, the happy few, who passed the brutal admission exam and is awaiting admission. In the latter case, it’s strange that Susan L. hasn’t finished her paperwork, as the last time the test for non-attorneys was given was November, 2018. She’s had months to get the paperwork done and in.

And “CPA” is missing from Susan L.’s name.

Looks like the condition has mutated from “C.P.A. = USTCP” to “Anybody = USTCP.” And is still contagious.