Judge Albert G. (“Scholar Al”) Lauber is a seasoned veteran of appraisal mix-and-matches, but Aloke Pal, T. C. Memo. 2026-93, filed 9/24/26, is simply a match.

Aloke switched money from his E*Trade IRA to his E*Trade stock trading account and back again. Of course Morgan Stanley, operator of E*Trade, filed a 1099-R. Aloke petitions the unreported income SND.

“In his Petition he asserted that “E*Trade has used all my 401k and pension [and has] reported false distribution[s] to IRS,” stating that he ‘want[s] his 401k and pension back.’ He asserted that he was a ‘victim of systematic hate/discrimination’ because he had filed whistleblower claims regarding Boeing’s ‘737 Max Program.’ He alleged that he had not received a Form 1099–R reporting any distributions for [year at issue] and that (in any event) he ‘did not recognize ACCT number on the 1099–R.’” T. C. Memo. 2026-93, at p. 3.

Judge Scholar Al helps Aloke out. He runs the account numbers for the IRA and the trading account, and verifies they match.

” The IRS may not rely solely on a third-party report of income, such as a Form1099, if the taxpayer raises ‘a reasonable dispute’ concerning the accuracy of the report. See § 6201(d). Petitioner has not done so. He has supplied no evidence to support his wild assertions that E*Trade stole his money and ‘reported false distribution[s] to IRS.’ The documentary record confirms the accuracy of Morgan Stanley’s reporting and clearly shows that petitioner’s assertions are baseless.” T. C. Memo. 2026-93, at p. 5, footnote 3.

“Petitioner has the burden of proof to show that respondent’s determinations of unreported income are ‘arbitrary or erroneous.’ See supra p. 5. He has supplied no evidence whatsoever to show that the stock transferred into his E*Trade brokerage account came from a source other than his E*Trade IRA. During trial the Court asked him where these shares could have come from, if not from his E*Trade IRA. He had no comprehensible response to that question.

“Petitioner’s submissions in his Posttrial Brief were not a model of clarity. His primary contention, as originally urged in his Petition, was that his retirement assets disappeared or were fraudulently taken by E*Trade. He did not supply an iota of evidence to support those assertions.” T. C. Memo. 2026-93, at p. 7. 

Of course Aloke claims reasonable cause for nonreporting the IRS distributions to avoid chops.

“In his Posttrial Brief petitioner contends that the ‘reasonable cause’ exception applies. He concedes that transfers were made into his Wells Fargo account, but he insists that he did not know where the transferred assets came from. We did not find this testimony credible. One may enjoy a large bank error in one’s favor when playing Monopoly, but this rarely if ever happens in the real world.” T. C. Memo. 2026-93, at p. 10.