Attorney-at-Law

JUDGE ON A TEAR – PART DEUX

In Uncategorized on 10/08/2020 at 18:14

Or, a Bad Day in Ogden

Judge David Gustafson has been on a tear before, but today the Ogden Sunseteers are down range, and they lose two (count ’em, two) tries at summary J.

Lawrence W. Doyle and John F. Moynihan, 2020 T. C. Memo. 139, filed 10/8/20, blow on some 501(c)(3)s Messrs. Dole and Moynihan allege have strayed from the straight-and-narrow. And they have 100 exhibits, which contain 6000 (count ’em, 6000) pages of stuff, enough for someone at Ogden to write on the file “contains specific credible documentation,” although much is publicly-available. Meesrs. Doyle and Moynihan originally filed a 211 in the name of some corporation, but later filed same info as individuals. No corporate blowing allowed.

Initial evaluator bucked the stuff over to TEGE (Tax Exempt and Governmental Entities) for subject matter expertise. Judge Gustafson reckons that any toss thereafter must be “denial,” and not “rejection.” Wherefore, there must be enough in the AR to be worth looking into.

The TEGE SME got an e-mail from her boss to buck this on to Criminal Investigation; she does, but CI sends it back, saying it declined to go further. The 11369, which CI generated, said yes, the claim was “surveyed or declined.” And no investigation was opened. But it took CI three tries for CI to get the Form 11369 filled out right.

Meanwhile, “Petitioners allege–but the administrative record does not reflect–that, in this same general time period, one of them had a telephone conversation… with a Special Agent of the Federal Bureau of Investigation who said, ‘I can’t say enough about what you and your colleagues have done in filing your submission and providing your materials. We greatly appreciate everything you and your colleagues have done in your work.’ Such non-record information might be pertinent to a motion to supplement the administrative record, see Van Bemmelen v. Commissioner, 155 T.C. __, __ (slip op. at 15-16) (Aug. 27, 2020), or to a request to obtain discovery; but we do not consider such information in ruling on the Commissioner’s motion for summary judgment.” 2020 T. C. Memo. 139, at p. 7, footnote 2.

Chaps, that’s Judge Gustafson saying “nudge nudge, wink wink.”

Notwithstanding the foregoing, when TEGE got the file back, they “rejected” the claim, saying no credible information. Judge Gustafson notes that this incorrect nomenclature, but says TEGE was being colloquial. Should be “denied.”

But the OS bounced Messrs. Doyle and Moynihan, saying no collection. Doyle and Moynihan petition, claiming many governmental officials blessed their work, and wanting Judge Gustafson to breathe threatenings and slaughter in Ogden.

Well, post-Van Bemmelen, all Judge Gustafson can do on a summary J motion is examine the AR. A mere dispute of fact is irrelevant. “That distinction (the more demanding standard of denying the motion if the record simply shows a dispute of fact versus [emphasis in original] the less demanding standard of denying the motion only if the record fails to support the conclusion) does not affect the outcome in this case since, as we explain below, the administrative record does not support a critical premise of the WBO’s determination, and we therefore deny the motion even under the less demanding standard.” 2020 T. C. Memo 139, at p. 21.

Now non-collection is a winner, but the final bounce letter says “no proceedings.” You can collect without proceedings, but the bounce letter didn’t say so. And IRS is Cheneryed into what it did say, not what it could’a should’a would’a said.

Now Tax Court can’t oversee or direct Exam, Collection or CI to do anything. But here, it looks like IRS is weasel-wording, and Judge Gustafson is no fan of weasel-wording.

“Prompted by petitioners’ allegations–explicit and detailed, with names, dates, and locations–the WBO’s email put a single direct question to CI: ‘Can you please confirm that IRS CI is not working with these WBs on any investigation with these [target] entities?’ CI’s reply was a non-answer that looks like it may have been a deliberate evasion: ‘The claim was appropriately declined by criminal investigation.’

“But was CI ‘working with’ petitioners or not? CI did not say. And it gives us no confidence in the WBO’s determination to note (as the administrative record shows) that… CI had to be asked three times to complete its Form 11369 for this case, giving ‘unacceptable’ responses to the WBO and grousing that it’s ‘somebody else’s job’. We therefore hold that the administrative record, containing petitioners’ detailed allegations and CI’s non-response, fails to support the WBO’s conclusion that CI had not proceeded with any action based on petitioners’ information. Accordingly, we deny the motion on the grounds that the WBO abused its discretion in reaching its conclusion, because not all of its factual determinations underlying that conclusion are supported by that record.” 2020 T. C. Memo. 139, at pp. 26-27.

Time to supplement the AR…and how!

But wait…there’s more! See my next blogpost.

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