No, nothing about tariffs or international trade negotiation from me: this blog remains nonpolitical. My political views are expressed elsewhere. What interests me today is Judge Nega’s further explication of Section 6103(h)(4)(C) transactionality in Family Office Foundation, Inc., Docket No. 10779-23X, filed 2/23/26.

At issue is the relationship of FOF to certain persons or entities denominated as Strangers and Nonparties, and Promoter, the latter being the subject of a permanent injunction for organizing phony charitable contributions of overvalued assets to Promoter-created 501(c)(3)s, where contributor retained control of said assets. FOF wants a Rule 103 protective order.  Judge Nega goes for a redacted administrative record.

“Petitioner claims that the administrative records contains [sic] references to individuals that are ‘unrelated’ to this case and seeks to have the record sealed to protect the privacy of those individuals (and entities). As an alternative to sealing the entire record, petitioner requests that they be allowed to submit an unredacted record under seal to the Court and redact another copy of the record for public access.” Order, at p. 2.

IRS’ counsel agrees that the relationships of some of the referenced are too attenuated to fall within Section 6103(h)(4)(C)’s transactionality net, so those can be redacted from the public view. So that takes care of Section 6103(h)(4)(C).

But the protective order?

“In order to rebut the presumptive public right to free access to the facts, a party must come forth with appropriate facts to support claims of harm that would occur as a consequence of disclosure. 

“Historically, parties have met their burden to show claims of harm sufficient to seal records where patents, trade secrets or confidential information are involved. Id. at 921. A showing that the information would harm a party’s reputation is generally not sufficient to overcome the strong common law presumption in favor of access to court records.

“In this case, petitioner has not asserted any claims of harm beyond annoyance or embarrassment. Accordingly, petitioner has failed to rebut the presumptive public right of free access to the Court and we will not issue a protective order. SeeWillie Nelson Music Co., 85 T.C. at 925 (‘[M]erely asserting annoyance and embarrassment is wholly insufficient to demonstrate good cause.”). All of petitioner’s claims that the information of “Strangers” and “Nonparties” is confidential tax return information was only of any relevance to a section 6103 analysis of whether that tax return information may be disclosed in this proceeding—not to the analysis of whether an unusual Rule 103 protective order is warranted.” Order, at pp. 4-5. (Citations omitted, but get them; this is where most would-be sealers come unglued).

And before my ultra-sophisticated readers jump in with FRE 404(b) objections, incidentally upbraiding me for not mentioning same, Judge Nega got the point.

“Of course, as petitioner emphasizes, the fact that Promoter conducted many illegal transactions does not necessarily have anything to do with whether petitioner’s transactions complied with all relevant laws and does not control the tax implications of petitioner’s transactions.” Order, at p. 2.

Taishoff says watch the fallout from the SCEs, as those enmeshed therein bring on similar motions from blown-up Dixieland Boondockeries.