I won’t drill down too deeply into the saga of Norris A. Dodson and Helen M. Dodson, 2020 T. C. Memo. 106, filed 7/9/20. It’s a CDP waltz, where the 433s show $615K equity in their principal residence and a $166K tax bill for the four (count ’em, four) years at issue. Norris and Helen were also behind on estimateds for the year in which they were at Appeals.

Norris and Helen don’t question liability for tax, but want abatement of the additions (nonfiling, nonpayment, non-estimateds). They want first-time abatement.

Judge Albert G (“Scholar Al”) Lauber finds this an interesting question. As this comes up on self-assesseds, no chance to contest until CDP. So is it abuse-of-discretion or de novo review? Check out 2020 T. C. Memo. 106, at p. 8, for a rundown on the caselaw; spoiler alert, it’s not a model of clarity. But Judge Scholar Al would toss first-time abatement under either standard, as Norris and Helen adduced no evidence at the CDP that they were willing to pay up or were current on their estimateds.

And they only claimed hardship in Tax Court, not at the CDP.

Best of all is the maneuver that Norris and Helen pulled post-submitting their 433-A to Appeals.

“Petitioners assert in their cross-motion for summary judgment that their residence is currently worth $835,000 and is subject to a mortgage of $668,000. Assuming this to be true, it would appear that petitioners have borrowed against the equity in their home since submitting the Form 433-A to the SO. In any event, the SO properly made her decision on the basis of the information before her at that time.” 2020 T. C. Memo. 106, at p. 12,  footnote 3.

Norris and Helen were in the real estate business.

For those of my readers who are not acquainted therewith, see my blogpost “Mortgaged Out,” 8/28/19, for an explanation of the title of this blogpost.