If anyone is unfamiliar with marketing jargon, welcome home. Today we have two for the price of one from my colleague and correspondent, whom I’ll designate as Mr. Mac. I’d noticed the disguised sale and substance-over-form order in Upland Resources, LLC, Upland Partners, LLC, Partnership Representative, Docket No.1240-23, filed 9/4/25, but Judge Tex Copeland’s C-Clairs’ separate-checks order of even date herewith was too good to miss.

I’d also told Mr. Mac I’d hold off if there were any opinions today, and as Jack Donald Supinger was back in focus, I had to deal with that case first.

OK, now for the two (count ’em, two) orders hot off Mr. Mac’s griddle.

The Uplanders yell that IRS is trying to wildcard in disguised sale and substance-over-form in its Pretrial Memo. There’s an argy-bargy through the stipulation process about what was agreed and what was reserved for trial, but the key is Section 170(e), the inventory valuation and short-term capital gain beatdown.

Judge Goeke says that issue is still in play, and IRS can use whatever legal arguments to get there. “However, the Court has concerns with respondent’s lack of clarity regarding his section 170(e) arguments in this case. By his own admission, respondent is raising what appear to be novel applications of the disguised sale and substance-over-form theories with respect to section 170(e). However, until his Pretrial Memorandum was filed, the Court is not aware of respondent making these arguments apparent to petitioner. Indeed, it presently appears that respondent’s position, especially his disguised sale theory, was not communicated, for several reasons.” Order, at pp. 4-5. (Footnote omitted, but see my blogpost “Shifty Boilerplate,” 8/12/25, for the case wherein Judge Goeke dropped a cognate footnote.)

So let the parties bukh at start of trial, specifically how the Uplanders are ambushed and how IRS told them all about it long ago.

The bonus package is Harness Rock, LLC, Ornstein-Schuler, LLC, Tax Matters Partner, Docket No. 29331-21, filed 9/4/25, IRS again playing crafty with its Section 170(e) shortchange.

“The Court has concerns with respondent’s potential lack of clarity regarding his section 170(e) position in this case, which is partially why the Court previously shifted the burden of proof on the issue to respondent.” Order, at p. 1.

See my blogpost immediately aforementioned. I thought you didn’t shift the BoP, Judge, when you complimented both the Harness Rockers’ trusty attorneys (that means you, Mr. Mac) and IRS’ astute counsel, saying that weight of evidence would probably win, so come out fighting, guys.

Howbeit, the Harness Rockers’ motion in limine to lock out Section 170(e) will await trial.

Meantime, Judge Goeke has some homework for y’all.

“We will rule on petitioner’s motion after hearing additional arguments from the parties. At the start of trial, the parties should be prepared to discuss petitioner’s motion and respondent’s response. Petitioner should be prepared to discuss specific documents and information that it would seek to admit regarding the section 170(e) holding period issue. Petitioner should also continue its efforts to secure any relevant evidence regarding the issue, should the Court permit it to admit such evidence during the trial. Respondent should be prepared to address the points regarding his conduct stated in petitioner’s motion, including discussing communications he has had with petitioner’s counsel regarding section 170(e) issues.” Order, at p. 2.