Oh, Boss Hoss, what sins are committed in thy name! Judge Rose E. (“Cracklin'”) Jenkins finds that what we thought was “settled law” was undone as the Boss Hoss leaves the stable after 2 Cir picked the issue preclusion lock.

And where better to encounter this latest resurgence of The Jersey Boys’ Greatest Hit, the Chai-Graev double, than in Annamalai Annamalai & Parvathi Sivanadiyan, Docket No. 2398-23L, filed 8/11/26, the latest episode in this eleven (count ’em, eleven) year blogfeast?

Ever since Warner Ent., Inc., we thought issue preclusion barred any Boss Hossery defense to a chop where liability had been litigated, deficiency and chops assessed, and decision was final. See my blogpost “How Now?” 8/22/22.

Seemed to touch all the bases: same parties and privies (that’s nonparties bound by participating parties), could have been raised and litigated at trial or in motion papers, no supervening change in law.

Except.

Boss Hossery has separate statutory requirements which an AO at Appeals has to fulfill at a CDP, whatever happened on a trial or summary J. So said 2 Cir in Besicorp. v. Com’r, No. 23-296 (6/29/26). 

“Most salient here, the Appeals Officer must also ‘obtain verification from the Secretary [of the Treasury] that the requirements of any applicable law or administrative procedure have been met.’ Id. § 6330(c)(1). Only after satisfyingthese requirements and considering the arguments and evidence presented by the Service and the taxpayer may the Appeals Officer issue a ‘Notice of Determination’ upholding or rejecting the lien or proposed levy.” Besicorp, at p. 9. Whatever the parties pled or proved at trial or motion, the AO must find Boss Hossery de novo. 

Judge Cracklin’ Jenkins finds the record (this is obviously a CDP review) fails to show that Boss Hossery was raised or considered either in the order and decision or at the CDP from whose NOD Annamalai petitions. All the AO did when she found no Section 6761(b) sign-off in the file was get a memo from counsel that the order and decision precluded Boss Hossery. And in her and counsel’s defense, pre-Besicorp that was the law.

OK, so how now, this latest silt-stir?

“Given the state of the Administrative Record and the absence of any argument by respondent about the verification requirement, this Court does not conclude that the Second AO did not abuse her discretion in sustaining the levy with respect to the section 6663 penalty for the 2007 tax year despite not verifying compliance with section 6751(b). Unlike the Second Circuit…, however, this Court does not conclude that the Second AO’s failure to verify approval permits a conclusion that no approval was obtained. Accordingly, the Court will remand this case to Appeals for further review to determine whether the verification requirement can be met with respect to the 2007 tax year. If Appeals is not able to verify approval of the 2007 section 6663 penalty, respondent may fully address the import of that failure at that juncture.” Order, at p. 21. (Citation omitted).

This is Remand No. 2 in this case.

I can but again quote myself when I blogged Senior Judge Mark V. (“Vittorio Emanuele) Holmes’ dissent in my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17.

“Oh brother, says Judge Holmes, you tried to bring peace, but like a much more exalted Authority you have brought not peace, but a sword. Section 6751(b) is a statutory one-off, a hapax legomenon as that classicist Judge Lauber and that Master of Tohubohu Judge Holmes put it. It’s intended to keep lower-level RAs and Examination types from bludgeoning settlements out of terrified taxpayers by threatening chops.

“But it doesn’t work.”

Except, that is, to stall once more a twenty (count ‘;em twenty) year old Tax Court case.