I must be wearying my readers with seemingly-endless dissections of consented dismissals of CDP NODs “without prejudice.”

Except.

The story goes on in Tax Court. Jerhi Curry, Docket No. 3819-24L, filed 1/30/26, tries both a Motion to Withdraw and a Motion to Dismiss, and a week later comes up with a Motion to Dismiss, citing Wagner and noting IRS doesn’t object.

No attorney or USTCP appearing for Jerhi is listed on the docket search, but somebody got it right.

Howbeit, Judge Alina I. (“AIM”) Marshall is down with this. She tosses the petition “without prejudice.” But interestingly, she cites to Dunn, T. C. Memo. 2026-2.

I wonder if Judge AIM Marshall gave Jerhi the same allocution Judge Goeke gave the petitioner in Dunn. For that, see my blogpost “Wagner Boechlerized,” 1/7/26. 

In both State and Federal courts, when a motion or application is denied, or a case dismissed, “without prejudice,” that means the movant, applicant, or petitioner can try again later. If they try in good faith, the fact they were turned down before won’t count against them. OTOH, if the motion or application is denied, or the case dismissed, “with prejudice,” it means “fuggedaboutit, you’re finished.”

Yes, I know Boechler made the Section 6330 thirty-day cutoff a claims processing limit, not a jurisdictional barrier. But a petitioner is still entitled to only one Tax Court review of a CDP. And even a claims processing limit has some preclusive effect. Even if the equitable tolling two-step highjump is not the only means of escaping the thirty-day cutoff, what are the other paths back to The Glasshouse in the Freezing City?

As Judge Goeke suggested in Dunn, dismissal “without prejudice” is largely symbolic.

So why even mention it? As Oscar Hammerstein II remarked, “Is a puzzlement.”

As I approach 84 (count ’em, 84, and I have, trust me) years of age, I announce my retirement from the practice of law. ABA Model Rule 1.16(a)(2) requires one to step down when one can no longer physically or mentally represent a client. I feel fine, but I don’t need stress.

Now our NY Rule 22NYCRR§118.1(g) provides for retirement by attorneys. But I could find none on the United States Tax Court website, so I emailed the Clerk’s Office requesting enlightenment.

I received the following reply. “Thank you for contacting Dawson Support. The Court does not have a retired or inactive status and currently has no notice requirement for those retiring from the practice of law.  If you do not plan on practicing before the Court, you may choose to resign from the bar of the Court by completing the attached form and emailing it to the Court’s Admissions Section at Admissions@ustaxcourt.gov.  If you prefer to keep active admission status, ensure your contact information and email address in DAWSON are updated and that your “employer” is set to “Private.” Please be aware that there is no status for the Tax Court that allows you to provide pro bono representation without admission to another bar.” 

I replied as follows: “I am not resigning. Attorneys resign when they have been charged with disciplinary violations that they cannot or will not contest. I am not charged with any disciplinary violations in any Court or administrative agency. To sign this instrument is equivalent on its face to pleading nolo contendere or accepting a plea bargain. I will retain my certificate of admission, though I will not practice law nor hold myself out as an attorney at law. As we have an aging population, I urge the Court to adopt an appropriate Rule for attorneys retiring from practice.”

Btw, don’t worry, guys, my blog, like Celine Dion’s heart, will go on. I’m not retiring as a journalist, hazardous as that profession is just now.

Back three years ago I didn’t say then-Judge Patrick J. (“Scholar Pat”) Urda was envious of the lifestyle of the late Richard J. Spizzirri and his bevy of ladies and multiple dwellings, but he does seem just a shade wistful as he slams the Glasshouse door on the late Rich’s ex’r. The ex’r wants to reopen the record to put in the estate’s additional (deductible) accounting, admins, and legal fees after 11 Cir blew up their appeal from Judge Urda’s T. C. Memo.

See my blogpost “Living the Dream,” 2/28/23 for Judge Scholar Pat’s take on the late Rich’s saga.

The timeline is key here. 11 Cir affirms, but holds the mandate (that’s formally sending back the case to Tax Court to enter decision and clean up anything 11 Cir told them to do). Meantime, the ex’r moves to remand to Tax Court and stay further appellate proceedings to put in for the aforesaid costs and fees. 11 Cir says no, without opinion, and remands. 

So ex’r now moves in Tax Court to reopen the record to put on same before Tax Court enters the decision.

Nope, says Judge Scholar Pat. While Rule 156 provides for reopener to deal with this stuff, 11 Cir has slammed that door. Yes, the ex’r moved two (count ’em, two) days before the Section 7481 finality clock ran out, so Tax Court has jurisdiction.

“The Estate here asked the Eleventh Circuit for a remand to this Court for redetermination of additional administrative expenses incurred after trial, which is the same relief that it now seeks from us. The Eleventh Circuit denied this motion and then issued a formal mandate. ‘When the [Eleventh] Circuit denied [the Estate’s] appellate motion, [the Estate’s] claim for [expenses]—in connection both with appellate and trial-level proceedings—was litigated to completion, and the law of the case doctrine precludes our reconsidering [the Estate’s] claim’ in its motion. Mazzei, T.C. Memo. 2022-43, at *8–9; see also Pollei, 94 T.C. at 608 (‘If petitioners had not requested the Court of Appeals for relief on the . . . issue at the trial level, it would then appear that the matter would be within our authority for consideration and decision.’).” Order, at pp. 2-3.

For the Mazzei story, see my blogpost “I Got It Right – Part Deux,” 5/2/22.

Euripides. Haste to sustain the assault!

Dionysus. Great gods, what a number of assaults!

I’ve quoted these lines from Aristophanes’ 405 B. C. smash hit The Frogs before, in another case where a Section 7345 passport grab was used as a basis for attacking a SND or NOD. In many cases IRS reverses the certification of seriously delinquent tax debt, so petitioner is nonsuited for want of any other or further relief Tax Court can give.

Judge Nega tells us today that Lloyd Thomas Spencer, Docket No. 6078-25P, filed 1/29/26 is out because his IAs for his four (count ’em, four) NITLs had all terminated (Order, at p. 4), and his OIC was bounced.

“To the extent that petitioner is seeking to challenge the denial of his proposed OIC made as part of his CDP hearing, such a challenge would be impermissible. Where a taxpayer has requested or there is a CDP hearing pending, the related tax liabilities are also excepted pending completion of the CDP hearing process. See § 7345(b)(2)(B)(i); Gayou v. Commissioner, T.C. Memo. 2023-61, at *6–7. But, petitioner only requested a CDP hearing with respect to the taxable period ending March 31, 2016. No CDP hearing was requested with respect to any other taxable period at issue. Further, Appeals has completed that CDP hearing and a Notice of Determination was issued sustaining the collection action and rejecting the proposed OIC. Petitioner then sought judicial review in this Court of that determination and entered into a stipulated decision upholding it. We will not upset that decision, and even so, this iteration of petitioner’s challenge would not provide a proper opportunity. See, e.g., Gayou v. Commissioner, T.C. Memo. 2023-61, at *7 (rejecting similar arguments as ‘wholly inapplicable’ to Passport Notice cases and finding completion of the CDP hearing ‘forecloses the potential application of the statutory exclusion’).” Order, at p. 4. (Footnote omitted).

For the Gayou story, see my blogpost “Another Modest Proposal,” 5/16/23. 

Hang on, Dionysus, more to come, I don’t doubt.

That’s what ex-Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan says Aventis, Inc. and Subsidiaries, 166 T. C. 1, filed 1/28/26 was trying to do with their financial asset securitization investment trust. Aventis issued some preferred stock, which an offshore sub bought and parked in the FASIT. Aventis also issued a couple notes (hi, Judge Holmes), one to an advisor to Aventis (representing ownership in the FASIT, per Section 860L(b)(2)) and another to a third-party bank. Both the stock and the notes were supposed to represent regular interest.

The advisor “as holder of the ownership interest in the FASIT, reported the income that [Aventis] received on the FASIT assets, and, relying on I.R.C. § 860H(c)(1), deducted amounts representing the expenses of the FASIT and the dividends paid to [offshore sub].” 166 T. C. 1, at p. 1.

Clear? Thought not.

Although this unguided Congressional largesse was repealed long before years at issue, there was a grandfather clause that kept this one alive.

The FASIT converted the stock dividends to interest, hence deductible. The deal was a mismatch between taxation of the offshore (equity, not debt, hence not taxable) and onshore (debt, hence deductible interest).

The deal was refinanced, with the third-party bank taking over the advisor’s role, and the deal finally ended after years at issue.

IRS disregarded the FASIT and handed all the gains back to Aventis, less fees paid to advisor. Aventis petitions.

The case goes off on debt-vs-equity, with an overlay of son-of-FDAP: was the interest readily determinable under FASIT rules? Was a fixed amount payable to the investor at maturity?  If not ab initio, grandfathering doesn’t help. It’s a duel of the experts.

And of course the parties modified the terms, which also knocks out grandfathering. And their substantial compliance argument founders on the express terms of the statutes.

FASITs were meant to spread risk and make business (nonmortgage) borrowing easier. They wound up making gimmicks like this available.

No, not those famous ones some of us have heard from childish lips around the festive board year after year.

This lot is what Judge Morrison poses to IRS and the trusty attorneys for Gerda Khouw, Donor, et al., Docket No. 11217-20, filed 1/27/26, There must be a lot als (hi, Judge Holmes), because here’s Judge Morrison’s preliminary take on the fact pattern.

“Under the 2014 Northern Trust master note, dated as of December 23, 2014, Northern Trust made $122,534,567 of advances that were used to pay the premiums on policies owned by the Tan Horse Trust. The Tan Horse Trust is an irrevocable life-insurance trust (ILIT). Under the provisions of the 2014 Northern Trust master note, the borrower (Gerda Khouw and the Survivor’s Trust, collectively) promised that the advances would be used to pay the premiums on the policies through the following chain of payments: (1) the borrower would contribute the advances to the Geona Trust, (2) the Geona Trust would contribute the amounts to GK Capital in exchange for a 99.98% limited partner interest in GK Capital, and (3) GK Capital would lend the amounts to the Tan Horse Trust to enable the Tan Horse Trust to make the premium payments.” Order, at p. 1. (References to stips omitted).

The parties are invited to correct, comment, agree, disagree. And of course there is a pledge agreement and collateral-assignment agreement back to Northern Trust. As Northern Trust’s website claims it has $1.8 trillion-with-a-T under management, this $122 million deal (and another $126 million mirror image a couple years later) is pocket change. 

Except to the parties, of course.

So let the parties dish on whether this is a split-dollar life insurance arrangement (see my blogpost “The Split,” 8/29/12 for some deep background). And if it is, what difference does that make?

If you’re the type who likes to get granular, go into the weeds, go nerd, or whatever the latest buzzwords might be, check out Order, at pp. 4-5. Judge Morrison overhauls statute and regs, and comes up with the aforesaid four questions. 

But if ever there was a case where the judge was telling the parties “You really don’t want me to decide this case, guys, so settle, OK?” this is that case. See Order, at pp. 5-6.

Jabir Algarawi and Amira Hachim, T. C. Memo. 2025-8, filed 1/26/26, tell Judge Cary Douglas (“C-Doug”) Pugh that Jabir was doing free tax returns for refugees from the Middle East and Central Asia via Arizona Allnation Refugee Resource Center, of which he was president.

He did ask for cash contributions through a Facebook group and a Zelle account. He did prepare some 1250 returns in Year One and 1900 returns in Year Two.

Except.

He kept no records of donations, sent out no CWAs, had no 501(c)(3) for his outfit, and put the donations in his personal bank account. Oh yes, his resource center had no separate bank account. He claimed the donations were for expenses, but kept no records.

“We do not question petitioners’ desire to support refugees in their community, but the gaps in petitioners’ proof, especially given Mr. Algarawi’s occupation as a paid tax return preparer, sink their arguments.” T. C. Memo. 2025-8, at p. 8.

What proof he tries to proffer was too late and hearsay anyway.

Deficiencies sustained, plus five-and-ten substantial understatement chops.

Yet again Judge Joseph W. Nega raises the doleful cry of the Man From Mumbai, and the unfortunate recipient is Jason Cutler, Docket No. 4023-23L, filed 1/23/26.

IRS dinged Jason for two (count ’em, two) fraudulent returns, and a late-filed one. He never petitioned the SND for the two, and the late filed one yielded add-ons, no deficiency (and IRS abates the add-ons, Order, at p. 3). So this comes up in a CDP.

Jason claims his bankruptcy discharge knocks out the deficiencies and chops.

Negatory, says Judge Nega.

“When a petitioner challenges a collection action by alleging that the tax debt was discharged in bankruptcy, that constitutes a ‘challenge to the appropriateness of collection actions’ under section 6330(c)(2)(A) and does not constitute a challenge to the ‘existence or amount of the underlying tax liability’ under section 6330(c)(2)(B).” Order, at p. 5. (Citation omitted).

So abuse of discretion is standard of review.

“For tax years [fraud], AO K determined that the assessments were not dischargeable in bankruptcy because those assessments related to fraudulent returns. See 11 U.S.C. § 523(a)(1)(C) (providing that a debt ‘with respect to which’ a debtor made a fraudulent return is not discharged by a bankruptcy discharge order). Since respondent has shown that a Notice of Deficiency asserting section 6663 fraud…was mailed to petitioner’s last known address and that petitioner did not challenge the fraud determinations by filing a petition with this Court, it is not an abuse of discretion for AO K to determine that the… assessments were not discharged by the Bankruptcy Court.” Order, at p. 6. (Name omitted).

Jason claims IRS never filed Proof of Claim in his bankruptcy proceeding, and therefore waived any claim.

“Petitioner contends that the IRS failed to object or file a claim in bankruptcy and argues that this makes the debts discharged even if those debts might otherwise be non-dischargeable. Respondent disagrees with petitioner and contends that the IRS did file a claim. Regardless of whether or not the IRS filed a claim in the bankruptcy proceeding, the debts from [all three] tax years were not discharged by the Bankruptcy Court’s discharge order because they were excepted from discharge by 11 U.S.C. § 523. AO K did not abuse his discretion by sustaining the levy action….” Order, at p. 7. (Citation omitted).

Innocent spouseries are all balancing acts. Mostly they’re the daily grist of separating credibility from self-service (but isn’t all testimony self-serving? Doesn’t even self-denunciation secure some intangible spiritual benefit?), innocence from exculpation? So how can we journos comment on results without having seen and heard the witnesses?

Well, because we can.

It’s only one factor in the multiplex calculus of Section 6015(f) for equitable relief, but benefit to the petitioner should figure in.

Lest I be misunderstood, I don’t say Asia Zaheen, Petitioner, and Kamran Ehsan, Intervenor, T. C. Memo. 2025-7, filed 1/22/26, was wrongly decided, nor that Kamran didn’t abuse Asia (that’s Doctor Asia). Judge Courtney D. (“CD”) Jones saw and heard Doctor Asia, Kamran, their two older children, and their housekeeper testify and be cross-examined; I didn’t. 

But one factor gives me pause. Kamran played games with Doctor Asia’s 401(k) while illegally running her medical practice (MA law says nonprofessionals can’t run professional practices), incurring the tax liability at issue here by rolling over and then taking taxable draws therefrom. However, most of the draws went to pay down the mortgage on the medical practice’s real and personal property, all of which Doctor Asia gets in the divorce. Since the debt was north of $260K, that’s no small benefit. And there’s no evidence Kamran enriched himself excessively thereby, except maybe what he took from the practice thereafter (if anything), and then only to the extent of debt service payments no longer due.

True, if Judge CD Jones concluded Kamran was a real nogoodnik (as did the local police and MA Department of Child and Family Services) and Doctor Asia told the truth, then maybe this is the correct way to handle it.

“The income that gave rise to the understatement in this case was used to pay down debt incurred to purchase real estate and medical equipment needed to establish Zaheen Medical Center. Dr. Zaheen is now the sole owner of Zaheen Medical Center, but Mr. Ehsan, at minimum, shared enjoyment of the benefit of the transaction at issue up until Dr. Zaheen filed for divorce. The benefit Dr. Zaheen derived from the understatement is mitigated by the fact that Mr. Ehsan controlled Zaheen Medical Center’s finances and business matters through the year in issue and remitted to Dr. Zaheen only a salary. Additionally, there is no evidence in the record that suggests the parties engaged in a lavish lifestyle. Under these circumstances, we find this factor to be neutral in our analysis.” T. C. Memo. 2025-7, at p. 18.

That’s the takeaway from Muhammad Zulfiqar, T. C. Memo. 2025-6, filed 1/22/26. Mu stiped out year at issue in a SND proceeding in Tax Court and paid up, but the stip omitted a couple late-filed and late-paid summary assessed add-ons (hi, Judge Holmes). It did say that Mu didn’t owe Section 6651(a)s.

IRS did give Mu a NITL at no extra charge, which Mu timely petitioned. Appeals sustained based upon an OCC memo, so IRS seeks summary J confirming Appeals’ NOD. Mu cross-moves for summary J that he owes nothing.

Judge Elizabeth A. (“Tex”) Copeland denies both.

The add-ons are assessable without a SND, hence Tax Court had no jurisdiction if they were separately assessed and not part of the SND case. Thus, the CDP was Mu’s first chance to contest. The stip makes no mention of the later add-ons, even though they had been assessed, and there’s no “below the line” mention of them. 

There may have been a mutual misunderstanding of fact when the parties stiped out the SND proceeding.

“While the Stipulated Decision provides ‘[t]hat there is no addition to tax under I.R.C. §6651(a)(1) due from petitioners for taxable year [at issue],’ it omits any mention of the previously assessed section 6651(a)(2) and 6654 additions to tax that are clearly still at issue in this CDP proceeding. Further, the document does not distinguish between the section 6651(a)(1) addition to tax subject to deficiency procedures in [SND proceeding] and the previously assessed section 6651(a)(1) addition to tax that, like the section 6651(a)(2) and 6654 additions, may likewise have been jointly omitted from consideration. The Zulfiqars emphasize that the Stipulated Decision contains no so-called below-the-line stipulation to clarify that the prior assessed section 6651(a)(1) addition remains, but such lack of modification may have been a mistake of fact. These are all material facts that prevent us from summarily adjudicating these cases at this time.” T. C. Memo. 2025-6, at p. 10.

When you’re stiping out, get the transcripts. State exactly what is still on the table, and if nothing, so state.