The late A. G. Linkletter would find The Glasshouse That Vic Built an endless source of josh, banter, and the jocose. Today Judge Albert G (“Scholar Al”) Lauber encounters yet another specimen of what makes blogging Tax Court “a medley of extemporanea.”

Ifeoma Ezekwo, Docket No. 15454-21P, filed 5/25/22, wants “…the IRS to “release[e] her full monthly disability payment to her and rush[] a check of $107,076.60 within the next 7 days.” Order, at p. 1.

Ya gotta admire Ifeoma. Not even the Jersey Boys would go for the cup off the tee from a parking lot two miles from the golf course.

Judge Scholar Al is benignly literal. This is a passport case. All Tax Court can do is tell State to return Ifeoma’s passport. If she wins, that is.

And if this were a CDP case, all Tax Court could do is enjoin collection if a timely petition were filed from a NOD. “But this is not a CDP case. And even if it were, we would lack authority to enjoin collection action because petitioner has supplied no evidence that a notice of determination has been issued to her, much less that she effected a timely appeal therefrom.” Order, at pp. 1-2.

We really need another Tax Court Judicial Conference, just to sit around and swap war stories. Perhaps Chief Judge Elect Kathleen (“TBS = The Big Shillelagh”) Kerrigan might consider convoking one when she takes office.

This formerly pejorative (not to say offensive and objectionable) phrase certainly does not apply to Martha L. Albrecht, T. C. Memo. 2022-53, filed 5/25/22. Martha did donate a substantial collection of Native American jewelry and artifacts to the Wheelwright Museum of the American Indian, as substantiated by a five-page deed of gift.

But the Wheelwright’s draftership falls short of the Section 170(f)(8)(B) contemporaneous written agreement standard. The deed does not say that no goods or services were provided by the Wheelwrights, although there’s no suggestion that there were. Nor does the deed state that there is no other agreement respecting the donation.

Judge Travis A. (“Tag”) Greaves plays the literalist here.

“Although the deed in this case provides that the donation was ‘unconditional and irrevocable,’ it continues that ‘all rights, titles and interests held by the donor in the property are included in the donation, unless otherwise stated in the Gift Agreement.’ (Emphasis added.) Thus, the terms of the deed were subject to a separate agreement, but the Wheelwright Museum did not provide petitioner with this document before the return was filed.” T. C. Memo. 2022-53, at pp. 4-5. (Footnote omitted, but it says that even though the parties stiped that Martha got nothing, that was after the fact, so it doesn’t help).

And that there never was a “Gift Agreement” doesn’t help either, because the deed says there was. Besides, the drafter of the deed made the rookie error of omitting an integration clause, which should say that this deed sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof, and may not be varied otherwise than in writing and signed by the party against whom any variation is asserted.

“We appreciate what appears to have been a good faith attempt by petitioner to substantially comply with the Code by executing the deed with the Wheelwright Museum. Substantial compliance, unfortunately for petitioner, does not satisfy the strict requirements of section 170(f)(8)(B). See 15 W. 17th St. LLC, 147 T.C. at 562. Thus, for the reasons given above, petitioner is not entitled to a charitable contribution deduction with respect to the donation as the deed does not satisfy these requirements.” T. C. Memo. 2022-53, at pp. 5-6.

For the 15 West 17th St. LLC story, see my blogpost “Executive Nullification,” 12/22/16.

Note well, I characterized that case as “one of those overblown façade farragoes.” With the façade and conservation chicanery, currently rife, IRS is going scalphunting. Charities and donors beware: those deeds of gift need to be bulletproof.

I’ll wager an ale or two that the drafter of this deed is getting The Phone Call.

This coming October will mark Year Fifty-Three (count ’em, Fifty-Three) since I shouted the above-captioned under the “blue and staring” Southeast Asian sky.

If the foregoing is obscure, consider yourself lucky; I cannot further explicate, as this blog is meant for reading around the family circle.

I am sure Ch J Maurice B (“Mighty Mo”) Foley is too well-bred to shout anything like that, but I am also sure he shares the feeling, with a scant week to go before he hands over the Chieftainship to Chief Judge Elect Kathleen (“TBS = The Big Shillelagh”) Kerrigan.

So today his order in Darcy Mae Englert, Docket No. 3464-22, filed 5/25/22, reflects his vision of “a truce, then, to our labors” that is so soon to come.

Darcy Mae has favored Ch J Mighty Mo with correspondence, but perhaps same is a trifle opaque. So rather than attempt to reconstruct, or request clarification (which can only lead to further opacity), Ch J. Mighty Mo orders the following.

]” …to the extent there is a request in petitioner’s Letter…that the place of trial in this case be changed to Cheyenne, Wyoming, that request is denied. It is further ordered that, to the extent there is any other request for relief in petitioner’s Letter… that request is denied.” Order, at p. 1.

Time for a Change

A reminder that tomorrow is the deadline for comments to Ch J Maurice B (“Mighty Mo”) Foley’s proposed amendments to the Tax Court’s Rules of Practice and Procedure. So get those incisive and insightful thoughts down in electrons, and get them to Ch Clk Servoss by 4:00 p.m., local time in the Stateless City, tomorrow.

Today STJ Eunkyong (“Sidewalks of N’Yawk”) Choi has an essay on a why Rule 90(c ) needs amending, so that it has some teeth and stops being a gameplayer’s delight.

Y’all can read for yourselves STJ Eunkyong’s exegesis of the Rule’s current verbiage, but at close of play, all she can do is punt, after three (count ’em, three) years of artistic stalling by Lony Tap Gatwas, Docket No. 11575-17, filed 5/24/22.

Note I’m not faulting Lony’s trusty attorney, James R. Monroe, Esq.,, whom I’ve often praised in the past. See, e.g., my blogpost “‘When You’re Down and Out’ – Part Deux,” 6/28/16. If there’s a valid argument you can use to get your client off the hook, you must use it.

Here’s STJ Eunkyong’s take on her options, and IRS’.

“Rule 90(c) requires specificity as to a denial of a matter only if such matter is denied in part. The Rule does not prohibit a party from wholly denying a matter without specifying a reason for the denial. See Rule 90(c). A party may wholly deny a matter if the party believes that the matter presents a genuine issue of trial. See Id. However, such an outright denial is subject to Rule 90(g), which provides that if a party unjustifiably fails to admit the truth of a matter as requested, the party requesting the admission may apply to the Court for an Order imposing such sanction on the other party or the other party’s counsel as the Court may find appropriate. Id.; see also Rule 90(g).

“The only relief this Court may grant respondent is (1) deeming admitted the matters asserted in respondent’s First Request for Admissions, (2) ordering petitioner to serve an amended response to respondent’s First Request for Admissions, or (3)  making a final disposition of respondent’s motion at a later, more appropriate time.  Rule 90(e). Because petitioner’s Response to First Request for Admissions was timely,  and because Rule 90(c) does not prohibit a party from wholly denying a matter asserted in a request for admissions, we do not find petitioner’s responses insufficient.” Order, at p. 4.

Of course, IRS’ counsel has an out.

“However, based on the record before us, we do find that respondent may apply to the Court for an order pursuant to Rule 90(g).” Order, at p. 5.

But in the meantime, nothing happens.

Of course, since Lony got two years of the three aforesaid by asking the Court to wait until he got out of jail, it will be interesting to see if there are any preclusive effects that shoot down his denials in the judgment that sent him there.

And I must recommend reading IRS’ requested admissions; Lony is quite inventive.

Howbeit, Rule 90(c) needs overhauling. If the requested admissions are baseless, let the Court strike them. If the responses are unresponsive, let the petitioner (or respondent) amend, or be sanctioned.

But endless punting accomplishes nothing but provide fresh CLE fodder: Stall Your Case At Discovery.

No, not the basic combat orientation of my long-ago days; I remember none of it. But today Judge Christian N. (“Speedy”) Weiler utilizes the judicial equivalent in escaping from the clutches of 11 Cir’s Hewitt decision in Michael Davis & Amy L. Davis, Docket No. 14870-20, filed 5/23/22.

It’s the usual striking gold in GA boondocks. Mike and partner buy just shy of 10 acres for $6K and take a $2.51 million conservation write-off. Those hills must be alive with dilithium crystals; or something. And of course the conservation easement deed is the usual improvements-out, although there’s a subsequent correction deed putting them back in.

But the improvements themselves is what Judge Speedy Weiler grabs to escape Hewitt and evade IRS’ motion for summary J.

“Under the deed, [the partnership] reserves the right to make improvements to the property, including the right to construct trails and footpaths on the property, install signs and other marks, construct low impact amenities, maintain and manage the property to prevent erosion, and install picnic tables, benches, and the like.” Order, at p. 2.

My astute, battle-hardened readers will shout as one “Improvements de minimis!” And quote Oconee and Little Horse Creek.

Judge Speedy Weiler doesn’t know, but that’s enough to scupper IRS’ motion for summary J.

“In short, the property has no existing improvements, and the permitted future improvements appear to consist of modest use intended for conservation, recreational, and educational purposes. At trial, petitioners may be able to establish that these improvements (if built) would be unlikely to increase the property’s fair market value in a material way (if at all). If any increase in value attributable to improvements would be de minimis, petitioners could contend that the deed’s ‘donor improvements’ clause would not cause [501(c)(3)] to receive less than its proportionate share of the proceeds in the event the property was sold following judicial extinguishment of the easement.” Order, at p. 6.

Value of improvements is fact-specific, hence ill-suited to summary J.

But IRS’ Boss Hossery is sufficient to allow them summary J for chops…if they get that far.

Having turned their $6K investment into a $2.5 million tax write-off, I doubt Mike and partner will spend a whole lot on improvements.

There’s a T. C. Memo. today, Genecure, L.L.C., Frank Y. Tung, Tax Matters Partner, T. C. Memo. 2022-52, filed 5/23/22, but it’s indocumentado meets Tokarski, and IRS messing up the Boss Hossery. Not worth noting.

It seems that, at long last, mirabile dictù, there is an accessible database of the Tax Court’s orders, such that a practitioner may actually now find that which I was posting back in 2013 via the old discredited Blackstone system. See my blogpost “Protection,” 11/21/13. Took the Genius Baristas less than ten (count ’em, ten) years to make it happen.

Judge Mark V.  Holmes man-‘splains in CFM Insurance Inc., et al., Docket No. 10703-19, filed 5/20/22.

“One of petitioners’ expert witnesses…submitted a report in which he relied in part on proprietary data. * * * This attracted a motion to strike from respondent, because Rule 143(g)(1)(B) requires data on which an expert relies to be shared with the opposing party. Petitioners object on the ground that the data is entitled to protection as proprietary. The obvious solution — a negotiated protective order limiting the use of any proprietary information — is a problem because respondent’s counsel doesn’t have delegated authority to sign one on behalf of the Commissioner. (The IRS takes the position that any such information should instead be protected under Code section 6103.).” Order, at p. 1.

OK, but trial is coming on in a month.

So Judge Holmes does one of his celebrated phoneathons. At the close of the session, a solution emerges.

“The solution was for petitioners’ counsel to move for a protective order with suggested language. She has now combed through our court’s own newly-accessible database of orders to do so. Although respondent’s counsel had to object, he has at least been consulted on the proposed language.” Order, at p. 1.

Given the swingeing penalties visited upon IRS personnel for Section 6103 leakage (which surpass even those for Supreme Court equivalents…but this is a nonpolitical blog), I am sure IRS counsel must continue to object.

But his protests go unheeded.

“Because the requested motion and suggested language balance the need of respondent to be able to understand and rebut petitioner’s expert-witness report and the legitimate request of petitioners’ expert to keep his proprietary database confidential the Court will grant petitioners’ motion.” Order, at p. 1.

And you can find the text of Judge Holmes’ order at p. 2.

Nothing interesting in Tax Court today, so I strongly suggest that any of my readers who can get to this Minor Outlying Island off the Coast of North America betake themselves to the Metropolitan Museum of Art before 9/5/22, and see “In America – An Anthology of Fashion.”

The best exhibition I’ve seen in seventy (count ’em, seventy) years.

You can skip the companion show “In America – A Lexicon of Fashion.” Claustrophobic, soporific.

For those who can’t make it, there’s talk of an illustrated catalogue of the “Anthology” exhibition to be issued this Fall. There’s already one for the “Lexicon” exhibition, which you can give to your worst enemy as a birthday present.

Once again, the Sage of Concord, Ralph Waldo Emerson: “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.” And Judge Morrison has a helping of Emerson’s wisdom for Kirk Stevens & Shannon Stevens, Docket No. 2824-20, filed 5/18/22.

Kirk & Shannon’s Sub S signed up with two unrelated entities, MVP and Hedge Red. MVP owned Hedge Red. Kirk & Shannon’s Sub S  signed aboard an “Amended and Restated Bermuda Call Option Agreement” with the aforesaid MVP and Hedge Red.

If this sounds to you like another of those offshore indifferent dodges, it did to IRS, who claimed no economic substance. But Kirk & Shannon claim IRS said it did have economic substance for MVP, and wants documents from IRS’ audit of MVP to show it. IRS says “Section 6013 taxpayer info, therefore cannot be disclosed.”

Kirk & Shannon riposte that Sections 6103(h)(4)(B) and (h)(4)(C) provide exceptions. Judge Morrison isn’t buying.

“The party asserting that an exception allows disclosure of third-party tax returns and tax return information under section 6103 bears the burden to show the information can be disclosed. Mescalero Apache Tribe v. Commissioner, 148 T.C. 291, 299-300 (2017). But respondent’s tax treatment of one taxpayer (here, MVP) is not relevant to the appropriate tax treatment of other taxpayers (here, the petitioners). And respondent is entitled to take inconsistent positions to ensure that it is not “whipsawed” by taxpayers who themselves take inconsistent positions. We therefore conclude that the petitioners have not shown that tax treatment of the option agreement reflected on MVP’s returns directly relates to whether the option agreement has economic substance (see §6103(h)(4)(B)) or that MVP’s return and return information directly relates to whether the agreement has economic substance (see §6103(h)(4)(C).” Order, at p. 2 (Citation omitted, but you’ll find the Mescaleros’ story in my blogpost ‘Indians Not Taxed, Maybe,’ 4/5/17).

Once again, Emerson prevails.

Judge David Gustafson confronts the old “seal one document, seal ’em all” problem which bedevilled the original new, improved, jim-handy (yeah, most affirmative, roger that) DAWSON electronic docket system. Now it seems that the Genius Baristas have so far pulled their thumbs out, that only individual documents can now be sealed, while the rest of the electronic docket may be available to the public, as intended by Section 7461.

Of course, that which was previously enveloped in the all-encompassing sealing must be individually released, rather like prisoners at the end of Act I of Fidelio.

Lawrence W. Doyle & John F. Moynihan, Docket No. 4865-19W, filed 5/17/22, are engaged with IRS in an unseal-athon. This started with one document, but 25 (count ’em, 25) others got involved.

Of course, the sealing started a year ago. See my blogpost “Stealth and Unstealth,” 4/28/21.

But IRS suggests this may all be for naught, as DC Cir put paid to Cooper and Lacey back in January, in Li v Com’r, 20-1245, filed 1/11/21. Mandy Mobley Li, pro se (natch), exhausted DC Cir’s patience, and they held that no award equals no jurisdiction, per Section 7623(b)(4). So whatever the Ogden Sunseteers did or didn’t do, neither Tax Court nor anyone else can say Word One.

For Mandy Mobley’s story, see my blogpost “Ran the Checklist,” 4/6/20.

Taishoff says DC Cir has made mincemeat of the whole tax whistleblower system. All the Ogden Sunseteers have to do is do nothing; no award, no Tax Court jurisdiction (and Tax Court’s jurisdiction is expressly “exclusive,” so no one else can look either).

So thanks to DC Cir, the brand-new Chief Whistler Mr. John W. (“Hoppin’ John”) Hinman has the easiest job in the world; he can run the 100% sequester.

Judge Gustafson does order the uncontested documents unsealed, although to what purpose remains doubtful. It’s doubtful if he has jurisdiction to do even that much.

So many expert witness jousts involve mixed questions of fact and law. And expert knowledge is essential in sorting out facts so as to make them intelligible to the trier of fact. But the judge decides when the expert has stepped out of bounds, to expound the law, or worse, to advocate. Here Judge Mark V. Holmes, summarizing in CFM Insurance Inc., et al, Docket No 10703-19, filed 5/16/22.

Judge Holmes has some thoughts that bring a grin to my battered visage.

“We began by agreeing with petitioner that it is correct that there is a fairly hard rule that expert testimony about domestic law is generally not admissible. This rule is usually accompanied by the line that ‘testimony about the law does not assist the court.’ Judges may pretend this is so, but in their hearts they know that many of the lawyers and sometimes even the witnesses who appear before them know much more about the law than they do.

“The rule would be a weak one if it was helpfulness in reaching the correct result that we focused on. But the rule would be a strong one if we focused on the difference between findings of fact and conclusions of law. Courts mostly serve as human lie detectors in evaluating testimony — they ask if the witness broke down on cross, engaged in self-contradiction, or told an incoherent story. Judges are not supposed to conduct private investigations outside the record into the facts of a case. But in reaching a legal conclusion, a judge is less constrained. He is able to consult his own resources and expertise, and looks to the advocates who appear before him for help in where to look. We expect lawyers to zealously advocate for their clients; we’re suspicious of witnesses who do so.” Order, at p. 1-2.

IRS was looking to eviscerate the petitioner’s expert’s report. Judge Holmes only cuts off a couple sentences. And this is as good a statement of the principles as I’ve seen.