This is an edited repost of a blogpost I inadvertently deleted while trying to edit a typo on the Firefox browser; Firefox is incompatible with WordPress, the platform wherein this my blog lives, moves, and has its being, as I found to my chagrin.
Brendan James Trainor, Docket No. 14996-22, filed 4/19/22, conflates liability with deficiency, and trots out some protester jive, but Judge Mark V. (“Vittorio Emanuele”) Holmes, but finds “a couple quirks that merit discussion” to spur his ongoing war with the partitive genitive. Order, at p. 1.
One, the deficiency doesn’t include any withholding credits. BJ owes less than the deficiency.
Two, BJ’s deficiency arises from unreported income based on third-party reporting, as reflected in an AUR. IRS’ counsel admits in its pretrial memorandum that they need proof of Section 6751(b) Boss Hossery, but says they’ll put in on the trial, which they don’t. There’s no CPAF attached to the SND, nor is there one in the parties’ stip. Order, at p. 3.
There is a saver, but IRS doesn’t pick it up. Judge Holmes sets it forth in a footnote.
“Section 6751(b)(2)(B) creates an exception to the usual requirement that the IRS has to show supervisory approval for a penalty for a penalty that is ‘automatically calculated through electronic means.’ And we’ve held that this exception applies to substantial-understatement penalties determined by the IRS’s computers in an Automated Correspondence Exam or through the Automated Underreporter program. Wahlquist [sic; should be Walquist] v. Commissioner, 152 T.C. 61, 70-71 (2019).” Order, at p. 3, footnote 1.
“We’ve also held that, when the only mention of a penalty under section 6662 is the generic language listing every type of penalty under that section – exactly the language that’s in the notice that the IRS sent to Mr. Trainor – we have to look to any more specific language in the approval form. See Rogers v. Commissioner, 118 T.C.M. 79, 91 (2019).” Order, at pp. 3-4.
For Walquist, see my blogpost “I Sing the Penalty Electronic – Part Deux,” 2/25/19. For Rogers, see my blogpost “I Must Make Amends – Part Deux,” 5/30/19.
No CPAF, no chops.
Taishoff Law 
The Tax Court keeps getting Walquist wrong, and won’t admit what IRS tells everyone in public: “The IRS receives information from third parties, such as employers and financial institutions. Using an automated system, the Automated Underreporter (AUR) function compares the information reported by third parties to the information reported on your return to identify potential discrepancies. When a potential discrepancy is identified, a tax examiner further reviews the return, comparing the information reported to the IRS by employers, banks, businesses, and other payers on information returns (Forms W-2, 1098, 1099, etc.) to the income, credits, and deductions you reported on your income tax return. If a discrepancy exists, a Notice CP2000 is issued.” So there is no Immaculate Assessment, done only by electronic means. A real tax examiner with a real supervisor should be required to provide a real penalty approval.
And the Myth of Walquist was disproven long ago. You can read about it here.
As reported, “In other words, in a case where the Tax Court saw no human intervention in a tax-protester audit, the IRS itself saw the need for managerial approval of a Section 6662 penalty, and confirmed it was done.”
Hi, Judge Holmes! (Sorry, but you have egg on your face.)
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