STJ Diana L. (“Sidewalks of New York”) Leyden shows us the truth of G. B. Shaw’s saying “A thing that nobody believes cannot be proved too often.” I don’t know that nobody believes in the necessity of keeping meticulous records, but too many people don’t do it.

And that hurts them, especially records of time actually spent, when Section 469 material participation is on the menu. And it’s even more the case when one has been “workin’ on the rairoad.”

Second case first. I’ve blogged the interplay between Social Security and Railroad Retirement Board benefits before now. See my blogposts “I’ve Been Workin’ On the Railroad,” 4/27/15, and “I’ve Been Workin’ On the Railroad – Part Deux,” 11/22/22.

Although Judge Alina I. (“AIM”) Marshall uses Kenneth Steven Tuma, Sr., and Deborah Ann Tuma, T. C. Memo. 2024-71, filed 7/11/24, to run a how-to-do-it CPE course for preparers confronted with retired or disabled, or both, benefitted railroaders, I want to focus on one area where a slightly obsessive paperkeeping might’ve helped. Ken claims he made contributions to his retirement plan for which the SNODs (not, Judge AIM Marshall, the “NOD”s) did not credit him.

“With respect to this argument, respondent conceded at trial that an employee contribution amount of $51,393 was reported on Mr. Tuma’s 2015 and 2016 Forms RRB–1099–R. He also conceded that this amount ‘is recovered ratably over the period of time that Mr. Tuma receives the benefit. And so that’ll be a computation that is done once we determine what is or isn’t gross income. And that recovery will be computed.’ On posttrial brief, however, respondent asserted that, although Mr. Tuma would ‘ordinarily be permitted to exclude a portion of’ the contributory amounts shown on his Forms RRB–1099–R from his gross income, Mr. Tuma failed to provide information with respect to his annuity starting date and his age on that date needed to compute the proper recovery. And on this ground, respondent further asserted that Mr. Tuma should therefore be allowed no offset for contributions or, ‘[a]ssuming the Court is inclined to provide some offset,’ an offset that assumes the facts most favorable to respondent.

“Mr. Tuma generally testified that that he was entitled to receive benefits from the RRB as early as 2009 but that he did not receive any payments until sometime in 2010. Mr. Tuma did not testify to any specific dates, however, or introduce any documentary evidence to support the testimony that he did provide.” T.C. Memo. 2024-71, at p. 18.

Wherefore, Ken gets the longest spread-out of the $51K (30 years), when he could have gotten more sooner with a couple pieces of paper (hi, Judge Holmes).

Ditto Timothy L. Foradis and Jessica L. Moore, T. C. Sum. Op. 2024-13, filed 7/11/24. Tim claims he built his carriage house to rent out and worked at renting it in his spare time while working forty (count ’em, forty) hours a week at his regular job. STJ Diana L. (“Sidewalks of New York”) Leyden finds Tim’s testimony that his construction and renting out hours are more than half of all his working hours fails the Tokarski test, and therefore “the Court need not address the reasonableness of the receipts or logs and whether Mr. Foradis performed more than 750 hours of services during the taxable year in real property trades or businesses in which he materially participated.” T. C. Sum. Op. 2024-71, at p. 5

Apparently those logs didn’t show dates and hours worked, including time of day and activities performed. I had pointed out, as had many of my colleagues before me, that relatively cheap and generally accepted software is available to track those matters contemporaneously. If Tim had proffered such, would STJ Di have been so quick to toss his case?

And even if Tim took more time to perform such tasks than a skilled professional would have done, that is not necessarily fatal. See my blogpost “Disabled Veteran – Part Deux,” 12/23/14.