But That’s No Reason To Go To Tax Court

Ordinarily, I wouldn’t even bother blogging Mark Pilyavsky, 2020 T. C. Sum. Op. 20, filed 7/2/20. Judge Gerber is remarkably douce, given how quickly and thoroughly Mark’s case craters.

But we’re coming up on a three-day weekend. I can’t spend it with one of my nearest and dearest in her Berkshire retreat; the Bayou City is under siege; and my local museums and concert halls are locked down, as am I. Note well, I am not complaining; so many have it so much worse, and I fear worse is yet to come. But if I have to shut down (or, as I’m sure some would say, shut up), I’ll take one more time at bat.

Mark claims IC, except his employment contract with PIMCO as senior database engineer says he can’t work for anyone else as a consultant, which he claimed on his return he was, and anything he invents or creates is work for hire.

Mark testifies truthfully and candidly.

“At trial, however, petitioner disavowed his statement that he was an independent contractor with PIMCO. Instead he testified that he was an employee. In addition, evidence in the record shows that he had agreed with PIMCO that he would not perform the same type of work with outside clients or use his experience in such pursuits. The presentation and explanation attached to the Schedule C was accordingly a fabrication intended to establish the appearance of a Schedule C business activity in order to report losses that could be claimed to be deductible from ordinary income.

“Further diluting petitioner’s position is that he does not have any original records of the alleged activity other than his bank statements from which his return preparer developed summaries in an attempt to support the more than $50,000 in claimed deductions. Petitioner’s testimony was vague, and he did not go into any details of his alleged business activity. On cross-examination it was shown that the summaries had numerous inaccuracies and contradictions. Under the circumstances, we find that petitioner’s testimony and other evidence lack credibility.” 2020 T. C. Sum. Op. 20, at pp. 6-7.

Mark was pro se, of course. I lament the recent death of Henry G. Miller, Esq., a remarkable trial lawyer from whose lectures I learned much. He said that when one’s client’s testimony sent the client’s entire case down the drain, one should brighten up, as if that testimony was just what you wanted the jury to hear, and smile one’s sweetest smile.

Then, when the judge nonsuited your client and dismissed the jury without having given them the case (as there was no case to give them), go out, find a quiet corner, and cry your eyes out.