Four (count ’em, four) T. C. Memo.s today, but two are consolidateds (mother and son used car dealers). Not a lot new here, so I’ll be brief.

Hani G. Ataya, T. C. Memo. 2025-55, filed 6/4/25, is consolidated with Mom Inaam Ataya; Mom was a real estate broker “and holds a bachelor’s degree in information systems. She previously worked for California’s Employment Development Department, which oversees collection of payroll taxes in the state.” T. C. Memo. 2025-55, at pp. 2-3. Hani never finished college, but had years of running used car businesses, buying at auction and reselling. Mom and Hani ran the C Corp used car operation. After stiping out the unreported dividends and unjustified deductions, the issue is good faith reliance on experts to defeat the 6662(a) and (b)(1) accuracy and negligence chops.

Judge Kashi (“My or the High”) Way isn’t buying the Atayas’ tale of CA seizing whatever part of their records they hadn’t lost, which seizure took place when the Atayas shut down the C Corp. “First, the deficiencies in these cases have been settled under Rule 91(e). Petitioners cannot now, after trial, circumvent the conclusive admissions in their jointly filed Stipulation of Settled Issues. Additionally, petitioners have not had entered into evidence or otherwise adequately shown that their corporate records were seized by California. While the Court accepts the stipulation that the bulk of [C Corp]’s records have been lost, the Court cannot find that California has interfered with their ability to litigate these cases.” T. C. Memo. 2025-55, at p. 8. (Citation omitted). Besides, Hani was an experienced businessman and Mom had been exposed to taxes. There’s no evidence of the qualifications of the attorney and bookkeepers they used or upon what advice they relied.

Judge Travis A. (“Tag”) Greaves doesn’t show the Section 6673 yellow card several times without consequences. Michael Austin French and Dawn Michelle French, T. C. Memo. 2025-57, filed 6/4/25, repeatedly asserted frivolous arguments both in pretrial proceedings and at trial, despite warnings from IRS counsel and Judge Tag Greaves.

“Given the public policy interest in deterring abuse and waste of judicial resources, the Court is given considerable latitude in determining whether to impose a penalty under section 6673 and in what amount. As we have found, petitioners’ arguments are frivolous and have been consistently rejected by courts. Throughout the pretrial proceedings, petitioners repeatedly asserted these arguments in various filings, motions, and hearings despite warnings that they risked a section 6673 penalty. This Court specifically warned petitioners of the possible imposition of a section 6673 penalty at the motion hearing… and at the start of the … trial session. Respondent also put petitioners on notice and cautioned them that their behavior could warrant a penalty imposed by this Court. Nevertheless, they repeated the same frivolous arguments and continued to advance them at trial, wasting the Court’s and respondent’s time and other resources. As a result, we will require petitioners to pay a section 6673 penalty of $1,000. We warn petitioners that they risk a much more severe penalty if they advance frivolous positions in any future appearance before this Court.” T. C. Memo. 2025-57, at pp. 6-7. (Citations omitted).

The one story which evokes some sympathy is Joanne A. Horsham, T. C. Memo. 2025-56, filed 6/4/25. Joanne gets two different stories from IRS about the NFTLs she got for the three (count ’em, three) years’ worth of reported but unpaid taxes. The SO at Appeals told her that, although her IA was accepted, NFTLs would be filed for all years; Joanne says she doesn’t remember that. Especially since another IRS employee (at a call center; how she got through must be quite a tale) told her that since her unpaid balance was then below $50K, there would be no liens, although the liens had already been filed. The explanation may be found in a footnote from Judge Albert G. (“Scholar Al”) Lauber: “In her Response to the [IRS summary J] Motion petitioner urges that ‘the left hand of the IRS did not know what the right hand was doing.’ The communication problem may have arisen because the Form 668(Y)(c) was prepared on… the same day that petitioner submitted her IA. The SO noted in her case activity record that the call site employee with whom petitioner spoke “could not see [the NFTL request] at that time” because that employee “does not have access to the system that the offer examiner works on.”” T. C. Memo. 2025-56, at p. 7, footnote 3.

Anyway, if Joanne keeps paying on the IA, she’ll be down below $25K by year-end, so the liens may go away even if she can’t prove how they hurt her.