What is standard operating procedure for many taxpayers and their preparers creates an alleged lacuna in Boss Hossery, as today Judge Albert G (“Scholar Al”) Lauber exorcises yet another Chaighoul in Long Branch Land, LLC, Big Escambia Ventures, LLC, Tax Matters Partner, T.C. Memo. 2022-2, filed 1/13/21.

While the Long Branches were being audited, but long before a word about chops was breathed in their direction, the RA’s Boss Hoss Ms M’s commission was due for expiration. The then acting territory manager extended Ms M’s commission a couple weeks (hi, Judge Holmes) prior to the stated expiry. Three (count ’em, three) days later, the ATM was replaced, and her successor, Mr D, discovering that his predecessor had notified the troops of Ms M’s extension, but hadn’t filed Form 11247 [sic], did so after the expiry date, confirming Ms M’s extension as Boss Hoss. Ms M signed off on the chops after her extension.

The Long Branches, ably represented by one of my colleagues from the Upper West Side of this Minor Offshore Island, claims lbw, namely and to wit, that Ms M wasn’t Boss Hoss because the Form 11247 [sic] was too late.

Judge Holmes may well be having a wee giggle over the silt stirred by Chai and Graev.

Judge Scholar Al isn’t giggling.

“Although Ms. M’s appointment was initially set to expire on July 7, 2018, the IRS extended her appointment to September 30, 2018. Ms. B, the then-acting territory manager, communicated that decision…on June 22, 2018. Acknowledging Ms. B’s action, petitioner asserts that she ‘did not have authority to appoint M . . . for a period that was to commence after B’s authority to serve as Acting Territory Manager had expired [on June 23, 2018].’ But Ms. M’s appointment did not ‘commence’ after Ms. B stepped aside. Ms. M was already serving… and her period of service was simply extended to the end of the fiscal year.” T. C. Memo. 2022-2, at p. 4.(Names omitted).

The Long Branches claim the Form 11247 [sic] was an attempt to paper over Ms M’s non-Boss Hoss status.

“Petitioner relies heavily on the Form 10247 that Mr. D prepared on August 7, 2018, confirming Ms. M’s appointment through September 30, 2018. Petitioner argues that Mr. D’s completion of this form reflects an ‘effort to cure unauthorized action by Government employees through retroactive delegations of authority.’ But Mr. D did no such thing. He simply memorialized Ms. B’s June 22 delegation on Form 10247, thereby confirming that Ms. M had served, and would continue to serve, as… acting manager through September 30, 2018.” T. C. Memo. 2022-2, at p. 5 (Footnote omitted).

And the gov’t’s best friend, the presumption of regularity, comes to IRS’ aid. Governmental acts are presumed regular, and the Long Branches can’t prove otherwise.

“Indeed, if Ms. M lacked authority to serve as acting team manager, then [the RA] would have had no manager for at least a month. Congress enacted section 6751(b) ‘to prevent IRS agents from threatening unjustified penalties to encourage taxpayers to settle.’ Chai v. Commissioner, 851 F.3d 190, 219 (2d Cir. 2017), aff’g in part, rev’g in part T.C. Memo. 2015 -42. Without Ms. M at the helm, all members of [RA’s team] (on petitioner’s theory) would have been compelled to assert penalties on their own (and violate the statute) or cease work indefinitely (and needlessly prolong the examination). We doubt that Congress wished to create this sort of dilemma. Cf. S. Rep. No. 105-174, at 65 (1998), 1998-3 C.B. 537, 601 (stating that proper supervision would ensure that IRS agents assert penalties ‘where appropriate’).” T. C. Memo. 2022-2, at p. 6.

And where would a Boss Hoss case be without that trusty hapax legomenon, “immediate supervisor,” a term neither defined in, or elsewhere met within, Title 26 USC? Ms M oversaw the RA’s work on the audit; whether she was a “manager” en titre is nothing to the point. She was his immediate supervisor throughout the audit, and approved the chops.

I give my colleague a well-earned Taishoff “Good Try, First Class.”

Edited to add, 1/14/21: After patient, unremunerated toil, I have sorted out the Form 10247-11247 enumeration. The right number is 10247. See IRM 1.4.50.3.1.4 (08-11-2021).