No, not Chuck Barris’ 1965 creation; Judge David Gustafson does not deal with such whimsicalities. Today he has a dubious date on two dubious documents, and needs more info to decide whether to bounce Richard Lipsky, Docket No. 5531-21L, filed 1/14/22.

Rich is fighting TFRP. IRS claims his mailed protest is four days late and a lot more than four dollars short.  But the Letter 1153 opportunity-to-contest bears either a “sloppy handwritten date of 8/8/2019” as allegedly mailed to Rich (Order, at p. 2), or no date at all, as faxed 8/13/19 to Rich’s representative. And of course which date matters for the sixty (count ’em, sixty) day cutoff to protest a TFRP.

IRS’ counsel makes a rookie error. “The declarant certifying the exhibits is the Commissioner’s counsel in this case, not the Revenue Officer…whose name appears on the Letter 1153 and who was apparently responsible to prepare it and have it mailed (nor even the settlement officer at Appeals who wrote in his case notes that the letter was ‘dated 08-08-2019′). That is, the Commissioner does not authenticate the handwritten date by anyone who could claim personal knowledge of the letter’s preparation.” Order, at p. 3 (Name omitted).

I remember, from long-ago days, my elders and betters ding, dinging into my youthful ears that “an affidavit from an attorney with no personal knowledge of the matters therein set forth is worthless.” It could be, however, that counsel’s certification was merely a table of contents and transmittal note of the attachments to the motion, and averred nothing more than “this is what Appeals handed me.” Of course, there should have been an affidavit (declaration) from the RO authenticating preparation and mailing procedures. But Monday morning quarterback is such an easy position to play.

Howbeit, we got an admin record with two (count ’em, two) versions of Letter 1153, and they don’t agree. And the sixty-day cutoff in the Letter 1153 is an “administratively imposed deadline.” Order, at p. 3. It isn’t statutory or regulatory, so equitable tolling isn’t necessary. If Rich is four days late, how is IRS hurt?

As usual, IRS wants summary J tossing Rich. Sure, Rich gets every favorable inference as nonmovant, so Judge Gustafson could just toss the motion.

Except.

“We might therefore simply deny the motion for summary judgment, but to do so would hardly advance the case. It may be that the Commissioner can make a showing of the actual ‘date of’ the Letter 1153; and it may be that he can demonstrate that it was not an abuse of discretion to hold Mr. Lipsky to the 60-day deadline stated in the letter. If so, then summary judgment may be a useful means for presenting the issues in this case.” Order, at p. 3.

Trust Judge Gustafson: tossing the motion kicks the cliché down the road, but it doesn’t make the case go away, or resolve anything for anybody.

Rich hasn’t spoken to IRS, and he’d best get with the program. Let Rich and IRS’ counsel confabulate, and let Rich “disclose any information that he has (such as the original Letter 1153) that bears on the ‘date of’ that letter. If the parties can stipulate the fact of the date (if any) that appeared on the original Letter 1153, then they should do so.” Order, at p. 3.

So in two weeks’ time, let IRS either move to supplement its motion for summary J, or else remand to Appeals to hear Rich’s bœuf (nudge nudge, wink wink).

This is why, among other things, I am a Judge David Gustafson fan.

The old Tax Court style book is going out of style. Its successor is here. There follows the dish.

The Tax Court recently modified the format, citation, and style used for all opinions and orders. A new Citation and Style Manual is posted on the Court’s website under Orders & Opinions/Citation and Style Manual. During the transition period, some opinions and orders will be issued under the pre-2022 format, citation, and style rules.

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).

I wasn’t wrong back in September, 2020, when I awarded Judge Christian N. (“Speedy”) Weiler that cognomen. Today he gives us an off-the-bencher that is as short and swift as any, Teresa G. Murphy, Docket No. 13970-19, filed 1/13/21.

Teresa’s been in Tax Court before on the very same issue, and lost 2019 T. C. Sum. Op. 32, filed 10/15/19, which I didn’t blog. It involved the Section 86 Social Security Retirement vs SSDI vs State or employer disability payments.

So does this case, but for a different year, wherefore Judge Speedy Weiler tosses Teresa again with a couple sentences summary (hi, Judge Holmes) of the issue.

IRS wants Section 6673 frivolity-delay chops. Judge Speedy Weiler says no, but he doesn’t tell us why. Was it just because, though Teresa had tried the same argument in another year and lost, she had not been warned by Judge Nega?

I wish Judge Speedy Weiler had given us some insight into what earns Section 6673 frivolity chops.

I quote Judge Buch in Waltner 2014 T. C. Memo. 35, filed 10/27/14: “Judicial opinions serve many purposes: they assist attorneys in advising clients and preparing cases; they provide the lower court’s rationale when the appellate court must evaluate its decision; they inform the public of the court’s analysis; and they establish clear and articulate rules for the future.” 2014 T. C. Memo. 35, at pp. 24-25. (Footnote omitted).

I don’t expect law review articles in off-the-benchers, but a few words why no chops for Teresa would be enlightening.

Amazing how ancient concepts, now much derided and discarded in many jurisdictions, swim back into memory from a most distant cue, a mere soupçon. Marcel Proust’s madeleine hasn’t anything on United States Tax Court’s Public Affairs Officer, as today she recalls part of The Rule Against Perpetuities, the long-range suspension of the power to sell or encumber. Rather like the ultimate forward pass.

Tax Court’s trial sessions are going remote again, just when you thought it was safe to show up, sit right down at counsel table, give your adversary a steely glance, and lay it on ’em.

Here’s the skinny: https://www.ustaxcourt.gov/resources/press/01122022.pdf

I’ll quote Oscar Wilde’s famous jibe about the cynic who “knows the price of everything and the value of nothing,” as I’m sure Judge Albert G (“Scholar Al”) Lauber, though himself no cynic, is fully familiar therewith. He shows just how familiar in Hancock County Land Acquisitions, LLC, Southeastern Argive Investments, LLC, Tax Matters Partner, Docket No. 12385-20, filed 1/12/21.

And, dear reader, before you groan “Oh no, not another GA boondockery,” know I said it first. But I have to blog it; you can stop reading now and ignore it.

Anyway, the Hancocks are a MS LLC box-checked as a partnership (natch) with HQ in GA (natch), which wound up with 236.12 acres of strip-mined scrub, which they had syndicated for $18 million to a bunch investors (hi, Judge Holmes) who took a $180 million Section 170 conservation easement write-off. Btw, the 8283 showed original purchase price as $166,551.00.

There’s much argy-bargy about from whom the Hancocks bought (or acquired) the property, whether they bought it or was it a capital contribution, but you can read for yourselves, Order, at pp. 6-7, and Judge Scholar Al wisely ducks the “substantial compliance” issue. Summary J is the game, and reasonable cause for any miscue is fact-driven.

Improvements in-or-out is the lead issue. The paperwork says improvements out; if extinguished, whatever award encompasses the improvements goes to the Hancocks.

Well, what are the improvements? “First, Hancock may maintain, enlarge, or replace the main access road and secondary access roads in ‘Acceptable Development Areas.’ Second, Hancock may construct new fences, and it may maintain, enlarge, and/or replace existing fences , for the purpose of preventing trespassing on the Property. Third, Hancock may maintain, enlarge, or replace certain ‘rustic structures,’ so long as the structures ‘blend with natural surrounding and complement the natural and scenic features of the landscape.” Finally, Hancock may establish and maintain hunting stands and platforms so long as such accessories ‘minimize[] damage to the Property, and so long as these activities preserve the value of the Open Area as wildlife habitat.’” Order, at pp. 2-3.

The Hancocks say the improvements are worthless. OK, cue Oconee and Wisawee. See my blogpost “Preserving the Preservation Easement,” 8/18/20.

But there’s a twist: although the worth or value of the improvements is a question of fact for the trial, the improvements are worthless because rocket science.

“This tract lies within a 125,000-acre ‘acoustical buffer zone’ surrounding the Stennis Space Center,  a rocket propulsion test facility operated by the National Aeronautics and Space Administration (NASA). Cognizant of the risks surrounding tests of rocket engines, the United States for decades has held a ‘perpetual and assignable easement’ over this buffer zone (NASA easement). The NASA easement grants the United States the right, within the buffer zone, ‘to prohibit human habitation or human occupancy of dwellings and other buildings, and the right to prohibit the construction of dwellings and other buildings susceptible of being used for human habitation or human occupancy.’” Order, at p. 2.

I suppose I shouldn’t revisit the façade cases, where the local laws already preserved the wannabes to a fare-thee-well. On the trial, NASA can sink the Hancocks.

But maybe the land itself has value, well above $180 million. Not for nuthin’, but what would Xi Jinping, Vladimir Putin, Kim Jong-Un, or Ali Khamenei, individually or collectively, pay for some “hunting stands and platforms so long as such accessories ‘minimize[] damage to the Property, and so long as these activities preserve the value of the Open Area as wildlife habitat,” that maybe might could be have a ringside view of the USA’s latest devices for putting a couple dozen kilotons (hi again, Judge Holmes) in their individual or collective hip pockets?

I won’t go into his multiple indocumentados. Judge Wells got paid to do that, and he did. One indocumentado is much like all the others. Wherefore, I’m blogging the first T. C. Memo. of the current year, Mohamed H. Elbasha, T.C. Memo. 2022-1, filed 1/12/21, because of his shifting status in the two (count ’em, two) years at issue.

Mo (that’s Doc Mo, emergency room physician in GA) was married in both years to the same lady, but Mrs. Doc Mo lived throughout in her “‘ome in the Soudan.” She was an NRA (that’s a Non-Resident Alien, not a pistol-packin’ Mama). Apparently they had no children in Year One, but in Year Two “(T)hey welcomed a daughter.” 2022 T. C. Memo. 1, at p. 3.

Doc Mo filed Single for Year one, and HOH in Year Two (apparently the daughter’s qualifications in support thereof never got contested). IRS never raised filing status in the SNOD, upping the ante on the trial, so IRS gets BoP at no extra charge.

Doc Mo goes one for two.

“Petitioner was married at the close of [Year One]  but contends he is entitled to the single filing status because his wife lived abroad. Simply having a spouse living apart or abroad is insufficient for a person to be considered not married. Respondent’s motion is therefore granted as to petitioner’s increased deficiency due to a change in filing status for tax year [One].” 2022 T. C. Memo. 1, at pp. 9-10.

As daughter was not welcomed until Year Two, he had no dependent that would have let him in under Section 7703(b). But as Bob Frost put it, “(A)nd that has made all the difference.”

“A person may file as a head of household only if the individual is not married at the close of the taxable year. Sec. 2(b)(1). For purposes of the head of household filing status, a taxpayer is not considered married at the close of the taxable year if that person’s spouse is a nonresident alien. Sec. 2(b)(2)(B). Petitioner testified that at the end of [Year Two] he was married but his wife, an alien, was not present in the United States.  Respondent provided no evidence to refute petitioner’s testimony. Respondent has not met his burden of proof, and the motion is therefore denied as to petitioner’s increased deficiency due to a filing status change for [Year Two].” 2022 T. C. Mewmo0. 1, at p. 10.

So we’ve seen the hidden spouse trick and the open spouse trick. Now we have the offshore spouse trick.

I can’t think any compendium of great political cartoons would be complete without Sir John Tenniel’s 1890 classic of the “Iron Chancellor” von Bismarck departing the bridge of the German ship of state he had so brilliantly steered into existence.

Today Judge Courtney D (“CD”) Jones, though no cartoonist, draws us a picture of how to replace a TMP. And that outgoing TMP is the Master Pilot of the GA boondock conservation easement dodge, Dave (“Homestead”) Hewitt, he who saved Daddy’s homeplace from the mobile homebodies, and fired the torpedo that 11 Cir used to sink IRS’ “highly contestable readings of what it means to be perpetual.” You’ll recall after Dave donated his properly valued conservation easement, he turned to the dark side and started flogging dubious deals. See my blogpost “Gude Faith, He Maunna’ Fa’ That – Part Deux,” 6/17/20.

Today, Dave is leaving one of his productions, Collinsville Land, LLC, Collinsville Land Partners, Tax Matters Partner, Docket No. 12022-20, filed 1/11/21. Dave was TMP when IRS pulled its return for examination (audit). Naturally, when IRS saw Dave’s name on a return, they reacted like Snoopy to The Red Baron.

While the exam was going on, Land Partners faxed a document to the RA on the exam signed by Dave and a partner of Land Partners removing Dave and subbing in Land Partners as TMP. Of course a FPAA followed. The Land Partners petitioned both as notice partner, and separately as TMP.

Judge CD eulogizes the now-extinct TMP. “We are mindful that a TMP is essential to the operation of TEFRA partnership proceedings. The TMP helps to ensure the fair, efficient, and consistent disposition of a partnership proceeding before this Court.” Order, at pp. 2-3. What the new “representative” created under the current régime will do is at best unclear.

The Land Partners want summary J that they are the TMP,. and they’ll move to toss the notice partner petition if they get it.

“Section 6626(a) provides that within 90 days after the day on which an FPAA is mailed to the TMP, the TMP may file with the Tax Court, a petition for readjustment of the partnership items for the taxable year. Section 6626(b) provides that if the TMP does not file a readjustment petition under subsection (a) with respect to any FPAA, any notice partner (and any 5-percent group) may, within 60 days after the close of the 90 -day period set forth in subsection (a), file with the Tax Court a petition for a readjustment of the partnership items for the taxable year. Section 6226(b)(5) provide that if a notice partner files a petition during the 90-day window for TMP petitions (commonly referred to as a ‘premature petition’), the premature petition is deemed to be filed on the last day of the 60-day notice partner window.”

Reg. Section 301.6231(a)(7)-1(d) says if the present TMP certifies that somebody else is TMP, the new TMP is subbed in. “The regulations further provide that the current TMP shall make the certification by filing with the service center with which the partnership return is filed a statement that includes information about the partnership; the partner filing the statement; the taxable year to which the designation relates; and other pertinent information. The statement must be signed by the partner filing the statement. See sec. 301.6231(a)(7)-1(d)(1) – (5), Proced. & Admin. Regs.” Order, at p. 2.

I’m sure my ultra-hip readers will cry with one voice “Hold on! The Land Partners faxed something to the RA at Exam. Nobody din’t say nuthin’ ’bout no service center!”

Judge CD Jones is on the case, chaps. “Respondent does not suggest that the filing requirement was not satisfied.” Order, at p. 3, footnote 5. If IRS don’t care, she don’t.

Judge CD Jones says the Land Partners are in fact the TMP, the notice partners petition unnecessarily complicates things, so let the Land Partners move to toss it.

Takeaway- In case it needs to be said again, read the Regs.

In a busy blogger’s day, one spends almost as much time deciding whether to blog a case as one spends actually blogging it. Lafayette Lorenzo Nelson, III, Docket No. 892-19, filed 1/10/21 is one such. Plus side, Judge David Gustafson. Minus side, another Section 274 indocumentado with tax home obbligato, as fact-specific as it gets. Plus side, LLN3’s work as product manager for Egyptian Magic Skin Cream, an outfit his uncle founded, with side-hustle in the music biz. And the decider, an interesting wrinkle on hotel travel deductions.

“Swagg Money is a record label responsible for signing artists, recording, and marketing their music, booking their concerts, and planning logistics for their tours. Mr. Nelson tries to identify promising new artists, invest in them, build their success, and profit from them in the long term.  Although Swagg Money maintained a Texas business address, its principal place of business was Atlanta, Georgia.” Transcript, at p. 6.

LLN3 has deductions from both. He shuttles from DC (corporate HQ for the Egyptians) to Dallas (bottling and distribution center). He lives in MD, commutable to DC. And travels all over on the music bit.

He gets some travel deductions from the Swagg gig, even though it loses money, because IRS folds on hobby loss. LLN3’s check register and credit card slips are enough. Likewise, LLN3 is in DC much more than in Big D, so that’s his tax home; thus trips to Dallas can be written off as uncompensated employee business deductions (now extinct).

The interesting part: “Given that Mr. Nelson’s tax home in [year at issue] was Washington, D.C., it follows that he was ‘away from home in the pursuit of a trade or business’ while in Dallas, and that he should therefore be allowed deductions for air travel between Dallas and Washington, D.C., as well as for the cost of his lodging and car rentals while in Dallas. See sec. 162(a)(2). Mr. Nelson had a business purpose to reserve his hotel room in Dallas for an extended period, because of the indeterminate yet frequent nature of his travel to Dallas for his work with Egyptian Magic, and because of the preferential nightly rate that the hotel offered for extended rentals.” Transcript, at p. 18.

While this is a non-precedential off-the-bencher, the argument that a cheaper extended stay rate might obviate the need to prove what nights you slept where could be useful for business travel by unreimbursed non-employees.

Judge Goeke takes us through the lien-levy compare-and-contrast when criminal restitution is on the menu, in Paul M. Daugerdas, Docket No. 7350-20L, filed 1/10/21. Paul, ex-attorney, took some heavy-duty falls in USDCSDNY for dodgeflogging, good for 15 (count ’em, 15) years in the slammer, plus around $371 million in criminal restitution.

Section 6201(a)(4), the “as if” provision allowing collection of criminal restitution as a tax, is the key. Title 26 doesn’t create the lien, Title 18 does. Paul tries to distinguish between loss of tax and failure to pay, but that doesn’t fly. “Petitioner seeks to distinguish a tax loss from a failure to pay any tax. For purposes of section 6201(a)(4), we find no distinction in the light of the plain language of the statute and the legislative history that establish that Congress intended to extend respondent’s section 6201(a)(4) authority to tax-related title 18 offenses.” Order, at p. 5.

It was Paul’s clients who didn’t pay, but that’s a mox nix under Bontrager. See my blogpost “One Man’s Tax,” 12/12/18.

Levy depends upon what the District Court ordered. Judge Goeke sends IRS and Paul back to Appeals, so the SO can apply 2 Cir learning, even though Paul is in IL, thus Golsenized to 7 Cir. The question is whether District Court ordered immediate payment (hence levy) or not, and whether or not Paul is destitute, even if it did.

As for the lien, that’s automatic. “The plain text of section 3613, title 18 makes clear that the lien is automatic upon the entry of the judgment and is for the full amount of the restitution. The statute does not require that that the criminal defendant have a current payment obligation under the restitution order. Thus, the lien automatically arises upon entry of the judgment under section 3613(c), title 18, irrespective of how the criminal restitution order is interpreted.” Order, at p. 6.

Split decision on summary J. Lien stays, levy awaiting remand.