That’s the lesson Judge Goeke teaches Joyner Family Limited Partnership, Gary Joyner Revocable Trust, A Partner Other Than The Tax Matters Partner, et al, Docket No. 24704-15, filed 6/4/20.

You’ll doubtless remember that the Joyners, who I hope bought their documents from the office supplies company where one of my nearest and nearest is employed, won their case. If you don’t, see my blogpost “We Don’t Need No Installment Method,” 12/11/19. Now their able counsel want legal and admins.

No dice, says Judge Goeke. During exam, the Joyners’ accountant and their “power of attorney” (I think you mean “representative,” Judge, a Power of Attorney is a piece of paper or maybe a bunch of conjoined electrons) didn’t get back to the RA timely. So she bounced them.

And when the RA sent the 30-day letter, which didn’t mention any appeal rights, she did enclose Publication 3498, which does, extensively. That’s enough for Judge Goeke.

“We find the lack of a 60-day letter does not excuse petitioners’ failure to request an Appeals conference. First, respondent is not required by statute to issue a 60-dayletter. Second, petitioners were informed of their Appeal rights in the 30- day letter. It is immaterial that the 30-day letter did not explicitly state JFLP had a right to Appeals because the enclosures provided that information.” Order, at p. 3.

Of course, Publication 3498 says “If you do not want to appeal your case within the IRS, you may take your case directly to tax court.” Publication 3498, at p. 6. What Publication 3498 doesn’t say is that, if you don’t appeal, you haven’t exhausted your administrative remedies and are precluded from getting Section 7430 legals and admins.

So Appeal. Whatever IRS sends you, appeal.

Judge Goeke rehashes the qualified offer issue in the FPAA context. Fortunately the PATH Act renders this obsolete, as there will be no FPAAs post-effectiveness. How the qualified offer will play out under the new régime is unclear. I see the same objection in the new partnership setting as Judge Goeke finds in the old; subchapter K is still there. Barring FICA/FUTA/ITW, partnerships aren’t taxpayers, partners are.

“…the offer tries to settle the effect of the TEFRA proceeding on the liability of the individual partners. The offer is unclear as to how it would resolve the tax liabilities of the individual partners. It listed the docket number and stated the offer is to resolve all outstanding issues’ and later states it ‘relates to tax years 2010-2012’ and is ‘to settle all issues and claims with finality by payment of a sum equal to $100,000’. We can assume that the partners sought to resolve their collective tax liabilities for $100,000. However, the offer is not clearly worded as to the adjustments it seeks to resolve with respect to each partner.” Order, at p. 10.

And there’s another thing; IRS’ newly-beloved amendment gambit. The qualified offer “… does not address how the offer would treat the losses that the FPAA computed for 2011 and 2012; the offer date is before the amendment to the answer that disallowed the losses.” Order, at p. 10.

So if IRS amends, must you make a new offer? Assuming, of course, that IRS doesn’t get leave to amend after the first date for trial is set, because the qualified offer period closes 30 days before the case is “first set for trial,” Section 7430(g)(2)(b). PATH changed none of this. And cases rarely get tried on the date first set for trial.

The Joyners lose, through no fault of their able counsel, although Judge Goeke finds the Joyners didn’t establish how able they were. “However, they have not identified any unique skills required, and we find the accounting method issues did not require distinctive knowledge or a unique and specialized skills that would constitute a special factor. We find that the issues were not of such difficulty to warrant any increase in the rates sought.” Order, at p. 11. But as he wasn’t awarding legals anyway, able counsel have only their labors for their pains.