In Uncategorized on 03/16/2021 at 16:49

The demise of the designated hitter was a real disservice to the blogger. Hunting through some hundreds of orders to find material worthy of e-space is burdensome. I know, under the old much-lamented system, many judges didn’t bother to designate their orders, and my attempts to proselytize the non-designators yielded little.

But now, with a few minutes to spare after a CLE, I came upon All-Rite Leasing Company, Inc. Docket No. 16216-18L, filed 3/16/21. Ex-Ch J Michael B (“Iron Mike”) Thornton canvasses Rule 123, Section 6673 and Section 7456, and finds none applies to IRS; the All-Rites’ bœuf is with Appeals.

Appeals didn’t give the All-Rites a face-to-face on remand because COVID. Appeals offered the All-Rites a Zoomie, but wouldn’t let the All-Rites record it. Ex-Ch J Iron Mike says there’s caselaw holding that CDP remands can’t be recorded. The All-Rites claim Appeals didn’t consider the financial statements underpinning their OIC. Appeals claims they reviewed the admin record, and ex-Ch J Iron Mike rejects the All-Rites’ attempt to limit what in the admin record Appeals can consider. If the All-Rites think the admin record is incomplete or contains extraneous matter, they can raise that at this second remand ex-Ch J Iron Mike orders.

This second remand puts paid to the All-Rites’ Rule 123 motion for default against IRS. “Rule 123(a) provides that the Court may hold a party in default for ‘failure to plead or otherwise proceed as provided by these Rules or as required by the Court’. Respondent has not failed to plead or otherwise proceed as provided by the Rules or as required by the Court. In any event, insofar as petitioner seeks remand of this case as a sanction, the request is rendered moot by our granting of respondent’s motion to remand this case….” Order, at p. 8.

But the All-Rites aren’t done. They want their Section § 6673(a)(2) excess costs, expenses, and lawyer’s fees, claiming Appeals botched the first remand. Except Appeals is a distinct component of IRS and isn’t a party to this case. “In any event, nothing in petitioner’s allegations suggests bad faith or recklessness on the part of Appeals personnel. We are astonished that petitioner would suggest that Appeals acted in bad faith or recklessly in declining to hold an in-person conference during the COVID-19 pandemic, when respondent’s offices were closed because of safety and health concerns. And insofar as petitioner’s complaint relates to Appeals’ declining to reconsider petitioner’s OIC on its merits, we expect any such concern to be addressed on remand of this case as requested by respondent….” Order, at pp. 5-6. (Footnote and citation omitted, but I’ll give you the footnote later.)

I said the All-Rites aren’t done. They want sanctions per Section 7456, the contempt of court power. Merely being a nonparty to a case doesn’t mean exempt from contempt. But the nonparty must be an abettor of the contemptuous act. “Petitioner has not meaningfully alleged that respondent or his counsel were involved in any contempt of this Court’s authority or orders. In any event, for reasons similar to those previously discussed, nothing in petitioner’s allegations suggests contemptuous disobedience to this Court’s orders by ‘Appeals’, SO L, her ‘Appeals’ bosses’, or anyone else. Indeed, petitioner has suggested no legal basis for holding ‘Appeals’ in contempt and seems implicitly to acknowledge the absence of any such legal basis when it asserts: ‘Alternatively, if the Court determines that I.R.C. §7456 sanctions can only apply to an individual, then I.R.C. § 7456(c)(1) allows this court to award the sanction Petitioner requested, as against SO L and her bosses as “misbehavior of any person in its presence, or so near thereto” as obstructing the administration of justice of Respondent’s refusal to comply with the Court’s May 27, 2020, Order.’ This assertion is wholly without merit. None of the alleged misconduct occurred in the Court’s presence (there have been no hearings in this case to date) or otherwise constitutes sanctionable misconduct under section 7456(c)(1).” Order, at p. 7. (Name omitted).

So ex-Ch J Iron Mike sends the All-Rites and IRS back to Appeals. And they can fight about the admin record there.

But here’s the footnote I promised to give you. And tell me if you think ex-Ch J Iron Mike got it right.

“That petitioner has predicated his motion to impose sanctions, twice supplemented, on this and other equally ill-considered notions causes us to question whether it is petitioner who is seeking to vexatiously multiply these proceedings.” Order, at p. 6, footnote 6.

Unfortunately, the new, improved (??), jim-handy DAWSON electronical wondersystem doesn’t show appearances, so I can’t tell if the All-Rites were represented by counsel. I somehow doubt it.


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