My readers with ultra-sharp memories may remember Indu Rawat, Docket No. 15340-16, filed 7/28/22. If you, dear reader, are not one such, check out my blogposts “Che Se Firma È Perduto – Part Deux,” 7/20/21, and “That’s the Word!” 8/26/21.

Well today, after argy-bargy in extenso, Judge David Gustafson tosses his order from last July, gives Indu summary J on the non-Inventory stuff, but denies as to Indu’s claim that she was a NRA in year at issue; that’s Non-Resident Alien, not a pistol-packin’ Momma. The issue, of course, is that if Indu was a NRA in year at issue, she owes no tax on the disposition of the inventory after she sold her partnership interest. Again, the 2017 amendment to Section 864(c)(8) doesn’t apply.

First, the Form 870-LT Indu and IRS signed is a Section 7122 settlement, but only binds the parties to what they explicitly agreed, not collateral issues. Second, the many and varied status reports the parties filed, wherein Indu’s NRA status was repeatedly mentioned, isn’t a concession by IRS. Indu said she was a NRA in her petition, which IRS denied in its answer.

“However, instead of putting forth evidence to support her assertion, petitioner asks us to draw inferences from statements of the parties in joint status reports— statements that merely clarify the issues set forth in the petition. The petition asserted that Ms. Rawat was a nonresident alien, and the Commissioner’s answer expressly denied that assertion. When he thereafter joined in status reports—stating ‘The petition filed in this case presents two primary issues for resolution, (1) whether petitioner, as a nonresident alien, is subject to tax on that portion of the gain on the sale of her interest in a U.S. partnership that is attributable to inventory” (Doc. 18 at 2) (emphasis added)—we think he did not admit that she was a nonresident alien but rather joined in stating a disputed issue in the case of which her status was a component. It is not impossible that someone joining such a statement would intend thereby to signal his concession of nonresident alien status, previously disputed, but the Commissioner insists (Doc. 41 at 11) that he did not so intend. In resolving petitioner’s motion, we draw all inferences in the Commissioner’s favor, and we therefore decline to infer that his joining this status report constituted a concession of Ms. Rawat’s alleged nonresident alien status.” Order, at p. 7.

And Indu didn’t submit her own declaration.

So before tossing the three bucks at the Glasshouse Copycats in the hopes of eliciting hot stuff in status reports, be advised that there may be less than meets the eye.