The elusive Michael T. Sestak, T. C.  Memo. 2022-41, filed 4/25/22, is back, but not for further epistolary jousting with IRS. This time Mike wants a tax loss for the forced sale of the Thai real estate whereat he parked the bribe money he took for selling US immigration visas.

Judge Christian N. (“Speedy”) Weiler has the sorry tale of Mike’s delictions. As part of the fall he took in USDCDC, Mike agreed to the sale, proceeds to go toward the $6 million money judgment the US of A was taking against him.

The sale fell short of what Mike had paid. Mike claims he was renting the Thai property. He wants a loss offsetting his liability.

“Federal courts consistently have disallowed loss deductions where the deduction would frustrate a sharply defined federal or state policy. The test of ‘nondeductibility on public policy grounds under section 165’ is the severity and immediacy of the frustration of a ‘sharply defined national or state policy’ that would result from allowance of the deduction.” T. C. Memo. 2022-41, at p. 7.

The cases Mike cites are payments to other than Federal or State governments. And public policy is clear: forfeitures sting. Neither Section 165 nor Section 162 helps Mike, and he didn’t argue Section 212. This is not an income tax case, this is a forfeiture of ill-gotten gains.

Mike doesn’t get a Taishoff “Good Try,” but he does get a Taishoff “Metallica”.