All my faithful readers will doubtless recall S. Rep. No. 105-174, at 65 (1998). This document denounced the rogue IRS examiners who brandished heavy-duty penalties wherewith to bludgeon settlements out of terrified taxpayers with meritorious ciaims but without cash to pay high-priced counsel.  There resulted Section 6751(b), the Boss Hoss sign-off.

Of course, this was diluted to the point where a random chickenscratch was sufficient, whether the chickenscratcher so much as looked at the CPAF before e-signing.

Formerly, the joust concerning the date of the chickenscratch and the first intimation of chops to petitioner took place toward the end of trial. But necessity is the mother of cliché. Confronted with the syndicated conservation easement tsunami, and witnessing the short-Circuiting of IRS’ carefully-constructed “highly contestable readings of what it means to be perpetual,” IRS pulled the hysteron proteron.

IRS moves for partial summary J that the Boss Hossery is A-OK.

Rock Cliff Reserve, LLC, Five Rivers Conservation Group, LLC, Tax Matters Partner, et al., Docket No. 12482-20, filed 7/10/23, is part of a consolidated group facing “(1) a section 6662(h) gross valuation misstatement penalty; (2) a section 6662A accuracy-related penalty on understatements with respect to reportable transactions; (3) a section 6662(e) substantial valuation misstatement penalty; (4) a section 6662(d) substantial understatement penalty; and (5) a section 6662(c) negligence penalty. These penalties corresponded to the downwards adjustment of the amount of charitable contribution deductions claimed by petitioners.” Order, at p. 2.

There followed “a second set of penalty approval forms, which listed a section 6662(a) accuracy-related penalty on the basis of both negligence or disregard of rules or regulations and substantial understatement of income tax. These penalties corresponded to the downward adjustment of the amount of other deductions claimed by petitioners.” Idem, as my expensive colleagues would say.

Despite the Five River gang’s defense, IRS prevails, and the chops stick.

“Both penalty approval forms were electronically signed by Ms. S before the issuance of the FPAAs to the TMP of petitioners, at a time when Ms. S still possessed the discretion to withhold approval. See Kroner v. Commissioner, 48 F.4th at 1279 n.1; Laidlaw’s Harley Davidson Sales, Inc. v. Commissioner, 29 F.4th 1066, 1071 (9th Cir. 2022), rev’g and remanding 154 T.C. 68 (2020). As this Court has repeatedly held, ‘a manager’s signature on a civil penalty approval form, without more, is sufficient to satisfy the statutory requirements’ of section 6751(b)(1). See Salacoa Stone Quarry, LLC v. Commissioner, T.C. Memo. 2023-68, at *6.” Order, at p. 4. (Name omitted). I have blogged all, or almost all, of these.

The Five River gang’s attempt to gin up a fact question based on want of a PDF-generated datestamp on the e-signed CPAFs founder upon the “general working principle” of presumed official regularity. Order, at p. 4, footnote 8.

So now the highrollers who bought into this consolidated dodge can contemplate the gargantuan gazumph into which the Five River syndicators have led them.

Nice bludgeoning, IRS.