Then It’s Discipline You’ll Get

The Supremes have been on a multi-year tear, of a kind not seen since the heady days of the Sixties and Seventies. “Judicial activism on steroids” say some; “a reassertion of separation of powers, reining in a runaway Executive” say others.

I report, you decide; so let’s look at Deep Rock, LLC, GH Manager, LLC, Tax Matters Partner, Docket No. 32696-21, filed 12/12/24.

The Deep Rockers want to amend their petition twice. IRS claims ambush, futile argument, and sovereign immunity, but Judge Travis A. (“Tag”) Greaves will none of the above. The Deep Rockers can have a go at getting jury trials on Section 6662 chops, specifically the 6662(c)-(e), 6662(h), and 6662A varieties.

Jury trials? In Tax Court? What happened to all that Eighth Amendment excessive-fines and right-to-counsel learning? It’s still there.

Except Jarkesy.

That’s SEC v. Jarkesy, 144 S. Ct. 2117 (2024)*, wherein the Supremes  “held that (1) penalties imposed by the U.S. Securities and Exchange Commission (SEC) were subject to the Seventh Amendment right to a jury trial because a dispute regarding those penalties resembles a common law cause of action and (2) that the public rights exception does not apply to penalties imposed by the SEC. See Jarkesy, 144 S. Ct. at 2127, 2128, 2131, 2132.” Order, at p. 1, footnote 2.

Btw, the public affairs exception “allows Congress to delegate deciding matters concerning public rights to an administrative body or other tribunal without a jury. See Jarkesy, 144 S. Ct. at 2132. In other words, according to petitioner, the imposition of these penalties can only be adjudicated before an Article III court.” Order, at p. 2.

As for ambush, trial hasn’t been set, so IRS has plenty of time to prepare.

As for futile argument or dilatory tactics, “(T)here is no evidence that petitioner made a conscious decision to delay bringing this issue or failed to exercise reasonable diligence. Instead, the argument that petitioner seeks to assert through its amendment is in response to a recent change of precedent regarding deference afforded to regulations.” Order, at p. 3., citing Loper-Bright, of course. Discipline by the barrelful, silt unlimited. And Tax Court never considered expanding Jarkesy to chops before, because Jarkesy was only decided a couple months ago (hi, Judge Holmes).

So go at it, guys.

I must award a Taishoff “Good Move, With Swords and Diamonds” to the Deep Rockers’ trusty attorneys, among whom is my esteemed colleague Lyle B. (“Full-Court”) Press, Esq.

If the Deep Rockers rock this one, they’ll put Boss Hoss out to pasture.

*https://scholar.google.com/scholar_case?case=4970553488002399673&q=SEC+v.+Jarkesy,+144+S.+Ct.+2117+(2024),&hl=en&as_sdt=6,33&as_vis=1