Diego E. Salazar, T. C. Memo. 2026-9, filed 2/3/26, wants interest and accuracy penalties abated, but he signed an IA. Even though he says he signed “under protest and with full reservation of rights,” including “seeking a future abatement,” T. C. Memo. 2026-9, at p. 5, Judge Albert G. (“Scholar Al”) Lauber says that bars him from contesting in Tax Court.

Diego had his chance to contest at the CDP and the Supplemental, but didn’t. Moreover, he got the IA (with an unexplained $8 per month reduction) with no Form 433-A or backups. The SO invited him to submit Form 843, Claim for Refund and Request for Abatement, but he never did so, T. C. Memo. 2026-9, at p. 4. 

His complaint about the crooked preparer who got him into this mess doesn’t cross the Section 6404 threshold, T. C. Memo. 2026-9, at p. 4.

And IRS conceded equitable tolling of Diego’s late petition.

Judge Cary Douglas (“C-Doug”) Pugh echoes the words of Judge Paris in Walker Church Greene 819, LLC, 830 Oconee, LLC, Tax Matters Partner, T. C. Memo. 2026-11, filed 2/3/26. Once again, a bunch partners (hi, Judge Holmes) try to jump in on the eve of settlement, after three (count ’em, three) years of doing nothing (see T.C. Memo. 2026-11, at p. 8). The big difference seems to be that the bunch own 62.27% of Walker; the other cases (see my blogpost “So Ya Wanna Participate?” 9/17/25) involved partners owning much smaller interests.

Mox nix, says Judge Pugh.

“This distinction does not change our conclusion. First, the Objecting Partners had three years to participate as of right or by Court leave and failed to do so. Moreover, the Objecting Partners do not explain what prompted their Motions for Leave beyond vague generalities. Thus, even if they ‘acted promptly upon discovery that the TMP was not protecting their interests,’ they did not provide the necessary facts to allow us to evaluate their assertion that the TMP was not protecting their interests. We will not infer a substantial showing simply because the Objecting Partners represent a majority of the partnership interests and disagree with the settlement terms. More is required beyond conclusory statements.” T. C. Memo. 2026-11, at p. 7. (Emphasis by the Court.)

Again, no showing that the TMP breached fiduciary duty, nor that OPs were ready and able to litigate. Each partner has a separate interest, but they haven’t represented they’d all be united in strategy and result, even though all have the same counsel.

Taishoff says conflict of interest, anyone?

I am sure the nine (count ’em, nine) trusty attorneys for Palmwood Holdings, LLC, Palmwood Investments, LLC, Partnership Representative, Docket No. 17489-23, filed 2/3/26, will echo the words sung by the late great Johnny Cash, first set forth hereinabove at the head hereof (as such high-priced attorneys would say) after hearing the admonition of Ch J Patrick J. (“Scholar Pat”) Urda set forth at p. 5 of the aforesaid Order.

It’s the usual IRS motion for Boss Hossery summary J, with a twist. IRS tries a double-pump, first going for summary J per Section 6662(c), (d), (e), and (h), the usual 20-40 accuracy-negligence-over/undervalue mix. Trusty attorneys fold that one, but IRS’ answer adds the Section 6663 75% fraud chop.

Trusty attorneys raise doubts as to who decided what when, and accuracy of supe signoff. But these echo arguments rejected in an order in an earlier unrelated case (which I did not blog). Ch J Scholar Pat reminds trusty attorneys that these arguments are routinely blown away in Tax Court. And he blows these away, too.

Now for the admonition.

“Having dispatched Investments’ argument as a legal matter, we pause to remind Investments’ counsel that accusing officers of the Court of untruthfulness is a very serious accusation and requires strong support. In this case, the accusation (‘Investments has reason to believe that [the Commissioner’s] assertion regarding the initial determination is not true.’) was leveled in an ill-conceived attempt to obtain discovery on a point that our precedent has repeatedly shown to be irrelevant. Worse yet, the purported smoking gun supporting this accusation—an email from three years prior involving a different taxpayer, a different property, and different

IRS personnel—has nary a connection to this case. Counsel who engage in such tactics risk losing their credibility with, and the patience of, the Court.” Order, at p. 5.

A source informs me that one of said trusty attorneys actually reads this my blog.

Taishoff says that the line between zealous advocacy and “such tactics” can be a fine one. While the “zealous advocacy” of the old Code of Professional Responsibility has been superseded by “competent representation” in ABA Model Rule 1.1, an attorney must make any honestly colorable argument, unless vetoed by the client. 

All attorneys walk the line.

Judge Goeke raises that question in Kenneth Son & Josephine N. Son, Docket No. 25814-22L, filed 2/2/26. This is a routine IRS summary J motion from a CDP NOD, to which the Sons objected but didn’t respond.

But the record is incomplete, and therein lies the question: before IRS can blow off an OIC, how much must the taxpayer default?

“The OIC is not in the administrative record. However, respondent described it as requiring petitioners to make estimated tax payments, timely file their returns, and make estimated tax payments for the 5 years following the IRS’s acceptance of the OIC, which are standard terms of OICs (5-year compliance requirement). See Form 656, Offer in Compromise.” Order, at p. 1.

The Sons’ OIC covers six (count ’em, six) years. The IRM is explicit as to what steps must be taken to invalidate an OIC. See Order, at p. 3. “Termination of an OIC for noncompliance is authorized but not automatic.”  

Judge Goeke finds IRS skipped a few. One such is the basis for the headline first written hereinabove at the head hereof, as expensive lawyers would say. “As an exception to the potential default rules, the IRM provides that a failure to pay amounts owed that are less than a certain dollar amount (which is redacted in the IRM) (threshold amount) is not treated as a breach. IRM pt. 5.19.7.14.4.1 (July 9, 2020). Thus, it appears that the IRM in effect for the 5-year compliance period provided than a minor breach (i.e., nonpayment below the threshold amount) does not cause a potential default.” Order, at p. 3.

So here’s a checklist for the upcoming trial.

“The administrative record does not establish the following facts: (1) the terms of the OIC; (2) the IRS sent a potential default letter, (3) the IRS sent a formal default letter, (4) petitioners ‘habitually failed to make [ ] required estimated tax deposits’ before the IRS terminated their OIC, and (5) it was appropriate for the IRS to terminate the OIC for unpaid balances of less than $1,000 and $500, for 2020 and 2021, respectively.” Order, at p. 3.

The following graces the Tax Court website 2/1/26.

“In the event of a federal government shutdown at midnight Friday, January 30, 2026, the United States Tax Court will open for business on Monday, February 2, 2026. Please check this website often for updates on Tax Court operating status and trial information.

“If you have questions about a scheduled trial session during any government shutdown, please call 202-521-0700 during normal business hours (8 a.m. to 4:30 p.m. Eastern time).”