Shawn Stephen Salter, T. C. Memo. 2022-29, filed 4/5/22, got his asserted deductions disallowed when he proffered a 1040 after he got the SNOD. He claimed he’d filed timely, but produced no proof. Since the SNOD came from a SFR, itemized deductions are off the menu. You have to elect to itemize, and you can only elect on a timely-filed return, Section 63(e)(1).

Shawn’s attempt to deduct unreimbursed medicals from the 10% Section 72(t) whatever-it-is (tax? addition?) on his retirement plan drawdown fails, because the amount he sought to exclude was less than 10% AGI, thus hitting the Section 213 cut-off.

IRS magnanimously conceded at trial the late-payment addition, but not the late-filing addition.

I’m sure Shawn was really pleased with the result.

“The notice of deficiency also determined a late-payment addition to tax of $1,527.25—25% of the deficiency—under section 6651(a)(2). By virtue of section 6651(c)(1), the failure-to-file addition to tax shown in that notice was therefore reduced to $1,374.52. Since respondent has conceded the addition to tax for late payment, section 6651(c)(1) does not apply, and the failure-to-file addition to tax will be larger than determined in the notice of deficiency.” T. C. Memo. 2022-29, at p. 6, footnote 2.

Takeaway: If IRS offers to drop late-payment but keep late-filing, reject the offer. Timeo Danaos et dona ferentes. And you don’t need a M. A. in Classics from Clare College, Cambridge, like Judge Scholar Al, to figure that one out.