Back two years ago I predicted another silt-stir after Blake M. Adams, 160 T. C. 1, filed 1/24/23; see my blogpost “Section 7345 – Backdoor CDP?” of even date therewith, as my high-priced colleagues would say.

But Donald Ray Pierre, Sr., Docket No. 5178-24P, filed 2/28/25, isn’t that case. Here, a deficiency that bears all the signs of a clerical or arithmetic error on the 1040 for year at issue (failure to transpose an amount from Schedule 1 to 1040) gives rise to $83K of substantial tax delinquency.

Donald seeks discovery by motion, not having made informal or informal request. Judge Morrison blows that off: you can’t move to compel production of what you haven’t asked for before. Anyway, IRS makes the usual claim it gave Donald everything already.

But the real kicker is Judge Morrison’s reading of Adams, despite IRS being unable to produce either an original or copy of the 1040, nor a SND, nor a notice of arithmetic or clerical error.

“We held in Adams v. Commissioner, 160 T.C. at 12–15, that the IRS’s failure to mail a notice of deficiency is not the type of error that we can consider in a passport-certification case. Similarly, we cannot consider whether the IRS erred by failing to issue a notice of mathematical or clerical error. Thus, discovery is not warranted in this case as to whether the IRS complied with the requirements that it mail a notice of deficiency or issue a notice of mathematical or clerical error.” Order, at pp. 6-7.

So barring extreme IRS transcript glitches showing delinquency below statutory cutoff (like wrong numbers and years where SOL ran), there is nothing to litigate in passport grab cases.

No silt.

Given the current Federal employment situation and allied matters to which I shall not allude in this avowedly nonpolitical blog, it would not surprise me if my readers asked me why I waste their time with John R. Dee, Docket No. 15135-17W, filed 2/27/25. Obviously IRS collected something, or else this five-year-old whistleblower case would have been thrown on the Li heap long since. So there is at least a semblance of basis for the petition. And John, pro se, has kept the thing going, despite failing to appeal rejection of his motion to seal “permanently.”

Judge Ronald L. (“Ingenuity”)  Buch rejects John’s motion to require IRS to file the administrative record because the caption is wrong (uses the docket number, not his name); John wants the document filed and that’s not production; John made no formal demand to produce on IRS, without which there is nothing to compel; and Rule 93 requires the filing John seeks within 45 days from setting of trial, which turns out to set the deadline  this coming Monday.

Even if Judge Buch granted the motion, “it would merely delay the relief he seeks. Common practice is to provide a nonmoving party an opportunity to respond to a motion and then decide the motion. And in the case of a discovery motion, if that motion is ultimately granted, common practice is to provide a reasonable time for the compelled party to provide the compelled discovery. Given these norms, any action on Mr. Dee’s motion would extend the date for filing the administrative record well beyond the date already established by the Court’s Rules.” Order, at p. 2.

If Judge Buch were required to list the five (count ’em, five) most important tasks he performed this week (may it never happen!), I very much doubt this order would be among them.

Has IRS produced yet another variant on stealth in Desmond McGuire & Cory Lynne Brame, et al, Docket No. 25461-16, filed 2/26/25?

Back a year ago, Des’ & Cory’s trusty attorney, who according to her website “was lead counsel in the first litigated 831(b) captive insurance case tried in the United States Tax Court,” unloaded a bunch document demands (hi, Judge Holmes).

IRS, not quite as obliging as Judge David Gustafson, “objected to the requests because they were premature, overly broad and unduly burdensome, cumulative and duplicative, and required the Commissioner to produce confidential return or return information protected by I.R.C. § 6103 and information that constituted attorney work product. The Commissioner’s response referred to his answer to petitioners’ informal discovery requests and stated the process of searching for additional responsive documents was ongoing. He also stated that ‘Additional responsive documents will be produced if and when they become available.’” Order, at p.1. (Footnote omitted).

So, having gotten bortscht (please pardon arcane technical term) between March and  November last year, trusty attorney moves for leave to file motion to compel out of time (that means late).

Judge Ronald L. (“Ingenuity”) Buch says no. IRS says they gave the documents as part of the stipulation process. The documents relate to the audit of a transactionally-related party. “The Commissioner argues that he was only able to produce the documents after a document-by-document analysis performed pursuant to section 6103(h)(4)(C) to determine if the return or return information was transactionally related to petitioners. The Commissioner states that the documents produced in discovery, in the expert production, and as proposed stipulation exhibits ‘provided a comprehensive response to petitioners’ formal discovery requests.’” Order, at p. 2.

So IRS produced the documents. Doesn’t matter when or how or whether they told trusty attorney. Motion denied.

Oh yes, btw, “We remind the Commissioner that should additional documents be found that are responsive to petitioners’ formal discovery requests, that he has a continuing responsibility to supplement his responses pursuant to Rule 102.” Order, at p. 3, footnote 4.

When not recruiting seminarians to enlighten practitioners, Judge Christian N. (“Speedy”) Weiler manages a busy division of Tax Court. He fends off a Loper Bright counterattack in Alan Hamel and Estate of Suzanne Hamel, Deceased, Alan Hamel, Special Administrator, T. C. Memo. 2025-19, filed 2/25/25.

Yes, I’m late, but blame the overwhelming hospitality of a distinguished professor emeritus of a world-famous medical school (and a friend since our middle school days seventy years ago). Give me a glass of Château d’Yquem and I’ll follow you anywhere.

Back to work, The backstory can be found in my blogpost “One Door Closes, Another Remains Open,” 6/3/24.*

The attack is on Temp. Reg. Section 301.6229(e)-1T, which mandated a specific form and means for notifying IRS of one’s partnership interest under the now-repealed TEFRA two-step.

While Loper Bright certainly effected a change of law sufficient to allow a post-30 day motion for Rule 161 reconsideration, it doesn’t of itself overrule cases where the court relied on Chevron.

And Section 6229(e) is ambiguous when it comes to identifying who is a partner under the old law. Wherefore, Tax Court must use its own independent ratiocinative powers, not merely defer to IRS because its statutory interpretation is permissible.

But the Temp. Reg. passes the test. Judge Speedy Weiler generously allows that IRS “engaged in some level of ‘reasoned decisionmaking’ when deciding to promulgate Temporary Treasury Regulation §301.6223(c)-1T.” T. C. Memo. 2025-19, at p. 8. IRS followed the APA, and while the Notice of Proposed Rulemaking didn’t spell out all the reasoning, it followed the Congressional directive to carry out the statute.

Anyway, the statute itself was amended to take chops (which is what petitioner is fighting about) off the deficiency menu and place it on the partnership (FPAA) tab; and that was already litigated at the partnership level.

Taishoff says it’s unusual that reconsideration merits a T. C. Memo. This one, however, serves notice that broad-spectrum Loper Bright challenges cut little ice in Tax Court.

* https://taishofflaw.com/2024/06/03/one-door-closes-another-remains-open/

Ever wondered how to put your best cliché forward when appearing before the 400 Second Street Bench? Judge Christian N. (“Speedy”) Weiler has convened an all-star team to tell you how, and they’re taking the field two (count ’em, two) weeks from tomorrow.

Here’s the link with the info: https://ustaxcourt.gov/resources/outreach/best_practices_webinar_march_2025.pdf

Unfortunately, once again this invaluable program will not be recorded, so if any among you has to make a living or has made other unreschedulable commitments that prevent your viewing same, accept my condolences. And Tax Court, please accept my respectful objection. Record these programs for those who need them but cannot attend at the date and time specified.

I’m a fan of sandwiches. So was Eaton Corporation and Subsidiaries, 164 T. C. 4, filed 2/24/25, but it costs them a bunch foreign tax credits (hi, Judge Holmes). Eaton sandwiched a domestic partnership between two coalitions of CFCs.

IRS “does not dispute that petitioner would be allowed deemed-paid FTCs arising from its section 951(a) inclusions with respect to the upper tier CFC partners, limited to the amount of foreign income taxes that they themselves paid or accrued. But respondent contends that the interposition of the partnership renders petitioner ineligible for deemed-paid credits for foreign income taxes paid by the lower tier CFCs.” 164 T. C. 4, at p. 2.

There’s no fight about foreign income taxes paid by the upper-tier CFCs. See my blogpost “When Judge Gustafson Dissents,” 2/25/19*.

“Here, petitioner, the only domestic corporation in view, had no section 951(a) inclusions with respect to the subpart F income and section 956 amounts generated by the lower tier CFCs. Instead, EW LLC—a domestic partnership, not a domestic corporation—had the section 951(a) inclusions with respect to the lower tier CFCs. And EW LLC’s section 951(a) inclusions were not included in the gross income of a domestic corporation. Rather, EW LLC was the United States shareholder required under section 951(a)(1) to include in gross income its pro rata share of the subpart F income generated by the lower tier CFCs. The upper tier CFC partners, which are foreign corporations, included their distributive shares of EW LLC’s section 951(a) inclusions with respect to the lower tier CFCs in their gross income pursuant to sections 61(a)(13) and 702(c). Eaton I, 152 T.C. at 54. In short, neither any CFC partner nor EW LLC was a domestic corporation. Therefore, the ‘hopscotch’ mechanism under section 960 is not triggered, because the statutory predicate in section 960(a) was not satisfied.” 164 T. C. 4, at pp. 9-10.

As for the undesirable result of double taxation, “any double taxation will be temporary, because petitioner will be entitled to the FTCs it seeks as soon as the earnings of the lower tier CFCs are distributed up to petitioner through the chain of ownership.” 164 T. C. 4, at p.10.

So Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan sums up.

“To summarize, no credit for taxes paid by the lower tier CFCs is available to petitioner under either of the two Code sections that allow for deemed-paid credits. There is no credit under section 902 because there was no dividend distribution, and there is no credit under section 960 because the section 951(a) inclusions with respect to the lower tier CFCs were not taken into gross income by a domestic corporation. Because petitioner cannot show that it is entitled to be deemed to have paid foreign income tax, it is not entitled to a credit on account of the same under section 901(a).” 164 T. C. 4, at pp. 10-11.

* https://taishofflaw.com/2019/02/25/when-judge-davidson-dissents/

The election returns are in. Judge Patrick J. (“Scholar Pat”) Urda has been elected Ch J of United States Tax Court for a two-year term commencing June 1, 2025.

He will succeed Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan.

Here’s the official word: https://ustaxcourt.gov/resources/press/02212025.pdf

OK, it’s obligatory, not that river in Egypt. Judge Christian N. (“Speedy”) Weiler has an essay in one paragraph on the effect of denial in Locust Creek LLC, Locust Creek Investors LLC, Tax Matters Partner, Docket No.13011-20, filed 2/21/25.

There’s a brief jumpball over informal discovery, but Judge Speedy Weiler blows off the Locusts’ objection: time for informality is over, since the Locusts’ responses were subpar. The Locusts must pony up the documents IRS requested.

IRS also wants Judge Speedy Weiler to review a bunch responses to interrogatories (hi, Judge Holmes), but that’s where denial comes in.

“Rule 90(e) provides that, in some circumstances, the Court ‘may order . . . that the matter is admitted’. When the answering party engages in circumlocution, or admits in one phrase and retracts in the next, or makes invalid objections, then deemed admission may be called for. But admission should not be deemed when, as if [sic] most often the case here, the response is a flat denial. When the answering party ‘Denies [period]’, a motion to review cannot become an occasion for the Court to make a pretrial adjudication of a factual dispute. The potential sanctions (see Rule 90(g), 104(c), (d)) for an unequivocal but unwarranted denial–which sanctions might include in an appropriate instance ‘the reasonable expenses, including counsel’s fees, caused by the failure’ to admit (Rule 104(c)(4))–can be imposed only after the denial has been shown to be unwarranted.” Order, at p. 1.

The Locusts did respond; that IRS is unhappy with the response isn’t enough to reject it.

“Having reviewed the Requests, petitioner’s Responses thereto–and while finding some responses appear to be less than forthcoming–we cannot say they violate the spirit of Rule 90. Accordingly, we find it is appropriate to deny respondent’s Motion to Review.” Id., as my expensive colleagues would say.

The backstory for Joint Star Properties, LLC, Joint Star Properties Investments, LLC, Tax Matters Partner, Docket No. 30289-21, filed 2/20/25, is found in my blogpost “Amen, Judge Pugh,” 2/23/24.* While there is no deliberative privilege to shield the IRS groupchat anent Boss Hossery for syndicated conservation easements, neither is the want of privilege an excuse for unlimited fishing expeditions.

“While the standard for relevance in discovery generally is broad, it is not unlimited. We are particularly careful to require a showing of relevance where the discovery sought may involve sensitive information pertaining to unrelated third parties. In this case, the Requests do just that, seeking information regarding third parties in all conservation easement cases.” Order, at p. 3. (Citation omitted).

Check out Order at p. 2. The groupchat is indiscreet, but hardly reaches the level of a determination sufficient to trigger Boss Hossery, especially given the judicially imposed restraints on its use to avoid chops. The behind-the-scenes bludgeoning that Section 6751(b) was enacted to prevent never gets to Tax Court; and for all I can see, never gets anywhere else, either.

• https://taishofflaw.com/2024/02/23/amen-judge-pugh/

Robert Donlan, Jr., and Kegan Donlan, 164 T. C. 3, filed 2/19/25, present a real head-scratcher or perhaps headshaker, despite having properly used the Tax Court robopetitioner to create and file their timely petition.

IRS moves to dismiss, claiming the electronic signature mechanism embedded in the robopetitioning software does not provide a valid signature.

Now we do have some shall I say “idiosyncratic” pronouncements from the Executive Branch of our government lately, so perhaps this motion should evoke no surprise. Judge Ronald L. (“Ingenuity”) Buch certainly deals with the motion with somber reasoning and appropriate citation to Rules 34 and 23(a)(3).

“Like other courts, the Tax Court has specific rules allowing for electronic signatures. Rule 34, which governs petitions, states in paragraph (e): ‘For the signature requirement of petitions filed electronically, see Rule 23(a)(3) and the Court’s electronic filing instructions on the Court’s website.’ In turn, Rule 23(a)(3) states: ‘A person’s name on a signature block on a paper that the person authorized to be filed electronically, and that is so filed, constitutes the person’s signature.’ Our analysis could end here.” 164 T. C. 3, at p. 4. (Footnote omitted, but it cites FRCP and FRAP electronicity, as well as Section  6061(b)(1) and  Internal Revenue Manual 10.10.1 (Aug. 12, 2024) (“IRS Electronic Signature (e-Signature) Program”)).

But Judge Ingenuity Buch cites to the instructions for robopetitioning electronic signatures as well.

Of course the petition is valid, so motion denied. The Donlans were directed by Judge Buch not to bother replying to this motion.

I wish I too had been spared from the need to comment thereon, but my sense of duty to my readers compels me.