That’s Ch J Maurice B (“Mighty Mo”) Foley giving the bad news to Rami A. Fares & Eman S. Fares, Docket No. 8685-20, filed 9/10/21.* The last day for them to file their petition from three (count ’em, three) years’ worth of SNODs was 3/5/20. Tax Court got the same on 7/10/20, when once again the postal workers might enter The Glasshouse in the Stateless City.

Alas, the envelope wherein said petition (signed 3/17/20) resided was postmarked 3/18/21 [sic]; I suspect typos at p. 1 of said Order. If I am correct, the postmark would have been 3/18/20, and the reference to 7/10/21 in the order should be 7/10/20.

Howbeit, “(I)n their petition, petitioners conceded that the petition was being filed after the filing deadline set forth in the notice of deficiency. In their objection to respondent’s motion to dismiss, petitioners further agree that the petition was not timely filed. Petitioners, however, contend that extenuating circumstances, namely the COVID-19 pandemic, were the reason for the late filing and request that the Court deny respondent’s motion to dismiss.” Order, at p. 1.

But the postmark was the same day Tax Court closed its doors, so Rami and Eman were late anyway, even if Tax Court stayed open. Hence Section 7502 mailed-is-filed avails them naught.

And the goalline save by Steve Mnuchin and the Treasury Munchkins (see my blogpost “The Quinzieme Juillet,” 4/10/20) is no help for Rami and Eman.

“The extension granted by Notice 2020-23, however, only applied to petitions due between the dates of April 1, 2020 through July 14, 2020 and, thus, that extension does not benefit petitioners in this case.” Order, at p. 2.

If you were late when the doors closed at the Glasshouse, nothing else counts.

*Rami Fares 8685-20 9 10 21

I didn’t blog the three (count ’em, three) previous visits of Karson C. Kaebel, 2021 T. C. Memo. 109, filed 9/9/21.* KCK was just another nonfiler who claimed he never got SNODs off the SFRs, so didn’t owe anything. But IRS proved he did, notwithstanding KCK’s motion to strike the USPS Forms 3877 showing proofs of mailing to his Lewisville TX last-known-address (at least someone in TX knows how to spell Lewisville, unlike that KY place). So you can read 2017 T. C. Memo. 37, and Order 7/26/18 in Docket No. 916-18, aff’d per cur 770 F. App’x 726 (5 Cir., 2019) for yourself.

Issue preclusion sinks KCK. He litigated the issuance and mailing of the SNODs, and lost. He tried again, lost, and appealed and lost. Even though he got tossed on the second try for want of jurisdiction rather than on the merits, he’d already had his shot at the merits. ” A dismissal for lack of jurisdiction precludes relitigation of issues essential in ruling on the jurisdictional question.” 2021 T. C. Memo. 109, at p. 13 (Citations omitted).

OK, so why is KCK back? Because State grabbed his passport per Section 7345, as IRS certified that KCK owed $250K+. KCK doesn’t dispute the certification. He reiterates the non-mailing of SNODs, but that train left years ago. He also claims the statute violates his Constitutional right to travel freely.

Judge James S (“Big Jim”) Halpern is the last Judge on whom to try that that gambit.

“In Rowen v. Commissioner, 156 T.C. __, __ (slip op. at 16-17) (Mar. 30, 2021), we said: ‘In short, the actions of the Commissioner, the Secretary of the Treasury, and the Secretary of State are governed by separate and distinct rules, which impose different responsibilities on each and grant them varying degrees of discretion in carrying out those responsibilities.” 2021 T. C. Memo. 109, at pp. 15-16.

For the Rowen story, see my blogpost “We Report, State Decides,” 3/30/21. IRS tells State that taxpayer owes money; State takes it from there. Pore l’il ol’ Tax Court cannot review whatever the Sec’y of State decides.

I said don’t try this with Judge Big Jim. Here’s why.

“This is the third proceeding before this Court and the fourth altogether, see Kaebel v. Commissioner, 770 F. App’x 726, in which petitioner has claimed that deficiency notices for one or all the delinquency years were not properly mailed. It should have become clear to petitioner, at least after the Court of Appeals in Kaebel II affirmed our rejection of his claims, that those claims lack merit. He has in this proceeding occupied the time of respondent’s counsel and this Court needlessly with his claims that deficiency notices for the delinquency years were not properly mailed. In pertinent part, section 6673(a)(1) allows us to impose a penalty of up to $25,000 if (1) the taxpayer has instituted or maintained proceedings before the Tax Court primarily for delay or (2) the taxpayer’s position in the proceeding is frivolous or groundless.” 2021 T. C. Memo. 109, at p. 17.

So let KCK show cause why Judge Big Jim shouldn’t mulct him.

*Karson C Kaebel 2021 T C Memo 109 9 9 21

The Jersey Boys, and their Great Chieftain Frantic Frank Agostino, are an unending source of blogfodder. When it comes to novel theories and unparalleled envelope-pushing, count on Hackensack as the launching pad to the stars.

Today, Judge Mark V. Holmes confronts the stretch of the year in Malka Yerushalmi, Petitioner, and Joseph Yerushalmi, Janet Baldwin, Next Friend, Intervenor, Docket No. 5520-08, filed 9/8/21*. That 08 is no typo; I’ve drunk good Scotch that’s younger than this case.

Frantic Frank signed aboard only last October, but he’s quick off the mark.

I’ll turn it over to Judge Holmes.

“Intervenor is the debtor in a long-running bankruptcy case, but in 2019 the Bankruptcy Court lifted the automatic stay to allow him to file his own case and to give us the authority to adjudicate together both he and his ex-wife’s tax liabilities for the years 1999 and 2000. We have since consolidated his and her cases.

“Intervenor’s bankruptcy case is ongoing, and the trustee of his bankruptcy estate has filed an adversary proceeding in Bankruptcy Court to authorize the sale of a condominium unit in which both intervenor and petitioner have an interest. Intervenor then moved for a protective order in this Court to stay the sale pending the outcome of this case. The Commissioner quickly made a jeopardy assessment against both petitioner and intervenor, the effect of which would seemingly be to ensure payment of the proceeds of any sale.” Order, at p. 1.

Howbeit, Frantic Frank’s move for a Rule 103 protective order to stay the sale by the Bankruptcy Trustee is truly breathtaking. Exactly how pore l’il ol’ Tax Court has such jurisdiction is above my paygrade.

“Intervenor cites Rule 103 as our authority to grant the order he seeks. That Rule is part of the section of our rules that governs discovery in our Court. It allows us to issue orders to protect persons who are the object of a ‘method or procedure’ of discovery ‘from annoyance, embarrassment, oppression, or undue burden or expense.’ Rule 103(a).

“We see nothing in that rule that would allow us to second guess any decision of the Bankruptcy Court’s to authorize the condominium sale. Intervenor’s stated reason for filing the motion is, moreover, to avoid prejudice to the Commissioner’s ability to apply any equity in the condominium to the Yerushalmis’ tax debt and to prevent petitioner from possibly putting the condominium out of the Commissioner’s reach. The Commissioner has shown he’s capable of protecting his own interest through the jeopardy assessment.” Order, at p. 1.

Judge, a quick check of our New York City Automated City Register Information System shows IRS filed a NFTL on Joe last month for about $2.5 million and two (count ’em, two) on Malka for about twice that. And if I got it right, there are three (count ’em, three) condos in play here. One is on 58th Street and Third Avenue, another on West 80th Street, and a third on Warren Street in the courthouse district, all on this Minor Outlying US Island. With deeds out showing no consideration. My kind of case.

The Commissioner is ultra-capable of protecting the fisc.

But I must give Frantic Frank a Taishoff “Gutsy Move, Hors Classe” for this one.

*Malka Yerushalmi 5520-08 9 8 21

Today we have another example showing why Campbell, LCJ’s famous statement is as true today as when he first said it. For the text, see my blogpost “Lord Chief Justice Campbell’s Dictum,” 6/1/21.

Here’s seventeen (count ’em, seventeen) pages of Judge Morrison deconstructing the discovery objections of Jeffrey A. Miller and Patricia J. Miller, Docket No. 8820-20.*

If you need a checklist of boilerplate discovery objections, Jeff & Pat have ’em for ya. See Order at pp. 2-3. Of course, Jeff & Pat are long on objections and short on facts.

Bottom line: If you are going to object, state the facts that underpin each of your objections. Otherwise, the judge will do as Judge Morrison does, and knock them down seriatim. If you don’t have something in your possession or under your control, say so. If you promise to produce something within a time certain, produce it. Blowing a time limit and promising again, without a good explanation why you blew the time limit, doesn’t help.

Finally, if you’re going to play lawyer, learn to play it right.

*Jeffrey Miller 8820-20 9 8 21

Though The Girl of My Dreams watches the double-wide in the living-room, I do not, so never is heard those discouraging words in our house.  But Judge Christian N. (“Speedy”) Weiler does just that, in Green Valley Investors, LLC, Bobby A. Branch, Tax Matters Partner, et al., Docket No. 17379-19, filed 9/7/21.*

Y’all will recollect that Judge Speedy upended the Green Valleys back in May. No? See my blogpost “How Green Was My Valley – Part Deux,” 5/27/21. Well, the Green Valleys tried reconsideration, and today fare no better.

I’m not going into the improvements-out or the deference-to-regulation arguments here. Read them for yourselves, but they’re much of a muchness with all the prior Tax Court learning. I’m waiting for appellate learning before chewin’ this cabbage twicet.

I’m going back to my old favorite, “so remote as to be negligible.”

Unhappily, the Green Valleys didn’t raise this argument in the partial summary Js for which they now seek reconsideration. Judge Speedy could blow them off on that alone. “On the basis of our review of the prior motion papers petitioners are raising this argument now for the first time and therefore could be denied on that basis alone.” Order, at p. 6.

OK, but the citation of precedents IRS (presumably) argues, and Judge Speedy buys, don’t really cover. First is the original “How Green Was My Valley,” 4/27/16, Carroll. But there Judge Ruwe distinguished Kaufman on the grounds that there was no intervening mortgage; and Carroll never appealed.

Next is Palmolive, as to which see my blogpost “No Joy Forever – Because Golsen,” 10/11/17.

But there, Judge Gustafson tossed Kaufman because Kaufman was 1 Cir and Palmolive was 7 Cir, and anyway, 1 Cir was wrong. But Palmolive folded (see my blogpost “Palmolive Washes Out,” 12/4/20), so no appeal there either.

OK, the Kaufman argument is a weak reed. Casualty loss is by “no means so remote as to be negligible,” especially to a New Yorker who’s seen two (count ’em, two) record-braking flash floods in the last ten days. And the mortgagee can scoop the insurance proceeds in every  mortgage I’ve seen. But brushing off condemnation by saying there are other ways that an easement may be terminated, as Judge Ruwe did in Carroll, is just as weak a reed. Those “other ways” as just as remote.

Yes, failure to raise the argument on the motion is enough to toss reconsideration, absent fraud, which is not the case here. Still, “very contestable readings of what it means to be perpetual” will not go away until the Circuits weigh in.

So don’t pass the remote quite yet.

*Green Valley Investors 17379-19 9 7 21

“(d) Business Hours: The office of the Clerk at Washington, D.C., shall be open during business hours on all days, except Saturdays, Sundays, and Federal holidays, for the purpose of receiving petitions, pleadings, motions, and other papers.”

Today, September 6, 2021, being a Federal holiday, this blog is not open.

Honor to the workers.

Very rarely do I go back to a blogpost to rant about how unfair an opinion was. Rants rarely accomplish much; the target assumes the role of one unjustly attacked, the ranter’s hyperbole undermines credibility; those who listen stop listening fast, as they’ve had enough of such stuff nowadays. And the whole thing sinks into oblivion.

Today I’m going to ignore my own good advice. So, readers, govern yourselves accordingly.

My blogpost “Go Nova,” 8/31/21, got seventeen (count ’em) seventeen views that day, and none thereafter. I’m not complaining about that. Most of my posts concerning small-claimer innocent-spouseries rarely get even that much.

But I went back to edit that blogpost on 9/1/21, because the opinion galled me. At the risk of chewin’ my cabbage twicet, I’ll repost that edit here, with a few extras.

“As best I, a mere old-time, beaten-up, beaten-down, single-shingle dirt lawyer ‘of limited experience and mediocre qualifications’ can discern, Denise blew through $1 million net from the settlement: she owes another $100K credit card debt, $160K to a cousin who lent her money (use of proceeds unknown), $16K to her divorce lawyer, and an undisclosed amount in real estate taxes and home equity line of credit on her MacMansion. Plus put $70K into a business, the fate of which is unknown. This is low income? This is not dissipation of assets? I won’t mention that a high-low settlement agreement got into the record of a trial, to the prejudice of a pro se. It’s been almost five (count ’em, five) years since I said this (and turns out I was right back then): If ever an opinion needed reargument, it’s 2021 T. C. Sum. Op. 31.”

The problem is that Kenneth, the intervenor, was pro se. His argument was probably so poorly articulated that STJ Yuda Guy brushed it off. I’m not faulting STJ Yuda; it probably came out as could’a would’a should’a, not dissipation of assets. Yes, I didn’t see the witnesses or hear the testimony. I know everybody’s testimony looks the same as everybody else’s on paper, but nobody’s testimony looks looks the same as anybody else’s on the stand.

I bet the Villanova Widger School of Law Wildcats must have chewed Kenneth up. There was the prof in charge and two (count ’em, two) students from a highly-selective law school, “hungry as locusts,” as a former US Supreme Court Chief Justice put it. Note I don’t blame either prof or students. They aren’t prosecutors, they’re advocates. Their job is not to make the other side’s case for them, especially when they got the IRS to fold; their job is to win for their client, within the bounds of the law and the ABA Model Rules, and they did.

But what if Kenneth had properly raised dissipation? What if he asked for the credit card statements that supposedly amounted to $100K? What do Denise’s bank statements show? And the $160K she owed to her cousin; don’t interfamily loans and deals get special scrutiny? So where is a copy of the note or other evidence of indebtedness, showing sum certain, dates for payment and maturity, stated rates of interest, events of default, and evidence showing that a commercial or institutional lender would have lent on substantially similar terms? And schedule of payments made thereon, and proofs of each such payment? How much is that real estate tax lien? How old is it, what rate of interest accrues, when does the municipality foreclose? Is this lien not an event of default under the home equity line of credit? And what are the terms of the home equity line of credit, and what drawdowns were taken therefrom, and where did the money go? And what about the business? Is it still operating? Did it ever operate? Was it a sole prop? Were there partners or investors? Let’s see the business’ books, records, tax returns, bank and brokerage statements, and public filings.

Any of my readers, admitted in USTC, would ask these questions, and no doubt a couple others (hi, Judge Holmes) even more pointed that I haven’t thought of. Or gotten the stuff in a Branerton show-and-tell.

Kenneth hadn’t a clue. No reason he should have. But a calendar call commando, or another LITC, would have made a big difference.

This needs reargument; in the interests of justice.

If, busy as he is, demanding the sixty-George-blinds from recalcitrant or unaware petitioners, Ch J Maurice B (“Mighty Mo”) Foley missed this IRS hot flash on Wednesday, I offer it now. IRS is singing the signature electronic.

Might be time to reconsider the blue-ink lockout, such as was visited upon Rhiannon Palmisano, Docket No. 20611-21, filed 9/3/21*.

It’s past time. I’ve been blogging this since 2013 (see my blogpost “Song Sung Blue,” 11/15/13) sub regni three (count ’em, three) Ch Js. Time to give the blue-ink snail mail petition a pension, and let it enjoy its golden years away from The Glasshouse on Second Street.

*Rhiannon Palmisano 20611-21 9 3 21

I’ve not gone in for science fiction. Rather, I want to set forth Judge Patrick J. (Scholar Pat”) Urda’s discussion of the parallel courses of a CDP and an audit reconsideration.

Michele Lee Pazden, 2021 T. C. Memo. 107, filed 9/2/21*, sent in a letter after she got a SNOD for a year for which she hadn’t filed timely. Apparently that was good enough to constitute a petition, which got tossed for Michele Lee’s failure to ante up the sixty Georges. This, of course, sinks Michele Lee’s future attempts to fight about liability.

But before the toss Appeals offered Michele Lee an informal hearing, whereat Michelle Lee was asked for a return, and tendered a 1040 three months late stating she would seek audit reconsideration. IRS gave Michelle Lee a NITL, for which she sought CDP. Appeals deemed the audit reconsideration to be a claim adjustment, and sent it to an RA. The RA heard out Michelle Lee, and bounced her claim adjustment.

Meanwhile, back at Appeals, Michelle Lee’s CDP founders when she wants to fight liability. Appeals said she had her chance, but they’d take a second look at audit reconsideration. The SO at Appeals checked with the RO at AR, and tossed Michelle Lee again. Michelle Lee petitions the CDP, and claims she should have had a second SNOD as a result, so she could contest liability.

Clear? Thought not.

Judge Scholar Pat: “Ms. Pazden nonetheless argues that her audit reconsideration request and the subsequent examination should have triggered a second notice of deficiency for [year at issue], giving her another opportunity to challenge the underlying liability. The IRS’ authority to issue a notice of deficiency, however, is predicated on the Secretary’s determining a deficiency in the taxpayer’s income tax. See sec. 6212(a). The IRS here did not determine any additional tax deficiency in the wake of the audit reconsideration examination, and a second notice was not required.” 2021 T. C. Memo. 107, at p. 8.

Michelle Lee wants Judge Scholar Pat to review the audit reconsideration. No; audit reconsideration runs parallel with a CDP, but Tax Court has no jurisdiction over an AR, an AR is purely discretionary, and the caselaw says Appeals need not wait on an AR to issue a NOD.

Michelle Lee plays the Taxpayer Bill of Goods, but that’s a loser. No new rights. And her demand for remand craters also;  nothing new here.

*Michelle Pazden 2021 T C Memo 107 9 2 21

See my blogpost “EFTPS,” 10/10/18, for the story on how to set up the Electronic Federal Tax Payment System to pay all your Federal tax payments.

It sure would have helped Chad Cassiday & Kelly Cassiday, Docket No. 11643-20L, filed 9/2/21.* While Judge Buch is remanding Chad & Kelly back to Appeals, the remand he orders is broader than what IRS is asking for.

“On April 16, 2018, Mr. Cassiday went to his bank and withdrew approximately $2.8 million to pay the Cassidays’ 2017 taxes. The money was withdrawn from their account on that day to create three separate cashier’s checks: two made payable to the Internal Revenue Service (one for $2,500,000 and the other for $326,316) and one made payable to the State of Michigan. (There were two separate checks to the IRS because the branch manager at the bank could not approve a single check in excess of $2.5 million.) Because the money was withdrawn from the Cassidays’ accounts for the bank to prepare the cashier’s checks, the Cassidays received no further benefit (such as interest) from those funds. Mr. Cassiday put the two checks that were payable to the IRS in a single envelope and mailed it to the IRS. The IRS cashed the smaller check, but the IRS never cashed the check for $2,500,000. Instead, the IRS imposed interest and penalties because of the apparent shortfall.” Order, at p. 1

 IRS then began its collection efforts. IRS hit Chad & Kelly with NFTL and NITL for “deficiency,” interest and chops. Except Chad & Kelly loudly protested at their CDP that they had paid.

Appeals blew it by not addressing Chad’s & Kelly’s underlying liability issue. IRS admits that, but their request for remand only speaks to interest abatement.

Judge Buch: “…before getting to the issue of whether interest should be abated, the Commissioner must address whether interest should have accrued at all. The Cassiday’s claim, at least according to their petition, is that interest was improper in the first instance. Their position, simply stated, is that they timely mailed their tax payment to the IRS. While we are not deciding the facts or law in this order, the Cassidays’ argument is that the liability was timely paid. Section 6601 imposes underpayment interest beginning on the last date prescribed for payment until the ‘date paid.’ Section 7502(a)(1) provides that ‘if any * * * payment required to be made * * *on or before a prescribed date * * * is, after such * * * date, delivered by United States mail to the agency, * * * the date of the United States postmark stamped on the cover in which such * * * payment * * * is mailed shall be deemed to be the * * * date of payment.’ We understand the Cassidays’ position to be that, because they timely mailed their payment, they do not owe any interest. Before considering whether the interest can or should be abated under section 6404(e) because of an unreasonable error or delay, the Commissioner must first consider whether the interest was properly imposed in the first instance.” Order, at pp. 2-3.

I hope Chad & Kelly get a total win. But win or lose, they had to engage counsel (a distinguished practitioner of many years’ tax experience in a prominent MI firm; I can’t think his fees are cheap), and go through meetings, document compilations, one and now a second CDP, waste time, effort, and endure emotional stress.

Remember how Judge Buch suggested paying taxes by means of a “certified check” in the Malasky case, discussed in my blogpost hereinabove cited?

Of course, no bank has issued “certified checks” in years, as they’re so easily forged or fraudulently altered. The banks  now issue official bank tellers’ checks, for which you have to jump through hoops, and they’re also fraud bait.

I urge my readers and their clients to consider EFTPS. I’ve used it for years with never a problem. If you’re worried about having your bank account hacked (although it probably has been already, and so has the US gov’t), create a dedicated account at your bank to use only for EFTPS payments.

And tell ’em Chad, Kelly and Taishoff sent ya.

*Cassiday 11643-20L 9 2 21