Judge David Gustafson is a great one for conundrums. You’ll doubtless recall Hendrieka Fitzpatrick, Docket No. 12797-21P, filed 6/28/22, from her previous appearance in this my blog. A fine batch of conundrums appeared then; see my blog “Lien On Me,” 3/8/22.

Well, maybe IRS sorted out that set of conundrums, because they’re back with a motion for summary J, tossing Hendrieka (that’s Doc Hendrieka). But before letting IRS and Doc Hendrieka sort out whether Doc Hendrieka underreported $195K or $60K for year at issue, Judge Gustafson can’t resist throwing a couple new conundra (hi, Judge Holmes, and Judges Scholars Al and Pat) into the mix.

“We assume, for purposes of this motion, that Dr. Fitzpatrick has a colorable argument that this determination [the $195K] is excessive. On the foregoing facts, one might conclude that her gross receipts totaled $195,736 (the amounts that the third parties had reported), that the $135,624 she reported on Schedule C was included in that total and was not in addition to it, and that therefore she had failed to report only $60,000 (not $194,868), so that her additional tax liability was much less than the $58,000 that the IRS determined. In addition, for all we know, she might have a ‘reasonable dispute’, see § 6201(d), that she did not in fact receive all of the $195,868 that the third parties reported to the IRS. On the other hand, she might not be able to substantiate all of the $134,507 of business expenses that she claimed on Schedule C. An adjudication of her 2013 liability (which we do not undertake,  for reasons explained below) would presumably look into all these matters.” Order, at p. 2.

This is a Section 7345(e)(1) passport grab case; the only issue is whether IRS reported a qualifying tax debt, not whether Doc Hendrieka actually owes same. That she can sort out administratively in an audit reconsideration (but no appeal to Tax Court), or “…petitioner may file a claim for refund. If her administrative claim for refund is denied, petitioner may pay the full assessed liability and then file a refund suit in Federal District Court or the U.S. Court of Federal Claims.” Order, at p. 7.