In Uncategorized on 08/17/2022 at 16:06

I trust my readers will pardon a garrulous (and perhaps grumpy) old man for telling yet again a twice-told tale. In my young day, and perhaps even now, judges would invite obdurate clients and their counsel into robing rooms or chambers, and extract settlements by a negotiating process we called “banging heads together.”

I’ve chronicled STJ Peter (“HB”) Panuthos’ efforts along those lines. Judge Mark V. Holmes showed some inclination that way. And today Judge David Gustafson reprises his genteel role (see my blogpost “Phone-Banging,” 2/22/22) in Mark D. Stockhausen & Kelly E. Stockhausen, Docket No. 29716-21, filed 8/17/22.

Mark wants summary J, but doesn’t get it. The SNOD he’s petitioning says $909 short, but Mark sent in $906. Mark may have made a mistake on the return. Judge Gustafson gently man-‘splains.

“Stated simply, a ‘deficiency’ is an amount of tax that a taxpayer owes which is greater than the amount he reported on his tax return. (See sec. 6211.) The taxpayer is allowed to challenge the IRS’s determination by filing a petition in the Tax Court (as the Stockhausens have done); and when the taxpayer does so, the IRS is barred by section 6213(a) from assessing the deficiency until the Tax Court has made a ‘decision’ as to that liability. In a Tax Court deficiency case like one, the issue is not whether the tax has been paid but rather whether the IRS will be permitted to assess the tax. Unless the IRS can assess the tax, it cannot keep the money.” Order, at p. 1.

Mark says he sent the $906, and IRS says they’ve credited it as an advance payment against tax. Thus Mark’s $906 is in limbo unless he or IRS gets a “dission” on the SNOD.

“…the question of how much tax has been paid is not really the issue here. Rather, the issue is how much tax was reported on a return,  compared to the tax actually owed. In their petition, the Stockhausens seem to admit that there was an error on their return, which they have undertaken to remedy by paying the tax. We commend such behavior. However, if the Stockhausens did under-report their liability by $906, then there was a deficiency in that amount, and that deficiency now needs to be assessed; and if that is true, then the Tax Court needs to enter a decision sustaining the deficiency. (Thereafter, any payment that the Stockhausens have made would be credited against that liability.).” Order, at pp. 1-2. (Emphasis by the Court).

But Judge Gustafson has neither seen the return nor done the math, so no summary J.

Maybe the parties can agree on a stipulated decision. If not, do a show-and-tell, and try the case.

Meanwhile, “…the motion for summary judgment is denied, and that this case will proceed to trial unless the parties are able to agree on a basis of settlement (which we hope that they will be able to do).” Order, at p. 2.

That’s Judge Gustafson…,gentility personified.


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