I gotta give it to Charles Dickens: he gets it right yet again. David Fred Krueger, Docket No. 26107-21L, filed 7/22/26 certainly tells a tale of hard times. Btw, that’s Doctor Krueger, the dentist. 

Doc Krueger bought his dental practice in 2007. He says he was walloped by The Black ’08, such that he couldn’t pay his taxes for seven (count ’em, seven) years thereafter, although he did self-report. See Order at p. 1, footnote 2. Two unpaid years remain at issue, plus reasonable cause for late payment add-ons.

Taking unpaid years first, the CA request was supported by “an unsigned, undated, and illegible Form 433–A with insufficient supporting documentation.” Order, at p. 3. Judge Ashford kicks that to the curb, Order, at p. 10, although Doc Krueger can try again administratively.

But as to the Section 6651(a)(2) add-ons, there is the question whether de novo or abuse is the standard of review. For whatever reason, I didn’t blog the cases Judge Ashford cites, Order, at p. 8, so get them for your memo of law files. Aliquando bonus dormitat Homerus. Spoiler alert: De novo wins, but it doesn’t help Doc Krueger.

“SO L rejected petitioner’s request for abatement of the section 6651(a)(2) additions to tax with respect to the years at issue on the grounds that petitioner’s needing to use all available funds for five consecutive years (i.e., from 2011 to 2015) to try to save his failing dental practice did ‘not me[e]t the criteria for reasonable cause abatement.’ Her conclusion was well founded. Petitioner provided no information to SO L (as well as to SO K) that satisfied the reasonable cause standards for any of the additions to tax. Instead, he made only vague or conclusory assertions that the local economy did not recover from the ‘catastrophic’ 2008 financial crisis by 2015, resulting in him experiencing a ‘sharp decline in business revenue’ and ‘significant financial hardship’ from which he could not recover. He also merely alluded to making ‘reasonable efforts to conserve funds to pay taxes,’ but also acknowledged that ‘[he] was unable to do so.’ Petitioner carries a heavy burden of proving that his failure to pay taxes for the years at issue was due to reasonable cause and not due to willful neglect. Petitioner’s assertions and allusions regarding financial difficulties were manifestly insufficient for SO L to gauge petitioner’s financial situation and petitioner’s exercise of ordinary business care and prudence with respect to his obligations to pay taxes for the years at issue. Indeed, petitioner has not explained how his failure to satisfy (or even attempt to satisfy) his tax payment obligations for the years at issue were the direct result of economic conditions in 2008, conditions that were roughly five and seven years before the years at issue. Accordingly, we agree with SO L that it was ‘unreasonable’ for petitioner to think that he exercised ordinary business care and prudence, thus establishing reasonable cause for his failure to pay the taxes for the years at issue and justifying abatement of the section 6651(a)(2) additions to tax for the years at issue.” Order, at p.9. (Citations, names, and footnote omitted but see infra, as the expensive lawyers say).

“We note that one of petitioner’s own statements to SO L (as well as to SO K) was that the dental practice showed net profits during the years at issue.” Order, at p. 9, footnote 8.