Judge Emin (“Eminent”) Toro surveys the post-Taxpayer First Act Section 6015(e)(7) landscape in Sydney Ann Chaney Thomas, Docket No. 12982-20, filed 4/26/22. There’s a chart at pp. 1-2.

The biggest issue is the administrative record. Since the statute provides, in pertinent part “a determination made under this section shall be reviewed de novo by the Tax Court and shall be based upon (A) the administrative record established at the time of the determination….” Order, at p. 2, how does the Court deal with what’s in it?

Here the admin record includes letters (two of which are notarized) from petitioner’s friends. IRS says “hearsay.” Of course, the letters are hearsay. But Judge Eminent isn’t so sure about excluding them.

“In general, the exclusionary rule in Rule 802 of the Federal Rules of Evidence provides that hearsay is not admissible. By its terms, however, the exclusionary rule applies unless a federal statute, the Federal Rules of Evidence (the ‘Rule Against Hearsay’), or a rule prescribed by the Supreme Court provides otherwise. Fed. R. Evid. 802. It would appear that, by requiring that we review innocent spouse cases ‘based upon . . . the administrative record’, I.R.C. §6015(e)(7) provides otherwise for purposes of this case. We recognize, however, that paragraph (e)(7) is a new provision that our Court has not yet analyzed in depth in the context of evidentiary matters, and we would welcome the parties’ views on this point.” Order, at p. 3. (Footnote omitted).

Likewise, relevance of what is in the admin record is an issue, although the relevance bar is low. Cf. FRE 401.

But really interesting is IRS counsel’s attempt to put in Sydney Ann’s personal blogposts. These weren’t in the admin record, but counsel claims “newly discovered,” Section 6015(e)(7)(B).

Judge Eminent has a dinner menu of questions and hints-and-kinks about this Stout Cortezery (yes, I know it was Balboa, but Keats thought Cortez scanned better), including without in any way limiting the generality of the foregoing a dictionary chaw worthy of ex-Ch J Michael B (“Iron Mike”) Thornton.

“Should the phrase ‘newly discovered evidence’ be given its ordinary meaning (e.g., evidence that was not “found out” before a relevant time) or should it be viewed as a term of art? See, e.g., Discover, OED.com, https://www.oed.com/view/Entry/54005?redirectedFrom=discover& (last visited April 14, 2022); see also Discover, Mirriam-Webster.com, https://www.merriam-webster.com/dictionary/discover (last visited April 14, 2022) defining ‘discover’ in relevant part to mean ‘to obtain sight or knowledge of for the first time’ or to ‘find out’?” Order, at p. 5.

But read all nine (count ’em, nine) conundra that Judge Eminent unloads, Order at pp. 5-6. And if your head starts to spin, lie down and rest a while. While you’re lying down and rising up, spare a thought for poor Sydney Ann, who’s pro se.

There’s also argy-bargy about stuff from a Ch 13 filing Sydney Ann made but that got tossed for nonpayment. IRS claims that’s not newly-discovered, but IRS and Sydney Ann stiped in some of the bankruptcy file, so why is IRS ambushed by this other stuff?

The real takeaway here is that, if this case goes any farther, the Cincinnati (that’s the reviewers of innocent spousery, not Washington’s officers) will start vigorously pruning the admin record, to keep out anything that helps the innocent. So keep copies of everything you send to the Cincinnati, and get itemized receipts for what you sent. Be prepared for a top-fuel challenge to the admin record proffered at petition time if what you sent, like love for the late great John Lennon, “has a nasty habit of disappearing overnight.”

As the CLE floggers never fail to point out, win your case at discovery. But Judge Eminent has a new twist: when it comes to innocent spousery, win your case at newly-discovery.