Whether on a laptop or in a looseleaf binder, the trial notebook is essential. It is the master checklist for conduct of the trial. Make sure whatever you need is in there, so that all the necessaries will be to hand when you need them out there in Tax Court.

Today, Judge Albert G (“Scholar Al”) Lauber gives us a table of contents for what goes in after pleadings and dispositive orders, borrowed from the parties’ counsel in CD LIstening Bar, Inc., et al., Docket No. 11369-16, filed 9/8/22.

It needs some tailoring for specific cases, but this order gives a thorough outline of what should be to hand when the time comes.

Once again, the warning I heard so long ago: “Be careful what you ask for…you might just get it” echoes through the Glasshouse halls, as Judge Albert G (“Scholar Al”) Lauber gives  Eric D. Clarkson, T.C Memo. 2022-92, filed 9/7/22, what he asked for. But it helps Eric not at all.

I never met up with Eric before, but apparently Eric is a long-time frivolite; Judge Scholar Al has Eric’s résumé in T. C. Memo. 2022-92, at p. 2. But Eric never yet got the Section 6673 frivolity yellow card, so he gets it now, T. C. Memo. 2022-92, at p. 13.

Anyway, fighting over some fourteen (count ’em, fourteen) years’ worth of tax, Eric sends in a bunch 1040s (hi, Judge Holmes), all-zeroes, claiming the old employment-tax-income-tax mismatch.

Question is, are those 1040s “returns”? IRS hit Eric with the Section 6702 frivolous return chop. Unlike Gwen Kestin’s, his weren’t photocopies nor were they so labeled, T. C. Memo. 2022-92, at p. 9.

Moreover, Eric “… repeatedly characterized his Form 1040 submissions as ‘tax returns.’ Indeed, when FRP [Frivolous Returns Program, IRS’ unfrivoliziers) sent him Letters 3176C warning that it considered his ‘submission’ frivolous and offering him the opportunity to withdraw them, he replied that they were not mere ‘submissions” and demanded that the IRS process them as “returns.” T. C. Memo. 2022-92, at p. 9.

Eric gets what he wanted. His 1040s are returns; but they’re also frivolous, and he gets the chops.

For the backstory of today’s installment, see my blogpost “Whistleblower Confidential,” 7/13/22. Now we have Whistleblower 20442-18W, filed 9/6/22 with the same story as 972-17W, the star of the above-cited blogpost. 20442 says IRS used his stuff to get money out of Target (not the department store); IRS says they had it all along, and 20442’s stuff added nothing, neither what he first proffered nor his supplements. So the Ogden Sunseteers bounced 20442’s Form 211.

20442 and IRS wanted, and got, a Rule 103 protective order for some Section 6103 material IRS would let 20442 quick-peek. They did discovery, but 20442 wasn’t happy, and wanted IRS’ “…complete administrative file, with no redactions, and its complete audit files for Target’s 2007–2015 years.” Order, at p. 2.

IRS claims “…the redactions to the administrative file are justified by the attorney-client privilege, the deliberative process privilege, and/or his obligation to protect confidential taxpayer information under section 6103. Respondent contends that the 2007–2015 audit files for Target are outside the scope of permissible discovery because they were not considered by the WBO and thus are not part of the administrative record. Alternatively, respondent contends that the audit files cannot be disclosed to petitioner because they constitute confidential taxpayer return information protected by section 6013.” Order, at pp. 2-3.

Judge Albert G. (“Scholar Al”) Lauber, showing once more his deft deflection of difficult decisions, notes that 972-17W deflated the Section 6103 defense with Section 6103(h)(4)(A), so maybe the taxpayer return info is in play. But Judge Emin (“Eminent”) Toro, who wrote the opinion in 972-17W, noted that not every piece of paper or electron IRS may have is part of the Ogden Sunseteers’ admin record. And IRS can always use Rule 27(a) and Rule 103(a) to set seals.

972-17W is not a ticket to a free-fire look-see.

But Judge Scholar Al isn’t quite ready to decide this.

“The Court would benefit from additional briefing from the parties in light of this recent Court-reviewed opinion. We request that the parties address the following questions (and any others they believe pertinent): (1) the extent (if any) to which section 6103 justifies redactions to the WBO administrative record to prevent disclosure to petitioner of third-party tax information, (2) the extent (if any) to which the other redactions respondent has proposed to the WBO administrative record—i.e., redactions unrelated to section 6013—are objectionable, and (3) the extent (if any) to which the IRS audit files for Target’s 2007-2015 tax years can be considered part of the administrative record of this case.” Order, at pp. 3-4.

Papers due 10/3.

We are all, I am sure, breathlessly awaiting the adoption, enactment, and publication of the Amended Tax Court Rules of Practice and Procedure proposed back in March by then-Ch J Maurice B (“Mighty Mo”) Foley. See my blogpost “A Chip Off the Old Rock,: 3/23/22.

Perhaps the current waiting time has been the result of numerous cogent comments from selected stakeholders, whoever those worthies may be.

Howbeit, United States Tax Court is closed today, 9/5/22, inasmuch as this day is “the day set aside by statute for observation of … Labor Day….” Proposed Amended Rule 25(a)(5)(A).

So today I don’t labor, either.

While my journalist colleagues of the blogosphere and trade press write lengthy dissertations on tax law, I cover United States Tax Court; and therein lies all the difference. I do not write law review articles, as I was not on law review. As a practitioner, my concern was and is practice; how does the machine work, how to fix it when it breaks, and how to adapt it to off-label uses.

So today Javontea D. Jones, Docket No. 12453-22, filed 9/2/22, reopens a question I asked at least six (count ’em, six) years ago: when, and by what means or method, is the sixty George big blind waived or refunded? See my blogposts “New Sheriff In Town,” 6/7/16, and “Now I’m Really Confused,” 9/27/16. There are others, but I won’t interlard this post with them.

Javontea petitions years 2021 and 2022. Needless to say, IRS has issued neither SNOD nor NOD to Javontea. His complaint is want of stimulus: “…petitioner attached various materials from the Missouri Department of Corrections reflective of his financial status as an inmate. The statements in the amended petition centered on complaints pertaining to petitioner’s failure to receive so-called economic stimulus payments.” Order, at p. 1.

I won’t dwell on Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan’s disquisition on the jurisdictional limits of United States Tax Court. IRS, unmoved by Javontea’s plight, moves to toss for want of jurisdiction.

Javontea’s riposte did not address jurisdiction. “…petitioner detailed challenges and hardships encountered as a result of petitioner’s incarcerated status and emphasized a request for leniency. Petitioner also highlighted financial difficulties and the importance that the stimulus payments could hold as petitioner sought to return to society.” Order, at p. 2.

So, while Ch J TBS “… is sympathetic to petitioner’s situation and understands the challenges of the circumstances faced and the good faith efforts made, the Court on the present record lacks jurisdiction in this case to review any action (or inaction) by respondent in regard to petitioner’s taxes. Congress has granted the Tax Court no authority to afford any remedy in the circumstances evidenced by this proceeding, regardless of the merits of petitioner’s complaints.” Order, at p. 3.

OK, then, right-about-face and march out Javontea. So why do I report this run-of-the-mill order?

Because back on 6/3/22, Ch J TBS ordered Javontea to ante up the sixty George big blind. Apparently he didn’t, so Ch J TBS waives the filing fee (without making reference to the 6/3/22 order), Order, at p. 3.

No showing Javontea filed The Form Without a Number (Application for Waiver of Filing Fee), with its quaint references in the instructions therefor to Adobe Acrobat 3.0, Internet Explorer, and Netscape Navigator. Might want to update the instructions, Ch J TBS; and give the form a number, like all its siblings.

So why the waiver? Was it Javontea’s piteous recitals, worthy of a latter-day Reading Gaol? Can other petitioners, similarly situated or not, with pathetic accounts of unmerited hardship, injustice, and oppression, lay bare their personal tragedies in aid of waiver, but without having to bare their finances on The Form Without a Number?

Perhaps a wee word to the petitioner with a sad tale might be in season: In your petition, tell your sad tale in extenso, but leave off the sixty Georges. And tell ’em Javontea sent ya.

The world-wide reach of this my blog extended overnight even to the Anatolian Plateau (and no, I didn’t know what that was before today). Looking at the board, I see six (count ’em, six) views from Armenia, the first from that country since the debut of taishofflaw.com.

What conceivable interest anyone in Armenia could have in United States Tax Court, much less my view of it, is unclear to me, but I extend a warm welcome.

Since the Tax Cuts and Jobs Act of 2017 cut the unreimbursed employee business expense deduction from Schedule A for years beginning 1/1/2018 and ending 12/31/2025, there will be no such deductions featured in Tax Court once the current crop wind their way through. And I’ll miss the variety, ingenuity, and imagination they bring to the blogger’s table.

George C. Luna, T. C. Sum. Op. 2022-18, filed 9/1/22, manages to survive the dreaded Reg Section 1.274-5T(c)(3) minefield, wherein so many of the unreimbursed come to grief. His “invoices, credit card statements, and receipts related to his trips to Brazil… ” T. C. Sum. Op. 2022-18, at p. 3, satisfy CSTJ Lewis (“The Name That Satisfies”) Carluzzo on that score.

George has been working in the non-profit sector for upwards of thirty years (voluntarily, unlike some of us who find we’re non-profit because we got stiffed). He even has a letter from his employer dated before the year at issue, stating that while George may pay (unspecified) expenses for his employer, there is no reimbursement therefor.

So George is home, right? He has ducked the two biggest traps for the unreimbursed: poor or no documentation, and available but unclaimed employer reimbursement.

Not quite. George’s non-profit employer was strictly State-side. While he was on the board of directors of a Brazilian outfit that did somewhat parallel work, there was no affiliation between the US non-profit and Brazil or the Brazilian. Remember, the unreimbursed employee must be spending money in aid of the employer; and prove it.

“As petitioner sees the matter, the contacts he makes, or has made, from his various travels and professional associations serve to advance the interests of [employer]. According to petitioner, ‘it helps [employer]. There’s no question about it.’  As we see the matter, there are some questions about it.” T. C. Sum. Op. 2022-18, at p. 6.

Like where’s specific evidence how the Brazil trips helped employer? And where’s the substantiation for George’s other unreimbursed travel? George fails on both scores.

George did buy some tax prep software, for which he might have gotten a deduction, were it not for the enhanced 2% AGI knock-out caused by the lost deductions.

IRS concedes the chops.

I’ll welcome these cases back in 2026.

When dueling motions jam the River of Resolution, it takes a crowbar to clear the way. Trust Ch J Kathleen (“TBS = The Big Shilleagh”) Kerrigan to wield the Rooseveltian big stick. Christina Cavallaro, Transferee, et al., Docket No. 1128-21, filed 9/1/22, doesn’t want a trial, and neither does IRS. But IRS wants summary J, and so moves; ChrisCav wants Appeals to sort it out, and seeks a stay three (count ’em, three) weeks after IRS.

I’m not saying Appeals doesn’t want to work, but this is a good opportunity to freeze sorting until IRS’ motion gets handled.

Ten months of silence provokes an order from Ch J TBS to bukh about status. Hearing this standstill, Ch J TBS orders each side to respond to the other’s motion.

“…the Court received petitioners’ Motion for Reconsideration of Order. That motion explains tha ‘requiring petitioners to respond to respondent’s motion for summary judgment runs counter to [their request for a stay] by allowing proceedings to continue apace.’ Given the fact that no action was taken by the parties to work towards resolution of these issues during the preceding ten months, it appears to the Court that directing responses to the pending motions is appropriate. Upon the filing of this Order and the assignment of the motion to stay, the parties should be prepared to participate in a conference call to discuss the pending Motion to Stay Proceedings.” Order, at p. 1.

And STJ Peter (“HB”) Panuthos gets the motion to stay.

Now we all know that STJ HB Panuthos earned the sobriquet “HB” because he engages in old-time head-banging. For any who don’t, see my blogpost “Old-Time Head-Banging – Part Deux,” 9/4/20.

And Ch J TBS tolerates no delay.