As I post my last for calendar 2021, I recall, from the earliest days of my infancy, Norman Corwin’s monumental 1945 radio play thus entitled, which aired VE-day. However dated and bombastic it may sound to jaded modern ears (assuming we can pry their blueteeth loose and Sisyphus-like roll their attention spans to greater than five (count ’em, five) seconds), it remains the greatest radio broadcast of all time.

No opinions, decisions, orders, or press releases today. The tumult and the shouting have died, the captains and the kings are checking the temp on the Veuve Cliquot La Grande Dame or the Billecart-Salmon Cuvée Elisabeth Salmon Rosé (and if the temp is right, please save a couple glasses for Judge Holmes and me). The Ancient Sacrifice is hanging out, as usual, per Psalm 51:17 and Rudy Kipling.

But, praise be, we have the old USTC DAWSONized website chugging again, at full cask strength. One can word-search, download, cut-and-paste, and even link (no more PDF-ing and footnoting). Loud cheers from this bedraggled, grizzled blogger.

And this my blog’s December views total has climbed above 4700 for the first time ever, going 20% better than ever in the last eleven (count ’em, eleven, and you’d better believe I have) years.

So no matter the vicissitudes of 2021, the year ends on a note of triumph.

Happy New Year!

At long last, the promise is kept, and the US Tax Court website, so long exiled and obscured, is recalled to life.

My colleague Peter Reilly, CPA, sent me the gladsome news thus: ” Something good may have finally come from Dawson.

“It now allows key word searching.

https://www.ustaxcourt.gov/release_notes.html

“In just a few minutes I found some 183 bench opinions that I had missed.”

Better yet, all those dockets previously sealed because of one (count it, one) document, now reenter the light of day, the Genius Baristas having assumed the role of Leonora in the second act of Fidelio.

Check it out, faithful readers.

A. Asterino Starcher, 2021 T. C. Memo. 144, filed 12/30/21*, didn’t petition the SNOD from the SFR for the year she never filed. She did petition the NITL, claiming her expenses would offset her income. She got the usual pre-hearing letter, but sent in nothing.

Came the telephonic CDP hearing.

” …petitioner joined the telephone conference as scheduled. She stated that she wished to submit a delinquent return for 2014 that would replace the SFR and reduce her tax liability. The SO explained that she could not dispute her underlying liability at the CDP hearing because she had failed to petition this Court in response to the notice of deficiency that the IRS sent her…. Petitioner confirmed that she had received the notice of deficiency. The SO nevertheless offered to look at a proposed 2014 return if submitted to him by August 7, 2020. He reminded petitioner that she needed to supply financial information by the same date if she desired consideration of a collection alternative.” 2021 T. C. Memo. 144, at pp. 3-4.

“The SO never received any financial information necessary for considering a collection alternative. He did receive from petitioner, on September 3, 2020, a delinquent … tax return, which he forwarded to a different IRS office.” 2021 T. C. Memo. 1445, at p. 4. Wherepuon, the SO confirmed the NITL.

A. Asterino asks why she can’t contest her liability, since the SO was willing to look at her (belated) return.

Judge Albert G (“Scholar Al”) Lauber eschews psychoanalyzing the SO.

” Petitioner notes that the SO offered to let her submit a delinquent return…. Why, she asks, would the SO have done this if he was unable to address her tax liability for that year? The record does not clearly establish the SO’s reasoning; one possibility is that he was considering whether petitioner’s… tax year could be submitted for audit reconsideration. But the SO’s thinking on this point is not important to our analysis. The only question of legal relevance is whether petitioner had a previous opportunity to challenge her … liability.” 2021 T. C. Memo. 144, at p. 6, footnote omitted.

No SO can consider liability if there was a previous opportunity to contest (the “single-shot” rule, per Section 6330(c)(2)(B)). Any such consideration forms no part of a NOD and may not be judicially reviewed, Reg Section 301.6330-1(e)(3), Q&A-E11.

All of which bears out the old trusim: most CDPs are lost long before they ever get to Tax Court.

*A Asterino Starcher 2021 T C Memo 144 12 30 21

The now-famous gambit is not solely the CDP petitioner’s move, but IRS can play it too. They do, in Mark G. Pfetzer, 2021 T. C. Memo. 145, filed 12/30/21*. Mark claims he never got the SNODs for the nine (count ’em, nine) years he never filed, but for which he got SFRs at no extra charge.

He also gets a NFTL.

Though he never petitioned the SNODs, he did petition the CDP sustentation of the NFTL. Appeals claims prior chance to contest, but the administrative record leaves IRS’ counsel with the Michael Corleone classical. Mark plays the Luke 18:1-8 defense, claiming at every chance he never got the SNODs.

The case comes before Judge Pugh via Rule 121, which included “… a joint stipulation of facts that included the following exhibits: the lien filing notice, petitioner’s hearing request, correspondence between petitioner and respondent during the initial administrative hearing and during remand, the notice of determination and supplemental notice of determination, SO S’s case activity record (case notes), and TXMODA transcripts for 2004 through 2012. Not included as stipulated exhibits are  (1) respondent’s complete administrative record; (2) any of the notices of deficiency; or (3) any proofs of mailing to petitioner’s last known address.” 2021 T. C. Memo. 145, at p. 7. (Footnote omitted, but it explains TXMODA, a form of IRS cyberbabble that generates transcripts, which we know are insufficient to prove mailing of SNODs.)

Judge Pugh, having sat through a hearing, a remand, and now this Rule 121, is a wee bit testy.

“Petitioner asserted during the administrative hearing and now before us that respondent failed to verify that a notice of deficiency was issued and mailed to petitioner’s last known address for each tax year in issue. Respondent attempts to deflect this challenge by asserting that it relates to the underlying tax liability, which he argues petitioner cannot challenge. But proper verification is not a challenge to the underlying liability; it is a stand-alone requirement in section 6330(c)(1) and is independent of the issues that may be considered under section 6330(c)(2) (such as the taxpayer’s underlying tax liability). Hoyle v. Commissioner, 131 T.C. at 200-203.

“We remanded this case to IRS Appeals to clarify the record as to what SO S relied upon in determining that the notices of deficiency were properly issued and sent to petitioner’s last known address, directing the parties specifically to Hoyle. Respondent has not pointed to evidence in the record showing that SO S examined underlying documents but rather has argued that her examination of the lien filing notice and the computerized tax transcripts satisfied the verification requirement in section 6330(c)(1).” 2021 T. C. Memo. 145, at p. 11. (Name omitted).

Not enough that some documents might exist somewhere to show something; there were copies of SNODs and PS3877s for a few of the years at issue, but no showing SO S looked at them, or that they made it into the admin record.

And the record rule rules: if it ain’t in there, it ain’t out here.

Mark wins.

*Mark G Pfetzer 2021 T C Memo 145 12 30 21

For one of independent mind, the spectacle of the protester-dodgers who clutter the Tax Court docket with ever-staler regurgitations of Hendrickson and his even-less-inspired disciples is wearying. I’ve been chronicling such cases for the sake of completeness, so that this my blog will cover US Tax Court more thoroughly than the blogosphere and the trade press.

But now, as I enter the twelfth (count ’em, twelfth) year of this my blog, I assert that ol’ Plato got it right: they got all the benefits of living and working here; they could’ve left at any time on complying with Section 877 and gone wherever would take them (and the US defense umbrella would cover a lot of those wherevers); wherefore, their dodging and legalistic blather is unworthy of serious consideration.

But Judge Elizabeth A (“Tex”) Copeland has some “somber reasoning and copious citation of precedent” for Michael R. Lowe, Docket No. 10954-20, filed 12/30/21*. Maybe Judge Tex Copeland is forbearing because Mike’s a fellow Texican.

Judge Tex Copeland thoroughly examines the Brushaber gambit (the Sixteenth Amendment dodge) at Transcript, pp. 8-10. Mike tries, of course, the old wages FICA/FUTA dodge, which gets the Crain brush-off.

Finally, Mike gets shown the Section 6673 frivolity yellow card.

IRS folds the Section 6662(a) accuracy chop. I most respectfully suggest that only encourages frivolites and dodgers.

*Michael R Lowe, Docket No 10954-20 12 30 21

Today STJ Daniel A (“Yuda”) Guy brings us the story of Whistleblower 15977-18W, 2021 T. C. Memo. 143, filed 12/29/21*, hereinafter known as Blower 159. You can only get Blower 159’s tale on this my blog after today, as the Genius Baristas have sealed the whole show.

Turns out the target, US-born to foreign nationals and now a prominent citizen of parents’ domicile Ruritania (which the unimaginative litigants call Country X, unaware of Anthony Hope and Rudolph Rassendyll), has neither US passport nor SSAN (no mention of ITIN, EIN, or TIN). Blower 159 cannot find any signs that Target (hereinafter “Rudy”) availed himself of any of the privileges and immunities (to say nothing of the “blessings of liberty to ourselves and our posterity”), and neither can the Ogden Sunseteers.

The OS did get a classifier from SB/SE, who decided Blower 159’s info was not credible. The Award Recommendation Memorandum (ARM) says “WB did not provide bank statements, financial records, or source documents that would allow the Service to determine amounts, tax years, where business income was allocated, (related entities?), nature or validity of the allegation, etc.” 2021 T. C. Memo. 143, at p. 6. Rudy’s off the radar.

Blower 159, petitioning the shootdown, wants a remand to “perfect” his claim. STJ Yuda says he can try again, from scratch.

“Section 301.7623-1(c)(4), Proced. & Admin. Regs., provides in relevant part that, if the whistleblower does not provide specific and credible information, the WBO has the discretion to reject the claim or inform the whistleblower of any deficiencies and provide the whistleblower an opportunity to perfect the claim for award. The regulation goes on to state that, if the WBO rejects the whistleblower’s claim for lack of specific and credible information, as was the case here, the whistleblower may perfect and resubmit the claim. Id.; see Rogers v. Commissioner, 157 T.C. 20, 29-30 (2021); Lacey v. Commissioner, 153 T.C. at 161 n.15. Under the circumstances, petitioner may elect to perfect and resubmit the claim to the WBO, but the WBO is not obliged to permit petitioner to do so within the context of this action.” 2021 T. C. Memo. 143, at p. 12.

Note that the epistolary volleying I so often blogged in the past, though it has led to the OS labeling its shootdowns as “‘FINAL DECISION UNDER SECTION 7623(a)'”, 2021 T. C. Memo. 143, at p.7, goes on in different guise, as there’s no SOL and apparently no user fee for filing Form 211, so serial blowing can go on apace (hint to that compleat angler Mr. Lee Martin, Chief Whistler).

STJ Yuda gives me a belated Christmas present in denouncing a pet peeve of mine: “We note that the final decision at issue in this case uses the ambiguous ‘and/or’ formulation that often makes it difficult to discern the WBO’s reasoning.” 2021 T. C. Memo. 143, at p. 9. Thanks, Judge; maybe if the Tax Court bench smites the OS with friendly rebuke a couple more times (hi, Judge Holmes, Happy New Year), they may get the message.

Anyway, Blower 159 loses summary J. Record is clear enough for STJ Yuda to find a rational basis for the shootdown. IRS’ move to amend their answer to allege Blower 159 didn’t clear the $2 million bar (Section 7623(b)(5)(B)) is denied as moot.

Takeaway 1- If born here and don’t want world-wide taxation, go away and stay away.

Takeaway 2- Blowers, take heart. There’s always another day and another Form 211.

*Whistleblower 15977-18W 12 29 21

The Battling Yerushalmis are back, and Judge Mark V Holmes finds IRS is entirely reasonable in hitting Malka with a jeopardy assessment. Here’s the latest iteration of Malka Yerushalmi, Petitioner, Joseph Yerushalmi, Janet Baldwin, Next Friend, Intervenor*, Docket No. 5520-08*, filed 12/28/21.

Yep, thirteen (count ’em, thirteen) years and going strong. I’ve paid real money for whiskey younger than that.

Y’all recollect, no doubt, my blogpost “Ex Jersey Semper Aliquid Novi,” 9/8/21, where I described some of Joe’s and Malka’s NY real estate wheeling and dealing. Puts me in mind of some clients and some deals (and fights) from the old days, featuring lovable rogues who made the Pirates of the Caribbean look like The Love Boat.

You can follow Judge Holmes’ tracing through trusts that appear and disappear, trustees who switch in and out like hockey players doing a flying line change, with Malka as nominee or maybe not, and the US Bankruptcy Trustee suing all and sundry.

This long-running show brings more than a grimace to my battered visage, as I remember Tommy Moore’s classic words “Thus shall memory often, in dreams sublime/Catch a glimpse of the days that are over/Thus, sighing, look through the waves of time/For the long-faded glories they cover.”

They don’t make ’em like they useta.

*Yerushalmi 5520-08 12 28 21

Those of us on our third Medicare card (the old SSAN version,. the paper-with-code version, and now the plastic-fantastic) may remember Mr Keen and his sidekick Mike Kelly from the radio so long ago, the longest-running eponymous detective series.

I doubt the anonymous SO in Brian K. Bunton and Karen A. Bunton, 2021 T. C. Memo. 141,* filed 12/28/21 was alive when Mr Keen and Mike faded from the airwaves. But she treads in their well-worn footsteps, as Judge Christian N. (“Speedy”) Weiler allows.

I won’t waste time with the usual FICA/SE conflation with income tax protester jive that Brian and Karen are trying.

The point here is what the administrative record showed IRS had done, before Brian and Karen raised non-receipt of the SNOD, to try to litigate liability.

“Throughout the CDP proceeding petitioners sought to challenge the underlying liability. However, the record shows that an SNOD for [year at issue] was sent to petitioners by certified mail at the … address…. A copy of the SNOD was also sent to petitioners’ representative, Mr. B. The administrative record reflects that the IRS had submitted to the USPS an ‘Address Information Request’ or ‘Postal Tracer’ for petitioners’ current address and received confirmation that mail was deliverable to them. The IRS had verified their current mailing address before issuing the SNOD, the same address they reported on their Forms 2848.” 2021 T. C. Memo. 141, at p. 14.

It’s not enough for the IRS tax transcript to show mailing to an address. Judge Speedy Weiler does a drill-down.

“Where a taxpayer specifically alleges in a CDP hearing that he never received a notice of deficiency, an Appeals officer cannot rely solely on tax transcripts to verify that a notice has been sent. Instead, the Appeals officer is to review the actions of the IRS when the notice of deficiency was issued and the underlying documents to confirm that the correct mailing address was used to send the notice of deficiency to the taxpayer. Even when the notice was properly mailed, a taxpayer may be able to challenge the underlying liability when he or she can establish nonreceipt of the notice.” 2021 T. C. Memo. 141, at p. 13, footnote 11. (Citations omitted).

Practice tip: If you have a CDP with a non-receipt-of-SNOD issue, and a credible client, check the admin record to see if the AO found a “Postal Tracer” request and response. If it isn’t there, make a note. Might could be maybe so it’s useful.

*Brian K Bunton and Karen A Bunton 2021 T C Memo 141, 12 28 21

Feisal Ahmed, 2021 T. C. Memo. 142, filed 12/28/21* sent in a check which would have satisfied his TFRPs, except his trusty attorneys claimed it was a bond and not a payment. IRS claimed that, since the TFRPs had already been assessed, since Feisal had petitioned a NOD, won partial summary J,  had a remand to Appeals (with no supplemental NOD issued), IRS had the cash in hand to pay everything in full, and had released the NFTL, there was nothing to bond, as IRS wasn’t going to take any further collection action.

Judge Michael B (“Iron Mike”) Thornton finds that, before he petitioned, Feisal paid off one of the four FICA/FUTA quarters he was supposedly “bonding,” so only three are open. And Feisal now (seemingly) concedes that his “bond” doesn’t comply with Section 6603(a), so all three can only be bonded based on a judicially-created “facts and circumstances” scenario, which Judge Iron Mike distinguishes, because in those cases the bond was tendered before the tax had been assessed.

As usual, the most interesting part of the opinion is in a footnote, which I recommend to all my readers who take an interest in bonding.

“Sec. 6603(a), as enacted in 2004, provides that a taxpayer may make a cash deposit with respect to ‘any tax imposed under subtitle A or B or chapter 41, 42, 43, or 44 which has not been assessed at the time of the deposit.’ Respondent asserts that petitioner’s $625,000 remittance failed to qualify as a deposit under sec. 6603(a) because petitioner’s TFRP liabilities had already been assessed at the time of the remittance. Seemingly on this basis petitioner concedes the nonapplicability of sec. 6603. Neither party has addressed what would seem to be a more fundamental impediment to treating the remittance as a deposit under sec. 6603(a), namely that TFRP liabilities are imposed under sec. 6672, which is in chapter 68 in subtitle F of the Code, rather than in any of the subtitles or chapters listed in sec. 6603(a).” 2021 T. C.  Memo. 142, at p. 9, footnote 4.

Feisal’s trusty attorneys are much-respected colleagues, for whom I have high personal and  professional regard. This case is an illustration and a cautionary lesson to us all.

However much we may think we know, and however cleverly we may craft our case, the devil is always in the cliché: read the statute; read the cross-referenced statutes.

Here be dragons.

*Feisal Ahmed 2021 T C Memo 142 12 28 21

My colleague Peter Reilly, CPA, noted that the docket number of the first petition filed in calendar 2021 was number 35101-21, not 35000-21. Therefore, he asserted, Sara Elizabeth Schweigert & Marcus Schweigert, Docket No. 35000-21, served 12/23/21, did not file the thirty-five thousandth petition. Thus, my claim that 35,000 had been reached (see my blogpost “A Christmas Present,” 12/24/21, and the comments thereto) was premature.

I accept, without making an affirmative finding, that Mr. Reilly is correct.

So today I offer Maria Esnaola, Docket No. 35101-21L, filed 11/12/21*, in place and stead of the Schweigerts.

My August 30 prediction was definitely in the money. Now who’s running a pool on the total number of petitions filed this year?

*Maria Esnaola Docket No. 35101-21