Judge Rose E. (“Cracklin'”) Jenkins has a guide for litigating the Dixieland Boondockeries that are so prevalent just now. See Wahoo River, LLC, Wahoo River Investments, LLC, Tax Matters Partner, Docket No. 503-23, filed 1/31/25. The Wahoos are bracketed with two other syndicated cases, and have chosen a test case “to rule them all, to find them, to bring them all, and in the darkness bind them,” as a much finer writer than I put it.

Judge Cracklin’ Jenkins lays out, at pp. 1-2 of her Order, to what she needs the parties to stipulate in order to bring the desired result: a one-size-fits-all resolution to the controversy.

But lest the parties become too elated, Judge Jenkins cautions them.

“There is not [sic] set formula for a stipulation of jurisdictional facts. The Court reiterates that the list provided above contains examples of facts and documents that are often included in a stipulation of jurisdictional facts. The Court recognizes that the parties may not be able to stipulate to all of the facts listed herein and that certain items and documents listed may not be relevant to this case.” Order, at p. 2.,footnote 1.

A short while ago I was pointing out how IRS’ boilerplate summary J motions for Boss Hossery didn’t always work. Well, just now Park Lake II, LLC, Park Lake Partners, LLC, Tax Matters Partner, T. C. Memo. 2025-11, filed 1/30/25, tells the old story: the exception proves the cliché.

While Judge Albert G. (“Scholar Al”) doesn’t tell us if the Park Lakers interposed good faith reliance as a defense to the chops, the Park Lakers’ trusty attorneys, led by the routable Vivian D. (“Golden”) Hoard, would not overlook any valid argument.

So IRS comes out swinging, with every RA, supe, team manager, territory manager, Senior Counsel, Associate Area Counsel, documenting time, activity, transmission, receipt of every communication.

But the Golden Hoard is nowise dismayed at this Constitution Avenue Charge of the Heavy Brigade. “Petitioner struggles mightily, but in vain, to gin up a dispute of material fact.” T. C. Memo. 2025-11, at p. 4.

No, there’s no Service-wide mandate to chop every Dixieland Boondockery with excessive over(under) valuation chops. The RA decided on her own after consulting team manager. Taishoff says once a deal type appears on the bad boys’ list, no need for a policy statement, there’s a target on the back and front of every one of them.

A preliminary “let’s think about chops” memo isn’t a determination, which must be “an action ‘with a high degree of concreteness and formality.'” T. C. Memo. 2025-11, at p. 5, citing Belair. But the entire idea behind Section 6751(b) was to prevent low-level examiners from bludgeoning settlements out of terrified taxpayers with meritorious claims by threats of chops; what price “concreteness and formality”?

And of course there’s no sense fighting about IRS’ paperwork and electronicity, as they’ve documented everything. Vivian keeps probing, but to no avail.

I have to think when IRS gets one of these syndicated conservation easement deals, the full-court-press immediately follows.

That’s another virtue of summary J; it exposes adversary’s weakness. But there’s a vice: it exposes yours. While the nonmovant gets all the breaks and you lose your motion thereby, you know where you need to strengthen your case if you have to go to trial. But you can overdo it.

I’ll leave any account of the tangled family buyout trail in Estate of Clark J Levi, Deceased, Nathan D. Clark, Administrator, Docket No. 34455-21, filed 1/30/25, to Judge Christian N. (“Speedy”) Weiler, whose grasp of these maneuvers exceeds mine, despite such neologisms as “As way of illustration,” Order, at p. 4. I humbly suggest either “As an illustration,” or “By way of illustration.” And I’ll also exclude speculation about the regulatory kerfuffle that triggered renegotiation of the buyout deal and stirred up the $1,306,284 payout to the bought-outs.

The late Clark J., before he became the late Clark J., deducted same as a Section 162 ordinary-and-necessary. Rather than disallowing, IRS says it has to be capitalized. Both cross-move for summary J.

Neither gets it.

“… respondent cites us to provisions of contracts and deposition testimony, however, petitioner objects on the grounds that the contracts ‘do not support respondent’s factual assertion’ or that ‘respondent’s factual assertions’ are rebutted by other evidence. In fact, petitioner’s Response contends that respondent ‘attempts to simply [sic] a complex and nuanced set of facts involving family and friends operating a highly regulated pharmaceutical operation with sales across multiple states.’ Considering the above factual disputes, we do not find summary judgment to be appropriate.” Order, at p. 4.

Judge Speedy Weiler draws the line.

“The parties are urged to minimize the time and expense of trial, if trial becomes necessary, by entering into more comprehensive stipulations, without disputed characterizations, that include all documents any party deems relevant and a narrative in chronological order of the organization and operation of the entities and relevant transactions. Further, the parties are urged to minimize time-consuming motions that can be avoided by negotiation between or among counsel.” Order, at p. 4. (Emphasis added.)

IOW, don’t use summary J as a hook to turn the Tax Court Bench into special masters supervising discovery. And don’t try for summary J where you have zero basis. ” The parties also seek summary judgment with respect to the penalties asserted by respondent in the notice of deficiency. The parties, however, have neither established nor negated a reasonable cause and good-faith defense to the penalties.” Order, at p. 4. The standard IRS tactic of moving for summary J on Boss Hossery to sustain chops doesn’t always work.

Once again, the Genius Baristas have released a bombardment of opinions. Widespread topics, some interesting sidelights, otherwise  not a lot new.

Karl W. Leo and Fay L. Leo, T. C. Memo. 2025-9, filed 1/29/25, is another Dixieland Boondock appraisal mix-and-match, although two interesting points emerge. First, from the formulaic language of the stips of fact. That an appraisal “may be considered by the Court in arriving at its finding of fact” doesn’t mean that the Court is bound by every word and number therein. It’s in evidence, so is weighed and sifted like all other evidence. T. C. Memo. 2025-9, at p. 20.

Second, the history of the Boondocks at issue is replete with leases and amendments to leases, each one more sloppily drafted than the last. Unattached exhibits and undefined terms abound. Judge Morrison must have remembered his days in private practice, berating junior associates, but here forbore.

Charlton C. Tooke, III, 164 T. C. 2, a full-dress T. C., filed 1/29/25, is Judge Courtney D. (“CD”) Jones’ tour d’horizon of the famous protester Appointments Clause (U.S. Const. art. II, § 2, cl. 2, the “advice and consent” bit) argument that Appeals Chief and the AOs are “officers of the United States” and need Presidential appointment and Congressional approval. No, says Judge CD Jones, in 41 (count ’em, 41) pages of somber reasoning and copious citation of precedent. Federal Constitutional law wonks will find this fascinating.

Finally, hitting for the cycle as we baseball fans say, STJ Diana L. (“Sidewalks of New York”) Leyden has an off-the-bencher, Carol D. Gomez, Docket No. 3339-24S, filed 1/29/25.. This is a new (post-7/1/19) innocent spousery, where Section 6015(e)(7) is in play, so she allows petitioner sworn testimony (previously unavailable) and reviews de novo. Doesn’t help Carol, though: “Given that petitioner had knowledge of the retirement distributions, reported the amount on the couple’s tax return that she prepared, and that she did not fear any physical or mental abuse from her husband for not reporting the full amounts as taxable, the Court concludes that petitioner is not entitled to equitable relief under section 6015(f).” Transcript, at pp. 11-12.

Carol was also too late for “section 6015(b) or section 6015(c) because she filed her claim more than two years after the IRS began collection activity—namely an offset of a federal tax overpayment….” Transcript, at p. 7.

Equitable tolling, maybe? Ya gotta love the Supremes, American jurisprudence’s answer to Ignaz the Mouse.

I hear maybe FDA isn’t so sure you should be, but Mira Vista Homeowners Association, Inc., Docket No.  14901-22X, filed 1/28/25, definitely wants supplements to the administrative record whereto should be added, they say, “some 239 pages, including favorable IRS exemption letters, website information and 990EZ annual filings for other HOAs located in Texas. On brief, respondent disputes the relevance of this submission by petitioner, and contends the documents ‘do not provide any of the facts and circumstances upon which the IRS based their determinations.’” Order, at p. 3.

The Mira Vistas and IRS, with the supplements up in the air, jointly moved to submit under Rule 121. See my blogpost “Common Good, All In ?” 9/25/24.*

Now IRS wants a vacation of that order, and remand to Appeals. The Mira Vistas want a trial.

Judge Christian N. (“Speedy”) Weiler shucks his former order and finds Rule 217 will stretch to cover.

“Rule 217 provides that the ‘[d]isposition of an action for declaratory judgment…that involves… the initial qualification or classification of an exempt organization…will ordinarily be made on the basis of the administrative record, as defined in Rule 210(b)(12). (emphasis added). This Rule equally provides ‘[o]nly with the permission of the Court, on good cause shown, will any party be permitted to introduce before the Court any evidence other than that presented before the Internal Revenue Service and contained in the administrative record as so defined.’ In interpreting Rule 217, courts have permitted supplementation of the record when good cause is shown.” Order, at p. 4 (Footnote and citation omitted).

So without deciding the merits (and not even if IRS was arbitrary in denying the Mira Vistas 501(c)(4) status, the Mira Vistas still have to prove they qualify), Judge Speedy Weiler tells the parties to decide what supplements they’re taking.

Practice tip: Never ever agree to a Rule 121 unless you’re sure your admin record is complete and bulletproof. Save the money your client will have to spend on supplements.

* https://wp.me/p1eNMc-6B9

For backstory, see my blogpost “A Hill of Beans,” 10/16/19.* Judge Elizabeth Crewson Paris sent IRS and the Aggies off to do a Rule 155 beancount (geddit?).

They ask for an extension.

Five (count ’em) five years later, they are still on extension, as they can’t agree how to allocate the DPAD against the DPAI of the four-member Expanded Affiliated Group taking into account patronage and nonpatronage activities, “including the EAG members’ distributive shares of relevant items from partnerships and limited liability companies (LLCs).” Order, at p. 2.

Oh yes, the case is Ag Processing, a Cooperative and Subsidiaries, Docket No. 23479-14, filed 1/17/25, going into its eleventh year, with years at issue well into their later teens. If the Aggies didn’t deposit to stop interest, anything short of an outright win will be far worse than if they’d paid the tax to begin with.

Anyway, perhaps the Aggies were counting on Growmark to bail them out. For the Growmark story, see my blogpost “Another Corny Cooperative,” 12/11/19.**

And they got the bailout.

“Having considered in detail all of respondent’s additional arguments in his Second Supplemental brief, the respondent has not persuaded the Court that the allocation method described in Growmark and proposed by petitioner for the Step Three allocations is incorrect.” Order, at p. 4.

A speedy resolution: took only five years. I wonder if the legal fees are less than the ultimate deficiency, if any.

Howbeit, Judge Paris has finally had enough.

“Further, because the parties have never agreed to the computations for entry of decision under Rule 155, the parties may submit their computations separately if they fail to come to an agreement and they are convinced they have reached an impasse. If that is the case, then each computation should include a supplemental brief to explain their positions, so long as those positions are not relitigating a matter previously decided by this Court in either this case, AG Processing, Inc., or Growmark, Inc.” Order, at p. 4.

And have it in by 2/28/25.

* https://wp.me/p1eNMc-43G

** https://wp.me/p1eNMc-48B

IRS, in its never-ending battle to shoot down Dixieland Boondockerys without the expense of witnesses and trials, for which I as a taxpayer applaud them (governmental efficiency transcends politics), is again on the trail of Desoto Holdings LLC, Desoto Investors LLC, Tax Matters Partner, Docket No. 13013-20, filed 1/24/25.

This time the claim is that, by subdividing the boondocks whereupon the Desotos placed the easements in question, the Desotos violated the zoning laws of the Town of Harpersville in Shelby County, Alabama (and no, I don’t know where that is, either).

Judge Elizabeth Crewson Paris hikes through the land transfers that landed the Desotos in this “Heart of Dixie,” and parses the relevant Harpersville enactments.

“Harpersville Subdivision Regulations § 1:05. A violation ‘shall be punishable by a fine of one hundred dollars ($100) for each lot or parcel of land so transferred sold or agreed or negotiated sold,’ and the Town of Harpersville “may enjoin such transfer or sale or agreement by a civil action for injunction brought in any court of competent jurisdiction.” Id.(emphasis added).” Order, at p. 6.

Except Harpersville didn’t enjoin. And the AL zoning cases involve disputes between vendor and purchaser, not at issue here.

Besides, “… the conveyance of property in this case has already occurred. The Town of Harpersville did not enjoin the transfer of property from [vendor] to DeSoto. Neither Alabama law nor the Harpersville Subdivision Regulations give the Town of Harpersville the right to void a completed transfer of property from [vendor] to DeSoto.” Order, at p. 7.

But whether the zoning violation would have prohibited the Desotos from engaging in the limestone mining they claim was worth the millions and billions which they forwent for the noble and Congressionally-endorsed purpose of sparing the precious wilderness from the cutter’s blade is a question of fact. And the Desotos can still apply to the Town of Harpersville for subdivision approval, even if maybe the subdivision law is only intended to control sales and development.

Summary J denied: the deed is not void for violation of the zoning law, and because a question of fact exists about whether the violation prevents the mining, and thus the “before”  valuation of the property in the Desotos’ hands.

Word to the dodgefloggers: Hire competent local counsel to do the due diligence on your boondocks. Or pay them when the slipshod work of those you did hire causes this kind of schemozzle. The former is probably cheaper.

Thomas G. Ogg, Docket No. 19454-24S, filed 1/24/25, had become the late Thomas G. Ogg before the petition was filed by the successor trustee to his lifetime trust. Successor trustee, Mr. Carr, moves to change caption and sub in as petitioner.

Of course, Mr. Carr has commenced no probate proceeding. Ever since Norm Dacey first started pushing the revocable grantor trust as “How To Avoid Probate”, residents of jurisdictions where the process is “an impenetrable morass, unintelligible alike to laymen and lawyers,” have fled to the trust as the hart panteth after the water brooks.

Doesn’t help you get into the Glasshouse in the Pity City. Rule 60 is an immovable barrier, says Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan.

“… the record in this case indicates that the decedent died before the filing of the Petition, and that to date no fiduciary or other representative has been appointed by a state court of competent jurisdiction to represent the decedent’s estate. Consequently, at this time the Court does not appear to have jurisdiction over this case. To the extent Mr. Carr seeks, in his capacity as successor trustee, to represent the decedent’s estate, we must deny his Motion, as we have held that the successor trustee of a trust established during a decedent’s lifetime is not legally authorized to represent a decedent’s estate before this Court. See Sander v. Commissioner, T.C. Memo. 2022-103.” Order, at p. 2.

For Sandra Sander’s sad story, see my blogpost “Unavoiding Probate,” 10/6/22.*

Nothing new here, so why do I note it?

Well, Judge Morrison gave Leda Sander, successor trustee to Momma Sandra, six (count ’em, six) months to explain whether a personal representative (ex’r/adm’r) was appointed for Momma Sandra, T. C. Memo. 2022-103, at p. 18. Ch J Kerrigan has given Mr. Carr 45 days to “advise the Court whether a probate proceeding has been commenced for the estate of the decedent Thomas G. Ogg and, if not, whether there are any plans to commence such a proceeding.” Order, at p. 2.

And, while he’s at it, “Petitioner shall attach to the response a copy of the decedent’s death certificate.” Ibid., as my high-priced colleagues would say.

Taishoff says that these trusts are designed to avoid probate, as aforesaid. Clearly, if probate is such an expensive and time-consuming process, more than 45 days should be allowed for the trustee to engage counsel and petition for letters.

* https://wp.me/p1eNMc-5KE

I’ve chronicled before IRS’ buckshot motions in limine to knock out every one of a petitioner’s experts. I won’t waste time now citing to these blogposts. Really, it’s time for a judge to put a stop to this tomfoolery. Judge Elizabeth Crewson Paris had the chance in Desoto Holdings LLC, Desoto Investors LLC, Tax Matters Partner, Docket No. 13013-20, filed 1/23/25, but forbore to do so.

I know, experts have long since ceased to serve the function envisioned by FRE 702, to be employed if “the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or determine a fact in issue.” Order, at p. 2. Rather, they have become professional witnesses, “hired guns,” whose functions are to attack, belittle, befog, and obfuscate, rather than to instruct or assist.

But is throwing them out altogether a better response? IRS seems to think so, and the Desotos counterattack with a motion to toss IRS’ expert.

Enough already.

Judge Paris clears the board of these motions with a simple: “The Court is not persuaded that the proposed reports are irrelevant, unhelpful to the trier of fact, or otherwise defective under Rule 143(g) or FRE 702. Any remaining concerns may be raised during voir dire or cross-examination during trial.” Order, at p. 2.

Maybe a judicial reprimand is in order when such motions are clearly intended to vex, harass, and waste the resources of the nonmovant.

This was the downfall of Ana M. Franklin, T. C. Memo. 2025-8, filed 1/22/25. That’s Sheriff Ana M., as she was Sheriff of Morgan County, AL during the years at issue. Among Sheriff Ana M.’s responsibilities was the feeding of prisoners housed in the County slammer, most of whom were awaiting trial. Sheriff Ana M.’s predecessor fed said prisoners on corn dogs from a truckload which he bought cheap, and pocketed the rest of the meal money the State and Feds paid him. This led to a class action and consent decree.

Sheriff Ana M. had problems making the money she got stretch to feed the large number of incarcerateds. So she raided the food money to invest in a Ponzi scheme her boyfriend guaranteed. Of course the money was lost, the boyfriend made good, but Sheriff Ana got 24 months probation for willful nonfiling, and a $1K fine.

IRS claims the $150K Sheriff Ana M. grabbed was embezzlement proceeds, and taxable.

No, says Judge Elizabeth Crewson Paris. It was a loan repaid, even without all the usual loan papering.

“Petitioner maintains that she did not embezzle the funds, but that they were a loan from the jail food money account, which she withdrew with the intention of repaying them with interest when she herself was repaid by [Ponzis]. Petitioner points to the fact that, as signatory authority on the jail food money account, she always had dominion and control over the funds in the account, and that she received no accession to wealth when she withdrew the funds because she created a corresponding obligation to repay the funds and that she ultimately did repay them.

“While it is true that, under the terms of Amended Paragraph 22 of the Consent Decree, petitioner was not authorized to use the funds in the manner that she did, the Court has long distinguished between unauthorized loans and embezzlement. A taxpayer has income when she ‘acquires earnings, lawfully or unlawfully, without the consensual recognition, express or implied, of an obligation to repay and without restriction as to their disposition.’ In circumstances where misappropriations do not enrich or benefit the misappropriator, and there is a consensual recognition of an obligation to repay the funds, income does not arise.” T. C. Memo. 2025-8, at p. 12. (Citations omitted).

Thus, no unreported income or SE tax, but no NOL, and no business deductions for the money Sheriff Ana M. spent trying to defend herself. Sheriff Ana M. was not in the prisoner-feeding business, except as she was obligated as Sheriff to do so, and unreimbursed employee business expenses were scuppered by TCJA.

Sheriff Ana M.’s trusty attorneys reduced the deficiency from $46K to $15K. They get a Taishoff “Good Job.”