Clair R. Couturier, Jr., Docket No. 19714-16, filed 1/22/24, shows Clair’s trusty attorneys arguing that all of the $26 million Clair got was sales proceeds from his ESOP-qualified stock. IRS claims that the ESOP-qualified was worth $650K at best, and the remaining $25 million-plus for was his two unqualified ESOP plans.

No question there was a rollover of $26 million into Clair’s own IRA when he split from his employer, but unqualified stock (or anything else unqualified, like proceeds from disposition of unqualified) raises the 6% Section 4973 excess IRA contribution tax. So Clair could roll, but not income tax-free or excessive IRA contribution tax-free.

But the worth of the qualified stock is a question of fact (apparently not publicly-traded, and even then, blockage might be a fact question).  No summary J for Clair.

Sydney Roads, LLC, Sydney Roads Investments, LLC, Tax Matters Partner, Docket No. 302878-21, filed 1/22/24, shows IRS again hitting the wall with its favorite tactic in the war on Dixieland Boondockery. Relying on Rev. Rul. 99-5, 1999-1 C.B. 427, 434–35, IRS claims Sydney’s holding period was short of one year when its acquisition of membership interests in a disregarded LLC turned the LLC into a partnership, thus summary J for IRS limiting the worth of the conservation easement.

Except.

Judge Pugh finds the documents submitted by Sydney scupper Rev. Rul. 99-5, or at least raise a fact question as to which flip of interests came before the other. Maybe you can follow the three-card monte hand-offs of membership interests; I can’t. If they run something like this at the Superbowl, there’ll be a lot of flying popcorn.

So IRS falls back on form-over-substance: the deal really was a land sale. The LLC stuff was window-dressing.

Except.

“The application of the substance over form doctrine is inherently factual and generally not appropriate for summary judgment.” Order, at p. 5.

I’m a great fan of summary J, but, as with many things in life, law, and football,  “ya win some and ya lose some.”