Letting in testimony from the SO on a CDP as to the contents of the admin record, and more unusually to discuss the petitioners’ allegations of bad faith, shouldn’t give rise to a blogpost. After all, completeness of the admin record is the foundation stone of review where de novo is off the table.

But Kevin J. Mirch & Marie C. Mirch, Docket No. 16277-16L, filed 6/28/23, have a more unusual problem. Kev is a CA attorney, and wants an opinion from the State Bar of California before Judge Patrick J (“Scholar Pat”) Urda goes on with the trial.

On what points of law this opinion is to enlighten the parties is not stated, but as a docket search reveals Kev is representing both himself and Marie C, have we echoes of Gebman here?

For the Gebman story, see my blogpost “No Good Deed – Redux,” 9/18/17.

But Judge Scholar Pat is taking no chances.

“In an abundance of caution and over the Commissioner’s objection, the Court will stay proceedings for the Mirches to confer with the State Bar. After doing so, the Mirches will report back to the Court, and we will take appropriate action for the conclusion of this trial.” Order, at p. 1.

A reliable source informs me that Kev is no stranger to the State Bar.

No, not the 1944 Sumner Welles’ story of his European eyeballings for FDR. Rather, today we note the amendment to Rule 23(a), which brings us to Rule 23(a)(4): “Decision Documents: A decision document, including a proposed decision document, must omit a party’s mailing address, email address, and telephone number.”

Unlike other filed documents, be they pulp-based or electronified, the time for decision is the time for  anonymity.

The general jubilation that followed the Supremes’ “endeavor to bring some discipline to use of the jurisdictional label” in Boechler, P. C., was rather like the starting gun in a wide-open footrace. The scramble succeeded the jubilation, many figuring that if they were a couple days late (hi, Judge Holmes), just claim Boechler and all would be well.

Not quite. Just ask John Roberts Coggs, Docket No. 13772-21L, filed 6/27/23.

JR was twelve (count ’em, twelve) days late with his petition from a NOD. IRS so alleges in its answer, and moved for a Rule 37(c) undenied-is-deemed-admitted. JR stands mute.

Judge Nega: “The section 6330(d)(1) 30-day filing deadline is not jurisdictional, which means this Court has authority to consider late-filed petitions, and the Court may accept a tardy filing by applying the doctrine of equitable tolling. Boechler, P.C. v. Commissioner, 142 S. Ct. 1493, 1496 (2022). A litigant is entitled to equitable tolling of a statute of limitations only if the litigant establishes that he or she has been pursuing his or her rights diligently and that some extraordinary circumstance prevented him or her from timely filing. Menominee Indian Tribe of Wisc. v. United States, 577 U.S. 250, 255–57 (2016); Smith v. Davis, 953 F.3d 582, 588 (9th Cir. 2020)(en banc). Petitioner has not asserted that he satisfies this test, so the Court may not accept his Petition by equitable tolling.” Order, at p. 2. (Footnote omitted).

Takeaway- Tell your story. If you’ve played straight so far, and you’re late only a couple days, maybe “extraordinary” needn’t be so extraordinary.

Sir Paul McCartney’s immortal words (assisted by the immortal John Lennon) from 1966 ring out again in Harry G. Zavisch, III and Estate of Eddy M. Zavisch, Deceased, Harry G. Zavisch, III, Surviving Spouse, Docket No. 14576-22L, filed 6/27/23.

Harry Z’s trusty attorneys move for vacation of the toss of their petition, claiming first that Harry  Z never got the NFTL. Doesn’t matter, says STJ Adam B. (“Sport”) Landy; NFTL properly mailed to last known address by certified mail within five (count ’em, five) days of filing.

Next, NFTL was filed in a county where neither Harry Z nor the late Eddy owned any property.

“…petitioners argue that the NFTL was filed in Bexar County, Texas, in a county they did not own property, and for this additional reason, the… NFTL was not properly filed. The Commissioner may file a lien against ‘all property and rights to property, whether real or personal” of any person liable for taxes upon demand for payment and failure to pay. See § 6321.  The lien arises automatically on the date of assessment and continues until the tax liability is satisfied or becomes unenforceable by reason of lapse of time. § 6322.. Section 6321 ‘is broad and reveals on its face that Congress meant to reach every interest in property that a taxpayer might have. The purpose of filing the notice of the tax lien, originating under section 6321, is simply to protect the Commissioner’s interest in a taxpayers’ property against the claims of a purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor. §6323(a).

“The NFTL filed by the Commissioner is valid and properly attached to all property and rights to property, whether real or personal, tangible or intangible, belonging to petitioners. Therefore, the … NFTL properly protected the Commissioner’s interest in petitioners’ personal property and future acquired property even though petitioners allegedly owned no real property in Bexar County, Texas, the county in which the Commissioner filed the NFTL.” Order, at p. 2. (Citations omitted).

Note that IRS maybe gets no benefit from the recording statutes as to real property if they don’t file NFTLs in the counties where Harry Z and the late Eddy do own real property. But that goes to priority of lien, not existence of lien. As for personal property, check your local laws; YMMV.

The late Donald M. Arndt, before he became the late Donald M. Arndt, blew the whistle on a step transaction that covered a couple years (hi, Judge Holmes). While Don blew for Year One, IRS only got the boodle for Years Two and Three. Don’s trusty attorneys want a bunch documents (ditto) covering those years, but IRS says they aren’t in the admin record, hence off-limits.

Judge Albert G (“Scholar Al”) Lauber isn’t buying, yet.

“Respondent contends that the documents petitioner seeks are not subject to section 6103(h)(4)(B) because they were not found within the administrative record compiled by the WBO. See Kasper v. Commissioner, 150 T.C. 8, 20–21 (limiting scope of review in whistleblower cases to administrative record barring exceptions). But a document may be “directly related to” an issue in a whistleblower proceeding, see § 6103(h)(4)(B), whether or not it is contained in the WBO’s own file. In other words, we do not view our ‘record rule’ for whistleblower cases as limiting what sorts of documents the IRS may disclose pursuant to section 6103(h)(4)(B).” Order, at pp. 2-3. (Footnote omitted, but read it. Maybe Section 6103(h)(4)(A), dealing with production for Federal tax proceedings, might play a part here).

For the Kasper backstory, see my blogpost “Two Old Cases,” 1/10/18.

So Don wins, right?

Not quite.

“Although we agree with petitioner that neither section 6103 nor Rule 70 precludes our granting the Motion to Compel, we believe it would be premature to rule on the Motion at this time. The Court recently provided further guidance on ‘whistleblower discovery requests’ in the context of motions to compel. See Berenblatt v. Commissioner, 160 T.C. No. 14 (May 23, 2023). We would find it helpful for the parties to set forth their views as to how (if at all) Berenblatt affects the proper disposition of petitioner’s second Motion to Compel.” Order, at p. 4.

For the Berenblatt story, see my blogpost “The. Bialystok Blower,” 5/24/23. Spoiler alert: it’s good news for Don’s trusty attorneys

Oh yes, the case is Estate of Donald M. Arndt, Deceased, Kathy R. Arndt, Personal Representative,, 1246-16W, filed 6/27/23.

Frank R. McNamara and Collette M. McNamara, T. C. Sum. Op. 2023-22, filed 6/26/23, find that their MA home secured the mortgage thereon for only five (count ’em, five) months, and not twelve months, during year at issue. Thus Reg. Section 1.163-10T(h) disallows Frank’s and Collette’s deduction, which they based upon a 12-month, and not a 5-month, average balance. The 5-month calculation puts Frank and Collette over the $1 million total indebtedness cutoff.

And the magic number is how long the home secured the mortgage debt.

No mention of chops, but Frank and Collette claim reliance upon examples in IRS Pub 936, Home Mortgage Interest Deduction, “to assert they correctly used a 12-month period to calculate the average monthly mortgage debt for their Massachusetts home.” T. C. Sum. Op. 2023-22, at p. 4.

Well, STJ Eunkyong (“N’Yawk”) Choi says of course that’s not good enough to ward off the tax bite when the statute and the regs clearly say otherwise.

But it seems to have allowed Frank and Collette to avoid the chops.

Taishoff says that if the statute and regs, or either, is so obtuse that IRS’ own pamphleteers get it wrong, maybe Congress and Treasury should pull a Habakkuk 2:2 and do a better job.

I expect it’s the post-Taxpayer First Act Next Big Thing, so we’ll be seeing more maneuvers like Christina A. Eldridge, Petitioner and Todd Eldridge, Intervenor, Docket No. 2200-21, filed 6/23/23, put on to occupy Judge Elizabeth A. (“Tex’) Copeland.

Trusty attorneys for Chris, Todd, and IRS, all join in, moving to supplement the administrative record. Of course, each has his, her,  its or their own proposed supplements, to which at least one of the others objects.

So both Chris and Todd move for a continuance (that’s an “adjournment” for us State courtiers), and IRS doesn’t object to that.

Judge Tex Copeland puts  the dueling motions on hold, while giving the parties some homework.

“… the parties shall each separately file with the Court a brief outlining their legal position as to adequacy of the Administrative Record filed in this case… with such briefs having a due date of July 24, 2023. Such briefs should address both petitioner’s Oral Motion to Complete or Supplement the Administrative Record and intervenor’s Oral Motion to Supplement the Administrative Record. The briefs should identify relevant facts and the case law in support of their positions, giving particular attention to I.R.C. § 6015(e)(7) and our guidance on completing or supplementing an administrative record, as outlined in Van Bemmelen v. Commissioner, 155 T.C. 64 (2020).” Order, at p. 2.

For the Van Bemmelen story, see my blogpost  “Administering Supplements,” 8/27/20.

The post-Li blower who survives the “we din’t get nuttin'” brush-off from the Ogden Sunseteers can find salvation only in what the OS gang looked at and packed into the admin record.  Post-Van Bemmelen, the party that controls the admin record controls the high ground. That’s where the fight must take place.

And Judge Tex Copeland realizes that, for innocent spouses in the world of Section 6015(e)(7), it’s still the same old story. Rarely if ever is there any “newly-discovered, previously unavailable” evidence. The trial de novo is the trial de nuttin‘, so the admin record is where it’s at.

Henry Seggerman,, T. C. Memo. 2023-78, filed 6/22/23, was doing what your credit report says you should be doing, paying as agreed. He was paying off a restitution-based assessment (RBA) on a dubious 706, per a cooperation agreement with DOJ in USDCSDNY.

But IRS hits Henry with a NFTL, which he petitions, claiming it hurts his ability to earn income, although he can provide no proof thereof. He does prove that he can’t pay more than what he’s paying under the cooperation deal. So Appeals put Henry in CNC, but leaves the NFTL in place.

Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan keeps the NFTL.

“Petitioner argues that he never fell behind on the district court’s payment schedule and that the NFTL was prematurely filed and therefore should be withdrawn. See § 6323(j)(1)(A) (providing for discretionary NFTL withdrawal if the notice was filed prematurely or not in accordance with administrative procedures). Respondent argues that he is not bound by the district court’s payment schedule because he has independent authority to collect RBAs. Respondent also notes that petitioner and the DOJ stipulated in the cooperation agreement that ‘the existence of a payment plan set by the [c]ourt shall not bar Governmental collection efforts against any of the defendant’s available assets.’

“We agree with respondent. Section 6201(a)(4)(A) provides that ‘[t]he Secretary shall assess and collect the amount of restitution . . . for failure to pay any tax imposed under this title in the same manner as if such amount were such tax.” T. C. Memo. 2023-78, at p. 5.

Liability is off the table, of course; the cooperation deal in USDCSDNY seals that exit. And that Henry is paying as agreed doesn’t preclude a NFTL; we call that a hit-the-lottery NFTL. If Henry hits the lottery big, he might be able to pay in full, and should not be allowed to walk with the boodle in such event, leaving IRS hanging.

If you’re going to try your own case and testify in your own behalf, you would be well-advised to sweat yourself good at trial prep, and take the advice of a judge as wise as Judge Cary Douglas Pugh: when she suggests you take a continuance so as better to prepare, take it. And if she refuses your request for an adjournment while you’re testifying, but offers you a lunch break instead, don’t go to lunch; take opposing counsel into the hallway and settle, quick.

Neel Kamal and Preeti Sharma, T. C. Memo.  2023-80, filed 6/22/23, do not heed the words of wisdom from Judge Pugh. Preeti doesn’t even show for the trial. Neel goes it alone, and his testimony is less than convincing.

“We did not find Mr. Kamal to be a credible witness. His testimony was inconsistent, confusing, and difficult to follow. He was defensive and evasive from the start, and he appeared increasingly uncomfortable and agitated as cross-examination exposed more holes in his story. His testimony about [his consulting outfit] did not match the documents provided by third parties. It did not stand up to logic and was not credible. After a series of questions and repeated admonishments, Mr. Kamal answered questions by stating that he did not remember or refused to answer altogether.

“In addition to his testimony, Mr. Kamal submitted a copy of a service agreement, invoices, and letters…. These documents are poor attempts at fabrication.” T. C. Memo. 2023-80, at p. 19.

And to make clear the title of this blogpost, as set forth first at the head hereof, “Plainly uncomfortable answering these simple, direct questions, Mr. Kamal asked that the Court adjourn trial to next day; the Court gave the parties a lunch break instead.” T. C. Memo. 2023-80, at p. 23.

This is an unreported income and indocumentado expenses case. You can read IRS’ barrel-shoot for yourselves.

I report this case only as an example of how an educated officer of a tech firm (bought out by Cisco) can come utterly unglued trying to play games with taxes. He gets the Section 6663 75% fraud chop at no extra charge.

Takeaway- The Judge can tell you a  lot, even when appearing to say very little. Don’t be caught out to lunch. Read and heed.

No, this is not another of my colleague’s Peter Reilly, CPA, beloved Reg. Section 1.183-2(b) “goofy regulation” cases, with Tennessee Walkers, cutting horses, quarter horses, or nicked-ancestry Graded Stakes winners.

This is yet another case of Taishoff beating a dead (metaphorical) horse, this time a Boss Hoss.

I must repeat yet again, if repetition is indeed necessary, that I am not trying to cram Tax Court Judges and STJs into a Procrustean cliché; judges must control their own courtrooms without looking over their shoulders for enforcement types who never tried a case.

What I have been trying to do is derive a framework sufficiently wide to accommodate the practical needs of judges, and yet with enough structure to avoid the “arbitrary and capricious” claims of the Section 6673 frivolites.

And today I’m stymied by Patricia Hyde, T. C. Memo. 2023-76, filed 6/21/23. Hyde is fighting about her 2006 deficiency, as to which she lost in Tax Court in 2011. Nowise daunted, she tried vacation, and lost. She appealed to 8 Cir, and lost. Of course, she petitioned for cert from the Supremes, and got tossed. Hyde having put up no bond, in 2012 IRS assessed, but waited until 2019 to file a NFTL.

Hyde files for a CDP, and frivols away. Receiving a NOD, she petitions.

Judge Paris, with commendable patience: “Petitioner contends in her Motion to Dismiss for Lack of Jurisdiction that this Court lacks jurisdiction over this case under sections 6320 and 6330 because Appeals abused its discretion and issued an invalid notice of determination. The Court disagrees with petitioner. Not only does petitioner misapprehend the effect that granting her Motion would have on her case; the record establishes that all jurisdictional conditions have been met and that the case is properly before this Court. See §§ 6320(c), 6330(d)(1). Accordingly, the Court will deny petitioner’s Motion to Dismiss for Lack of Jurisdiction.” T. C. Memo. 2023-76, at p. 5.

The best is yet to come. In her 2011 visit to Tax Court, Hyde got handed a $3K Section 6673 chop. Hyde now claims that the chop is invalid, because not Boss Hossed per Section 6751(b). This is after she lost her Rule 161, her appeal to 8 Cir, and toss by the Supremes, more than ten (count ’em, ten) years ago.

Judge Paris finally falls back on Benton Williams.

“Section 6673(a)(1) authorizes this Court to impose a penalty of up to $25,000 on a taxpayer whenever it appears that the taxpayer instituted the proceeding primarily for delay or that the taxpayer’s position is frivolous or groundless. The authority of the Court to impose such a penalty is not subject to the supervisory approval requirement of section 6751(b)(1). Williams v. Commissioner, 151 T.C. 1, 5–10 (2018). This is so because the provision ‘was not intended as a broad restraint mechanism on the Federal judiciary . . . [or] to cover the imposition of penalties that Congress intended could be imposed by courts because of misbehavior by a litigant during the course of a judicial proceeding.” Id. at 10. Accordingly, the Court concludes that petitioner’s assertion that sanctions imposed pursuant to section 6673 must comply with section 6751(b)(1) is wrong and that the section 6673 penalty was assessable contemporaneously with the decision entered in the notice of deficiency case. See §§ 6671(a), 6673(a)(1).” T. C. Memo. 2023-76, at p. 8.

For the Williams story, see my blogpost “Into the Sunset,” 7/3/18.

So why am I telling you this?

Because after all Hyde’s frivolizing, Judge Paris and IRS decide that a computational error in Hyde’s favor was made back in 2011 in reckoning the Section 6654 add-on, and so a Rule 155 beancount must follow, and no Section 6673 for this latest frivolity fest.