The latest entry in my “ambush” sequence is the most important. Judge James S (“Big Jim”) Halpern has a lot to say about unexplained delay by petitioner seeking to amend their petition six-plus years after telling IRS’ counsel they wouldn’t seek to amend on that issue, in TBL Licensing LLC f.k.a. The Timberland Company, and Subsidiaries (A Consolidated Group), T. C. Memo. 2022-71, filed 7/12/22.

But the bottom line is “(P)etitioner acknowledges that we have ‘denied motions to amend pleadings that were filed after a trial based upon “the established policy of this Court to try all the issues raised in a case in one proceeding.’” The prospect that a posttrial motion for leave can properly be denied does not establish that we have no choice but to grant a motion for leave made in any case in which no trial has yet been held. Although we resolved without trial the section 367(d) issues the parties presented on summary judgment, the case required extensive proceedings up to that point. The parties submitted thousands of pages of stipulated documents in connection with their Motions for Summary Judgment.  The burden on the Court of resolving the section 367(d) issues was not materially different because the parties submitted those documents by stipulation rather than in a trial. In positing that respondent be given ‘as much time as he needs to consider [its] entitlement to tax credits,’ petitioner, in effect, asks that we put on indefinite hold a case we have already decided and require respondent to open, conduct, and complete an examination of a previously unexamined issue. Our caselaw does not establish that parties are, in all events, entitled to one trial.” T. C. Memo. 2022-71, at pp. 14-15.

All y’all will recall that Judge Big Jim handled the Section 367(d) income pickups of Timberland’s inversion on submitted facts, more particularly bounded and described in my blogpost “Into the Woods – Part Deux,” 1/31/22, as corrected 2/8/22.

The Timberlands’ claim that IRS accepted the Section 41 research credits in years prior to year at issue evokes Judge Big Jim’s Einsteinian reply that you don’t do identical research year after year, leaving out that expecting different results is crazy. When one experiment fails, you try another.

And stale facts are a fresh problem, especially when dealing with research credits, which require an item-by-item drilldown.

The Timberlands’ trusty attorneys barely avoid a Taishoff “Oh, Please.”