Islander

As the inmates of 400 Second Street, NW, close the Glasshouse doors on 2024 and put the Pol Roger Cuvée Winston Churchill on ice, I close my account likewise. Here’s another beneficiary of unguided (misguided?) Congressional largesse to our Insolvent Islands in the Sun, Dennis M. Curtin, et al., Docket No. 32212-15, filed 12/31/24.

This is Dennis’ second summary J ty to make my blog. See my blogpost “Activist Judges,” 10/2/23.*

It’s unclear when Dennis first became a permanent Virgin Islander, but that doesn’t matter to Judge Ronald L. (“Ingenuity”) Buch. There’s enough disputable facts in the record to defeat Dennis’ summary J motion.

Dennis filed 1040s with VIBIR, not IRS, but did file Form US 1040-SS, self-employment tax on US-source income, claiming Reg. Section 1.932-1(g)(2)(ii)(C) sources his multiple corporate handouts to the USVI, not the USA, hence no US income tax.

IRS says per Reg. Section “1.932-1(g)(2)(iii)(B) ‘the Virgin Islands does not include the United States geographically for purposes of determining the source of a taxpayer’s income (other than for foreign tax credit purposes).’ The Commissioner further states that there are material facts in dispute as to the portion of Mr. Curtin’s income that is attributable to the sales made by [one of Dennis’ corporations] in the U.S. and the source of that income.” Order, at p. 3.

Dennis claims the 1040-SSs he filed started 3SOL, which has run. No, says Judge Buch, those forms flunk the Beard test; they expressly exclude salary and wages. The 1040s which Dennis filed with VIBIR show a lot more income than the 1040-SSs he filed with IRS. The 1040-SSs aren’t themselves in the record, although IRS concedes they were filed. So Judge Buch can’t tell if they were complete, but even if they were, they don’t provide sufficient information to calculate US Federal income tax, and aren’t fair and reasonable attempts to compute income tax liability.

Dennis claims his compensation from his corporations was fair and reasonable, and proffers various studies in support thereof.

“The reasonableness of compensation is an inherently factual question as evidenced by Mr. Curtin’s reliance on the studies, which are akin to expert reports. Expert reports offered as evidence to establish the reasonableness of compensation cannot be accepted for purposes of summary judgment because there is no opportunity for cross-examination.” Order, at p. 6.

No summary J for Dennis.  But this move by his trusty attorneys did serve its purpose: it focuses their trial strategy.

Happy New Year, everyone.

* https://taishofflaw.com/2023/10/02/activist-judges/