Judge Elizabeth Crewson Paris has entered decision in AG Processing, Inc A Cooperative and Subsidiaries, Docket No. 23479-14, filed 9/30/25, a mere two days shy of eleven (count ’em, eleven) years after the petition was filed, and a merer (if there is such a word) eighteen days shy of six (count ’em, six) years after Judge Paris’ opinion, for which see my blogpost “A Hill of Beans,” 10/16/19.

The three (count ;’em, three) years at issue are 17, 16, and 15 years ago respectively. The two refunds involved were paid 17 and 16 years ago, respectively. For the third year at issue there was neither deficiency nor refund.

Those who were my readers at the time of the aforementioned blogpost still sentient may recall that the opinion ended with a Rule 155 beancount. Four (count ’em, four) days ago, IRS moved to entry of computation.

As a lawyer I admittedly cannot add, but if my calculator is correct (which I neither guarantee nor warrant) the beancount lasted from October 16, 2019 until September 25, 2025, just 21 (count ’em, 21) days shy of six years.

That must have been one heluva mountain of beans.

Once again the United States Congress intones Roger Christian’s 1963 invocation of dragstrip prowess. But don’t worry, readers,  Tax Court stands ready to tack it up.

United States Tax Court will remain open for business on Wednesday, October 1, 2025. Please check the Court’s website often for updates on Tax Court operating status and trial information.

Taishoff will also try to keep readers posted.

It’s only a couple days short of a year (hi, Judge Holmes) since Tonia L. Hartman, Docket No. 18106-24, filed 9/29/25, made her debut on this my blog. See my blogpost “Six Decades of Practice,” 10/2/24. It was Tonia’s debut as a protester; she apparently tried another one later (see infra, as my expensive colleagues would say), but one was enough for me.

A year ago I said “(I) understand the frustrations and anger; the present system is deeply flawed. But the cure is not effected by making a fruitless protest that only worsens your situation by invoking Section 6673, although STJ Panuthos spares the rod this time.”

Apparently Tonia doesn’t read, or if she does she doesn’t heed, this my blog, because CSTJ Zachary S. (“High-Rise”) Fried brushes off her protester jive without even quoting same, just citing Crain, Wnuck, and Waltner. Then he hits Tonia with a $2K Section 6673 chop, seasoned with a warning.

“In previous cases, filed at Docket Nos. 1713-24 and 9513-24, she has been warned that positions similar to the position taken in this case are groundless, and her arguments frivolous. We therefore will impose a penalty of $2,000 pursuant to section 6673(a)(1) on petitioner. We again warn her that if she does not abandon these misguided positions in future filings before this Court, a greater penalty may be imposed.” Order, at p. 3.

This post is music criticism, non-tax related, so readers looking for such can save their time now. For anyone else, the Metropolitan Opera has a reprise of the 2023 Ivo van Hove production. Briefly, last night showed unsatisfying sets and costumes, some truly fine performances, but ultimately disappointed me.

First, the good news. Ben Bliss’ Otttavio, less nerd-like characterization, great singing (an “Il Mio Tesoro” to remember); Federica Lombardi’s Donna Anna, acrobatic acting; Jannaï Brugger, a presenter at the Laffon Grands in March, a good advertisement for the Lindemann’s young artist program, a presence vocally despite a wardrobe failure of a costume. Hera Hyesang Park’s Zerlina deserves its own sentence; here’s a great star at the edge of enormous success. Big voice, great presence.

Now the bad news. I’ve been a fan of Ryan Speedo Green since 2015, when I saw him as Rochfort in Anna Bolena in Vienna. His last-season Carnegie Hall recital triumph in Mussorgsky’s Songs and Dances of Death reminded me of Sherrill Milnes’ Onegin. But last night he was a half-beat behind Nézet-Séguin, who was having his own issues with Mozart’s score (more about that infra). HIs voice seemed shrouded, his characterization seemed all bully (one wondered how he attracted even a fraction of the Spanish mille é tre). His Champagne Aria made me cringe: this is Giovanni’s moment to sparkle, but there was nothing there beyond the notes, smothered at that. Back to the woodshed. I’m also a Nézet-Séguin fan, but he lost me. The tradition is Mozart was a stickler for expression in his music, but N-S suppressed many of the finest points. He got right that Mozart wanted his allegros played swiftly. In short, too much Nézet-Séguin, not enough Mozart, in one of his most brilliant scores. The Met orchestra is world-class, and deserves better.

The OKs. Commendatore Adam Palka checked all the boxes, as did Leporello Adam Plachetka, whose slow start (a lackluster Catalogue Aria, more catalogue than aria) made me nervous, but finally came alive in Act II.

The sets looked like last season’s Romeo and Juliet recycled; why must the Met play a great scenic opportunity in what looks like a Robert Moses slum clearance housing project?

The staging was unworthy of comment: only the artistry of the performers saved it from the done-to-death film noir fogbank that has enveloped so much of contemporary operatic staging.

Contemporary costumes work for contemporary opera, but Don Giovanni is nothing if not a child of its time; poor Dannaï Brugger, who looks well in period costume, was wearing the sort of 1950s ladies’ suit that came out of a Lane Bryant (of infamous memory) clearance sale. The Giovanni-Leporello clothing swap loses all meaning when both are wearing dress suits. You cannot do grand opera when everyone looks like casual Friday.

The singers saved a disappointing evening.

The 1931 Harry Barris – Gordon Clifford classic that catapulted Bing Crosby to all-time greatness echoes through the unending barrage of IRS’ partial summary J motions to assure Boss Hossery in the Dixieland Boondockery scuffles.

Just one example: Harviell Lowlands, LLC, Harviell Lowlands Investments, LLC, Partnership Representative, Docket No. 5750-23, filed 9/26/25.

Judge Jeffrey S. (“Schwer”) Arbeit has this one.

“…petitioner filed notice of concession in response to respondent’s motion for partial summary judgment… maintaining that respondent addressed the issue of whether he has demonstrated compliance with the written supervisory approval requirements under Internal Revenue Code (‘I.R.C.’) § 6751(b) for the following penalties identified in the Notice of Final Partnership Adjustment issued to Harviell Lowlands, LLC: I.R.C. §§ 6662(c), 6662(d), 6662(h), 6662A.” Order, at p. 1.

Among Harviell’s trusty attorneys I note a constant reader of this my blog, who has decided not to fight a losing battle by trying to enforce Congress’ miserably-drafted attempt to protect taxpayers from bludgeoning by over-zealous RAs against a judicial system that has systematically gutted whatever minuscule force it was intended to have.

I’ve written a lot about sealing documents in Tax Court because it’s an evergreen. Many a petitioner comes to grief there, and not a few practitioners. I’ve seen motions seeking sealing do more harm than just riding head-down under cover of all the other pleadings and other documents.

Weidong Zhang, Docket No. 15356-20W, filed 9/25/25, being a whistleblower, gets special treatment. Section 6103, the guardian of taxpayer information, lifts the shield when needed for judicial or administrative proceedings pertaining to tax administration in Section 6103(h)(4).

Judge Rose E. (“Cracklin'”) Jenkins sets forth the safeguards when IRS hands over third-party or nonparty Section 6103 information to petitioners for trial prep.

“(w)henever petitioner intends to provide for trial preparation to any person(s) any Protected Documents, petitioner must first provide a copy of this Order to any such person(s), inform such person(s) that he or she must comply with the terms of this Order, and obtain on a copy of this Order the name, the business or home address of such person(s) at which service of process can generally be made during business hours, and the signature(s) of such person(s). Petitioner shall retain the signed copy of this Order until one year after the decision in this case becomes final within the meaning of section 7481(a). After petitioner has complied with the first sentence of this ordered paragraph, petitioner may provide for trial preparation to any person(s) described in the first sentence any Protected Documents.” Order, at p. 2.

Given the pace of Tax Court litigation, that holding period could be a very long time.

A docket search shows Weidong Zhang is pro se. Judge Jenkins doesn’t state who Weidong Zheng might have engaged to help with trial prep. If any is not covered by Section 7525 confidentiality or litigation prep privilege, I wonder what cover they have.

Judge Albert G. (“Scholar Al”) Lauber stiches up the career of ex-PA-Senator Vincent J. Fumo, T. C. Memo. 2025-97, filed 9/24/25, as “Senator R2–D2” (T. C. Memo. 2025-97, at p. 22) gets hit both for unreported income on his 1040, and for Section 4958 excess benefits he got from the 501(c)(3) he created.

Most of the information in this case comes from the criminal trial in USDCEDPA, wherein Sen. Fumo went down on 137 (count ’em, 137) counts “including mail fraud, wire fraud, obstruction of justice, conspiracy to obstruct justice, and violation of section 7206(2) for willfully aiding or assisting in filing false tax returns.” T. C. Memo. 2025-97, at p. 4.

Sen. Fumo padded his payroll, aided by the chief clerk of the PA Senate who routinely accepted whatever senators said. And while the cash didn’t go into Sen. Fumo’s pocket, what it bought was valuable.

“By diverting excess compensation to his staff, petitioner garnered more than ‘political capital.’ He sought to assure—and he in fact obtained—unquestioning loyalty from his staff, especially when the going got tough. He incentivized his employees’ compliance in rendering personal services that directly benefited him and his political allies. And he ‘bought their silence’ about improper or illegal behavior in which he was engaging, including the use of Senate resources for his political Campaigns. These benefits plainly had economic value. And while the fair market value of these benefits might be hard to calculate in isolation, petitioner has not shown that it was ‘arbitrary or erroneous’ for the Commissioner to use the excess compensation he engineered for his staff as an index of the value he received from them.” T. C. Memo. 2025-97, at pp. 44-45.

There’s a lot more. His ostensible staff, paid for by the taxpayers, were his personal servants, the taxpayers paid for his travel, tools, farm equipment, cars, cellphones, and girlfriends, and the 501(c)(3) paid for the rest, though he was careful to trash all the records.

Of course, some of the staff actually worked in appropriate situations, and Judge Scholar Al carves these up as best he can. If any reader works for a corrupt politician and needs a template for dividing the padded staff wages, read T. C. Memo. 2025-97, at pp. 46-61. And any of you who practice in the criminal fraud arena will find this useful too.

As for the money given to family, friends, and political allies, that’s still income to Sen. Fumo, as he could choose where to divert what he stole.

The Section 4958 excess benefit excise tax is extensively dealt with. I leave that to Mr. Paul Streckfus, the EO expert, to discuss.

As for Section 6663 chops and the open fraud SOL, Sen. Fumo has enough badges to qualify for eagle status. Wiping your e-records goes a long way. And Sen. Fumo failed to file Form 4720 to report his excess benefits.

“The Form 4720 is admittedly an exotic species: The obligation to file this return––unlike the obligation to file (say) Form 1040––is far from common knowledge. Petitioner maintains that he had reasonable cause for his failure to file because he lacked any concept of the terms ‘constructive income’ or ‘disqualified person.’ He assertedly had ‘no inkling that he may have obtained a taxable . . . benefit’ during the years at issue.

“We are not persuaded. Petitioner was an attorney, a bank chairman, and a highly sophisticated actor. He caused his Senate staff to create [the 501(c)(3)] as a tax-exempt charity, and it was operated out of his office. He is charged with knowledge of the basic rules governing the operation of public charities.” T. C. Memo. 2025-97, at p. 89.

Master cartoonist Carl Rose’s immortal line about the little girl’s book report (“This book told me more about penguins than I wanted to know”) echoes in Judge Alina I. (“AIM”) Marshall’s exhaustive (and exhausting) trudge through Jackson Stone South, LLC, Jackson South Investments, LLC, Tax Matters Partner, T. C. Memo. 2025-96, filed 9/23/25.

After 146 (count ’em, 146, and I have) pages, wherein donative intent (long since demolished), appraiser qualifications (the cut isn’t hard to make), shortened holding period (new matter, which IRS stiped away), qualified appraisal (errors which IRS claims torpedo its validity notwithstanding, as these go to weight, not qualification, but watch out for those mesic hardwood forests and no, I don’t know what those are either, and oak-pine-hickory types), and the new flavor du jour comparable sales which destroy discounted cash flow, the Jacksons get the 40% gross overvaluation chop plus an evaporated deduction.

Yes, this is granular Dixieland Boondockery, with all the usual suspects among the landowner-seller (longtime Jones County real estatenik) and promoters.

But the kicker is the following, in a footnote, as usual.

“The tax opinion letters warned prospective investors: ‘PARTICIPANTS IN THE PROPOSED TRANSACTION WILL NOT BE ABLE TO RELY ON THIS OPINION TO ESTABLISH A REASONABLE BELIEF THAT THE TAX TREATMENT OF THE PROPOSED… CONSERVATION EASEMENT TRANSACTION WAS PROPER OR FOR ANY OTHER PENALTY PROTECTION PURPOSES.’” T. C. Memo. 2025-96, at p. 27, footnote 27.

Translation: “Hook up, head for the jump door, and don’t even wait for the green light.”

Not equine treats, rather the story of Wesley E. Young and Janet S. Young. T. C. Memo. 2025-95, filed 9/22/25, who combined team roping (Wes) and pecan farming (Jan) with their home and a wedding venue to end up with massive deficiencies for two (count ’em, two) years at issue.

Mr. Peter Reilly, CPA, here’s another hobby loss case.

While the heavy-duty losses to offset the even heavier-duty income from the aircraft parts business Jan inherited from her late husband form the top line, the bottom line is want of records and the trappings of a business operation. Again and again ex-Ch J L. Paige (“Iron First”) Marvel is unable to tie in deductions, even when substantiated, with the years in which they were paid or incurred.

And there’s insufficient evidence to show that land appreciation was economically integrated with the rest of the horsing and pecaning to satisfy the special rule in the last two sentences of Treasury Regulation § 1.183-1(d)(1) pertaining to farming. Anyway, the land appreciation wasn’t the primary purpose; they testified they fell in love with the ranch.

The 43 (count ’em, 43) pages of ex-Ch J Iron Fist Marvel’s prose are too fact-specific for me to quote for the general reader,  but lead to the same conclusion: if you want to treat an activity as a profit-making activity, paper (or electrify) it as a business. Draft your business plan before you’re audited. Invest in bookkeeping software and use it. Don’t use your personal checking account for business and pleasure; get a separate business account even if you don’t get cash for opening it. Tie your trial testimony into your records; a great deal of trial testimony gets rough treatment because the documentary evidence, such as it is, contradicts or fails to support. If you’re relying at trial  on what you heard and did with other people, make sure they testify. And of course, merely retaining a CPA to prepare your returns from the materials you provide doesn’t prove good-faith reliance.

Note that events from out years are admissible when they show patterns and course of conduct.

While farmers do get some indulgence when it comes to recordkeeping, Wes and Jan are too hip to qualify (Jan has a BBA degree).

They’re judges who substitute or deputize for the king, presiding over trusts, wills, estates, adoptions, guardianships, and the like, s/a/k/a probate judges. While their decisions and orders have State weight, the same don’t preclude Judge Emin (“Eminent”) Toro from brushing off a settlement decree in Surrogate’s Court,  New York County.

It looks like an up-and-coming source of blogfodder, Estate of Patrick Heiniger, Deceased, William A. Cahill, Jr., Ancillary Administrator c.t.a. and Alicia Heiniger, Ancillary Executor, Docket No. 8096-17, filed 9/19/25. The AA and AE, and the late Patrick’s longtimer whom I’ll call Hana, want summary J, and none of them get it.

At issue are a condominium unit in prestigious Olympic Tower and some eight (count ’em, eight) works of art. Hana and the AA and AE settled out in Surrogate’s Court, and want the deal to bind IRS so as to avoid estate tax.

“We disagree with Ms. Stevens and the Estate as to the effect of state trial court decisions on adjudications concerning the federal estate tax. The Supreme Court’s decision in Commissioner v. Estate of Bosch illustrates how state law and state court decisions should be treated when making federal estate tax determinations:

‘It follows here then, that when the application of a federal statute is

involved, the decision of a state trial court as to an underlying issue of

state law should a fortiori not be controlling. This is but an application

of the rule of Erie R. Co. v. Tompkins, [304 U.S. 64 (1938)], where state

law as announced by the highest court of the State is to be followed. . . .

If there be no decision by that court then federal authorities must apply

what they find to be the state law after giving “proper regard” to relevant

rulings of other courts of the State. In this respect, it may be said to be,

in effect, sitting as a state court.'” Order, at pp. 3-4 (Citations omitted).

Here we don’t have a case litigated and decided. All Judge Eminent has is a stip. If a litigated lower court decision doesn’t bind Tax Court, no way can a deal between the parties. Taishoff says moreover, IRS wasn’t a party to the litigation or the deal.

And the parties were brandishing all kinds documents (hi, Judge Holmes) allegedly written by the late Pat before he became the late Pat.

“Determining who owned the artwork and the condominium at the time of Mr. Heiniger’s death would require us to resolve questions about the authenticity, timing, and content of Mr. Heiniger’s writings, including holographic wills and letters supplied as exhibits to the declarations filed by Ms. Stevens and the Estate.” Order, at p. 4.

Summary J is issue-finding, not issue-determining. Here, reasonable questions of fact preclude summary J.

Taishoff Footnote: A quick online search of NY land records shows the condominium unit owned by a corporation; I expect we’re taking about stock ownership thereof. The corporation is called Hodet Corp., apparently the alter ego of Odette Heiniger, a previous owner. Hodet, where is thy sting?  And since there’s a Section 6662(a) chop here, do we get Boss Hosiery? Oh Graev, where is thy victory?

Sorry guys, the devil make me do it.