Dixieland Boondockery churns up silt by the cubic meter. And Tax Court furnishes the cauldron. Here’s Desoto Holdings LLC, Desoto Investors LLC, Tax Matters Partner, Docket No. 13013-20, filed 6/24/24. Of course, chops rain down like an everflowing stream. Judge Elizabeth Crewson Paris has the laundry list.

“… accuracy-related penalties for gross valuation misstatement under section 6662(a) and (h) and, in the alternative, substantial valuation misstatement under section 6662(a), (b)(3), and (e), reportable transaction understatement under section 6662A, substantial understatement of income tax under section 6662(a), (b)(2), and (d), and negligence or disregard of rules or regulations under section 6662(a), (b)(1), and (c).” Order, at p.1.

Of course, it’s a motion for summary J, and with a $25 million claimed deduction on tap, the Destos’ trusty attorneys leave no stone unturned. Who spoke to whom, who supervised whom, who decided what (if anything), who communicated, all is dragged out. Of course, 11 Cir learning gets a good workout; as long as the supe signed while still in charge of RA, whenever before assessment, game over.

Judge Paris reviews the quibbles even though she says she doesn’t have to. And if she doesn’t have to, I certainly don’t.

I said it seven (count ’em, seven) years ago.

“Section 6751(b) is a statutory one-off, a hapax legomenon as that classicist Judge Lauber and that Master of Tohubohu Judge Holmes put it. It’s intended to keep lower-level RAs and Examination types from bludgeoning settlements out of terrified taxpayers by threatening chops.

“But it doesn’t work. It speaks of ‘assessments,’ but the vast majority of those happen automatically, nay, even electronically. Except where IRC says there must be a pre-assessment notice (primarily SNODs, and not even all of those; remember jeopardy assessments), assessments don’t need any advance warning to the taxpayer. And SNODs get reviewed de novo; the past isn’t even prologue. Mox nix what happened at Examination or anywhere else prepetition. Except now it does.

“Besides, the greatest majority of low-level IRS RAs and Exam types are below the radar when it comes to bludgeoning. There never is a deficiency most times. What Tax Court don’t see, Tax Court can’t fix.”

See my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17.