That 1950s Cairol advertising slogan echoes once again, this time from The Great Australian Outback, in Michael W. Aubin & Kerry A. Aubin, Docket No. 1814-20, filed 6/8/23. Mike signed a Section 7121(b) closing agreement at the behest of his defense contractor employer, wherein Mike waived his right to take Section 911(a) Foreign Earned Income Exclusion on his income earned at a hush-hush US defense complex in Australia.

If this sounds vaguely familiar, you probably remember my blogpost “Unclosed?” 8/25/22, wherein Cory a/k/a Corey Smith dealt with a not dissimilar issue.

Judge James S (“Big Jim”) Halpern gets to deal with a conundrum that must delight him: did the delegate of the delegate of the Secretary who signed off on the closing agreement have authority to do so? Mike’s trusty attorneys say no, IRS says yes. But not even Judge Big Jim knows for sure.

Turns out the delegate of the delegate did have authority in Cory’s a/k/a Corey’s case in her own right, but in Mike’s she was the delegate of Mr. S., whose job title changed. IRS argues that the new function was “substantially similar” to the old (approved) function, but Judge Big Jim says not good enough.

“The relevant question is not whether the position Mr. S held (in an acting capacity)… was substantially similar to one or more prior positions whose occupants had the authority to sign closing agreements such as Mr. Aubin’s. Instead, the test is whether the position of Assistant Deputy Commissioner (International) is essentially the same as a prior position but with a new title.” Order, at p. 3. (Name omitted) (Emphasis by the Court).

And IRS left out a job description for the old and the new titles, so Judge Big Jim can’t tell. Neither did Mike’s trusty attorneys establish that Mr. S’s new title disqualified him from signing off.

“Although respondent has not argued that Mr. S ’s position description was sufficient, under IRM 1.11.4.3.(4) (Oct. 10, 2008), to provide him with authority to have signed Mr. Aubin’s closing agreement, petitioners sought to preempt such an argument in the Report they submitted after our… hearing. In that Report, they argued that ‘the position description . . . does not provide the Assistant Deputy Commissioner, International with authority [to sign Mr. Aubin’s closing agreement] because it does not describe the authority to execute the closing agreement with particularity.’ Petitioners do not explain, however, why the authority to ‘administer[] the operating provisions’ of the 1982 [Australian tax] Treaty would not encompass the signing of an agreement of a type that we have held to involve a ‘specific application[]’ of the treaty.” Order, at p. 5.

Both sides want summary J, neither of them gets it.

There’s much argy-bargy about whether Mike signed the closing agreement under duress, but as Mike had been ten (count ’em, ten) years on the Australian job, and as his employer told him to sign, that fails. Mike’s claim that his employer was agent for IRS likewise founders.

Mike’s trusty attorneys aren’t done. The claim IRS violated Section  6103, but all they did was sign off on the closing agreement they imposed on a class of employee, which doesn’t involve return info. And all Mike’s employer did was deliver the signed closing agreement to IRS, so they didn’t act as Mike’s agent without a Form 2848; to do that requires the Representative prepare and file with IRS, and the employer didn’t prepare.