Poker players know the feeling, however well they mask it. Whether behind sunglasses or under a hoodie or baseball cap; whether they subconsciously flick their eyes down at their hole cards or their stack; whether they lift their chins like French Foreign Legionnaires on parade; whether they bully, blabber or banter, the moment has come when one must lay it down, or risk all. Face, hands, eyes, words may mask the feeling. But a sphygmomanometer would tell the story plainly.

I don’t know if Judge Albert G (“Scholar Al”) plays poker. But he does know how to call.

Marc S. Barnes & Anne M. Barnes, Docket No. 6330-19L, filed 7/21/20, drew an apt docket no. for their CDP petition from a NFTL. Marc & Anne assert that they went through Ch 13 bankruptcy, with a confirmed plan that was fully paid out. Yes, they do happen. So discharge.

IRS says no, year at issue wasn’t included in the proceeding. IRS never filed proof of claim, because the deficiency for year at issue wasn’t determined at date of filing the bankruptcy petition. There was a Tax Court case pending, that Marc & Anne ultimately lost.

But Marc & Anne riposte that they had a hearing in Bankruptcy Court last June. “Petitioners represent that, during the June … hearing, they asked the Bankruptcy Court to consider: (1) whether their 2003 liability was discharged in the bankruptcy proceeding, even though the liability had not yet been assessed; and (2) whether an injunction issued by the Bankruptcy Court bars the IRS from attempting to collect that liability. Petitioners represent that the Bankruptcy Court currently has these two questions under advisement. They ask that we defer ruling on respondent’s motion until the Bankruptcy Court has addressed those questions.” Order, at p. 2.

OK, but they had a chance to contest in Tax Court, and lost. So liability is not an issue, only abuse of discretion. But if Bankruptcy Court determined the discharge subsumed the year at issue tax debt, then sustaining the tax lien is an abuse of discretion.

But something is missing, whence the title of this blogpost.

” Petitioners allege a dispute of material fact as to whether their 2003 liability was discharged in bankruptcy and/or whether an injunction issued by the Bankruptcy Court bars further IRS collection activity for that year. Petitioners represent that they have asked the Bankruptcy Court for a ruling on these questions, but they have not produced any motion, court filing, transcript of proceedings, or other document that corroborates their representation. We will ask petitioners to supply documents that shed light on the questions (if any) currently being considered by the Bankruptcy Court. After they have supplied that information, we will ask respondent to file a reply to petitioners’ response, expressing his view as to whether (among other things) it is necessary or desirable to stay further proceedings in this case until the Bankruptcy Court has addressed these questions.” Order, at p. 3.

Marc & Anne, lay ’em down by 8/17.

Taishoff suggests that Section 7421 puts paid to the injunction of collection. And if IRS was not given notice to be present at that June hearing, how are they bound by the bankruptcy proceeding at all? Should be interesting.

No, this isn’t a lookback at that heartbreaking high school moment, when the athletes received their machine-embroidered recognition, to the teary-eyed grumblings of us lesser mortals. Today we’re looking at various Letters in the roadmap to Appeals. We just saw the Oropezas get the word from Exam via the Letter 5153 in a T. C. Memo. of even date herewith. For that, see my blogpost “Forty’ll Get Ya Twenty,” 7/21/20.

But Letter 5157 takes a starring role in Rickey B. Barnhill, 155 T. C. 1, filed 7/21/20, as Judge David Gustafson gives Letter 5157 the prominence it deserves. Rickey avers he never got the Letter 5157, although he did get the Letter 1153, breathing slaughter for TFRPs. Rickey was a director of an outfit called Iron Cross, which outfit was a trifle lackadaisical about remitting FICA/FUTA/ITW to the tune of ten (count ’em, ten) quarters.

Rickey fired in a timely protest, claiming he wasn’t liable. Appeals returned Letter 5157, which sets the appointment for a phoneathon to discuss the matter, and suggests what documents to send. Rickey says he never got Letter 5157, notwithstanding it was mailed to last known address. IRS says “too bad, so sad, mailing was enough.”

Note that the SO waited two (count ’em, two) days after the scheduled phoneathon that never happened to bounce Rickey’s appeal. IRS then gave Rickey an NFTL. Rickey asked for a CDP, and got it, but when he contested liability, he was told he had his chance and blew it.

Judge David Gustafson isn’t happy with the two-days-and-out bit. ” There may be good and sufficient reason for this brisk efficiency, but we cannot say that it gave Mr. Barnhill an ‘opportunity’ to dispute his liability.” 155 T. C. 1, at p. 30.

The magic word is “opportunity” (Section 6330(c)(2)(b). Letter 1153 gives notice of the opportunity. If the responsible party fails or refuses to act timely, then receipt of the Letter 1153 is enough. And so it was in many cases, wherefore it became Tax Court slang to call Letter 1153 the opportunity.

But not here.

“The facts before us may not suggest a deliberate, arbitrary refusal by Appeals to hear Mr. Barnhill’s appeal, but a taxpayer who did suffer such a refusal could hardly have received any less of ‘an opportunity to dispute * * * [his] tax liability’ for the TFRP at issue within the meaning of section 6330(c)(2)(B) than Mr. Barnhill did. As we explain above in part II.B.2., receipt of the Letter 1153 is required not for the sake of receipt itself but rather for the opportunity it is supposed to deliver.” 155 T. C. 1, at p. 31. I left out part II.B.2, because you can read it for yourself; Judge Gustafson says it all right here.

IRS claims harmless error. Judge Gustafson is too well-mannered to give IRS’ counsel a Taishoff “Oh, Please,” but I’m not. Harmless error doesn’t excuse abuse of discretion.

And while IRS was willing to consider an OIC based on doubt of liability, that’s not a CDP, and if Rickey’s story is true, he was and is entitled to one.

Note this comes up on IRS’ motion for summary J. In summary J, all of the facts asserted by the non-movant (Rickey) are assumed to be true, except only those asserted by the movant (IRS) and not challenged by Rickey with contrary facts. So Rickey still has to prove he never got the letter.

Note also IRS’ snarky comments; Judge Gustafson does.

” For purposes of the Commissioner’s motion, we also assume that–as Mr. Barnhill has declared under penalty of perjury–he did not receive the Letter 5157. We do not cross our fingers behind our back as we state this assumed fact, though the Commissioner’s papers seem to suggest that we should. His motion states: ‘While petitioner claims he did not receive the letter from Appeals officer P scheduling the telephone conference, such letter was sent to the same address as the Letter 1153, which petitioner received.’ (Emphasis added.) His reply states: ‘The Appeals officer sent petitioner a Letter 5157 to his last known address (the address on the Letter 1153) scheduling a telephonic conference. Petitioner claims he did not receive the Letter 5157.’ (Emphasis added.) If the Commissioner wishes to raise doubt about that assertion, the forum for that effort would be a trial, not a motion under Rule 121 that asserts we need no trial.” 155 T. C. 1, at p. 14. (Name omitted).

Ad hominem arguments rarely ingratiate those who make them to the trier of fact.

Jesus R. Oropeza and Fabiola Anaya Oropeza, 2020 T. C. Memo. 111, filed 7/21/20, engaged in micro-captivity (no, that’s not the prequel to Fifty Shades of Grey, that’s a micro-captive insurance company that siphons taxable income). With the SOL running out, Examination offered J and F a Form 872 waiver of SOL, or an immediate SNOD with a 40% insubstantiation chop (there was a cool million bucks-plus of extra income at issue). This was conveyed via Letter 5153.

J&F elected neither, so they got the SNOD at no extra charge.  Though the SNOD included the 40% chop, the underlying CPAF only mentioned 20%, and showed zero for the 40 percenter. And the SNOD wasn’t issued until RA, Group Manager, and IRS Chief Counsel Attorney eyeballed same.

My diligent readers surely by now will have divined that this was a Graev mistake.

And Judge Albert G (“Scholar Al”) Lauber is on this blunder like couple color on a Hopkins brindled cow.

IRS claims that J & F neither got issued a thirty-day letter nor a sixty-day letter, therefore that was no final determination when the 40% chop was first broached. “A 30- or 60-day letter is one way of communicating to a taxpayer that the Examination Division has concluded its work. But it is not the only way. The Letter 5153 clearly communicated the same message to petitioners: It told them that they could now go to Appeals, but only if they first executed a Form 872 that would give Appeals enough time to consider their case.” Order, at pp. 8-9.

Having disposed of IRS’ argument, Judge Scholar Al turns to J and F and their trio of trusty attorneys. They claim the Group Manager didn’t look closely enough at the penalty issue, and signed only one page of the CPAF.

As for the latter “(T)his argument is a nonstarter. Both pages are part of a document that is denominated ‘Civil Penalty Approval Form.’ Page 1 of the form contains a space at the bottom for ‘Group Manager Signature’ and ‘Date.’ Group Manager P affixed his signature and date in the spaces provided; there is no space on page 2 for a signature, and he was not required to interpolate one. We have repeatedly relied on Civil Penalty Approval Forms signed and dated as this one was.” Order, at p. 2 (Citations and name omitted).

As for the former, all the statute requires is the sign-off by the right overseer. Nowhere is Tax Court empowered to go behind the hoofprint of the Boss Hoss.

The twenty percenter was timely Boss Hossed. The forty percenter was unhorsed.

As I said in my blogpost “From My Notebook,” 7/8/20, it seemed then that a lot of cases were being transferred from Judge Ruwe to Judge Greaves. I have not heard from the Ch J’s chambers, but I suppose the staff are working remotely and have more pressing matters with which to deal.

I discovered from rereading the press release dated 6/24/20 yesterday that there exists a Public Affairs Office, “the office that dares not speak its name,” nowhere listed on either the old well-designed website or the new, unimproved, jazzy website. I telephoned today, identified myself and my purpose, and asked about the reassignments: was it simply rebalancing the portfolio? The officer could not comment.

I draw no inference: given the dislocations caused by COVID-19, any inference would be mere speculation, hence valueless.

But today a new transfer piques my curiosity. It’s a case already tried and briefed.

Akeem Adebayo Soboyede, Docket No. 13146-18S, filed 7/21/20, was tried last December. Both sides’ briefs were submitted by early February.

I’ll let Ch J Maurice B (“Mighty Mo”) Foley take it from here.

“This case was tried by and submitted to Judge Robert P. Ruwe. The Court proposes to reassign this case to another judicial officer of this Court for purposes of preparing the opinion and entering the decision based on the record of trial previously held in this case.” Order, at p. 1.

Unusual, but not unprecedented. And as this case is a small-claimer, it might be a good idea to let a new appointee to the Tax Court Bench, even if not named in this order, take a preliminary canter before trying to jump Becher’s Brook at Aintree: metaphorically, of course.

And of course both Akeem and IRS’ counsel have time to consent, or move for a new trial, or move to supplement the trial record.

I hope all is well with everyone at Tax Court.

Once the Ogden Sunseteers have done the Lacey SME mambo and come up dry, STJ Daniel A (“Yuda”) Guy is powerless to help Dannez Westbrook Hunter, Docket No. 11453-19W, filed 7/20/20.

And this is so, even when Dannez claims “… one of the taxpayers had ‘money laundered stolen proceeds of Aunt Jemima royalties that belong to my family’ and that the others had failed to pay a certain individual’s ‘$3,500,000,000.00 UCC lien for [sic] involving theft of Terminator and Matrix franchise copyrights’. Petitioner claimed that he was the administrator of the individual’s purported UCC lien. Attached to the Forms 211 were various documents, including copies of court filings, taxpayer biographies, news articles, and a letter from petitioner.” Order, at p. 2.

And Dannez also claims two or more of the targets bribed the FBI and a judge and his clerk to sink his whistleblower claim.

“The administrative record in this case establishes that the WBO received petitioner’s applications for award, evaluated petitioner’s information, which included receiving input from an IRS classifier, and based on that classifier’s recommendation, determined that petitioner’s information did not warrant further investigation by the IRS. In doing so, the WBO performed its evaluative function. See Alber v. Commissioner, T.C. Memo. 2020-20, at *8-*9.” Order, at p. 4.

All y’all will recall Christian Bernd Alber. If not, check out my blogpost “We Don’t Need Lacey,” 1/30/20.

“Petitioner is clearly frustrated that information he believes is actionable was not pursued by the IRS. However, as petitioner has failed to show that the WBO’s determination in this case was arbitrary, capricious, or without sound basis in fact or law, we find that the WBO did not abuse its discretion in rejecting petitioner’s whistleblower claims. Consequently, in the absence of any justiciable dispute as to the actions that the WBO took in response to petitioner’s whistleblower claim, it follows that respondent is entitled to decision as a matter of law.” Order, at p. 5.

BTW, if you’re as curious as I am about the judge and clerk, check out Dannez’s other order today, wherein Ch Judge Maurice B (“Mighty Mo”) Foley must deal with “…petitioner’s memorandum memorandum in support of objection to U.S. Tax Court Chief Judge Maurice B. Foley, fraudulent court order to strike dated July 9, 2020, petitioner’s supplemental pleadings as a pro se litigant under U.S. Tax Court Rule, Title IV, Rule 41(b)(2)(c), filed July 16, 2020….” Order, at. p. 1.

And nobody had better mess with Aunt Jemima; the Girl of My Dreams will not countenance anyone else’s waffle and pancake mix.

It’s SOP for Tax Court litigants to try to bar each other’s expert witnesses’ reports and testimony. Every form file should contain at least one boilerplate Daubert-Kumho Tire gatekeeper motion in limine.

But to move for reconsideration “woefully late” because your expert’s report was admitted into evidence is a new one on me. Trust Robert G. Taylor II, Docket No. 400-13, filed 7/20/20; Mr. Taylor and his expert figured in my blogpost “Appraisals – From Texas to Oregon,” 8/19/19. You’ll recall Mr. Taylor’s expert relied too much on mold, asbestos and the Black ’08, rather than on physical damage to his “ornate and architecturally significant house.” Order, at p. 4.

And Mr. Taylor was a wee bit parsimonious with the details he told his expert.

“Petitioner either did not correct the report before submitting it to the court as evidence or petitioner had failed to inform his own expert witness that he had removed value from his fee simple property by transferring ownership of certain fixtures and sculptures to a trust, to include some portion of the stained glass windows in his dining room and wall paneling throughout the house. Nor did it appear that petitioner had disclosed to his own expert that he had originally purchased the subject property in an ‘as is’ condition with no warranties.” Order, at p. 4.

But Judge Paris gets to the point.

“The Court found petitioner’s expert witness credible and her report aided the Court in understanding the evidence. While the aid ultimately helped the Court find for respondent on whether petitioner was entitled to a casualty loss deduction, the expert witness report does not become inadmissible because it did not have the desired effect for petitioner.” Order, at pp. 8-9.

And I wasn’t alone in finding Mr. Taylor’s claim unique.

“Petitioner appears to be arguing that his substantial rights were affected by the Court admitting his expert witness report. The Court is not aware of and could not find any instance where a party has been unduly prejudiced by their own expert witness report being admitted into evidence.” Order, at p. 9.

The good news is that Mr. Taylor recovered from his insurer for the damages. “Petitioner’s ornate and architecturally significant house only reflected damage at best and described as proportionately minor according to insurance documents admitted into evidence. The damage and the subsequent repairs were fully reimbursed to the petitioner by his insurance company.” Order, at p. 4.

I hope he recovered for his 6,889 bottles of wine, half of which were submerged by Hurricane Ike.

Has anybody encountered the new, unimproved, jazzy United States Tax Court website? Note that most, if not all, of today’s online orders have no links. This requires a separate docket search for each of the unlinked, from which webpage one is shortly and summarily evicted. And the monuments of unageing intellect who devised the new, unimproved, jazzy website moved the docket search feature from the old easy-access link on the orders search page to the e-filing section, necessitating opening a new window.

See my blogpost “Updating Mark Twain,” 11/12/19. The famous “contractors,” whoever they may be, clearly have not heeded the time-tested admonition hereinabove set forth at the head hereof, as my high-priced colleagues would say. The last time they fussed (I wanted to use another word, but this is a blog for family reading) with the site, they took out all the links.

As for improving the “search” function, as was alleged back last November, there is no link for “search” on the website.

Why was no beta version released for public comment? Those of us who actually use the website every working day might have had a seasonable word or two, from which even the genius barflies who produced this might have profited.

Perhaps some person from the Public Affairs office (an outfit which dare not speak its name, as it is nowhere listed anywhere on the website) might deign to explain why this mother of abominations was foisted on a public that never did them any harm, and at taxpayers’ expense, to boot.

The new, jazzy homepage of US Tax Court announces the retirement of Judge Joel Gerber. Here’s a link: https://ustaxcourt.gov/resources/press/07172020.pdf

The words of an Authority even more exalted than Judge Nega echo through his order in Alan L. Davis & Deborah D. Davis, Docket No. 13791-18, filed 7/17/20. Seems Al & Deb maybe so petitioned a SNOD, having something to do with Clean Energy Systems.

But the envelope wherein the petition arrived bore a return address other than Al’s & Deb’s, namely, that of Management Concepts, PLC. And when Al & Deb moved to dismiss same, the signatures on the motion didn’t match those on the petition. Of course, you can’t dismiss a timely petition from a SNOD without handing IRS a win on all counts.

But doesn’t this all sound a wee bit familiar? If not, see my blogpost “Eh Bien, Voila Au Moins Qui N’est Pas Banal – Redivivus,” 6/4/19.

Looks like Carl Rex Olson, honcho of Management Concepts, PLC, whence came the dubious petition in this case, is at it again.

Judge Nega doesn’t mention Judge Buch’s takedown of Carl Rex, particulars of which can be found in my blogpost hereinabove cited. But he did find the same Federal statute to use in a footnote, just like Judge Buch.

“It appears that Mr. Olson is no stranger to this Court and we warn him that if he continues to engage in similar conduct in the future, the Court would strongly consider referring him to the U.S. Department of Justice for prosecution.” Order, at p. 3. (Footnote omitted, but here it is).

“18 U.S.C. sec. 1001 generally makes it a crime to knowingly and willfully submit to a court ‘any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry.'” Order, at p. 3, footnote 3.

Of course, Al’s & Deb’s non-petition is tossed because not signed by petitioners.

But may I most respectfully suggest that, once the lights go on again all over the world, Judges Nega and Buch get together in the Tax Court Judges’ cafeteria, over a cup coffee and a piece pie (hi, Judge Holmes), and sort out how to handle Carl Rex.

It’s a run-of-the-mill Rule 91 motion, a show-cause why facts and evidence should not be  deemed admitted. And ex-Ch J Michael B (“Iron Mike”) Thornton grants motion, nemine contradicente. Happens all the time.

So why am I blogging Clovis Chadmar Partners, LLC, Charles R. Lande, Tax Matters  Partner, et al., Docket No. 11903-18,filed 7/16/20?

Because the order is confusing, or maybe I am easily confused.

Ex Ch J Iron Mike notes that “(P)etitioners have filed no response to the Court’s order to show cause…, even though petitioners are currently represented by counsel.” Order, at p. 1.  Well, doesn’t the need for a lawyer’s reply depend upon what the facts and evidence are? If none thereof hurts the client, or if objection would invoke a Section 6673 delay-of-the-game chop, why waste time or money replying? Besides, aren’t the facts and evidence already stipulated?

Ex-Ch J Iron Mike says so, unless I’m much mistaken. He orders “the facts and evidence set forth in the stipulation of facts attached as Exhibit A to respondent’s motion to show cause” are deemed admitted. Order, at pp. 1-2. Well, if the facts and evidence are stipulated, which to me means agreed to by both parties and assented to in writing, why agree twice? Or is this stipulation only a proposed stipulation, not consented to? Then opposing counsel’s non-response would evoke comment.

But there’s always the strategic thought that petitioners’ counsel is giving IRS rope wherewith to do the cliché. See my blogpost “Short Sale – Part Deux,” 7/13/20, where a weasel-worded sentence in a stip torpedoed a bunch of chops.

Once again, dear friends and followers, stipulate…don’t capitulate.