Yeah, Roger That

Judge Emin (“Eminent”) Toro lets IRS put in a bunch blogposts (hi, Judge Holmes) as “newly discovered” evidence in Sidney Ann Cheney Thomas, 160 T. C. 4, filed 2/11/23, a post-7/1/19 Taxpayer First innocent spousery. Sidney Ann objects, and her trusty pro bono attorney from a NYC powerhouse firm suggests IRS could have found the stuff with a simple Google, so how come Section 6015(e)(7) “newly discovered” is in play?

Judge Eminent says IRS didn’t know about the blogposts until the de novo trial, and the due diligence standard of FRE 60(b)(2) is for motions to set aside trials and orders, hence too restrictive.

There’s the usual dictionary chaw, but “newly discovered” apparently means something in plain sight that IRS never bothered to look for.

Piling on, the Center for Taxpayer Rights, the Community Tax Law Project, the UC Hastings Low-Income Taxpayer Clinic, and the Villanova Federal Tax Clinic, file amici and say let it in. Most innocent spouses are pro se, know nothing of law and procedure, and can be sandbagged by nonrequestors. The CCISO isn’t a trial, no subpoenas, no document demands, no administrative law judges.

IRS says Appeals isn’t a litigant, but an arbiter; burden on requesting spouse. If requesting spouse hasn’t got the goods, why should Appeals hunt for evidence? IRS can start looking for evidence only when denied requesting spouse petitions, because that’s when we get a trial.

Judge Eminent lets it all in. Ch J Kerrigan, JJ. Foley, Gale, Paris, Morrison, Buch, Nega, Pugh, Ashford, Urda, Copeland, Jones, Greaves, Marshall, and Weiler are all down with this.

So is Judge Buch, but he points out with vivid illustrations how an innocent blogger-spouse can be sandbagged. If she blogs about how the nonrequestor beat her up, but doesn’t put in the blogposts, they can’t be “newly discovered” on the Tax Court trial de novo. On the other hand, an abused spouse, terrified by the abuser, may post all kinds of wonderful stuff that IRS can use to sink him or her. JJ. Ashford and Copeland join in.

Judge Ronald L (“Ingenuity”) Buch puts his finger on the ridiculous 6015(e)(7) mishmash, another example of Congress making a knife that does everything but cut.

“This provision was meant to resolve conflicting decisions amongst courts in innocent spouse cases, with some courts holding that an abuse of discretion standard applied while other courts held that the more taxpayer favorable de novo standard of review applied. Staff of J. Comm. on Tax’n, 116th Cong., General Explanation of Tax Legislation Enacted in the 116th Congress, JCS-1-22, at 11–13 (J. Comm. Print 2022). With the addition of section 6015(e)(7), Congress expressly adopted the more taxpayer favorable de novo standard of review. But it limited the scope of the review to the administrative record, except for newly discovered or previously unavailable evidence. In doing so,  Congress may have greatly reduced the putative innocent spouse’s ability to bolster his or her case as part of that de novo review. See Steve Milgrom, Innocent Spouse Relief and the Administrative Record, Procedurally Taxing (July 9, 2019), https://procedurallytaxing.com/innocent-spouse-relief-and-the-administrative-record/. As a result, Congress may have made it harder for a putative innocent spouse to challenge determinations denying relief. This would seem to run contrary to the stated purpose of the Act, to put taxpayers first.” 160 T. C. 4, at p. 18.

But word to my fellow bloggers: Everything you post will be used as evidence against you. Whenever, wherever, and by whomever, discovered.