As the probably-fictional law student pronounced it, res judicata features in Crystal R. Vettel, T. C. Memo. 2025-110, filed 10/22/25. Crystal’s husband was a self-made millionaire who wound up stashing another million in a Swiss bank account, titled in a Belize corporation, at the suggestion of said Swiss bank. He never told Crystal, a high school graduate, and never told IRS. Of course, FUBAR blew the gaff, hubby opted into and then out of OVDI, and hired trusty attorney, who petitioned the SND that followed the opt-out.

Trusty attorney did represent both hubby and Crystal. Though trusty attorney and trusty CPA considered innocent spousery for Crystal and even drafted a Form 8857, when IRS offered them what they thought was a good deal, they dropped innocent spousery to grab a quick stiped decision, on which Crystal signed off.

Now Crystal wants innocent spousery, but IRS raises the stiped decision. A decision in a case precludes anything raised or that could have been raised. For innocent spousery, Section 6015(g)(2) gives an out: if either innocent spousery wasn’t an issue or Crystal didn’t “meaningfully participate“ in the litigation, no claim or issue preclusion.

Judge Elizabeth Crewson Paris checks the boxes.

“While the Court accepts petitioner’s claim that she was unaware of the existence of the [Swiss stash] account or of the details of Mr. Vettel’s international business dealings when the returns were filed, it is clear from the record that, by the time the Vettels initiated the deficiency case, Mr. Vettel had made petitioner aware of the matter, and she kept herself informed of the progression of the case. Nothing in the record suggests that information was withheld during the deficiency proceeding or that she was denied a voice in the decision-making process.

“Furthermore petitioner did participate directly, as well. She personally signed the proposed stipulated decision…stipulating the deficiency and penalty amounts for the years at issue. That decision was entered by the Court…. Petitioner does not contend, nor is there any evidence to suggest, that she was coerced into signing that document or that she did not understand its effect.” T. C. Memo. 2025-110, at p. 10.

Taishoff says the dual representation of Crystal and spouse would raise an issue. Judge Paris doesn’t say whether Crystal signed a conflict letter (if the conflict is waivable at all) or was made aware of the conflict. Participation through one’s counsel is meaningful participation.

“There is nothing in the record to indicate that she was denied access to information about the ongoing case, that Mr. Vettel or their counsel sought to exclude her from the decision-making process, or that her counsel acted against her interests. Rather, through the advocacy of her counsel, petitioner avoided liability for the section 6662(a) penalties for tax years 2006, 2007, 2008, 2009, and 2010. Indeed, the evidence shows that petitioner was typically included on emails discussing the case, and petitioner admitted that she reviewed the draft Form 8857 while the deficiency case was ongoing.” T. C. Memo. 2025-110, at p. 12.

I want to circle back to the conflict here. Crystal admittedly had only a high school diploma; her business experience was working as a bank teller and a receptionist at a dermatologist’s office, interrupted by about ten years as a stay-at-home Mom, T. C. Memo. 2025-110, at p. 2. Spouse was an international highroller. Crystal may have been shown all the documents, but how much did she understand? Being cc’d on emails is all very well, but it doesn’t help if they’re written in unintelligible legal gibberish. And if spouse is writing the check for their high-priced counsel, they’ll both want to be sure that Crystal is in as deep as spouse. Note that as of trial Crystal and spouse were still married (idem.); given their relative economic situations, I’m not surprised. I’m not as sure as Judge Paris how material was Crystal’s participation, although I didn’t see the witnesses or hear their testimony. Maybe Crystal is a lot more hip, and shows it on the stand, than her CV would indicate. Still, I wonder. Especially at counsel rushing to make the deal that IRS offered at the cost of throwing Crystal’s innocent spousery overboard; I know second-guessing other lawyers’ strategy is our profession’s second-favorite indoor sport, but is it true in FUBAR settlements that “first money, best money”? Readers, what do you think?

I read footnotes. However much I mock them in law review articles (whose authors, like generals who measure success by the casualty lists, count coup thereby), Tax Court Judges, unlike the residents of Tommy Gray’s country churchyard, rarely waste their sweetness on the desert air. Much of the judicial nectar is found in footnotes.

Andrew Mitchell Berry and Sara Berry, T. C. Memo. 2025-109, filed 10/21/25, is a much-of-a-muchness unreported income case, where the pro se members of the family Sub Ss try to manufacture ex post facto evidence and play lawyer. You can read Judge Cary Douglas (“C-Doug”) Pugh’s recounting for yourself.

Here are the stories of attempts to put in documents after the PTSO 14-day cutoff and Rule 131(b) lockout.

“Ronald was not a petitioner in this case and appeared only as a fact witness. He did not respect this distinction, however, and his efforts to help Andrew, from the stand and from the audience, undermined his credibility.” T. C. Memo. 2025-109, at p. 5, footnote 7.

Ron also claimed he was unaware of Andrew’s case, and SPTOs. Judge Pugh responds with a brisk “Yeah right, roger that.”

“In addition to this case, standing pretrial orders were entered at least once in all of Andrew’s cases before this Court. See, e.g., Standing Pretrial Order, Berry v. Commissioner, No. 11739-22 (T.C. Feb. 15, 2024); Standing Pretrial Order, Berry v. Commissioner, No. 11180-19 (T.C. July 30, 2020); Standing Pretrial Order, Berry v. Commissioner, No. 6584-19 (T.C. Oct. 29, 2019); Standing Pretrial Order, Berry v. Commissioner, No. 18196-16 (T.C. May 30, 2017); Standing Pretrial Order, Berry v. Commissioner, No. 9707-15 (T.C. Oct. 28, 2015). Likewise, this Court issued standing pretrial orders in all of Ronald’s cases that were set for trial. See, e.g., Standing Pretrial Order, Berry v. Commissioner, No. 7832-24S (T.C. May 14, 2025); Standing Pretrial Order, Berry v. Commissioner, No. 20086-23 (T.C. Aug. 7, 2024); Standing Pretrial Order, Berry v. Commissioner, No. 18635-16 (T.C. Sept. 26, 2017); Standing Pretrial Order, Berry v. Commissioner, No. 14090-15 (T.C. Apr. 12, 2016); Standing Pretrial Order, Berry v. Commissioner, No. 18162-14 (T.C. June 3, 2015).” T. C. Memo. 2025-109, at p. 7, footnote 10.

Read the opinion. Tell me if I got it wrong.

It had to happen, and of course my colleague Lyle (“Full-Court”) Press, Esq., is onboard with the defense. We get four (count ’em, four) opinions for the price of one in this exagmination round the factification of a statute repealed effective as of seven (count ’em, seven) years ago.

At least part of the Ornstein-Schuler crew are at bat in North Wall Holdings, LLC, Schuler Investments, LLC, A Partner Other Than the Tax Matters Partner, 165 T. C. 9, filed 10/21/25. Pitching for the USTC is Judge Ronald L. (“Ingenuity”) Buch, joined by JJ. Kerrigan, Nega, Pugh, Ashford, Copeland, Greaves, Way, Arbeit, Guider, and Jenkins in full: Ch J Urda, and JJ Jones, Marshall and Judge Emin (“Eminent”) Toro join as to Part VI (spoiler alert: Part VI is why Congress didn’t want equitable tolling in TEFRA latecomer cases). Judge Emin (“Eminent”) Toro does concur as to result and writes a concurrence in which Ch J. Urda and Judge Pugh join. Next up, Judge Weiler writes to concur in result. Judge Alina I. (“AIM”) Marshall concurs in part and dissents in part, while Judges Landy and Fung wisely concur in result and stand mute.

Clear? Thought not.

Anyway, Schuler, a notice partner, comes 18 (count ’em, 18) days late to the 60-day TMP afterparty, apparently tipped off to the FPAA by the TMP in time to file timely. IRS moves to toss for want of jurisdiction, Schuler responding that the 150-day cutoff to petition a FPAA is nonjurisdictional (while not claiming equitable tolling, thus ducking the extraordinary blockage and prompt follow-up issues, which ultimately costs them).

Judge Buch does a historical walk through TEFRA’s attempt to bring all partnership issues into a single case. Neither TMP nor a notice partner nor 5-percenter can jump the queue, but an early notice partner petition gets held in abeyance until the TMP is timed out or qualifies as a notice partner. The whole thrust is one single proceeding, not tag-teaming petitions.

Issue is subject-matter jurisdiction (can the Court hear anything?) vs. claim processing (orderly disposition of the case). Only Congress can set those boundaries, and old Section 6226 with its interlocking timeframes is clear enough for Judge Ingenuity Buch and the majority, especially since Congress amended the first version of Section 6226 to allow a premature notice partner’s petition to await the TMP, rather than to be tossed as premature. If the premature petition was simply claim processing, why amend the statute?

And both 5 Cir and 9 Cir have held it jurisdictional (pre-Boechler).

Treating Section 6226 as nonjurisdictional would create chaos, with overlapping claims, late petitions in Tax Court, and cases in USDC or USCFC (concurrent jurisdiction for FPAAs, but Tax Court goes first) subject to stays.

And like a deficiency case, while a FPAA case is pending, no assessment or collection of tax from partners; IRS could start collecting after time ran out, only to be stayed by an equitably-tolled petition. Section 6229(d) only allows a year to enter assessments against partners after a Rule 155 beancount or expiry of time to petition a deficiency if noncomputational. Equitable tolling collides with all time limits, and allows for gamesmanship; one partner’s equitable tolling tolls every other partner, whether the others have a meritorious claim or not.

The presumption in favor of equitable tolling is just that – a presumption. Judge Ingenuity Buch demolishes the presumption in this case. History is on his side.

Judge Emin (“Eminent”) Toro says, sure toss the Schulers, but why the jurisdictional argy-bargy? Say they’re late, and walk away. Let 11 Cir deal with this.

Judge Christian N. (“Speedy”) Weiler, says he’s cool with tossing the Schulers, but three (count ’em, three) USCCAs going for equitable tolling in Section 6213(a) cases is a pattern, not a coincidence. There’s a compelling case for equitable tolling, but the Schuler’s attempted sashay around the prerequisites for equitable tolling (extraordinary circumstances delaying filing and prompt follow-up when able) by claiming nonjurisdictional without producing evidence in support of equitable tolling rules them out.

Judge Alina I. (“AIM”) Marshall says she’s down with the toss, but should be for failure to state a claim, not want of jurisdiction. There is jurisdiction, but got to plead and prove equitable tolling. The Schulers didnl’t.

Those words from Section 7502(a)(1) are sufficient to scuttle the petition of Laura Booth, Docket No. 20531-24, filed 10/20/25. The German postmark was late, anyway.

Although late-filed petitions are the most commonly tossed, I mention Ch J Patrick J. (“Scholar Pat”) Urda’s three-page order because of the tour d’horizon he furnishes of the CCAs take on Boechler equitable tolling in Section 6213(a) deficiencies.

“In a deficiency case our jurisdiction depends upon the issuance of a valid notice of deficiency and the timely filing of a petition. See §§ 6212 and 6213; Edwards v. Commissioner, 791 F.3d 1, 4 (D.C. Cir. 2015); Hallmark Rsch. Collective v. Commissioner, 159 T.C. 126, 130 n.4 (2022) (collecting cases); see also Sanders v. Commissioner, 161 T.C. 112, 119–20 (2023) (holding that the Court will continue treating the deficiency deadline as jurisdictional in cases appealable to jurisdictions outside the U.S. Court of Appeals for the Third Circuit). Contra Oquendo v. Commissioner, 148 F.4th 820 (6th Cir. 2025) (holding that the deficiency deadline is not jurisdictional and subject to equitable tolling); Buller v. Commissioner, No. 24-1557, 2025 WL 2348969 (2d Cir. Aug. 14, 2025) (same); Culp v. Commissioner, 75 F.4th 196 (3d Cir. 2023) (same), cert. denied, 144 S.Ct. 2685 (2024).” Order, at pp. 2-3.

Less than three (count ’em, three) weeks to go before the 11/5/25 Slaughter of the Innocents (a/k/a the examination for nonattorney applicants for admission to practice before the United States Tax Court), guys. Hasten your preparations to conclusion, and stand to!

Section 7482 interlocutory appeals are even more extraordinary than nonparty depositions in Tax Court. The Section 7482(a)(2)(A) triple-jump, proving the case 1) involves a controlling question of law (2) about which there is a substantial ground for difference of opinion and (3) an immediate appeal from the order may materially advance the ultimate termination of the litigation, trips up even the inventive.

Judge Cary Douglas (“C-Doug”) Pugh leans on number 3 above to shoot down Silver Moss Properties, LLC, Silas Mine Investments, LLC, Tax Matters Partner, Docket No. 10646-21, filed 10/17/25.

Y’all will recall the Mossbacks wanted a jury trial for the Section 6663 fraud chop IRS wildcarded in via an amended answer. No? Well, check out my blogpost “Full House,” 8/21/25.

Judge Pugh drops a heavy-duty, law review style footnote blowing off number 2 above with somber reasoning and copious citation of precedent galore, but ends up saying “we do not need to rely upon petitioner’s failure to satisfy this second requirement, because petitioner’s failure to satisfy the third requirement is fatal to its motion.” Order, at p. 2, footnote 2.

The real issue here is “whether petitioner is entitled to claim a noncash charitable contribution deduction for the contribution of a conservation easement and, if so, the amount of that deduction. This primary issue will occupy most of the trial time, as it will require testimony by most, if not all, of the anticipated fact witnesses and likely all of the expert witnesses. The fraud penalty will apply only if we reject petitioner’s position on the primary issue and we also conclude that respondent met his burden of proving the fraud penalty applies. And the fact witnesses who testify regarding the fraud penalty are likely to testify regarding the facts relating to the primary issue. Eliminating the fraud penalty will only shorten their testimony regarding the secondary penalty issue; it will not eliminate the need for trial or the need for testimony of the fact or expert witnesses.” Order, at p. 2.

And Section 6662 negligence and substantial understatement of tax chops are still out there, which require defending in much the same way as fraud chops.

The Mossbacks claim that resolving the fraud chops will enhance prospects of settlement. Judge Pugh isn’t so sure that is relevant, but the CCAs are all over the lot on that. Resolving any question of law would shorten any trial, but that’s no reason for an interlocutory appeal on every disputed point of law.

Anyway, Judge Pugh thinks she might win on appeal, and that wouldn’t shorten anything.

Craig K. Potts and Kristen H. Potts, T. C. Memo. 2025-108, filed 10/16/25, claim they were robbed in Turks & Caicos when they bought some stock in a gambling operation. Craig & Kris were cash machinists in Native American casinos who diversified into slot machinery in those delightful Islands in the Sun.

There, they claim, two dudes who ran a routing operation (running the slots, taking the cash, paying the taxes to the T&C Gaming Commission and dividends to the lucky shareholders) told them the $2.5 million USD Craig & Kris paid them for stock in the business was going back into the business, except they absconded with $2 million USD thereof, hence the theft loss they took and IRS disallowed. The absconders never installed the legendary neon sign in the hotel where they were supposed to build this fancy casino which never got built.

Except.

If you claim you’re robbed, you have to prove it. Craig & Kris put in no evidence of Turks & Caicos law; their factual theft claim was supported by a lawyer who didn’t represent them and whose testimony Judge Cary Douglas Pugh found unworthy of belief. T. C. Memo. 2025-108, at p. 17.

Judge Pugh goes through the local law herself and finds the only offense that could qualify requires a written statement, which Craig & Kris don’t have. The purchase documents don’t say anything about what the seller is to do with the proceeds of sale, and have the usual integration clause (“entire agreement of the parties, no oral or written document contradicts”).

Anyway, Craig & Kris bought the stock from a corporation which the alleged fraudsters controlled. Craig & Kris never said the stock was worthless and could only raise the Section 165(g) claim on an independent event showing worthlessness. If anyone was deceived it was the corporation whose cash the alleged fraudsters supposedly took.

If you want to find out about how slot machinists do their thing in Turks & Caicos, read the opinion. Me, when I was there forty years ago, I went sailing and swimming.

That’s Judge Rose E. (“Cracklin'”) Jenkins’ take on how Appeals (and IRS’ trial counsel) handled Avalon Home Health, Inc., T. C. Memo. 2025-107, filed 10/16/25, when they tried to work out an IA.

Though proper mailing of the SND and the Letter 3172 which followed was disputed, Judge Jenkins finds that the defective USPS Form 3877 is probative evidence (if not enough to raise a presumption) of mailing, hence Avalon can’t dispute underlying liability, but only abuse of discretion. Here, though it looks like Appeals verified all steps, “given the absence from the administrative record of documents apparently reviewed by Appeals, this Court declines to conclude that there was no abuse of discretion with regard to the verification requirement.” T. C. Memo. 2025-107, at p.l13. (Footnote omitted, but it says the USPS Form 3877 for Letter 3172 and the Notice CP210 are not in the administrative record IRS filed).

While discussion of installment payments and partial payments by Avalon’s officers did happen, “entry into an installment agreement requires more formality than an offer by a taxpayer and continued payment on an optimistic assumption that it will be accepted—specifically, a written agreement.” T. C. Memo. 2025-107, at p. 14.

Nevertheless, Avalon’s trip to Appeals went through four (count ’em, four) separate AOs over a three year period, while Avalon’s request for audit reconsideration was on hold because Avalon asked for a CDP; unhappily, nobody told either Avalon or Appeals that the CDP had to be withdrawn to get audit reconsideration. Avalon refused, afraid if they did drop the CDP their payments and IA would be gone. And the NOD states Avalon dropped its request for an IA, which Avalon disputes.

Finally, “neither the record nor petitioner’s posture before this Court lends credence to the idea that petitioner indicated disinterest in an installment agreement, supporting a denial. And there is no other indication in the record of why the installment agreement actually was denied. It is also not clear whether the one-week deadline that the Fourth SO gave petitioner’s representative to reply to him was reasonable, given the years-long pendency of petitioner’s case, the delays in which can largely be attributed to the IRS’s failure to communicate about petitioner’s audit reconsideration request. Cf. Long v. Commissioner, T.C. Memo. 2023-130, at *10. Thus, this Court cannot conclude that the denial was not an abuse of discretion.” T. C. Memo. 2025-107, at p. 16.

For the story of Kevin Long, see my blogpost “I’ve Heard That Song Before,” 10/30/23.

Back to Appeals to clean this up, hopefully to give the Avalons their IA, with full credit for payments made.

Judge Jeffrey S. (“Schwer”) Arbeit tells IRS and Newell Brands Inc. & Subsidiaries, Docket No. 11897-24, filed 10/16/25 to keep negotiating a protocol to protect the documents and testimony that “‘may’ include ‘sensitive information’ the disclosure of which ‘could’ result in a competitor gaining some “unfair advantage” or simply in general ‘adverse economic damage.’” Order, at p. 4.

Newell asked for a Rule 103(c) blanket covering 25 (count ’em, 25) categories, including 14 that Newell could wildcard in at any time. See Order, at p. 1 for the whole story, too voluminous for me to reprint or attempt to summarize.

Judge Shwer Arbeit lives up to his cognomen, writing a précis of caselaw from Willie Nelson to Microsemi. That the proposed protective order would encompass material upwards of ten (count ’em, ten) years old is also a factor. Old grows cold. See Order, at p. 4.

In short, see Matthew 10:27.

And of course Sections 7458 and 7461 get an airing (public hearings and public evidence), with the saver that discovery materials that never make it to trial get a higher level of protection.

Here’s what IRS offers Newell: “To the extent Petitioner wishes to identify for Respondent specific documents or portions of documents that meet the requirements of Rule 103, Respondent remains willing to review any such proposal. Additionally, to the extent Petitioner identifies specific, concrete examples of documents that Petitioner considers to be trade secrets, e.g., a specific, named patent or process, Respondent is willing to review those examples and, if warranted, agree that documents of the same c haracter should be protected.” Order, at p. 4.

Judge Schwer Arbeit says you can’t say fairer than that. No blanket protective order, go talk among yourselves.

It had to happen, but I could not have predicted it. Judge Joseph W. Nega has encountered The Mad Comedian, and he tells the story in Coaches 101 a NJ Nonprofit, T. C. Memo. 2025-106, filed 10/15/25.

Coaches was incorporated as “a publication . . . to help children in all areas, whether it is childrens [sic] books or getting high school students into college. Coaches 101 is about getting the children the right education to play in sports and conitue [sic] with there [sic] careers.” T. C. Memo. 2025-106, at p. 2. Its Certificate of Incorporation and by-laws puzzle Judge Nega, as one refers to a board of trustees and the other to a board of directors, but the Form 1023 application for 501(c)(3) status really confuses.

“The application explains that petitioner ‘was basically organized to act as the license holder of Omar Dyer as a literary agency.” It further explains that on January 1, 2020, Mr. Dyer created a ‘social media based foundation” called ‘My Plan Challenge Foundation Fund’ with the goal of pursuing blogs, podcasts, and other entertainment media related to Mr. Dyer’s Mad Comedian project. The application states: ‘The future plans of this company is [sic] to be a foundation that is directed around the new face of the company in Mad Comedian.’

“At some point, as the application notes, Mr. Dyer ‘changed his status from a volunteer to actual employee getting wages.’ It also explains that petitioner maintains a ‘Profit Sharing Program” (PSP) and Simplified Employee Pension Plan (SEP IRA) for the benefit of its employees. As described, the PSP provides that ‘executive employees will be have [sic] an agreement with the organization for personal funds used by the organization, and given back to the employee once when the organization creates a profit.’ The specific agreement between petitioner and Mr. Dyer provides that ‘[a]ny and all profits after expenses . . . are eligible for profit-sharing. Profits will be calculated as sales operations for that period minus expenses for that time period . . . .’” T. C Memo. 2025-106, at pp. 3-4.

Judge Nega gives this outfit the operational test (does it work for charitable purposes, with no substantial part of operations inuring to the benefit of any insiders). He needn’t run the organizational checklist.

“The only activities petitioner puts forward that could plausibly, taken at face value, qualify as exempt activities are vague assertions it ‘helped’ host an event for children and wrote a handful of recommendation letters for high school students. These do little to overcome the abundant evidence that petitioner’s primary activities are commercial ventures designed to earn a profit with no apparent connection to an exempt purpose.” T. C. Memo. 2025-106, at p. 8.

There’s procedural argy-bargy, which you can read for yourself. At close of play, summary J for IRS bouncing the application.

Who said Tax Court is dull?

I certainly don’t claim that Tax Court gets the majority of off-the-wall maneuvers, nevertheless litigants both ordinary good faith types and rounders, protesters, defiers, wits, wags, and wiseacres devise novelties. These tend to clump and the new craze becomes a trend.

Y’all will recollect Melvyn Duane Salter’s latest pas seul. What, no? How fleeting is fame. OK, then check out my blogpost “The President in Tax Court,” 10/7/25.

At the time, I thought this was a novel one-off from a rounder with a solid track record.

But maybe Melvyn Duane has started something that has legs.

Leo Cono, Docket No. 17671-24W, filed 10/14/25, is making his debut in Tax Court and on this my blog, but he’s given STJ Lewis (“There’s Music in That Name”) Carluzzo something to think about. Leo made a motion to take a deposition, which in a record-ruler like a Section 7623 whistleblower case is a nonstarter. Even more so, as IRS has moved to toss Leo for want of jurisdiction (sounds like a “no dough, you go.”).

“The relief sought in petitioner’s motion is less than clear, but it appears that the proposed deponent is the President of the United States. Although we wonder about the merits of petitioner’s motion, we think it imprudent to resolve it before addressing the Court’s jurisdiction over this matter.” Order, at p. 1. STJ Lew holds Leo’s motion in abeyance.

STJ Lew, you aren’t the only one wondering. Is the President in Tax Court the next big thing?