It’s thirty-five years since I heard the gravelly rasp of my law partner Sid directed to a client who wanted to pretend his troubles (it was usually “his”) would go away if he did nothing. Well, his rasp echoes today, as Judge Goeke admonishes James R. Morris and Lori A. Egbers-Morris, 2021 T. C. Memo. 120, filed 10/25/21*.

Jim and Lori are victims of their own success. They turned Jim’s packaging business into a conversion business (and no, I don’t know what that is, either), and made a lot. But they didn’t file for a couple years (hi, Judge Holmes) because they made a few accounting moves that their trusty CPA, who’d theretofore been doing their taxes, thought might land them in the calabozo if they fessed up for those years. So they didn’t, and the moves didn’t, but they finally stiped out with IRS to $600K for one year and $1.7 for the other.

And now all they’re fighting about is the add-ons, non-filing, non-paying, and non-estimating.

Of course Jim and Lori claim reasonable cause, based on trusty accountant’s advice.

“Reliance on such advice ‘do[es] not sanction an abdication of responsibility for the timely filing of a return admittedly due. United States v. Kroll, 547 F.2d 393, 397 (7th Cir. 1977); see also Fleming v. United States, 648 F.2d 1122, 1125-1126 (7th Cir. 1981). The Code provides an unambiguous deadline, and ‘no special training or effort [is required] to ascertain * * * that it is met.’ Boyle, 469 U.S. at 252.”Petitioners were not advised that they were not required to file a return. The alleged advice was to delay filing while audits for prior years were completed. Allowing such a basis for reasonable cause would make timely filing optional for any taxpayer under audit. Petitioners were aware that they had a duty to file a return timely and consciously failed to file. It is well settled that taxpayers must file timely returns using the best information available to them and may file amended returns if necessary.” 2021 T. C. Memo. 120, at pp. 7-8. (Footnote omitted).

The rest of the add-ons follow on similar lines. Trusty accountant never testifies, and correspondence from said trusty accountant never makes it into the record. I make the morning line 8 to 5 the trusty accountant already got The Phone Call. For those tuning in late, see my blogpost thus entitled.

*James Morris &; Lori Morris 2021 T C Memo 120 10 25 21