No, not a baseball story. Whistleblower 6417-20W, Docket No. 2026-89, filed 9/16/26, is the story of how someone pitching tax services and technology claims a Section 7623 whistleblower award, which the Ogden Sunseteers negative by showing they knew all along. Ch J Patrick J. (“Scholar Pat”) Urda, obviously relishing this opportunity to escape the role of judicial busyworker, delves deep into the administrative record to find Blower 6417 added nothing to IRS’ ongoing examinations.

“Petitioner had no inside knowledge about Target or its tax planning and was not involved in the preparation of Target’s financial or tax returns. Likewise, ‘[v]irtually all the information . . . supplied was derived from publicly available sources, such as newspaper articles, business journals, and SEC filings.’ Researching this type of public information was nothing notable, but the first stop in any transfer pricing examination….

“Although petitioner mentions discussions with an advisor and then in February 2013, Target representatives, there is less than meets the eye. The advisor with whom petitioner discussed Target’s transfer pricing did not work for Target but merely had reviewed ‘how [it] do[es] [its] allocations.’ Target’s advisor moreover did not have ‘direct access to the cost sharing calculations’ or a full picture of the various components of Target’s transfer pricing analysis. Their discussions came in connection with petitioner’s attempts to convince Target to retain petitioner’s services regarding transfer pricing compliance.” T. C. Memo. 2026-89, at p. 24. (Citation omitted).

Ch J Scholar Pat stresses in no fewer than five (count ’em, five) places in his opinion that whatever Blower 6417 got, he got as he pitched Target for their tax business and got no inside scoop.

Making a sales pitch is no route to a Section 7623 payday. 

We all know that CNC status is impermanent; the magic word in “Currently Not Collectible” is “Currently.” Hit the lottery, get named in the will, or score the dream job and you’re back in IRS’ crosshairs, with interest and chops.

But should you stipulate to your deficiency-plus?

That’s the tactical dilemma for Adrian Wright, Docket No. 9547-25L, filed 9/17/26. Adrian, pro se of course, petitions a CDP, from which issues Letter 4223, declaring “Case Closed – Currently Not Collectible.” Order, at p. 2.

IRS tries twice to draft a stiped decision with below-the-line language affirming Adrian’s CNC status. Adrian refuses.

STJ Peter J. (“HB”) Panuthos, master headbanger, dismisses Adrian’s Zuch claim, because Zuch involved a tax liability satisfied in full, so further or future collection is not possible. Jennifer Zuch wanted to contest how the liability was paid, and that she cannot do in Tax Court. Adrian’s tax liability is still open; IRS just can’t grab to satisfy it yet.

STJ HB Panuthos goes to his usual move: if y’all don’t settle, I’ll do it for you or you can try the case, and sotto voce, you won’t like the result.

“If petitioner continues to decline to sign a stipulated decision, the Court would consider an appropriate motion to enter a decision or the Court may set this matter for trial in order to resolve any remaining issues.” Order, at p. 3.

OK, so what should Adrian do? Remember Matty Dean Vigon, or if you don’t, see my blogpost “‘Crafty – Akin to the Weasel,'” 7/24/17.

What would you advise, reader? Stipulate a decision with a below-the-line CNC saver? Insist on the stiped decision stating CNC above the line, making it part of the decision rather than a contract between the parties? Or let IRS enter decision on liability with no mention of CNC?

There is no correct answer.

That’s Christopher (“Gentleman Chris”) Aubuchon who earned that sobriquet from Judge Christian N. (“Speedy”) Weiler back in 2024; see my blogpost “I Sing the Transfer Electronic,” 12/23/24.

This time in T. C. Memo. 2026-87, filed 9/16/26, Judge Jeffrey S. (“Schwer”) Arbeit, though acknowledging Gentleman Chris ” is well educated; he holds a doctorate from Stanford University and has founded several companies. Aubuchon I, T.C. Memo. 2024-115, at *2. He has served as chief executive and chief technology officer of those companies, where he received compensation for services. See id. Throughout the proceedings, he has shown his ability to research the law and draft polished, though mistaken, filings. He has also demonstrated that he can understand the law when doing so suits his purposes. In these cases he has spent considerable time and effort submitting forms to the IRS to ‘correct erroneous W–2 information,’ writing letters expounding his view of the law, and filing returns asserting that he is ‘not liable,’ nevertheless he has been warned and chopped aforetime, so gets $5K Section 6673 frivolity.

This despite his “respectful and well-spoken” demeanor. T. C. Memo. 2026-87, at p. 2.

And a footnote.

“While he may consider the penalty here modest, petitioner would do well to consider this his final warning. Should he appear before us in the future, he should not again make frivolous arguments.” T.C. Memo. 2026-87, at p. 10, footnote 7. Somber reasoning and copious citation of precedent follow.

Shelterflogger Philip G. Groves, T. C. Memo. 2026-86, filed 9/16/26, claims that because the Notice of Penalty Charge (Penalty Notice), a/k/a Form CP15, didn’t calculate how the Section 6707(a) shelterflogger chop was calculated (even though the NOPA he got did), he shouldn’t be chopped.

Judge Jeffrey S. (“Schwer”) Arbeit  says no hurt, no foul.

“Petitioner’s failure to allege prejudice is not so surprising. There does not appear to be uncertainty about how the penalty was calculated. The NOPA clearly showed the basis for the original penalty of $5,831,197 and an attached spreadsheet included a computation. Because of payments by others liable for the same penalty, the IRS determined that petitioner was liable for only a reduced penalty of $4,351,138. At the 2016 Appeals conference, the IRS explained the computation for the reduced penalty. When issued shortly thereafter, the Penalty Notice reflected the reduced amount. Even if the Penalty Notice did not include a computation, petitioner never seems to have asked for an explanation. He had no need to.” T. C. Memo. 2026-86, at p. 7.

Anyway, Tax Court caselaw says the statute requiring inclusion of calculation in the notice imposes no sanction for failure to do so, hence is a procedural irregularity, and only invalidates an administrative act if prejudice results.

I know, I know, I’ve said this is a nonpolitical blog more times than I can count or that my readers (however many there are, which is what this blogpost is about) can stand with equanimity.

But WordPress’ accounting for my subscribers puts me in mind of the unending claims about political elections, the particulars of which I am sure my readers have heard and read ad nauseum, and Bureau of Labor Statistics employment numbers revisions (ditto).

Two (count ’em, two) days ago the number stood at 368. Yesterday it was 338. Ostensibly, thirty (count ’em, thirty) of the subscribers to this my blog left en masse. I trust they gave the lamb the Exodus 12:8-10 treatment.

Today the number bounced back to 364. 

I have to laugh.

Justin Joseph Moore, T. C. Memo. 2026-85, filed 9/15/26, is another CDP from an NFTL over an IA. Judge Emin (“Eminent”) Toro conducted a trial to see if JJ had raised underlying liability at the CDP, thus triggering de novo review at Tax Court. Result is that merely stating that one doesn’t know if IRS’ balances due are correct is not sufficient; one must produce some evidence to challenge IRS’ records.

True, JJ had problems working out with IRS his correct balances due on his late-filed returns, which stalled the refinancing of his commercial real estate until the interest rate escalation put paid to his plans. And Medicaid fraudster tenants didn’t help. But the refinancing proceeds were going into the real estate and not to IRS, so the liens won’t be lifted. Every lien lift I’ve ever seen went the same way; IRS goes first.

Anyway, lien stays.

But the headline first written hereinabove at the head hereof (as my already contemplatIng their second Grey Goose Gibson colleagues would say) shows itself in a footnote.

“Finally, we note that Mr. Moore’s Opening Brief, which appears to have been drafted with the assistance of artificial intelligence (AI), contains some troubling citation errors, including citations of pages that do not exist and citations of cases that do not support the propositions for which they are cited. For example, Mr. Moore’s Opening Brief cites page 1260 of Mesa Oil, Inc. v. United States, 467 F.3d 1252 (10th Cir. 2006), but that case ends on page 1256 of the federal reporter. Additionally, the Opening Brief cites Mesa Oil for the proposition that “[t]he balancing test under § 6330(c)(3)(C) requires reasoned analysis reflecting meaningful consideration of relevant evidence.” Pet’r’s Br. 51. But Mesa Oil, 467 F.3d at 1256, does not discuss section 6330(c)(3)(C); instead, it analyzes the collateral order doctrine and dismisses an interlocutory appeal for lack of jurisdiction. Mr. Moore is reminded that, although the Tax Court Rules of Practice and Procedure do not prohibit parties from using AI tools to help with preparing their cases, each party remains responsible for ensuring the accuracy of information submitted to the Court. See, e.g., Clinco v. Commissioner, T.C. Memo. 2026-16, at *6–8.” Order, at p. 10, footnote 3.

For the Clinco story, see my blogpost “The Phantom Citation,” 2/9/26.

That is the question for Judge Nega in Family Office Foundation, Inc, Docket No. 10779-23X, filed 9/15/26. This is a DJ reviewing IRS’ retroactive revocation under Rule 217. The Faily claims this is a recordruler, so no Branerton needed.

Family claims Section 7428 limits review to Administrative Record, and since no disupute about contents thereof, no need for any discovery. Family also claims no legal basis for Rule 217.

No, says Judge Nega. 

“There is a sound legal basis for Rule 217. That basis is section 7428. Congress directed that the Tax Court should take a leading role in developing the procedural rules used by courts with jurisdiction over cases arising under section 7428. See H.R. Rep. No. 94-658, at 285 (“’suggest[ing] that the district courts give special weight to Tax Court precedents developed in this area’). In fact, Congress chose the effective date of section 7428 in part to give this Court ‘an opportunity to establish any necessary rules and otherwise make administrative preparations.’ S. Rep. No. 94-938(I), at 590. Congress expected we would leverage our then-recent experience with section 7476 to promulgate rules tailored to the needs of section 7428, and for other courts to follow that example. S. Rep. No. 94-938(I), at 588 (1976). Rule 217 is the product of that direction. See Declaratory Judgments—Retirement Plans, Section 367 Exchanges, Exempt Organizations, Rule 217, 68 T.C. 1031, 1047–51 (1977). From the beginning, the Rule has drawn a sharp distinction between rejections and revocations.” Order, at p. 3.

Initial IRS qualification review is limited to applicant’s say-so. IRS doesn’t investigate what applicant says, only that they said the right stuff. But revocation is another story and is most often based on what applicant did (or didn’t do), not only what they said maybe years before. Plenty of fact questions here.

So discovery is in order. And Family can fight about what’s in the Administrative Record afterward.

Sysco Corporation, T. C. Memo. 2026-84, filed 9/14/26, claims Tax Court got it wrong in Varian II, a/k/a Varian Medical Systems, Inc. and Subsidiaries, 166 T.C.  8, more particularly bounded and described in my blogpost “‘Such Rarefied Heights of Pure Mathematics – Excluded,” 8/4/26. 

Judge Emin (“Eminent”) Toro sums it up. “In Varian II, 166 T.C., slip op. at 20, we held that section 246(c)(1) limits the deduction available under section 245A to amounts treated as dividends on shares directly held by the relevant taxpayer. We further held that the formula used to compute the foreign tax credit disallowance under section 245A(d)(1) must include the post-section 965(c) amount in the denominator of the fraction. Varian II, 166 T.C., slip op. at 33.” T. C. Memo. 2026-84, at p. 2.

Simple enough, right?

On the return at issue, Sysco excluded the Section 245A deduction for the deemed dividends received of foreign taxes (Section 78). IRS said no, per Varian II.

Thye whole fight is over Section 246(c)(1). First is the phrase “held by the taxpayer.” Sysco claims only US person owning 10% of designated foreign corporation’s stock, per Section 951(b). Too narrow, says Judge Eminent Toro. Taxpayer means anyone subject to any IRC tax. And “held” means held directly.

“The history of section 246(c)(1) allows us to draw several conclusions. First, when Congress adopted the phrase ‘held by the taxpayer’ in section 246(c)(1), subpart F concepts, including indirect and constructive ownership under section 958(a) and (b), were not in the picture. Second, Congress has in the past expressly differentiated between direct and indirect ownership requirements in rules regarding dividends received deductions. And third, as Congress amended section 246(c)(1) through the years, it retained the phrase ‘held by the taxpayer’ rather than replacing it with more expansive terms or incorporating tests from other provisions.

“There is no indication that, when Congress amended section 246(c)(1) to include section 245A in its list of covered provisions, the meaning of ‘held by the taxpayer’ changed to incorporate concepts from subpart F. If that were true, the text of section 246(c)(1) would adopt an entirely different meaning depending on the provision under which the taxpayer claims a dividends received deduction. Specifically, ‘held by the taxpayer’ would mean ‘owned, as described in section 958, by the U.S. shareholder as defined in section 951(b)’ only when a taxpayer claimed a dividends received deduction under section 245A.

“This is not how statutes work.” T. C. Memo. 2026-84, at p. 9.

There’s a lot more, but ‘ll spare you. “In short, Sysco’s valiant efforts to find a statutory hook for its position do not carry the day.” T. C. Memo. 2026-84, at p. 11. (Footnote omitted, but it says indirect ownership does play a part. If 5% owned directly and 95% indirectly, shareholder can deduct 5% of the dividend since the 95% counts toward the 10% threshold, but if the 95% didn’t count at all, shareholder could deduct nothing.)

Reg. Section 1.245A-5 doesn’t help, either. All it says is what part of the dividend deduction will be disallowed; it doesn’t say whether anything over will necessarily be allowed.

Legislative history doesn’t avail either. There’s more mathematics for those who like that sort of thing.

But at close of play, there’s no variant of Varian.

Don’t say you weren’t warned. Six-and-a-half (count ’em, six-and-a-half) years ago, I predicted “be prepared for orders from other judges and STJs requiring courtesy copies of exhibits. And remember: thumbs up.” See my blogpost “Thumbs Up,” 2/24/20.

Judge Rose E. (“Cracklin'”) Jenkins tells the recalcitrant third-party recipient of a document subpoena in David J. Feingold, et al., Docket No. 19354-24, filed 9/11/26, that PDFs won’t cut it, so hand over documents in native format on a thumb drive, Order, at p. 4, footnote 2.

And Judge Jenkins reprises her lost document template, Order, at p. 2. Alert readers of this my blog will remember I blogged this useful form when it was issued in May. See my blogpost “The Missing Document,” 5/1/26. Properly tailored, the template could be useful in other contexts.

There’s also a primer on privilege logs, Order, at p. 5. I can’t think any of my ultrasophisticated, battle-hardened readers need this, but I note it for the record.

I’m reluctant, not because of any criticism from the reader (Bob Kamman, Esq.), but because he has raised, in a comment to a very old post, a point that I have beaten to what I supposed was death a long time ago. You can find his comment, and my reply, at my blogpost “Statute of Limitations? Maybe Not,” 12/28/10.  That’s only about sixteen (count ’em, sixteen) years ago. 

The case is Estate of Arthur I. Appleton, Deceased, Linda Potter, Executor, Docket No. 15121-12, filed 9/10/26. Ch J Patrick J. (“Scholar Pat”) Urda orders either a stip of settlement or a status report 90 days out.

Mr. Kamman points out that this is status report number 28; I count 34, but it really doesn’t matter.

Can any reader point me to another court where cases hang around for decades with no end in sight? I mean, besides Jarndyce v. Jarndyce.

Way back in 2010, Judge Julian I. Jacobs (now long since retired) stated in a companion case “that the interest of the taxpayer in a speedy resolution outweighs the specific governmental interest of the Virgin Islands Bureau of Internal Revenue in orderly tax administration of the USVI.”

Yeah, roger that, most affirmative.