Before you beat me up as a conspiracy theorist, I am aware that most if not all of what is ascribed to malice is actually stupidity. While one must assume that every adversary and counterparty knows everything one knows, one cannot assume that adversary or counterparty will draw the correct conclusion therefrom.

Which leads me to Salacoa Stone Quarry, LLC, Eco Terra 2017 Fund, LLC, Tax Matters Partner, T. C. Memo. 2023-68, filed 5/31/23. It’s the usual Dixieland boondockery, 106 acres of scrub bought for $304K, syndicated exactly a year later for $24.8 million. Love those dilithium crystals.

IRS moves for summary J on the 6751(b) Boss Hoss.

The Salacoa Stones want discovery, because the dates on the penalty lead sheet vary.

Judge Albert G. (“Scholar Al”) Lauber expends the usual somber reasoning and copious citation of precedent, both Tax Court and 11 Cir, to blow off the Salacoa Stones’ trusty attorneys’ attempt to freeze the puck. All that is necessary is the right signature from the right person in the right place before Word One of chops is breathed to the Salacoa Stones. As the Man from Mumbai put it, “The door is shut; we may not look behind.”

But why all these summary J cases to nail down Boss Hossery?

I posit that Section 6751(b)’s avowed purpose was to prevent the bludgeoning of taxpayers with the threat of penalties into unfair settlements. OK, but what happens after the Boss Hoss signs on the dotted line? Then the penalty jack is hoisted to the maintop. The Salacoa Stones are confronted with a 40% gross overvaluation misstatement chop, with the 20% five-and-ten as a fallback.

Remember, Hewitt put paid to IRS’ tactic of decapitating syndicated easements without expensive trials featuring expensive expert witnesses, by means of “highly contestable readings of what it means to be perpetual.”

So how to avoid said trials now? How about flaunting the aforesaid penalty jack early by way of summary J, to evoke a sense of dread in the hearts of the syndicated highrollers who wrote off telephonic gains based upon this marked-up mudflat?