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