In Uncategorized on 06/04/2020 at 16:55

Judge Travis A. Greaves is dealing with another Graev matter in Choong H. Koh, 2020 T. C. Memo. 77, filed 6/4/20. Opposing IRS in this fight over $16K in chops is the grandpappy of all the Graevdiggers, Frank Agostino, Esq., the man who made Graev a household word.

In the SNOD, IRS stung Choong with $43K in deficiencies for two years, with chops per Section 6662(j), the offshore 40%. Judge Greaves doesn’t tell us if there was Boss Hossery in respect thereof pre-SNOD, unlike Whimsical Judge Wherry in the Roth case, cited by Judge Greaves. Judge Wherry catalogued every Boss Hoss who laid hoof to recommendation. See my blogpost “Tag ‘Em All – Part Deux,” 12/28/17.

Here, the answer switched the chops to Section 6662(b)(1) or (2), negligence, disregard or understatement, basically 20-percenters. The chops per-SNOD still look like 40% to my imperfect math, and the deficiency numbers don’t seem to justify the 40% substantial undervaluation or overstatement add-on, but maybe the trial or the  Rule 155 beancount will clear that up.

Anyway, since Judge Wherry in Roth said mox nix what happened before IRS counsel and Associate Area Counsel signed off on the answer, and 10 Cir affirmed, Judge Greaves says who cares?

Mr A wants partial judgment on the pleadings that counsel hadn’t authority to shift the basis for the penalties, and Judge Greaves is willing as far as the question whether IRS’ counsel could make the switch.

“In his reply to respondent’s answer, petitioner challenges not only respondent’s counsel’s authority to assert penalties, but also whether respondent’s counsel followed the proper procedure under sec. 6751(b)(1). This second issue may involve factual considerations, and therefore we do not decide it today. We note that the Court has found that an IRS Chief Counsel attorney satisfies the supervisory approval requirement under sec. 6751(b) where the attorney’s immediate supervisor personally approved in writing the assertion of a penalty that was first raised in the answer, as evidenced by the signature of respondent’s associate area counsel on the pleading. See Roth v. Commissioner, T.C. Memo. 2017-248, at *11, aff’d, 922 F.3d 1126 (10th Cir. 2019).” 2020 T. C. Memo. 77, at p. 4, footnote 3.

I point out that Roth, both below and above, was pre-Clay. 10 Cir’s affirmation is dated 4/29/19. Clay was filed 4/24/19. No way 10 Cir could have considered Clay, which is not cited in their decision. Choong is Third Circuit (NJ) anyway.

Unless it can be shown that the Boss Hossery happened before 30-day letter (or equivalent) was issued, even for an erroneously-designated chop, I question whether IRS counsel, associated or not, can wild-card in a different chop at the answer.

All yours, Mr A.

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