I should be pleased that Section 6751(b) Boss Hossery furnishes so much blogfodder and such ample opportunity for scouting (pejorative: look it up) the wretched drafting of the statute. But the enormous waste of judicial resources and litigants’ effort is headshaking material. The statute doesn’t accomplish what Congress intended; even if it could, the ensuing jurisprudence has made it worse than useless. 

Here we go again. Harvey Birdman & Diane Birdman, Docket No. 28897-10, filed 9/18/26, make their third appearance in this my blog. Harv & Di are leads in six (count ’em, six) cases, all old Section 932 Virgins, Congress’ unguided largesse to Our Insolvent Islands in the Sun.

IRS wants Boss Hoss summary J only as to Harv & Di, but trusty attorneys list all six docket numbers in their opposition papers, earning a reproof from Judge Cary Douglas (“C-Doug”) Pugh. Order, at p. 1, footnote 1.

But IRS’ paperwork is far from exemplary. I won’t attempt to condense, much less set forth in full, the Penalty Approval Form, more particularly bounded and described at Order, at p. 2. It tops Bud Abbott and Lou Costello’s celebrated “Who’s-On-First?” routine.

Judge C-Doug Pugh manages to rescue the Section 6663 fraud and the Section 6662(b)(1) negligence chops from under the hooves of this staggering Boss Hoss, incidentally reiterating everything wrong with the statute.

“The statute requires approval ‘in writing’—it does not prescribe a particular form that writing must take. See § 6751(b)(1); Belair Woods, 154 T.C. at 17. Likewise, this Court has consistently declined to prescribe a particular format or style for a supervisor’s written approval under section 6751(b). See, e.g., Palmolive Bldg. Invs., 152 T.C. at 86 (2019) (citing Deyo v. United States, 296 F. App’x 157, 159 (2d Cir. 2008) (requiring ‘only personal approval in writing, not any particular form of signature or even any signature at all’)); Belair Woods, 154 T.C. at 17. Because petitioners fail to raise a material factual dispute regarding supervisory approval of the section 6663 fraud and section 6662(b)(1) negligence penalties, we will grant respondent’s motion in part.” Order, at p. 4.  (Footnote omitted, but it says deposing the RA adds nothing to her declaration for the purposes of this motion; presumably petitioner can get their whack at trial, see Order at p. 4.)

One final reproof to petitioners’ trusty attorney, and this is one we had ding-dinged into our heads in Civil Procedure One (thanks Dean Warren). ” We note that Mr. D’s declaration contains many pages of legal argument. We address his legal argument as if it were contained in petitioners’ Opposition brief because it is argument only and not factual support. We caution counsel that arguments do not belong in declarations.” Order, at p. 2, footnote 3. (Name omitted).

Once again, memory drifts me back to the Hill Far Above and a former millennium, more particularly bounded and described in my blogpost “The Battle of the Forms,” 11/16/17. Now, however, there’s a clear winner, as Form 872-M o’ercrows Form 8981, bringing DIBC Buffalo Hills Ranch, LLC, LC Fulenwider, Inc., Partnership Representative, Docket No. 13369-25, filed 9/18/26, squarely within Tax Court jurisdiction.

The Buffalo hillbillies claim 3SOL, but the designated hitter of their PRep, duly designated in Form 8979, Partnership Representative Revocation, Designation, and Resignation, duly signed two (count ’em, two) successive Forms 872-M, Consent to Extend the Time to Make Partnership Adjustment, during which second extension IRS dropped their NOPPA and FPA.

Judge Christian N. (“Speedy”) Weiler takes up the story.

“Petitioner did not request any changes or modifications in response to the. NOPPA; however, …petitioner electronically submitted Form 8981, Waiver of the Period under IRC Section 6231(b)(2)(A) and Expiration of the Period for Modification Submissions Under IRC Section 6225(c)(7). A representative of IRS, however, never countersigned Form 8981 nor sent an executed copy of the Form 8981 back to petitioner.” Order, at p. 3. (Footnote omitted, but it says IRS sent the FPA after the 270 day cutoff.)

So battle is joined. “Petitioner contends that since it submitted Form 8981 … under section 6235(a)(2), the IRS was required to issue the FPA within 270 days from the date of submission of Form 8981…. Respondent contends that since the partnership never submitted a request for modification or changes, section 6235(a)(2) has no application; moreover, even if there was a valid Form 8981 executed by the parties, the parties had previously agreed to extend the limitations period under Form 872–M.” Order, at p. 5.

For those who remember my blogpost “A New Day – Extended,” 9/9/26, the outcome is no surprise.

“In any event, ‘any agreed-upon extension under section 6235(b) would necessarily extend the limitations period for making adjustments, and any extension must be taken into consideration in determining the latest of the periods found in paragraphs (1), (2), and (3).’ Katanga Properties, LLC, 167 T.C. slip op. at 7–8. In this case the parties agreed to extend the limitations period under section 6235(a)(1) on two separate occasions: the first Form 872–M extended the adjustment limitations period until December 31, 2024, and the second Form 872–M further extended the adjustment limitations period until December 31, 2025. Both periods were extended prior to the expiration of such period.” Order, at p. 6. (Footnote omitted, but it says Extension One was timely.)

The Buffalo hillbillies’ trusty attorney cannot be faulted for not foreseeing Katanga at the hearing of the summary J motion back in June. He gets a Taishoff “Good Try, third class.”

The famous eleven (count ’em, eleven) badges of fraud get a workout in Dawn Chappelle Cottman, T. C. Memo. 2026-88, filed 9/17/26, since her fall in USDCDMD for 14 (count ’em, 14) counts of filing false returns and other delictions didn’t estop her contesting the Section 6663(a) fraud SOL extender. Her Section 7206(1) fall doesn’t establish fraudulent intent, only intent, and her 18 USC §286 conspiracy fall has never been considered by Tax Court as establishing tax fraud and wasn’t briefed by the parties here.  

So Dawn loses seven of eleven badges, and I’ll spare you the details.

Two are neutral: failure to cooperate because Dawn was in the slammer when IRS asked for documents (even though after she was out she clammed up). And her testimony, though it strained, it did not break, her credibility, as it squared with her trial position and confirmed IRS’ bank deposits analysis.

But the two I want to stress are the two that she won. Dawn did file returns, true or not, for the years at issue; filing returns count. And Dawn’s explanations and litigation conduct have been consistent and not incredible.  “Although this Court finds that certain aspects of petitioner’s story lack credibility, there have been no major inconsistencies in petitioner’s legal arguments or factual allegations.” T. C. Memo. 2026-88, at p. 13.

Judge Kashi (“My or the High”) Way unpacks a lot of issue preclusion and Federal criminal law here.

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.