As long as the Boss Hoss remains in the saddle before assessment, the Section 6751(b) signoff is timely, says Judge Travis A. (“Tag”) Greaves, to Amgen Inc. & Subsidiaries, T. C. Memo. 2024-38, filed 4/4/24.

Amgen is routinely audited. Three (count ’em, three) years before the SNOD at issue here, Exam sent Amgen a memo for previous years stating that Amgen’s Section 482 transfer pricing compliance might preclude any good-faith defense to chops. Then IRS audited years at issue here, proposed chops, got Boss Hossery, gave Amgen the thirty-day package with the chops in, and moved for summary J.

Amgen, being a C Corp, doesn’t get the Section 7491(c) shield for IRS burden of production, so Amgen is on their own.

Amgen claims the memo should have been Boss Hossed. IRS relies on 9 Cir’s Laidlaw’s approach, where Boss Hossery can take place any time before supervisor loses jurisdiction over supervised. Amgen’s trusty attorneys say Laidlaw’s was an assessable penalty, namely a Section 6011(a) failure to report a dodge, so no SNOD required. The SNOD here is nonassessable, because Section 6312(a), so let’s wait for 9 Cir to speak to this type.

Judge Tag Greaves won’t wear it.

“While petitioner is correct in noting the distinction in the type of penalties at issue, we recently held that for cases appealable to the Ninth Circuit, the holding in Laidlaw’s Harley Davidson encompasses penalties subject to deficiency procedures. See Kraske v. Commissioner, No. 27574-15, 161 T.C., slip op. at 7–8 (Oct. 26, 2023). Kraske directly resolves the issue, and therefore we see no reason to delay ruling on it.” T. C. Memo. 2024-38, at p. 5.

For the Kraske story, see my blogpost “Beating the (Dead) Boss Hoss,” 10/26/23.

So Tax Court follows Laidlaw’s, and since no one suggests that any of the Boss Hosses, whether at Exam, Appeals, or OCC, lost jurisdiction over any underling at any time during the chain of events that led up to the SNOD prior to assessment, and that the memo was issued four (count ’em, four) months before IRS even started auditing the years at issue here, Amgen loses.

As I said in my above-cited blogpost, “(O)nce again, the sloppy drafting of Section 6751(b) and the statute’s mechanical application by Circuit Courts of Appeals utterly eviscerate the protection sought in 1998 against IRS juniors using the threat of penalties to beat up taxpayers and obtain unjustified settlements.”