Scott Allan Webber, Docket No. 14307-18L, filed 8/25/23, tries again to drench his liability in a cascade of alleged credits, seeking reconsideration and vacation, but Judge David Gustafson turns off the cascade.

The backstory is in my blogpost “With Cold Cascade – Part Deux,” 5/22/23.

“…on his tax return for each year in this series of years, Mr. Webber claimed as a payment a large credit elect from the previous year, and did not request a refund of the resulting large overpayment in the current year, but instead requested that the entire claimed credit be applied to the succeeding year (in an amount that he expected would greatly exceed the liability for that succeeding year). Thus, his apparent plan was to leave in the IRS’s hands indefinitely a large overpayment amount rolling forward. In order for the IRS to determine, in such a circumstance, whether in any year Mr. Webber has overpaid (or underpaid) his taxes, this ‘cascade’ makes it necessary to determine his liability for each year in the cascade. An adjustment in any year may affect the liability in any subsequent year. This is a situation—of Mr. Webber’s deliberate making—that is looking for trouble.” Order, at pp. 3-4.

Scott Allan is crafty: he files each return late, but not quite three (count ’em, three) years late, keeping SOL open throughout the cascade. This throws IRS’ recordkeeping off, as does “his unorthodox reporting,” Order, at p. 4. This does not endear Scott Allan to Judge Gustafson.

Nevertheless, and notwithstanding the foregoing, though the Tax Court cascade is now quenched, Scott Allan can try USCFC or USDC.

“As we noted in our opinion (at 30-32), Mr. Weber may have available the remedy of a refund suit, in which suit the issue would be not simply whether the IRS had allowed a credit (the only issue here) but instead whether Mr. Weber overpaid his tax for the years at issue in such a suit. In that case, he would then presumably have the opportunity to put on proof of his initial overpayment and of the unbroken cascade into subsequent years until the amount of the ‘available’ credit were to equal zero. But in this case, we cannot adjudicate that overpayment issue….” Order, at p. 4.