James (“Little Jim”) Haber, immunologist and dodgeflogger, has another of his progeny up today on a bounced OIC, claiming IRS needs a fresh Section 6751(b) Boss Hoss signoff on the long-ago decided chops in Humboldt Shelby Holding Corp., Docket No. 23763-16L, filed 12/7/22.

STJ Eunkyong (“N’Yawk”) Choi says no.

“This Court has found that ‘where the Court previously adjudicated and entered a decision determining the applicability of penalties, the settlement officer merely needs to determine that the penalty was properly assessed …’ Warner Enterprises, T.C. Memo. 2022-85 at *6. The settlement officer in this case did so. We therefore find that the settlement officer complied with the requirements of section 6330(c)(1).” Order, at p. 5.

For the Warner story, see my blogpost “How Now?” 8/22/22.

There’s another twist, of course. The OIC provided that it would be a universal settlement, letting off both Humboldt Shelby and “any person, as an alter ego, agent, nominee, transferee or otherwise, for my outstanding tax debt.” Order, at p. 6.

Well, since Little Jim’s M.O. involved intermediary transactions to avoid tax (shares of Mid-Coast), transferee liability is definitely in play.

What’s more, even though the initial offer was only $1K, and even though Humboldt Shelby is Broke From Brokesville, Humboldt Shelby’s lawyer thinks he might have more money in the file. STJ N’Yawk Choi jumps on that.

“If it truly is unreasonable to believe that respondent may be able to collect from a third party in this matter, then petitioner would not have gone so far as to impermissibly add this additional term to Form 656. Petitioner’s counsel previously indicated that petitioner is prepared to offer a ‘substantial amount of money’ to settle its liability. This is so even though petitioner submitted an OIC showing that petitioner has no assets and no income. The $1,000 offer amount and additional amount petitioner planned to negotiate can only come from a third party. It is reasonable for respondent to refuse to accept petitioner’s OIC based on the concern that doing so may foreclose collecting from a third party to the fullest extent possible.” Order, at p. 6.

Summary J for IRS. But I doubt that’s the last we’ll hear from Little Jim.

Takeaway, if one is necessary- Don’t be cute.