Judge Courtney D. (“CD”) Jones issues an all-points-bulletin for gli amici degli amici to put in briefs amicus in Sunil S. Patel and Laurie McAnally Patel, Docket No. 24344-17, filed 7/19/24.

Sunil and Laurie have been here before, of course. See my blogpost “Two Memos, Nothing New,” 3/26/24. But now, they have got something new, chops per Sections 6662(a) and Section 6662(b)(6) for “a 20 percent accuracy-related penalty on the portion of an underpayment of tax attributable to a transaction lacking economic substance within the meaning of section 7701(o).” Order, at p. 1.

The problem is Section 7701(o). It says “The determination of whether the economic substance doctrine is relevant to a transaction shall be made in the same manner as if this subsection had never been enacted.” Order, at p. 2.

Sunil’s and Laurie’s trusty attorneys claim the word “relevance” leaves unaddressed whether the determination of “relevance” writes the two-part test of Section 7701(o)(1)(A) and (B) out of the equation, throwing us back into the pre-act analysis of economic substance (moving the economic needle).

Of course, Taishoff says, ma nishtanah? Or, in English, how do the criteria in Section 7701(o)(1)(A) and (B) differ from past learning?

But Judge CD Jones, a true lawyer, finds (as Sunil’s and Laurie’s trusty attorneys aver) the statutory scheme to be ambiguous.

Any lawyer who can’t find an ambiguity should find another way to make a living. Trust me, Sunil’s and Laurie’s trusty attorneys are the A-Team.

Is there the need for a threshold Section 7701(o) finding of pre-Act relevance before invoking Section 6662(b)(6) and chopping Sunil and Laurie? If so, what are “the circumstance(s) in which the economic substance doctrine is ‘relevant’ within the meaning of section 7701(o)”? Order, at p. 2.

Soi let the parties brief this question, and nothing else; and while they’re about it, let the sundry wits, wags, and wiseacres file motions for leave to file brief amicus, because of the novelty of this issue.

And because your reporter really needs some good blogfodder during the summer doldrums. So come on, chaps, join the partay.