Attorney-at-Law

Archive for November, 2021|Monthly archive page

THE EXTRA BASE

In Uncategorized on 11/26/2021 at 09:41

It’s a thrilling moment in baseball when the baserunner goes for an extra base. The acrobatic fielder firing the ball from an impossible position; the runner’s feet, legs, and lungs pumping like mad; the fielder’s waiting teammate urging the ball to the glove while trying to avoid an interference call from the hovering umpire; and the third base coach urging the runner on in a frantic ballet. What a scene.

And then the cloud of dust, as the runner slides and the tag is (or is not) applied.

Well, today this thrilling spectacle is being played at The Glasshouse on Second Street, NW. There is neither opinion nor order, not even a press release, notwithstanding that, as my source tells me, today is not a public holiday in The City of Much Taxation but no Representation.

It seems that Judges (both Senior and regular), STJs, flailing datestampers, and hardlaboring intake clerks, have all taken an extra base after the Thanksgiving  Day holiday.

Hence the cloud of dust and nothing else on this my blog.

YEAH, MOST AFFIRMATORY, ROGER THAT

In Uncategorized on 11/25/2021 at 10:47

United States Tax Court is closed today, “a day of national humiliation, fasting, and prayer,” as Lincoln put it.

Enjoy the turkey, cranberry sauce, bourbon maple sweet potato puree, hot biscuits, and get ready to rush the discounts at midnight.

I’ll be back blogging tomorrow.

DQ

In Uncategorized on 11/24/2021 at 17:24

It’s never happened that I horse I backed was elevated on account of a DQ, nor had any horse I backed been itself DQ’d. But I’ve seen it happen, and the objurgations, imprecations, expostulations, ejaculations, and anathemizations of those whose horse was thus cast out by the stewards were worthy of utterance by my old outfit in Vietnam.

It’s a shame that the examination for admission to the Bar of the United States Tax Court took place last week, because today Judge Alina I (“AIM”) Marshal has a survey of grounds for disqualifying counsel for conflict of interest that would be a good review for candidates for the Biennial Slaughter of the Innocents.

Here’s Pecan Ranch Family Trust, et al., Docket No. 21716-18, filed 11/24/21*. It’s another Section 6901 transferee liability case, with a twist. No MidCos or shell-shills to buy gain-laden C Corps; a now-deceased accountant cooked up a bunch phony Sub Ss (hi, Judge Holmes) to shelter income from a couple doctors and pay the Docs’ personal expenses.

The Pecans got the Sub S stock for a $100K purchase price. IRS claims either the S Corps are a sham and assignees of income, or the Pecans are transferees of the tax liabilities of the now-deceased accountant who should have paid tax on the pass-through doctors’ income he sheltered. The Pecans are represented by two attorneys from a firm, and IRS claims they’re promoters, and thus flunk Rule 24(g)(1).

The Pecans provide a written waiver of the conflict that passes muster.

“Respondent has not shown that Mr. Y was involved in planning a transaction that is connected to any issue in these consolidated cases. Conversely, respondent has shown Mr. H to have been involved in: (1) the formation of the Trust; (2) the sale of the S Corporations to the Trust; and (3) the money transfers of $625,000. Messrs. Y and H obtained from petitioners a broad written consent, which includes statements that petitioners read documentation from respondent asserting conflicts of interest under Rule 24(g)(1). Further, respondent has not established any other concurrent conflict of interest under Rule 1.7 or Rule 1.10, ABA Model Rules. On the basis of the arguments and documents before us, we conclude that petitioners’ written consent is sufficient to obviate the conflicts of interest with respect to Mr. H and Mr. Y under Rule 24(g)(1).” Order, at pp. 4-5. (Names omitted).

But will Mr. H have to testify on the trial? Judges take a real close look at that, because it’s a good tactic to knock out counsel by claiming you’ll call her/him as a witness.

Mr Y is clearly in; he hadn’t anything to do with the S Corp stock sale to the Pecans. But Mr H is another story.

“Respondent has shown that Mr. H advised petitioners on various transactions related to the S Corporations and the Trust. The advice that [the doctors] received when the Trust purchased the S Corporations is relevant and material to the application of section 6901 and determination of a fraudulent or constructively fraudulent transfer under TUFTA. See Cullifer v. Commissioner, T.C. Memo. 2014-208, at *18-*19. Petitioners argue that Mr. H is not a necessary witness because the relevant and material evidence is obtainable from other sources. This argument, however, is undercut by the following considerations: (1) Mr. [deceased accountant] passed away on November 21, 2014; (2) Dr. B and his colleague… have indicated a lack of knowledge or understanding of the various transactions related to the S Corporations and the Trust; and (3) Mr. H was a principal tax advisor to petitioners and their related entities when the transactions related to the S Corporations and the Trust occurred. Accordingly, Mr. H’s testimony is uniquely valuable in these consolidated cases and is unattainable elsewhere.” Order, at p. 6. I think you meant “unobtainable,” Judge.

For the backstory on Cullifer, see my blogpost “Cullifer’s Travails,” 10/8/14.

But remember the “bedrock of Tax Court practice.” The stip. And Judge AIM brings it to the front in the stretch. Only before you cash those tickets, remember Taishoff’s Rule: Stipulate, Don’t Capitulate.

“We are unable to determine at this time, however, whether Mr. H is likely to be a necessary witness. It is also unclear at this time whether the parties can agree to facts that would render Mr. H’s testimony duplicative or related to an uncontested issue (i.e., for purposes of Rule 24(g)(2)(A)(i)). The determination of whether Mr. H is likely to be a necessary witness will be made following submission to the Court of an executed stipulation of facts and the parties’ pretrial memoranda. Because we cannot yet determine whether Mr. H is likely to be a necessary witness, we need not consider at this time whether Mr. H’s testimony would be protected by attorney-client privilege.” Order, at pp. 6-7.

*Pecan Ranch Family Trust 21716-18 11 24 21

MANY HAPPY RETURNS

In Uncategorized on 11/24/2021 at 16:12

No, not birthday wishes; this is the story of Dragan Razmilovic & Jadranka Razmilovic, Docket No. 3513-20, filed 11/24/21*. Drag & Jad filed three (count ’em, three) tax returns for the same year, each one different from the previous.

Drag was a dental tech who worked both as an employee and as an IC in the year at issue. He first reported salary and wages of $40K, with employee unreimbursed expenses of $42K. Judge Mark V. Holmes is stunned, because although such returns are “audit bait,” (Transcript, at p. 4), IRS didn’t challenge the unreimburseds. On the contrary, IRS hit Drag with $11K reported on a 1099-MISC by a dentist for whom Drag freelanced, and $24K of taxable Social Security. 

Judge Holmes and IRS are stuck with the unreimburseds.  But Drag & Jad admitted the $11K and the $24K omitted income on the trial, so they’re stuck with that.

But Drag & Jad filed two (count ’em, two) subsequent returns, each with different numbers, and each after the petition. The second amended return claimed the same Sched A deductions, but added a Sched C with $39K of expenses but no new income, apparently to take care of the 1099-MISC and Social Security. The last had no Sched A, cut the Sched C expenses to $36K, and cut the Sched A back to $13K. IRS recalculated the Sched A and came up with the same $13K. “But this was just the Commissioner’s good-faith estimation of a Schedule A expense that was not actually on a Schedule A on the second amended return.” Transcript, at p. 5. 

The third amended return had no Sched C, but boosted the Sched A expenses to $30K. and didn’t mention the 109o9-MISC from the dentist.

Perhaps by now you can join Judge Homes and me. “This leads me to conclude that I have no idea what the Razmilovics’ position is.” Transcript, at p. 6.

But Judge Homes doesn’t need to know. Drag conceded the $11K and the $24K income at trial. IRS never challenged the original Sched A numbers at audit or on the trial, so Judge Holmes won’t go there.

Drag offered some scraps of paper (no receipts) to offset the $11K at the trial, but between that and Drag’s off-the-wall numbers, Judge Holmes concludes Drag hasn’t proven it more likely than not that he did make the payments claimed.

Even George M. Cohan never rose to such a rarefied level of inexactitude.

*Dragan Razmilovic C+Docket 3513-20 11 24 21

MORE INSUBORDINATION

In Uncategorized on 11/23/2021 at 18:23

Judge James S (“Big Jim”) Halpern is just the man to deal with insubordination in the ranks. The Tax Court website says  Judge Big Jim is a Colonel in the Army Reserve. Now he confronts the insubordination of mortgagees when it comes to knicking casualty insurance proceeds in 901 South Broadway Limited Partnership, Standard Development, LLC, Tax Matters Partner, 2021 T. C. Memo. 132, filed 11/23/21*.

The 901s were gearing up for trial, with hot-and-cold running experts to tussle over valuation of the historic façade, when Judge Big Jim said it might be cheaper to deal with insubordination rather than spend big bucks on said experts. See my blogpost “The Rule Against Perpetuities,” 7/23/21.

There are three (count ’em, three) mortgagees, and five (count ’em, five) lenders, and they all used the Model Historic Preservation and Conservation Easement published by the National Trust for Historic Preservation, which of course gives Lenders first dibs on insurance and condemnation proceeds. 2021 T. C Memo. 132, at pp. 11-13.

As we expect, there’s much procedural argy-bargy, the 901s claiming IRS ambushed them with insubordination, and IRS saying that was in from the getgo. Judge Big Jim goes with IRS.

The 901s claim there are a “myriad of fact issues” requiring trial, but when push comes to cliché have only four (count ’em, four) legal issues.

First, the 901s read the assignment of leases and rents provision in the Model Easement to encompass insurance and condemnation proceeds, except it doesn’t.

Second, Gordo and Lorna Kaufman’s win in 1 Cir gets Golsenized, as the 901s are appealable to 9 Cir. See my blogpost “A Joy Forever”? – Maybe Not,” 7/20/12.

Third, since the 901s didn’t put in the mortgages (called “deeds of trust” in CA, because mortgages there are conveyances, not liens as they are here in NY, but there’s no real difference, and Judge Big Jim says so, 2021 T. C. Memo. 132, at p. 22, footnote 5.), so the CA “good faith and fair dealing” standard for mortgagee behavior isn’t clear.

Finally, there’s the usual assault on the Proceeds Regulation.

Judge Big Jim trawls through the Model Easement, finding the mortgagees come out ahead in condemnation and casualty proceeds. CA gives mortgagees discretion, albeit to be used in good faith, where our NY Real Property Law makes casualty insurance proceeds trust funds to be used for restoration.  

Neither condemnation nor casualty is “so remote as to be negligible.” The 901s have a building in a major metro area, where casualties to buildings are not uncommon.

Taishoff says this is in contrast to conservation easements on boondock land, with minimal, if any, improvements; insurance is not the issue, condemnation is.

In short, “If under any circumstances that have at least a material chance of occurrence the Lenders would have a priority right over the [501(c)(3)] to insurance or condemnation proceeds that the Lenders did not agree to subordinate to the [501(c)(3)], the requirement of section 1.170A-14(g)(2), Income Tax Regs., as interpreted in Palmolive Bldg. Inv’rs, would be violated. The number of circumstances in which the Lenders would not have a priority right would be of no moment.” 2021 T. C. Memo. 132, at p. 46. (Emphasis by the Court.)

For the Palmolive story, see my blogpost “Palmolive Washes Out, 12/4/20.

The 901s claim Judge Big Jim ambushed them and took over the case, preventing their trusty attorneys from advocating for their client.

“In evaluating a party’s arguments on an issue put before a court, that court might well identify deficiencies not raised by the other party. Doing so would not take the court beyond its proper adjudicatory role. That is particularly so in a case in which the court’s statutory jurisdiction is as broad as that granted by section 6226(f) (or section 6214(a)).

“Petitioner seems to think that its task was limited to advancing arguments more persuasive than those advanced by respondent, expecting us to ignore any deficiencies in its position not brought to our attention by respondent. Petitioner misunderstands both its role and ours. Petitioner must convince us that its position is correct. See Sineneng-Smith, 590 U.S. at ___, 140 S. Ct. at 1581 (observing that ‘a court is not hidebound by the precise arguments of counsel’). 2021 T. C. Memo. 132, at p. 65.

In short, summary J for IRS.

*901 S B’way LP 2021 T C Memo 132 11 23 21

CHANGING HOSSES IN MIDSTREAM

In Uncategorized on 11/23/2021 at 16:46

Folk wisdom tells us not to do this, but IRS did. They promoted RA C (name omitted) while she was auditing Sand Investment Co., LLC, Inland Capital Management, LLC, Tax Matters Partner, 157 T. C. 11, filed 11/23/21*. In consequence whereof, she moved from Team One to Team Two, hence from the command of Manager One to that of Manager Two.

Judge Lauber takes up the story.

“But because the Sand examination was ongoing, the IRS authorized RA C to continue her work with Team 1 until that examination concluded. Although Manager Two became responsible for approving RA C’s timesheets, leave requests, and other routine administrative matters, Manager One remained the case and issue manager of the Sand examination and continued to oversee all of RA C’s work on that examination.” 157 T. C. 11, at p. 5 (Names omitted).

At this juncture, my ultra-sophisticated readers will have shouted “Conservation easement, GA boonies, Section 6662(h) overvaluation/understatement chops!” And they will be almost 100% right, except these boonies are in Jasper County, SC.

Also at this juncture I must give a Taishoff “Good try, First Class, with Chaighoul skull-and-bones,” to Sand’s trusty attorneys at Chamberlain Hrdlicka.

RA C whanged Sand with Section 6662A and section 6662(a), (b)(1), (2), and (3), (d), (e), and (h) chops. 157 T. C. 11, at p. 6.

“Her recommendations to this effect were set forth in a ‘Penalties Lead Sheet.’ Manager One digitally signed this document on November 20, 2018, as the ‘Case/Issue Manager.’ RA C concurrently prepared a Supplemental Civil Penalty Approval Form, which states that she ‘made the initial determination to assert * * * penalties.’ RA C signed that form on November 20, 2018, and Manager One digitally signed it the same day as the “Case & Issue Supervisor.” RA C also sent a copy of her penalty approval form to Manager Two, who signed on November 23 as the ‘Immediate Supervisor.'” 157 T. C. 11, at p. 6. (Names omitted).

Again, my ultra-sophisticates have already yelled “But between November 20 and November 23, RA C tipped off Sands!”

Right again, champs.

IRS claims the first notification was the FPAA more than sixty (count ’em, sixty) days later, but of course Sands’ trusty attorneys say “no, mailed is communicated, and sending the 5701 and 1807 even if only a couple days (hi, Judge Holmes) before RA C’s new immediate supervisor, Manager Two, signed off, is leg-before-wicket and you’re out.” Of course, like lbw, Boss Hossery has produced much controversy.

Trust Judge Albert G (“Scholar Al”) Lauber. Boss Hossery turns on the magic Section 6751(b) words “immediate supervisor.”

“Congress did not define the term ‘immediate supervisor,’ and that term elsewhere appears only once in the Code. See sec. 7521(c). The IRS itself does not appear to employ the term ‘immediate supervisor’ uniformly in its personnel practices. See, e.g., IRM pt. 4.46.4.11.2(3) (Dec. 13, 2018) (referring to an examiner’s ‘issue manager’” as the immediate supervisor); id. pt. 20.1.4.1.3(3) (Feb. 9, 2018) (referring to an examiner’s ‘team manager’ as the immediate supervisor); id. pt. 4.19.10.4.5.3(3) (Dec. 9, 2020) (referring to an examiner’s ‘immediate manager’). In this respect as in others, section 6751(b) is not a paragon of statutory draftsmanship.” 157 T. C. 11, at pp. 9-10. (Citation omitted).

So in dealing with this one-off language, let’s use ordinary meanings. Congress wanted the Boss Hoss sign-off to cool off overzealous grunts, who would use the threat of astronomical chops to bludgeon settlements out of timorous taxpayers, despite IRS’ case being none too strong and the taxpayer’s case being better than somewhat.

“Given this legislative purpose, an agent’s ‘immediate supervisor’ is most logically viewed as the person who supervises the agent’s substantive work on an examination. That person (after the agent) presumably has the greatest familiarity with the facts and legal issues presented by the case. That person is thus in the best position to supply the approval that Congress believed desirable.” 157 T. C. 11, at p. 11. (Footnote omitted, but read it; it says assertion of penalties in litigation is “(S)omewhat different (though analogous) considerations may apply.” 157 T. C.11, at p. 11, footnote 5. (Citations omitted, but get them).

And RA C got both her old Boss Hoss and his successor to sign off, even though Manager Two only approved her time sheets and leave requests. “Because of the ever-changing landscape created by evolving judicial interpretations of this ambiguous statute, RA Cooper evidently took a belt-and-suspenders approach. We decline to penalize her for doing more than the statute required.” 157 T. C. 11, at p. 14.

Judge Holmes’ disciple. Remember my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17.

Takeaway- Boss Hossery can get tricky. And not only at exam, but in the answer, amendments, and motions. What about Section 6673s? Be alert to spot the angles.

I want to mention by name the Sands’ trusty attorneys. Hale E. Sheppard, Esq.,  Jeffrey S. Luechtefeld, Esq., John W. Hackney, Esq., Brent N. Bartlett, Esq., Samuel H. Grier, Esq., and Cassandra S. Bradford, Esq. I wish I could hold an awards ceremony, and pin their decorations on their battledress. Good try, tough loss, guys.

*Sand Invesdtment Co 157 T C 11 11 23 21

INSUBORDINATION

In Uncategorized on 11/22/2021 at 22:27

The great post-Oakbrook turkey shoot season has opened, and IRS has Buckelew Farm, LLC F.K.A. Big K Farms LLC, Big K LLC, Tax Matters Partner, Docket No. 14273-17, filed 11/22/21* all lined up, but Judge Christian N. (“Speedy”) Weiler says subordination doesn’t control split-at-extinguishment.

For Oakbrook, see my blogposts “They Always Must Be With Us,” 5/12/20, and “Keeping Things in Proportion,” of even date therewith, as my expensive colleagues would say.

For some backstory on the Buckelews, see my blogposts “Ins and Outs,” 10/28/21, and “Whitefish and Silt,” 5/13/20.

The Buckelew fight is the usual: a $47.5 million conservation easement write-off of GA boondocks. The Buckelews want to amend the deed of gift to cut the 501(c)(3) protector, preserver, and defender in on the improvement goodies if the easement is judicially extinguished. Of course, the 501(c)(3) is down with that, there being better odds that the Islanders will win the Cup than that any government will raise taxes to stump up cash to buy this.

The Buickelews want to “fight old battles o’er,” and relitigate the validity of the Proceeds Reg, 1.170A-14(g)(6)(ii), which mandates the improvements-in split-up, but Judge Speedy Weiler is quick to jettison that line.

“The Court is not convinced by petitioner’s challenge to the Proceeds Regulations. We comprehensively addressed and rejected these arguments in a recent Court-reviewed Opinion. See Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. 180, 189-200 (2020). We need not repeat that analysis here.” Order, at p. 6.

OK, so what about the correction deed? The Buckelews want a trial, with testimony about who intended what, and much briefing of GA law that says you can correct mutual mistakes by way of a correction deed. IRS says you have to have all the requirements met at Day One, so whether GA lets you amend or correct is beside the point. IRS relies on Ramona Mitchell (see my blogpost “Subordinate or You Lose,” 4/3/12; note that 10th Cir affirmed Tax Court). But Ramona’s problem was an insubordinate mortgagee, Lonesome Charley Sheek. Although Lonesome Charlie eventually became a good subordinate, it was too late to save Ramona’s deduction.

No mortgage here, so insubordination plays no part.”Although respondent relies on Mitchell to argue that all of the requirements of section 170 must be met at the time of the grant, we find the issues in Mitchell to be distinguishable from the issues in the instant case. In Mitchell, the Tenth Circuit held, inter alia, that a taxpayer’s grant of a conservation easement was not ‘protected in perpetuity’ due to a violation of the mortgage subordination provision of the conservation easement regulations. Mitchell v. Commissioner, 775 F.3d at 1251. However, in Mitchell, the third party mortgagees did not subordinate their mortgages until after the easements were donated and section 1.170A-14(g)(2) was therefore held not to have been satisfied. We find the Tenth Circuit’s reasoning in Mitchell to be specific to the mortgage subordination provision of the regulation.” Order, at p. 8. (Footnotes omitted).

Note Judge Tamara Ashford (then Acting AAG) was on the brief in Mitchell. And note no one mentioned Gordo and Lorna Kaufman and their insubordinate mortgagees at 1st Cir; see my blogpost “A Joy Forever? – Maybe Not,” 7/20/12.

While Tax Court and the Circuits have not allowed amendments to change the tax consequences of completed transactions, there’s an outlier, where a scrivener’s error was allowed under GA law.

“Although the Court is doubtful that equitable reformation can operate to change the Federal tax consequences of a completed transaction; since the Court has found there remains a genuine dispute of material fact precluding summary adjudication, it is not necessary for the Court to determine now whether the facts of this case warrant the equitable remedy of reformation under Georgia law.”

Taishoff says, I’m not sure what this material fact might be. The Reg was in existence long before the initial deed. If there was a mistake, it was a unilateral mistake of law at best. The 501(c)(3) is exempt from tax. In any case, the risk of judicial extinguishment is so remote as to be negligible. This is just one more case of highly-contestible readings of what it means for an easement to be “perpetual.”

Judge Holmes is right; the trial should be on valuation, not about what some lawyers and highly-interested parties claim they thought years after the fact.

*Buckelew Farm LLC Docket No 14273-17 11 22 21

NOT ACCEPTED? NOT A PROBLEM

In Uncategorized on 11/22/2021 at 16:32

Judge Kathleen Kerrigan clarifies that a return (if it is a return) only needs to be filed with the proper IRS office to beat the Section 6511(b)(1) three-year cutoff for a credit or refund. If IRS doesn’t accept or process the return, mox nix.

So James Forrest Willetts, 2021 T.C. Sum. Op. 39, filed 11/22/21*, is going to get a credit or refund of his $1533 overpayment. Or whatever’s left after the Rule 155 beancount, because Jim was almost three (count ’em, almost three) years late with the return.

IRS claims they didn’t accept Jim’s return because it looked like he was a victim if identity theft, but either they didn’t tell Jim or he didn’t understand until IRS sent him an AUR and he resubmitted the same return he’d sent before. IRS bought his numbers then.

IRS doesn’t dispute that Jim’s return satisfied Beard and was legit at least as to AGI. But they claim Jim resubmitted late.

“A return is considered filed when it is ‘delivered, in the appropriate form, to the specific individual or individuals identified in the Code or Regulations.’ Allnutt v. Commissioner, 523 F.3d 406, 413 (4th Cir. 2008), aff’g T.C. Memo. 2002-311; see also sec. 7502 (implicitly equating filing with delivery). A valid return is deemed filed on the day it is delivered, regardless of whether it is accepted by the Commissioner. See Blount v. Commissioner, 86 T.C. 383, 387 (1986) (holding that the period of limitation begins to run when a valid return is delivered to the Commissioner, whether or not accepted).” 2021 T. C. Sum. Op. 39, at p. 6.

The return claimed the refund, and therefore beat the Lookback clock by a couple months (hi, Judge Holmes).

Judge Kerrigan says explicitly at p. 7 that Jim gets $1533, so why a Rule 155?

*James Forrest Willetts 2021 T C Sum Op[ 39 11 22 21

AN AWARD WITHOUT PROCEEDS

In Uncategorized on 11/22/2021 at 15:55

That’s what Herman J. Marino, 2021 T. C. Memo. 138, filed 11/22/21*, wants from Judge James S (“Big Jim”) Halpern. While IRS’ investigation and audit may have been less than brilliant, and the administrative record itself been insufficient to support IRS’ motion for summary J tossing Herman, Judge Big Jim isn’t buying it.

First, as to the deficient administrative record, “(R)ule 802 of the Federal Rules of Evidence generally prohibits the admission of hearsay. But those rules ‘apply [only] to proceedings in United States courts.’ Fed. R. Evid. 101. Thus, in determining petitioner’s eligibility for an award, the WBO was not barred from considering hearsay evidence. And in determining whether the administrative record supports the WBO’s denial of an award, we must consider the contents of that record without regard to whether it might include evidence that would be inadmissible as hearsay in a trial de novo. A court reviewing agency action for abuse of discretion must uphold the agency’s factual findings if they are ‘supported by substantial evidence’.”2021 T.C. Memo. 138, at p. 21. (Citations omitted). And Judge Big Jim finds the hearsay trustworthy and reliable.

Of course, Tax Court can’t order IRS to audit, investigate, or sue. All pore l’il ol’ Tax Court can do is see if the reward (or lack thereof) is based on substantial evidence, the  abuse-of-discretion standard.

Herman relies on the 2018 amendment to Section 7623, which added the parenthetical “(determined without regard to whether such proceeds are available to the Secretary).” Herman says that means he gets an award even if IRS got nothing. Herman is nothing if not inventive: he gets a simultaneous Taishoff “Oh, Please!” and a Taishoff “Good Try, Third Class.”

Alas, Judge Big Jim awards Herman only a brush-off. “…petitioner’s interpretation of section 7623(b)(1), as amended in 2018, is nonsensical. If a whistleblower’s entitlement to an award no longer depends on the collection of proceeds, how would the amount of the required award be determined? As a percentage of the proceeds that would have been collected had the IRS conducted an audit satisfactory to the whistleblower? Petitioner never explains.” 2021 T. C. Memo. 138, at p. 36.

There’s a lot here for practitioners who represent blowers, or for those seeking to enter the practice, that time and space limits prevent me from drilling down. To them I say, read and heed. And watch the administrative record: there’s a lot of room for wildcards and last-minute ben trovatos.

*Herman J Marino 2021 T C Memo 138 11 22 21

 

STJ YUDA, TAKE A BOW

In Uncategorized on 11/22/2021 at 12:50

STJ Daniel A (“Yuda”) Guy has received the J. Edgar Murdock Award for distinguished service to the United States Tax Court.

I’m sure my readers will join in congratulating STJ Guy.