IRS makes two (count ’em, two) motions for summary J in Carl B. Barney, Docket No. 5310-22, filed 4/12/24, winning one and losing the other, incidentally invoking yet another Taishoff rant that Tax Court should clean up the whole summary J process by Rule (rather than the current SPTO), namely, setting a deadline for summary J motions, requiring all applications for summary J to be made in a single motion (and, if desired, seeking alternative relief in each), permitting cross-motions, and limiting out-of-time motions.

But that’s just me. It would seem no one else cares. Except Carl does, as this will cost him $12 million via Section 6662(h) gross valuation misstatement on the for-profit coileges he sold and gifted in a complex series of transactions, the details of which you can find in Order, at pp. 2-3..

Boss Hossery first, as IRS makes the now-standard motion that the Boss Hoss has been thoroughly doped and nobbled. Judge Christian N. (“Speedy”) Weiler brushes aside Carl’s argument concerning inconsistent numbers in the SNOD, the explanation thereof, the Form 4089–B, Notice of Deficiency-Waiver, attached to the Notice of Deficiency, and sundry metadata, thus: “…respondent goes on to cite us to contemporaneous emails between the RA and his immediate supervisor as being the most helpful and specific evidence of respondent’s compliance with section 6751(b). Respondent goes on to note how our decision in Clay v. Commissioner, 152 T.C. 223 (2019) has been reversed in three U.S. Courts of Appeals, including the Ninth, Tenth, and Eleventh Circuit Courts of Appeal, and that we should abandon our prior decision in Clay and apply these circuit decisions going forward as to the interpretation of section 6751(b). Lastly respondent contends how— at a minimum—the ‘factual anchors’ of his motion are not in dispute and therefore summary judgment regarding his compliance with section 6751(b) remains appropriate here.” Order, at p. 5.

Judge Speedy Weiler finds the e-mails and the PDF-watermarked signoff on the CPAF satisfy Boss Hossery.

But the Section 6662(a) chop (from which the Section 6662(h) chop depends) is another story. Carl claims the whole shebang started when he tried to revoke his Section 453 installment treatment of the sale. Carl tried Section 453(d) revocation, believing he could do so with an amended return. Wrong; Section 453(d)(3) says you need Com’r approval; Carl got audited, asked at Exam, but never got the OK to revoke.

Carl claims abuse of discretion.

“The exercise of discretionary authority granted to respondent will not be disturbed unless we find there was an abuse of discretion. However, the determination or question abuse of discretion is factual, with an elevated burden of proof usually defined as rising to the level of arbitrary and capricious.

“We agree with petitioner’s contention that our review for abuse of discretion must consider a full review of respondent’s actions, including the administrative record. At this point we find it to be premature for us to consider respondent’s actions. Furthermore, the question of abuse of discretion is an inherently factual question, and best determined at trial on the merits. ” Order, at p. 7. (Citations omitted, but get them for your memo of law file).

Although Carl’s trusty attorneys deserve a Taishoff “Good Job,” which I’m giving them, note that IRS claims that preventing avoidance of tax is a proper ground for rejecting a revocation (Order, at p. 6), although no citation of authority is provided. Taishoff wonders if there were such authority, why it wasn’t cited, if it were conclusive.