In Uncategorized on 11/01/2021 at 16:15

It’s an occupational failing that long predates any lawyer living at this hour. Second-guessing someone else’s trial strategy is always as popular an accompaniment to cocktail hour as tapas or mezzes. For that matter, it probably predates cocktail hour.

But today I’ll forbear, though the temptation is very strong. I’ll simply note Karla Amburgey and Mary Dutey-Amburgey a.k.a. Mary Amburgey, T.C. Memo. 2021-124, filed 11/1/21*.

The case features a Constitutional challenge to the much-contemned Affordable Care Act of 2010. Coming up in the usual Section-36B-APTC-minus-Form-8962-reconciliation deficiency case, this is definitely a nonstarter.

Judge Kathleen Kerrigan: “In Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519 (2012), the Supreme Court held that the Affordable Care Act’s (ACA) penalty-backed individual shared responsibility payment is constitutional. Petitioners argue that a subsequent opinion, Texas v. United States, 945 F.3d 355 (5th Cir. 2019), rev’d and remanded sub nom. California v. Texas, 593 U.S. , 141 S. Ct. 2104 (2021), renders the individual shared responsibility payment and associated penalty invalid. We are not persuaded.

“In Texas the U.S. Court of Appeals for the Fifth Circuit dealt with 2017 amendments to the ACA that reduced the individual shared responsibility payment under section 5000A(c) to zero. These 2017 amendments were not effective until after December 31, 2018. Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, sec. 11081, 131 Stat. at 2092. The deficiency at issue here stems from an increase in tax due to excess APTC paid on petitioners’ behalves throughout 2018 before the ACA amendments discussed in Texas took effect. Therefore, the reasoning of the U.S. Court of Appeals for the Fifth Circuit in Texas does not apply.” 2021 T. C. Memo. 124, at p. 6.

Anyway, the Supremes tossed Texas.

“Petitioners have failed to meet their burden of showing that the provisions of section 36B violate the  Constitution. See Conard v. Commissioner, 154 T.C. 96, 103 (2020) (rejecting taxpayer’s constitutional challenge of a Code provision because taxpayer failed to negate ‘every conceivable basis which might support’ the legislation (quoting Estate of Kunze v. Commissioner, 233 F.3d 948, 954 (7th Cir. 2000), aff’g T.C. Memo. 1999-344)).” 2021 T. C. Memo. 124, at pp. 6-7.

Karla and Mary admitted they filed late, so the add-on is in. And they got picked up via the AUP, so no Boss Hoss involved. But they put in no evidence about good faith for either late filing or the five-and-ten understatement.

When APTC is on the table, I’d suggest that a good faith confusion argument to avoid Section 6662 five-and-ten or accuracy chops, if it can be made with a straight face, isn’t a bad idea. Of course, there may be tactical considerations here of which I’m unaware; those may apply to the entire case.

*Karla and Mary Amburgey 2021 T C Memo 124, 11 1 21


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