Once again, the Jersey Boys’ alumni association is trying to get taxpayers off the fraud hook when their bent-penny preparers did the nasty, unbeknownst to their taxpayer-clients. Front and center is BASR and the USCAFC, with its tripartite view of the SOL as it affects the innocent.

Judge Patrick J. (“Scholar Pat”) Urda is just the judge for this one, Stephanie Murrin, T. C. Memo. 2024-10, filed 1/24/24. The usual sad tale: many years ago, Steph (and apparently spouse, although spouse is now former spouse and doesn’t appear in this case; 6015?) fell in among a thief, apparently none other than Duane (“The Pain”) Howell. For the backstory on Duane (“The Pain”), see my blogpost “The Fraudster’s Toolbox,” 6/17/16.

One of Duane (“The Pain”)’s clients were the Finnegans, who got nailed for deficiencies arising from Duane (“The Pain)’s fraudulent returns (but not fraud chops), long after 3SOL had run.

This case is largely a replay of my above-cited blogpost, except  for Judge Scholar Pat’s evisceration of BASR.

“We have previously declined to revisit our precedent in light of the Federal Circuit’s opinion, noting that each of the judges on the panel wrote separately and that ‘it is unclear . . . which interpretation of sect[ion] 6501(c)(1) would prevail.” Finnegan, T.C. Memo. 2016-118, at *18 n.6. Laying out the scorecard: (1) the author of the majority opinion concluded that section 6501(c)(1) ‘suspends the three-year limitations period only when the IRS establishes that the taxpayer acted with the intent to evade tax,’ BASR, 795 F.3d at 1342; (2) the author of the concurring opinion reasoned that ‘it is the taxpayer (or possibly his authorized agent) who must have the requisite “intent to evade tax,”’ id. at 1351 (O’Malley, J., concurring); and (3) the author of the dissenting opinion agreed with our holding in Allen, id. at 1357–61. (Prost, C.J., dissenting).

“The Federal Circuit’s position on the precise point before us is not clear. We further note that ‘there is no jurisdiction for appeal of any decision of the Tax Court to the [Federal Circuit]’ in any event. Finnegan, T.C. Memo. 2016-118, at *18 n.6; see I.R.C. § 7482(a)(1).” T. C. Memo. 2024-10, at p. 4.

So Golsen is off the boards.

Too bad, and I mean it. Steph gets hit, notwithstanding that she didn’t intend to defraud, and no one said she did.

Tax prep is, as I have said too often, the Wild West. Absent cover from Congress (best of British luck wi’ that, Squire), IRS is helpless. Every attempt to impose discipline (hey, Supremes) on the tax prep rodeo gets shot down in court. And I can’t say no, because it’s for Congress to prescribe the reach and grasp of every Federal agency; a society as complex as ours can’t be governed by gunfights at the OK Corral. Time, and past time, for Congress to act.