Though an Authority even greater than STJ Diana L. (“Sidewalks of New York”) Leyden has decreed that the laborer is worthy of his hire, he’s not worthy of ducking the Section 6662 chops when he’s a pharmacist and the 1040 at issue says he’s a “laborer.”

Even the Harvard LITC, under their redoubtable leader Temple Keith (“Phileas”) Fogg, can’t extricate Ashenafi Getachew Mulu, 2023 T. C. Sum. Op. 2, filed 1./25/23, from the toils of the late David Clerie, unregistered preparer and friend of the Ethiopian immigrant community. Ash realized the immigrant’s dream of owning his own home and was fitting up the upper floors to rent. The late Dave, PTIN-less but inventive, let his fancy roam when he did Ash’s return for year at issue.

STJ Di: “Petitioner’s [Year at Issue] federal income tax return prepared by Mr. Clerie claimed deductions and reported expenses related to the purchase of the house and costs incurred with respect to the rental of the second and third floors. With respect to his real estate petitioner claimed passive activity losses on Form 8582, Passive Activity Loss Limitations, and deductions on Schedule E, Supplemental Income and Loss, thatwere related to the purchase of the house. However, petitioner substantiated only $9,500 in repairs and conceded the remainder. Petitioner also claimed deductions for car and truck expenses on Schedule C, Profit or Loss From Business, and reported his principal business or profession as a ‘driver,’ in part because he used his vehicle to drive his parents and others in his community to church and to commute to his jobs. Petitioner concedes he is not entitled to those deductions.

“During the [Year at Issue] petitioner worked as a pharmacist. However, the [Year at Issue] return prepared by Mr. Clerie listed petitioner’s occupation as ‘Laborer.’” 2023 T. C. Sum. Op. 2, at p. 3.

When time to file drew near and Ash hadn’t gotten his return, he hunted down Dave, found one Motoban, who claimed to be Dave’s brother and heir to his tax practice and who e-filed Ash’s return using FreeTax. Ash never reviewed the return.

“If petitioner had reviewed his return, he would have noticed that his occupation was listed as ‘Laborer.’ Petitioner was a pharmacist, and the obvious listing of his occupation as laborer should have prompted him to question the accuracy of the return. Further, given that he was aware that for [Year ast Issue] he was claiming tax deductions with respect to real estate and had not done so in the past, petitioner was put on notice that he should have reviewed the return with respect to such deductions. Therefore, regardless of whether he understood the rules regarding depreciation or deducting real estate expenses, petitioner had a duty to review the return and exercise prudence before filing it. He did not do so.” 2023 T. C. Sum. Op. 2, at p. 7.

Substantial underpayment chops for Ash, and one in the loss column for the Harvards.