You remember Pengcheng Si, Docket No. 18748-18, filed 4/14/20, got his trial. No? How come? Well, see my blogpost “‘Too Soon Arrives As Tardy As Too Late’ – The Next Generation,”1/20/20.

But Pengcheng lost. After a bench trial, Judge David Gustafson obliged IRS (but not Pengcheng) by tossing his deductions for “other expenses”, “meals and entertainment”, and “legal and professional services”. Order, at p. 1.

Now Pengcheng wants reconsideration of the last of these. $19K of legals, he says, was paid in connection with his whistleblower case. You’ll note there is no “W” in Pengcheng’s docket number. Pengcheng blew under 31 USC 18 (sic) Section 3730, the Civil War qui tam False Claims Act. Has nothing to do with taxes.

But his whistleblower case got tossed with no recovery three years after the year at issue, wherein Pengcheng claimed the $19K.

And Judge Gustafson states the rule for False Claims is the same as Section 7623 whistleblowing: “No dough, no go.” Only Judge Gustafson is a lot more elegant than I.

“Neither Mr. Si’s motion for reconsideration nor his reply in support of that motion cites or discusses the controlling statute, section 62(a)(20) of the Internal Revenue Code (26 U.S.C.), nor suggests any reason that it does not have the effect stated in our bench opinion.” Order, at p. 2.

Judge, with submission, Section 62(a)(20) only mentions legal fees in connection with awards under section 7623(b), or, in the case of taxable years beginning after December 31, 2017, any action brought under section 21F of the Securities Exchange Act of 1934 (15 U.S.C. 78u–6), a State false claims act, including a State False Claims act with qui tam provisions, or Section 23 of the Commodities Exchange Act (7 USC 26).

Pengcheng didn’t mention a statute that clearly on its face doesn’t apply.