Delta Investments, Inc., Docket No. 15731-23L, filed 5/13/24, avoids summary J sustaining a NOD on the NFTL IRS slapped it with for five (count ’em, five) years’ worth of FICA/FUTA.

Judge Elizabeth A. (“Tex”) Copeland isn’t convinced that DI’s in-house counsel (who didn’t enter appearance in this case, a good strategic move; he can then testify without the automatic exclusion Tax Court applies to attorneys for parties, despite the explicit language of ABA Model Rule 3.7(a)(3)).

IRS claims in-house counsel folded contesting liability at the CDP, after having raised it in the petition.

“In its Petition DI contends that ‘[a]t the time of the appeal’ it believed that certain of its tax liabilities had been paid. Respondent interprets DI’s statement to refer only to its request for a CDP hearing. We do not agree with Respondent’s interpretation. Claims in a petition ‘should be broadly construed so as to do substantial justice’ and a petition filed by a pro se litigant, as is the case here, ‘should be liberally construed.’ We interpret DI’s statement to mean that it challenged the underlying liability not only in the CDP hearing request but during the hearing itself. The administrative record does not support AO C’s assertion in the notice of determination that DI abandoned its challenge to the underlying liability. We conclude, based on discrepancies in the administrative record, that there is a genuine dispute as to whether DI properly challenged the underlying liability during the CDP hearing and whether AO C improperly refused to consider the issue. Summary judgment is therefore not appropriate in this case.” Order, at p. 7. (Name and citation omitted).

There’s also an apparent mix-up on the date the lien was filed and the date notice thereof was given.

And DI’s sole stockholder signed the petition as president of DI.

Takeaway- If counsel is going to be involved, note DI’s in-house counsel’s strategic move, for which he gets a Taishoff “Good Job, First Class, with Oak Leaf Cluster”. Maybe best for another officer of a corporation to appear and sign pleadings. And maybe consider this for other types of Tax Court litigation.