When Ch 7 is on the menu, in personam versus in rem is in the recipe. Judge Travis A. (“Tag”) Greaves serves this up to John J. Mongogna and Michelle L. Mongogna, T. C. Memo. 2025-89, filed 8/18/25. John and Michelle are fighting about some fourteen (count  ’em, fourteen) nonconsecutive years’ worth of unpaids, but two are out because SOL on collection.

Their rep at Appeals didn’t exactly cover himself with glory, as he didn’t argue OIC or CNC, despite these being claimed on the 12153.

The real issue is the worth, if any, of John’s and Michelle’s equity in any exempt or abandoned property of the estate. And neither John nor Michelle nor their rep ever told the SO, despite numerous requests and chances to do so.

“The IRS properly filed NFTLs for tax years [Three] through [Ten] before petitioners filed for bankruptcy. The IRS is well within its right to enforce its lien. A chapter 7 bankruptcy may discharge a person from personal liability for the federal taxes owed in some cases, discussed infra; however, it does not extinguish a pre-petition federal tax lien.” T. C. Memo. 2025-89, at p. 9.

Herer’s the infra.

“The bankruptcy court’s discharge order states that ‘no one may make any attempt to collect a discharged debt from the debtors personally.’ It further explains that ‘a creditor with a lien may enforce a claim against the debtors’ property subject to that lien unless the lien was avoided or eliminated.’ Here, respondent had a pre-petition lien for tax years [Three] through [Ten]. Thus, under the discharge order, respondent may not collect from petitioners personally (in personam) for these years but may enforce the claim against petitioners’ exempt property (in rem) because a lien was filed before petitioners’ bankruptcy action.” T. C. Memo. 2025-89, at p 10.

OK, so Years One and Two are out SOL; and Years Three through Ten can be collected against property but not people; but what about Years Eleven, Twelve, Thirteen, and Fourteen?

Before my ultrasophisticated readers echo the words of the Man From Mumbai first set forth hereinabove at the head hereof, here’s Judge Tag Greaves.

“11 U.S.C. § 507(a)(8) includes claims for income tax for a taxable year ending on or before the date of the filing of the bankruptcy petition for which a return, if required, is last due, including extensions, after three years before the date of the filing of the petition. In other words, if the IRS has a claim for tax on a return that was due within three years before the bankruptcy petition was filed, the claim is not dischargeable in a chapter 7 bankruptcy case.”  T. C. Memo. 2025-89, at p. 10.

Corri A. Feige, T. C.  Memo. 2025-88, filed 8/18/25 claims the stock in her employer that she got when she was terminated wasn’t hers (hence nontaxable) because treasure trove per AK law. Termination of employment did terminate Corri’s rights in her employer’s stock plan, but Corri’s efforts to return the stock (a couple phonecalls and e-mails; hi, Judge Holmes) fell well short of renouncing same.

Since Corri had neither noncompete nor obligation to refund past compensation, Section 83 o’ercrows Section 61. Besides, Corri knew she and her ex-employer were the only ones with claims to the shares, unlike the cash-in-the-piano case where there might be multiple claimants.

Corri had unfettered right to sell or pledge; no possibility of forfeiture.

Corri claims she didn’t file for year at issue, despite having filed for years before and after, because of personal problems (not bad enough says Judge Alina I. (“AIM”) Marshall). Her husband knew from nothing and always did the taxes using TurboTax. And Corri lived in the remote wilderness (Chickaloon, AK) where there were no tax gurus.

“Petitioner argues that her failure to timely file the return was ‘reasonable under the circumstances because the tax issues presented were complex and outside of petitioner’s understanding.’ She further argues that she intended to file the return but could not because of the complexity of the issue and the lack of readily available tax professionals in the remote part of Alaska where she lived. Petitioner notes that [year at issue] was the only tax year for which she and her husband failed to file a tax return. Additionally, petitioner argues that at the time the return was due she experienced personal hardships that compounded the problem, including her unemployment and the illness and death of her father. Finally, she argues that she exercised ordinary business care to resolve the issue by requesting to have tax withheld from any distribution of shares under the [employer stock plan] and contacting [employer] to recover the shares.” T. C. Memo 2025-88, at p. 18.

Judge AIM Marshall ain’t buying.

“Petitioner was not limited to finding a tax professional in or around Chickaloon. During her employment with [employer], petitioner routinely travelled 80 miles from her home in Chickaloon to [employer]’s office in Anchorage. We note that petitioner’s attorney in this case is also based in Anchorage. There is no reason she could not have sought out a tax professional based in Anchorage when the issue originally arose…. Additionally, she could have consulted with a tax professional based outside Alaska through phone calls or email. The fact that petitioner resides in a remote location does not excuse her failure to seek out a tax professional to advise her on the issue, complex as it may have been.” T. C. Memo. 2025-88, at p. 19.

Corri gets nailed for failure to file, but not failure to pay tax due or estimateds for year at issue. IRS’ records show they prepared and mailed a SFR, but they put in neither SFR nor copy thereof, nor any other document showing sufficient information from which to compute the taxpayer’s tax liability, nor did any form and any attachments purport to be a return. And since prior year’s return never went in either, no showing that a 1040-ES was necessary either.

A Taishoff “Good Job, Second Class” to Corri’s trusty attorney.

Y’all will recall that back a couple days ago (hi, Judge Holmes) the trusty attorneys for Ivey Branch Holdings, LLC, Ivey Branch Investors, LLC, Tax Matters Partner, Docket No. 19189-19, filed 8/18/25 expressed fears of getting Section 6673(a)(2) chopped if they zealously pursued their client’s valuation argument in the face of previous Tax Court rejections thereof. See my blogpost “Papering Over the Silt,” 8/14/25.

Y’all will also recall that Judge Albert G. (“Scholar Al”) Lauber soothed their fears by refreshing their recollections that next month’s trial is only Part One of a bifurcated trial, whereat only fact witness and nongeological and nonvaluation expert testimony will be heard. The rocks-and-rolls won’t come till next year.

Except.

Nevertheless, and notwithstanding anything in the foregoing or elsewhere herein contained to the contrary (as my expensive colleagues would say), IRS counsel “served petitioner with numerous interrogatories directed to geological evidence.” Order, at p. 1.

Check it out. IRS counsel wanted a short course on kaolin, which is clay. Order, at pp. 1-2.

Judge Scholar Al is too genteel to treat this disregard of his order otherwise than as follows.

“The terminology used in many of the interrogatories is open-ended or vague. More importantly, the interrogatories do not seek information about the facts of this particular case. Rather, they seek background facts about the kaolin industry. Large-scale, generic information of this sort is not provided by fact witnesses, but by experts—either industry or geological experts. In effect, respondent is asking petitioner to disclose the type of information that could be expected to appear in expert reports that petitioner may submit relating to geological evidence and valuation. But under our pretrial Order for the second phase of trial, the parties are not obligated to exchange expert witness reports directed to these subjects until February 25, 2026.

“We agree with respondent that our Rules require each party to respond forthrightly and in good faith to reasonable discovery requests. But we think respondent’s interrogatories seek information outside the boundaries of normal fact discovery and, in effect, seek a preview of what petitioner’s experts may say in their expert witness reports.” Order, at p. 2.

Maybe so might could be that disregarding a scheduling order and attempting to undercut another order to the same effect, necessitating employment of scarce judicial resources, unduly prolongs the proceedings; ya think?

No, the above written is not a misprint. It’s the cry of Vincent Edward Mandley & Yolanda B. Mandley, Docket No. 1121-23, filed 8/15/25. And while Judge Benjamin A. (“Trey”) Guider, III, disallows Vin’s & Yo’s claim that IRS already levied for part of self-assesed but unpaid tax for Year Three for want of evidence, despite Appeals having given them eight (count ’em, eight) months to find same, Year One is at issue because of a blown assessment.

IRS and the Mandleys stiped out Year One five (count ’em, five) years ago.  And below Judge Albert G. (“Scholar Al”) Lauber’s signature, IRS and Vin & Yo set down what deficiency and add-ons were allocated to both and what to Vin individually.

Of course, when it came time to assess (that is, set down on IRS’ records, per Section 6203), IRS gave the wrong amounts to the wrong people. Now we all know that the “so-ordered” stip (to use our State court language) only comprises what the judge wrote “above the line” whereon s/he signed. But below the line matters signed off by both parties aren’t mere surplusage. See my blogpost “Below the Line,” 11/14/23, for the Rockafellor case, cited by Judge Trey Guider.

When IRS gave Vin & Yo a NITL for that year, Vin & Yo tried to get things set right at Appeals. The SO thought they were contesting liability when they contested the extra interest caused by the wrongful allocation of deficiency and add-ons, even though IRS conceded the error.

“The interest provision in Mr. Mandley’s original stipulated decision was a below-the-line stipulation, which does not constitute a finding by the Court and evidences only an agreement between the parties. See Rockafellor v. Commissioner, T.C. Memo. 2023-137, at *15. There are multiple instances where a settlement officer considered a petitioner’s abatement of interest request despite the existence of a prior stipulated decision containing a below-the-line interest provision. The record indicates that SO2 did not consider the Mandleys’ interest abatement argument as required by section 6330(c)(3)(B). As such, an error of law occurred constituting an abuse of discretion, and summary judgment with respect to the [Year One] tax year is not appropriate.” Order, at p. 7. (Citations omitted).

So back to Appeals for Vin & Yo to sort out the interest.

Vin & Yo object that Appeals showed the NOD to IRS counsel before sending it to them, but Rev. Proc. 2012-18 says that’s OK.

“These guidelines expressly state that respondent’s counsel “should review the supplemental [NOD] before it is issued to the taxpayer. This review is for the limited purpose of ensuring compliance with the Tax Court’s remand order.” Rev. Proc. 2012-18. Here, SO2 sent the supplemental NOD to respondent’s counsel in accordance with standard IRS procedure. This communication was proper and does not give rise to an abuse of discretion.” Order, at p. 6.

Long-time readers of this my blog may remember Kumar Rajagopalan’s and Susamma Rajagopalan’s five (count ’em, five) appearances in this my blog, ending in their total Dixieland Boondockery win. What, no? How fleeting is fame!  Then see my blogpost “No Head-banging, No Penalty,” 11/19/20.

OK, Kum and Sus have gone home winners. So why does Judge Mark V. (“Vittorio Emanuele”) Holmes recall their win today?

Because Warren C. Sapp & Jamiko Sapp, Docket No. 21575-11, filed 8/14/25 want Section 7430 legals. Warren & Jamiko were in on the deal with Kum & Sus.

Football fans know Warren as the 13-year NFL Hall of Fame defensive tackle with the Tampa Bay Buccaneers and Oakland Raiders. This gives Judge Holmes a chance to inject football jargon into his order.

Problem is, despite getting smashed on the trial (see my blogpost aforementioned), IRS’ positions at time of answer weren’t unreasonable. This even though subsequent appellate learning sank a lot of it. While the taxpayers’ appraisal had the right number, it had sufficient imperfections in getting there to leave room for doubt. The NC market boom leading up to the appraisal was an eyeopener sufficient to raise at least one eyebrow. And the claimed qualified offer, though the right number, failed to satisfy the statutory criteria.

And all this despite IRS’ utterly lackluster pleadings in defense of Warren’s and Jamiko’s motion. See Order, at p. 4, footnote 2.

Judge Holmes, obviously impressed by Warren’s athletic prowess and legal team’s agility (including a faithful reader of this my blog; Good Try, Ms. L), gives a lengthy review of the facts that IRS should have pled and documents that IRS should have introduced in support.

Judge Holmes vies with Judge David Gustafson for an obliging nature.

This will remain a nonpolitical blog. I make my views abundantly clear elsewhere and advocate for them strongly. I must however strongly urge here that none of us can do as Aldous Huxley titled his novel, and remain eyeless in Gaza.

I must give hearty, though belated, thanks to Judge Mark V. (“Vittorio Emanuele”) Holmes for an analogy that has worn well: “(T)he silt we stir today will cloud the cases we plunge into tomorrow.” 137 T. C. 17, at p. 61.” See my blogpost “The Great Dissenter,” 12/28/11.

I wish my high-priced refrigerator (kaput for the second time in less than two (count ’em, two) years) had worn half as well.

Judge Ronald L. (“Ingenuity”) Buch took a 500 hp Mercury outboard to the silt in Veribest Vesta, for which see my blogpost “Judge Buch Says It All,” 7/15/25. And the muddied waters are swirling about Judge Albert G. (“Scholar Al”) Lauber, as he tries to quieten the allegedly spooked trusty attorneys for Ivey Branch Holdings, LLC, Ivey Branch Investors, LLC, Tax Matters Partner, Docket No. 19189-19, filed 8/14/25.

Among said trusty (but allegedly spooked) attorneys is the redoutable Vivian D. (“Golden”) Hoard, Esq., who with her crew gets a Taishoff “Good Try, Third Class.”

“… petitioner filed a Motion to Stay Proceedings, requesting that the Court stay proceedings in this case pending resolution of appeals from this Court’s decisions in Ranch Springs, LLC v. Commissioner, 164 T.C. No. 6 (2025), and Beaverdam Creek Holdings, LLC v. Commissioner, T.C. Memo. 2025-53. Petitioner’s counsel urge that they face a dilemma: Zealous advocacy dictates that they continue to embrace the discounted cash flow valuation method rejected in Ranch Springs and Beaverdam Creek, but doing so could risk sanctions in light of views expressed in a recent bench opinion delivered by another Judge of this Court. See Veribest Vesta, LLC v. Commissioner, Docket No. 9158-23, Entry No. 194, Transcript of July 11, 2025 (Bench Op.).” Order, at p. 1.

Judge Scholar Al, perhaps with a muted sigh and uplifted eyes, rejects.

“Petitioner’s request for a stay ignores the bifurcated nature of this trial. The first phase of trial is limited to taking the testimony of fact witnesses and experts whose testimony does not implicate valuation or geological evidence…. We will not hear expert testimony implicating valuation until the second phase of trial…. Petitioner will thus have no occasion to engage in ‘zealous advocacy’ regarding the appropriate valuation method during the initial phase of trial. In any event, the undersigned will not entertain any Motion to Impose Sanctions prior to a definitive appellate court ruling on the subject.” Order, at p. 1.

It’s not only Judge Ingenuity Buch who brings ingenuity to Tax Court practice.

Making his seventh (count ’em, seventh) appearance in this my blog, Clair R. Couturier, Jr., Docket No. 19714-16, filed 8/13/25, or rather his trusty attorneys, whom I’ll call “Alvah’s Guys,” fling a spanner in the IRS’ chopworks.

I’ll let Judge Albert G. (“Scholar Al”) Lauber judge-‘splain.

“In the Notices of Deficiency issued to petitioner respondent determined additions to tax under section 6651(a)(1) for failure to file Forms 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. In determining these additions to tax, respondent relied on this Court’s Opinion in Paschall v. Commissioner, 137 T.C. 8, 21 (2011), which held (among other things) that the “Form 5329 is a tax return within the meaning of section 6011, and failure to file Form 5329 can result in section 6651 additions to tax.” Order, at p. 1. For the Paschall mystery, see my blogposts “Dies Ira,” 7/15/11, and “Retro,” 2/29/24.

Alvah’s Guys go for broke.

“After the trial record in this case was closed, petitioner filed his Simultaneous Opening Brief in which he contended that the Court should overrule Paschall. If the Court were to do that, petitioner says, Form 5329 would be a return required only under the authority of section 6058—which requires the filing of returns respecting tax-deferred plans—and not under the authority of section 6011. In that event, petitioner contends, failure to file Form 5329 could not result in additions to tax under section 6651.” Order, at p. 1.

Taishoff says, wotta move! May not win, but worth a Taishoff “Good Try, Hail Mary Division.”

Howbeit, Alvah’s Guys have rattled IRS counsel.

Wherefore, IRS seeks to amend the answer to assert “an alternative position, that petitioner’s failure to file Forms 5329 generates additions to tax under section 6652(e). That section imposes additions to tax for failure to file a return required by section 6058.” Order, at p. 1.

Except.

IRS never alleged Boss Hossery, because no need to get Boss Hoss sign-off for any addition to tax under section 6651, 6654, 6655, or 6662.” See § 6751(b)(2)(A).

Except.

Section 6652(e) is not among the “blessed communion, fellowship divine” un-Boss Hossed by Section 6751(b)(2)(A).

So IRS moves to reopen the record to wild-card in the declarations of the super and the suped, affirming Boss Hossery, a mere nine (count ’em, nine) years after the petition was filed. Apparently both super and suped are, like the hero of the Platters’ 1959 immortal hit, “still around.”

I’m surprised IRS didn’t just have them sign off now, as assessment hasn’t yet occurred and Clair is Golsenized to the Korner-cutting 9 Cir.

Don’tcha just love this stuff?

Section 7491 BoP shifts are rare, and Harness Rock, LLC, Ornstein-Schuler, LLC, Tax Matters Partner, Docket No. 29331-21, filed 8/12/25, really hasn’t asked Judge Goeke for a shift. The Harness Rockers want Judge Goeke to rule that IRS’ Section 170(e)(1)(A) argument is new matter, which would trigger the shift.

Judge Goeke does, shifting aside Oconee Landing, Rock Cliff, and Jackson Corners, in all of which Tax Court held it wasn’t, despite the wild-card boilerplate language of the FPAA. But Judge Goeke prefers 46 Henry Locust Rd.

Here’s the relevant FPAA language.

“To the extent you are able to establish that a noncash charitable contribution has been made, you failed to establish that it satisfied all the requirements of I.R.C. § 170 and the corresponding Treasury Regulations for deducting a noncash charitable contribution. If it is determined that you have satisfied all the requirements of IRC. § 170 and the corresponding Treasury Regulations for deducting a noncash charitable contribution, you have not established the value of the noncash charitable contribution.” Order, at p. 2.

The Harness Rockers’ trusty attorneys sent a Section 170(e)(1)(A) Branerton to IRS in April, which IRS ghosted. Then IRS raised the issue last month.

IRS claims the broad language of the FPAA takes in all of Section 170. But that broad language speaks of allowing the deduction; Section 170(e)(1)(A) speaks of valuing the deduction.

“Respondent did not explicitly raise the section 170(e)(1)(A) issue until July 2025, approximately two months before the trial. While Harness Rock’s organizers/managers may have been aware of the possibility that respondent might pursue such an argument based on letters they received from law firms regarding similar transactions undertaken by other entities they organized/managed, we do not believe petitioner should have been forced to speculate as to respondent’s position so close to the trial date. This is especially true considering that addressing the section 170(e)(1)(A) argument will require the production of additional, different evidence.” Order, at p. 5.

Besides, Section 170(e)(1)(A) provides an alternative valuation method, which the FPAA would take away.

“…the Henry Order shows that respondent’s language could not have pertained to the amount of the deduction in that case because sustaining it would have resulted in an allowable deduction smaller than respondent’s alterative [sic] valuation position. Although there has been no argument that respondent’s section 170(e)(1)(A) argument would produce such a result in this case, we believe the Henry Order demonstrates the somewhat unthinking nature and mechanical use of respondent’s broad FPAA language. There is no indication that such language is sufficient to raise section 170(e)(1)(A) as an issue in petitioner’s case, when similar language did not raise section 170(e)(1)(A) as an issue in Henry. We note that the Henry Order is more recent than the Oconee, Rock Cliff, and Jackson Orders; in those earlier cases we had not yet been confronted with such an issue with respect to section 170(e)(1)(A).” Order, at p. 5.

And clearing this up now, with trial a month away, lets the parties know what evidence to produce.

But before the Harness Rockers’ trusty attorneys pop the corks on the Krug, they should check this out.

“We note that both parties are represented by knowledgeable counsel and appear to have engaged in extensive discovery and other preparation for trial. We consider it unlikely that there will be an evidentiary tie on the section 170(e) issue that would cause the burden of proof to be the deciding factor. See Knudsen v. Commissioner, 131 T.C. 185, 188 (2008). At trial, both parties should be prepared to introduce all admissible evidence relevant to this issue.” Order, at p. 1, footnote 3.

While I oughtn’t to single out any of the Harness Rockers’ thirteen (count ’em, thirteen) trusty attorneys, all of whom get a Taishoff “Good Job,” I do want to give a shout-out to my colleague Lyle (“Full-Court”) Press, Esq.

Lest I be misunderstood, I am all in favor of whistleblowers. I said it long ago: the information may be publicly available, but so what? “(I)t needs the whistleblower to connect the dots. Some dots may be public, some private, some hidden, some in plain sight. But in the immortal words of the late great Bill Klem, “Some is balls and some is strikes, but they ain’t nuthin’ till I calls ‘em.” Somebody has to call ‘em, or at least put it all together, so the party charged with “callin’ ‘em” can in fact call ‘em.” See my blogpost “Qui Tam?” 9/12/12.

That said, I am no fan of the stripminer who conjoins his EDGAR and Wall Street Journal subscriptions with his on-the-job training at an accounting firm that does Section 482 work to try to extract cash from the public fisc with hand-me-down info and unsubstantiated theories.

Hence when Judge Albert G. (“Scholar Al’) Lauber curb-kicks Whistleblower 20442-18W, T. C. Memo. 2025-86, filed 8/11/25, I’ve no sympathy for said blower.

“Respondent contends that petitioner’s information did not ‘substantially contribute’ to the adjustments made by the examination teams, and we agree. In analyzing this question, it is helpful to focus first on the character of the information petitioner supplied. He had no inside knowledge about Target or its tax planning. He had no involvement in the preparation of Target’s financial statements or tax returns and no access to its internal documents. Virtually all the information he supplied was derived from publicly available sources, such as newspaper articles, business journals, and SEC filings.

“Petitioner was employed by a firm that did SEC filings for large multinational corporations. Given his experience, he was able to scrutinize Target’s SEC filings and make an educated guess about transfer pricing issues that might arise during an IRS audit. Petitioner presumably could have reviewed SEC filings by dozens or hundreds of other large multinational corporations, made educated guesses about transfer pricing issues they might have, and filed whistleblower claims targeting them.

“By its nature, high-level information of this sort is unlikely to be of great use to experienced IRS examiners who are auditing large multinational companies. And that was what the exam teams found here.” T. C. Memo. 2025-85, at p. 14.

Mike Lissack’s up-and-down safari with Reg. Section 301.7623-2(b)(1) and its “substantially contributes” language gets an airing. This blower fails on that score. Again, for full disclosure, Mr. Lissack was a client of mine many years ago in an entirely unrelated matter.

In short, bravo to the blowers who risk all for truth, justice, and the American way. But no praises for the stripminer and bounty hunter who “habitually overhauls the register of deeds in search of defects in titles, whereon to stir up strife, and put money in his pocket.”