Those of my readers who remember the bifurcated road where trod Heinrich C. Schweizer, T. C. Memo. 2022-102, filed 10/6/22, now get to see the end of said road. Those who don’t remember Heinrich C. can read my blogpost “There’s A Bifurcation in the Road,” 2/18/22, and join the rest.

Turns out the bifurcation resulted in a trial that only knocked out Heinrich’s good faith reliance on his return preparer for a Section 170(f)(11)(A)(ii)(II) save of his $600K deduction. Heinrich’s preparer’s testimony varied from Heinrich’s, and Heinrich’s counsel’s direct examination fell a wee bit short. And the Form 8283 fell a lot shorter than that.

Judge Albert G (“Scholar Al”) Lauber isn’t sympathetic.

“In this case Mr. K was available to testify, and did testify, at trial. But he did not corroborate, in any respect, petitioner’s testimony about the alleged advice. And petitioner’s counsel asked no questions of Mr. K squarely directed to this point. The fact that petitioner did not seek corroborative testimony from the person who might have supplied it weighs against him.” T. C. Memo. 2022-102, at p. 9. (Name omitted).

Ever have a witness tell you not to call him, because his testimony would sink your client? Oh yes.

Judge Scholar Al shows that Heinrich is a fellow scholar, having a German law degree and passing the five-day state Bar exam over there. He was ABD (all-but-dissertation) for a PhD in German law, when he switched to fine arts, and became head of Sotheby’s African fine arts department. He’d done enough value estimating and even donating art himself to ask for a Statement of Value (SOV) from the IRS Art Appraisal Services. Check out Pub. 561 for more. But Heinrich never got the SOV in time to attach to his return.

Hence the willful blindness.

” Even if petitioner had not already been familiar with Form 8283 and its requirements, the defects were there in plain view. The … sculpture was listed (incongruously) in section A of the form, where taxpayers are instructed to report donated property worth less than $5,000 and ‘certain publicly traded securities.’ On the line calling for a ‘[d]escription of donated property,’ the words ‘SEE ATTACHED’ appeared, but there was no attachment. Section B of the form, where the gift should have been reported, was left blank, including two gaping blanks for signatures. Form 8283 explicitly says that ‘[a]n appraisal is generally required for property listed in Section B,’ but there was no appraisal.

“One does not need to be a tax expert to open his eyes and read plain English. If petitioner had reviewed the Form 8283 as he testified, it would have been obvious to him that it was defective in many respects. We find it wholly implausible that a taxpayer as educated as petitioner, having devoted almost a decade to the study of law, would have acquiesced in the notion that he could properly file a tax return obviously lacking these required elements.” T. C. Memo. 2022-102, at p. 11.

Studying law can be hazardous to your tax health.

No chops, as IRS folds the Section 6662s for want of Section 6751 Boss Hossery.