That out-of-date slang phrase meaning certainty certainly doesn’t apply to Walker Clay and Timber, LLC, Walker Investments, LLC, Tax Matters Partner, Docket No. 23404-21, filed 5/21/26. So says Judge Benjamin A. (“Trey”) Guider, III, denying IRS summary J in yet another of their desperation attempts to stave off a valuation trial.

The Walkers claim their carefully-sculpted deed to 501(c)(3) Oconee River Land Trust, Inc., a perennial guardian of Dixieland Boondockery, precluded the previously permissible use of those 819.75 acres of swamp as a wetland mitigation bank. 

And no, I didn’t know what that was either; the National Environmental Policy Act of 1970 postdates my time in the Army Engineers. So when IRS claims the HBU of said swamp remains the same after the easement, hence any diminution said easement caused is worth zero, there is a fact question.

I’ll let Judge Trey Guider Judge-‘splain. 

“A wetland mitigation bank is defined as a site (or sites) where wetlands are ‘restored, established, enhanced, and/or preserved for the purpose of providing compensatory mitigation for impacts authorized by [Department of the Army] permits.’ 33 C.F.R § 332.2. Mirroring the regulation’s language, the [expert’s] report in this case stated that ‘[t]he proposed wetland mitigation bank on the subject property would include wetland restoration and enhancement, and wetland preservation.’ Ex. 1-J, at 81.” Order, at pp. 3-4.

The language of the deed, construed most favorably to the nonmovant Walkers, prohibits restoring, enhancing, and preserving to offset what the Engineers allowed somebody else to muck up. Presumably if you have a wetland mitigation bank, you can let somebody use your swamp to offset the swamp somebody else drained. But if you’ve given away that right, your swamp is worth less. 

So what exactly did the Walkers give away?

The bedrock of Tax Court discovery is informality. Now in its 52nd year, Branerton remains the touchstone, the standard: first comes the informal.

River Moss Property, LLC, River Moss Management, LLC, Partnership Representative, Docket No. 7324-24, filed 5/20/26 and IRS certainly followed where Branerton led. For an entire year they kept extending the Mosses’ deadline to review certain documents obtained from third parties by way of informal requests for privilege. When the Mosses wanted more time, IRS called the clock. The Mosses then moved for a Rule 103 protective order.

Ex-Ch J L. Paige (“Iron Fist”) Marvel doesn’t give the Mosses the cover.

First, the Mosses haven’t made out that IRS took sneak peeks at the confidential material (if indeed it is confidential). The Mosses had a year to figure out and haven’t gotten there yet. Let them do so now. And don’t say that IRS was dishonest without strong proof. “…we seriously caution petitioner against accusing another party of untruthfulness without strong evidence.” Order, at p. 3.

Secondly, and here’s the important point: “…the documents at issue were obtained pursuant to our informal discovery procedures. Rule 147 does not apply to informal discovery procedures. Moreover, we are skeptical that even Rule 103 applies to informal discovery procedures. See Fu Inv. Co., Ltd. v. Commissioner, 104 T.C. 408, 410 (1995) (‘Arguably, [informal discovery requests] do not fall within our discovery procedures, and, thus, are not subject to restriction under Rule 103.’)”. Order, at p. 3.

IRS’ discovery requests to the third parties stated at least twice that they were not subpoenas and that the third parties had no mandatory obligation to respond. Order, at p. 1, footnote 3.

“Just a friendly chat?” Beware!

Ex-Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan sustains the NITL that was left hanging at the last Tax Court visit of Bryan Edward Menge, T. C. Memo. 2026-41, filed 5/19/26, which I chronicled under the heading “Substantially Prevailed,” 12/16/22. Further background is discussed in T. C. Memo. 2026-41, at p. 3, footnote 2.

Here the NITL is sustained as to the four (count ’em, four) years that weren’t before 1 Cir, where Bryan Edward was battling a contractor holdback, a common source of controversy between contractor and owner. Bryan Edward didn’t contest his self-reported numbers; he claimed he was due a credit from the adjudicated outyear, but ex-Ch J TBS said that was decided at 1 Cir and so off the table.

Seventy (count ’em, seventy) years on, John Osborne’s title, if not his play, is going strong. This time, it bars Jorge Fernandez Maceira, Docket No. 20299-23L, filed 5/19/26, from claiming bankruptcy discharge of four (count ’em, four) years’ worth of income tax, despite a miscue by the SO as to one of those years.

Judge Benjamin A. (“Trey”) Guider III Judge-‘splains.

“SO C investigated whether petitioner’s tax liabilities for these years could have been discharged in his prior bankruptcy proceedings. Certain tax liabilities may not be discharged during bankruptcy, including liabilities based on late-filed returns which are filed less than two years prior to the bankruptcy petition’s filing. 11 U.S.C. § 523(a)(1)(B)(ii). The returns for tax years 2009–2012 were all filed late on December 12, 2013, and assessed on February 24, 2014. SO Cha found a bankruptcy indicator on petitioner’s account which began on December 23, 2013, and was reversed on April 1, 2014. Because the 2009–2012 tax liabilities were filed late and filed less than two years prior to the bankruptcy petition, they are precluded from discharge through bankruptcy. See id.

“Notably, SO C’s sole rationale for determining the liabilities’ discharge eligibility was because ‘[b]ecause [sic] the[] returns were filed and assessed within three years of [petitioner’s] bankruptcy filing.’ Doc. 26, Ex. 35-R. This reasoning seems to be grounded in 11 U.S.C. sec. 523(a)(1)(A)’s three-year lookback rule prohibiting the discharge of tax liabilities ‘for which a return, if required, is last due, including extensions, after three years before the date of the filing of the [bankruptcy] petition.’ 11 U.S.C. § 507(a)(8)(A)(i). Petitioner’s returns for tax years 2010, 2011, and 2012 were each due in April 2011, April 2012, and April 2013, respectively. As such, each of these returns were due in the three-year period prior to the bankruptcy petition’s filing in December 2013. However, petitioner’s 2009 tax return was due in April 2010. As such, this tax year falls outside of the three-year lookback period. Nonetheless, because the 2009 return was filed late and less than two years prior to the bankruptcy petition’s filing, 11 U.S.C. sec. 523(a)(1)(B)(ii) precludes this year’s liabilities from discharge.” Order, at pp. 7-8. (Name omitted). 

So SO C’s error was harmless.

IRS’ motion to toss for nonprosecution fails because, although Jorge’s ‘ participation has not necessarily been ideal, he has not been wholly unresponsive, and his conduct therefore has not amounted to a ‘complete lack of interest in presenting his case.’” Order, at p. 4. Jorge continuously asserted he’d paid tax in Puerto Rico, although presenting no proof until long after CDP was closed.

So Judge Trey Guider prefers summary J for IRS.

That’s apparently IRSspeak for Boss Hossery. Or so we learn from a footnote in Marievi Garalde Palter, Docket No. 9321-25L, filed 5/18/26. 

This is another unpetitioned SND case, so underlying liability is off the table at Appeals, and RCP is over the uncontestable liability, so IRS gets a walkover. But the SO checked with AUR (income from credit card payments are unreported).

“When the IRS Independent Office of Appeals (Appeals Office) Settlement Officer (SO) assigned to petitioners’ request for a Collection Due Process (CDP) hearing reviewed the case, she contacted the Automated Underreporter (AUR) coordinator for verification of the section 6662(a) substantial understatement penalty asserted in the Notice of Deficiency. …the AUR coordinator informed the SO that the substantial understatement penalty assessed under section 6662(a) for taxable year 2021 should be abated because no managerial [sic] was present on petitioners’ account. Accordingly, the SO submitted an abatement to the appropriate IRS operating division for processing… and verified that the abatement was input.” Order, at p. 4, footnote 3.

Footnote to a footnote: AUR? Isn’t that electronical, hence no “managerial” necessary per Section 6751(b)(2)(B)? But cf. the colloquy that followed my blogpost “A Couple Quirks,” 4/30/26.

Ch J Patrick J. (“Scholar Pat”) Urda, whom I must think laments the Congressionally-forged jurisdictional fetters in which he is confined like a latter-day Prometheus, finally expresses same in the measured language which befits the judicial character.

Susan Marie Hansen, Docket No. 910-26, filed 5/15/26, is five-plus years late with her petition from a 2000 SND covering tax years more than thirty (count ’em, thirty) years ago.

When IRS moves to toss for want of jurisdiction, Ch J Scholar Pat reels off the laundry list of jurisdiction-conferring notices and scenarios, none of which Susan Marie Hansen has proffered.

Susan Marie Hansen’s plea is one too often heard from self-representeds.

“Petitioner was served with a copy of respondent’s motion to dismiss and… filed a response in apparent objection. Therein, petitioner did not directly counter the jurisdictional allegations set forth in respondent’s motion and did not establish that petitioner had filed with the Tax Court during the time frame relevant to any statutory notice. Rather, the submission, to the extent even minimally intelligible, seemed to reference hardships being suffered by petitioner and family members and to be a plea for some type of aid. It did not, however, appear to acknowledge the specific jurisdictional parameters in question, nor did it allude to or attach any notices from the IRS that could bear upon the jurisdictional query before the Court.” Order, at pp. 3-4.

Susan Marie Hansen is clearly frustrated, but the Tax Court train left that station years ago.

“Absent a specific statutory grant to the Court to address a particular notice or scenario, the Court has no general jurisdiction to consider and redress complaints simply because they may pertain to taxes.” Order, at p. 4.

See the headline first written at the head hereof (and hi, Judge Holmes).

Taking my cue from E. G. Leutze, whose famous mural in U. S. Congress shows about the only progress in U. S. Congress…but this is a nonpolitical blog. So I shall soberly discuss Clint L. Martin and Jenifer Martin, T. C. Memo. 2026-40, filed 5/14/26, a coupled entry with Cousin Stephen and his spouse Amanda.

Clint and aforesaid family donated 13.3 acres to the striving, thriving municipality of Highland City, UT, which gratefully accepted same “to maintain th[e] property in perpetuity as preserved open space.” T. C. Memo. 2026-40, at p. 2, with all taxes paid through calendar year at issue and all costs of the transfer picked up.

IRS plays the usual avoid-trial summary J gambits: no CWA, no qualified appraisal, and no complete and correct appraisal summary attached to year-at-issue return.

Judge Cary Douglas (“C-Doug”) Pugh cuts to the cliché: no CWA, no deduction, no need for trial except any reasonable reliance or Boss Hossery defenses for the chops.

There’s no prescribed form for the CWA, except it must contain a description of the property, and an affirmative statement that no goods or services were provided in exchange (merely stating “donation” or “generous gift” is insufficient; Judge C-Doug has the receipts). Substantial compliance doesn’t get it, and Judge C-Doug won’t let Clint’s trusty attorney try to backdoor it in by citing UT law. 

“We need not decide what Utah law would provide because petitioners identify no cases (nor did we find any) applying the affirmative indication test to look outside a deed for a merger clause. And it would be contradictory to read a merger clause into a deed to satisfy a statute that, by its express terms, requires a written acknowledgment.” T. C. 2026-40, at p. 6.  (Emphasis by the Court).

Trusty attorney claims a Joint Letter signed by the Martins and the mayor of Highland City describing the donation, the Form 8283 filed with the year-at-issue return, and the deed, read together, satisfy the statute. Indeed, documents have been read together to satisfy Section 170(f)(8).

But the deed has no merger clause, stating it embodies the entire understanding the parties and can’t be changed or waived without a writing signed by the party against whom change or waiver asserted. 

What it does have is proof that whoever drafted the deed used a dime-store bargain and sale with the infamous “ten ($10.00) dollars and other good and valuable consideration” language that sank poor ol’ Randy Schrimsher. It also proves that same person doesn’t read this my blog. See, e.g., my blogpost “Merger,” 12/19/22.

Suffice it to say that the Joint Letter doesn’t say what the City was going to do with the property to preserve it as open space, nor that that wouldn’t benefit the Martins.

The plain words of the three (count ’em, three) documents don’t satisfy the statute, and no one claims they’re ambiguous. 

Take it from an old Army engineer and long-time dirt lawyer, those dime-store deed forms are unexploded ordnance. 

Cases like Craig Bernier & Lynette Contreni Bernier, Docket No. 2196-26S, filed 5/13/26, are the daily gravel that comes to the Tax Court gold pan. The IRS sends form letters which addressees petition, even though none of same are deemed SNDs by Ch J Patrick J. (“Scholar Pat”) Urda or his colleagues. Hence the petitions are dismissed for want of jurisdiction.

So the petitioners are out sixty Georges, and their frustration, acknowledged in the boilerplate order, goes unredressed.

But is there a hidden nugget in the grit at the bottom of the pan?

IRS acknowledges in its filing with Tax Court that no SND was issued as at the date of the order. That acknowledgement also fixes a locus for 3SOL and 6SOL. If at a later date the SOL issue arises, there is the statement and the order embodying it. See FRE 801(d)(2).

Has any reader any experience to share? What do you tell a client in these circumstances?

Judge Rose E. (“Cracklin'”) Jenkins is circumspect, denying trusty attorneys for GO Risk Management, Inc., et al., Docket No. 14012-21, filed 5/12/26, a deposition of IRS’ expert witnesses, on the grounds that they failed to give advance notice to IRS’ counsel and the experts that they would seek deposition, and that trusty attorneys did not “elaborate on the other means considered or attempted” to show why the information sought could not be otherwise obtained.

They seek to depose Ms. M. (name omitted), to elicit “the bases of her opinions, specifically mentioning lack of specificity in her expert report concerning which documents she reviewed and how she selected samples of documents to review. Their motion also indicates that they seek to clarify the assumptions underlying Ms. M’s current opinions and the circumstances under which they might change. And petitioners raise questions about her actuarial judgment that they seek to answer. They state that the information sought is not readily available through the report alone, without addressing any other possible means of obtaining the information.” Order, at p. 1.

As for Mr. C (name omitted), they wish to clarify “the facts and data underlying his opinion, understanding his analysis, and exploring his knowledge, skill, experience, training, and education. They elaborate that his CV is unclear about the nature of his roles and responsibilities and how they qualify him as an expert or provide sufficient detail about his captive insurance to identify potential conflicts. Petitioners further argue that Mr. C’s report contains no information about the documents reviewed and question whether Mr. C drew conclusions from the absence of documents. And they argue that the report doesn’t identify sources, standards, and authorities for what Mr. C characterizes as standard practices. Petitioners also seek to determine whether alternative assumptions or comparisons would affect Mr. C’s conclusions. And they seek to clarify any quantitative analysis undertaken by Mr. C and the analytical framework used in reaching the conclusions. Petitioners represent that the information sought is not available by any other means, although they do not elaborate on the other means considered or attempted.” Order, at p. 2.

Taishoff says the point is that what trusty attorneys seek is a substitute for voir dire at qualification and cross-examination when the expert’s written report goes in as the expert’s direct testimony.  

Yet again I quote the immortal words of Colonel John Henry (“Wiggy”) Wigmore: “Cross-examination is beyond any doubt the greatest legal engine ever invented for the discovery of truth.”

And I recall from the days of my youth, when our New York Civil Practice Law and Rules were The New Big Thing, the adenoidal snarl from the cigar-laden lips of Old Greyback From Wayback: “Depositions? Any lawyer who needs a deposition needs a nursemaid. You sweat your witnesses hard before trial, boy, and sweat their witnesses hard at trial. Depositions? Bah! What’s the law comin’ to?”

That’s a term I hadn’t applied even to Judge Mark V. (“Vittorio Emanuele”) Holmes, who certainly fits the appellation. However, Judge Elizabeth A. (“Tex”) Copeland has drawn a litigant who vies for the title, Craig Walcott, Docket No. 21820-22, filed 5/11/26.

According to Judge Tex Copeland, Craig “pled guilty to one count of willfully attempting to evade tax, in violation of section 7201. After he had served his sentence of three years of imprisonment and three years of supervised release, he moved to vacate the judgment for lack of subject-matter jurisdiction, arguing that the United States had failed to identify a specific constitutional taxing power relevant to his case. The district court denied the motion, describing Mr. Walcott’s ‘characterizations of the law and Constitution’ as ‘frivolous.’ Mr. Walcott appealed to the U.S. Court of Appeals for the Tenth Circuit, which affirmed the district court. Mr. Walcott now plans to petition the U.S. Supreme Court for certiorari, and he requests us to continue the case so that we do not ‘waste this Court’s resources and risk producing a judgment that must be revisited,’ should the Supreme Court grant certiorari and affirm his argument that his criminal conviction was ‘premised on a constitutionally erroneous direct-tax theory’.” Order, at p. 7.

That’s a real never-say-die spirit, worthy of a better cause.

Now, having late-filed for three (count ’em, three) years and facing deficiencies for an aggregate $172K plus nonfiling add-ons and a couple Section 6662 chops (hi, Judge Holmes), Craig has seven (count ’em, seven) questions for IRS. I’ll defer to Judge Tax Copeland to deconstruct these, which she does at Order, pp. 5-6. 

Craig also wants a Rule 103 protective order, preventing IRS from mentioning Section 6673 chops in correspondence. “Mr. Walcott’s questions imply frivolous positions, such that justice does not require us to protect Mr. Walcott from the Commissioner asking the Tax Court to impose a section 6673 penalty on Mr. Walcott.” Order, at p. 6.

I expect we’ll hear more from Craig after trial, assessment, and the inevitable CDP.