Michael B. Shapiro, T. C. Memo. 2023-144, filed 11/30/23, has problems. He’s physially unable to practice medicine, and has heavy divorce costs and payments. But he’s either underpaid or not paid at all for four (count ’em, four) years at issue. Dr. S is fighting about the Section 6651(a)(2) and Section 6654 add-ons. He claims reasonable cause.

Ex-Ch J L. Paige (“Iron Fist”) Marvel has this one. “Resolution of this case does not require us to hold that taxpayers facing a genuine choice between satisfying court-ordered payments in a divorce proceeding or satisfying their income tax obligations timely should prioritize the latter over the former or vice versa.” T. C. Memo. 2023-144, at p. 20.

Dr. S. didn’t use ordinary business care and prudence, despite his tough economic position.

He never asked for an extension to pay, sought an IA, set aside monies to pay estimateds, sought out legitimate lenders to borrow money to pay, sought divorce court leave to liquidate assets to pay taxes, tried to find alternative sources of income besides his joint practice while he could practice, or sought guidance on bankruptcy as a solution.

“These actions or others may have provided only a partial solution, and some of them may have been ineffective under the circumstances at improving his ability to pay. Nonetheless, it is imperative that when a taxpayer unilaterally extends himself a de facto loan from the government on account of his own financial circumstances, he has adequately explored the available alternatives and taken those that are appropriate. The United States Treasury is not a taxpayer’s personal line of credit, or at least one of first resort. Dr. Shapiro has the burden to develop the record adequately to show that he has appropriately used it as such, but he has not done so.” T. C. Memo. 2023-144, at p. 22.

Bottom line, if you’re claiming ordinary business care and prudence, ya gotta try.