Judge Mark V. (“Vittorio Emanuele”) Holmes blunts the efforts of Alice Perkins & Fredrick Perkins, Docket No. 28215-14, filed 9/15/23 to revive their claim to untaxed gravel. Readers with long memories will recall Judge Holmes’ digging into Seneca Nation’s lands and the history of Indian treaty obligations from my blogpost “Indians Not Taxed – But They Are,” 3/1/18.

Despite Judge Holmes’ dubious excursion into NY dirt law (see my blogpost aforesaid and ex-Ch J Maurice B (“Mighty Mo”) Foley’s dissent in 150 T. C. 6, at pp. 29-30), 2 Cir affirmed the denial of tax exemption, which was all Alice & Fred raised. And the Supremes denied cert two (count ’em, two) years ago.

So why are they back in Tax Court? Well, 2 Cir affirmed, but remanded for further proceedings. Exactly what “further proceedings” were required neither IRS nor Alice & Fred could tell. There had been a decision entered after the Tax Court’s opinion affirming the SNOD, so no Rule 155 beancount needed.

But Alice & Fred got new trusty attorneys, and here’s the story.

“They want to amend their petition to introduce—for the very first time—the issue of whether they had business-expense deductions that would reduce the mining income that we and the Second Circuit have held to be taxable. Their reason for this delay is that they believed the mining income was tax-exempt which, they argue, would have made claiming business expenses on that income an inappropriate and unlawful duplicative deduction. The obvious problem here is that Tax Court has no prohibition on making an argument in the alternative, which might well have made good sense in this case.

“But that’s not what they did.” Order, at p. 1. They want a Rule 162 vacation a couple years late (this is Judge Holmes, after all). The only reasons that a decision can be vacated after it becomes final (and this one is final beyond possibility of successful appeal or further appeal) are want of jurisdiction, fraud on the court, or mutual mistake of fact. None of these apply.

But trusty attorneys (no, not The Jersey Boys, but cast in the same mould; never say die) claim Rule 1(a) lets them go on a FRCP 60(b)(6) vacation “for any other reason that justifies relief.”

Though this is worthy of a Taishoff “Good Try, Second Class,” Judge Holmes isn’t buying.

“Such justification may be found during ‘extraordinary circumstances, or where the judgment may work an extreme and undue hardship.’

“While we don’t doubt that the Perkinses’ inability to raise the issue of their eligibility for business-expense deductions works some financial injury, we cannot find that it rises to the level of an extraordinary circumstance or an extreme and undue hardship. If anything, it would hardship for respondent to litigate a new issue raised one-and-a-half years after the decision became final.” Order, at p. 2. (Citation omitted).