Like the human players in Jaques’ soliloquy, the CDP plays many parts. It can take the form of a phoneathon, a tete-a-tete, or a correspondence volley. Thus Judge Ashford teaches us and James D. Sullivan, Docket No. 11738-20L, filed 8/4/21.

James is a frivolite, playing the SE gambit: “The IRC is only applicable in DC and US Territories for those born in  US Territory, who work for the National Government, or are US  Resident Aliens. At all times relevant to this inquiry, the IRC did not apply to me. I was born in one of the 50 states and thus not subject to the territorial jurisdiction of DC and US Territories. I did not work for, or receive income from, the National Government in any capacity, and was not a US Person (a US Taxpayer). I am not one described in IRC 6331(a) as a federal employee, officer or or [sic] elected official. Thus, I received no ‘taxable income’; the levy is invalid; and the NOIL [i.e., the levy notice] must be rescinded.” Order, at p. 3, footnote 4.

James got a SNOD for the $370K in deficiencies and chops, and timely petitioned, except he didn’t pay the sixty Georges or file a proper amended petition, so he got tossed four years ago. When he got the NFTL, he went to Appeals.

There’s argy-bargy about whether James got some letters from the SO, and there’s also some phone-tag, but James chose to respond to everything in writing (frivolities and attempts to litigate the deficiencies included).

Judge Ashford: “Petitioner also asserts that he never received a (telephonic) CDP hearing. However, the record reflects that petitioner’s primary method of communication during the CDP process was through mailed correspondence. AO R attempted to call petitioner several times and had been corresponding with petitioner via mail because that was the way he communicated with her. She explained in her letters to him why he could not challenge his underlying liabilities and, by his own admission, he was not seeking a collection alternative. These communications with petitioner collectively constituted his CDP hearing; he thus received all the process that was due to him. See sec. 301.6330-1(d)(2) Q&A-D6, Proced. & Admin. Regs. (‘A CDP hearing may, but is not required to, consist of a face-to-face meeting, one or more written or oral communications between an Appeals officer or employee and the taxpayer or the taxpayer’s representative, or some combination thereof.’)….” Order, at p. 6. (Citation and name omitted).

Takeaway- A CDP can be a couple letters (hi, Judge Holmes).

Readers may recall my blogpost “18F? WTF,” 7 /9/21. I received a reply to my letter in paper format yesterday, unsigned, although the name and title of Tax Court’s general counsel was typed on the letter. I had requested a reply by e-mail, so I might cut-and-paste the reply in its entirety, unaltered into this blogpost.

I do not intend to type a copy of this document, with its voluminous footnotes.

I have promised, however, both the addressee and my readers that the full document will be posted. I will therefore scan the document and insert it in a subsequent blogpost at no distant date.

See below. My comments will follow at no distant date.

2021_08_04_19_49_20

I learned this fact three-quarters through the last century of the last millennium, and it’s stayed with me. Today I offer for your reading pleasure and enlightenment Jerry R. Abraham and Debra J. Abraham, 2021 T.  C. Memo. 97, filed 8/3/21, as told by Judge Patrick J (“Scholar Pat”) Urda. That’s Jerry R. Abraham, Esq.

Jerry and Debra have four (count ’em, four) years’ worth of partially unpaid taxes, plus failure to pay tax and failure to pay estimateds add-ons, which don’t need Boss Hossery, 2021 T. C. Memo 97, at p. 12, footnote 6. IRS hits them with a NFTL, Jerry and Debra riposte with an OIC of $50K to settle a $204K liability. This gets bounced, and Jerry and Debra petition.

Jerry claims the SO at Appeals should have allowed the $2900 per month for their childrens religious education (they had ten, count ’em, ten children, and claimed the Code was biased against large families; “…they supported four of their children (ages 16, 18, 21, and 23), who lived with them.” 2021 T. C. Memo. 97, at p. 4. The SO allows two of the kids, but cuts those two non-minors whom Jerry says are ” underemployed or unemployed.” 2021 T. C. Memo. 97, at p. 8.

Jerry wanted to wild-card in a year for which he had neither SNOD nor NOD, but that gets dumped for want of jurisdiction.

The real fight is RCP. Appeals says Jerry can pay in full in the ten-year window.

“They assert that the offer specialist’s financial analysis incorrectly disallowed monthly religious education expenses of $2,932 for their dependent daughters in violation of the Religious Freedom Restoration Act of 1993, Pub. L. No. 103-141, 107 Stat. 1488. The Abrahams further argue that the financial analysis incorrectly included as assets $61,075 ‘set aside for taxes and IRA contributions.’ Finally, they contend that the financial analysis incorrectly computed the RCP by multiplying the monthly disposable income by 33 months rather than 12 months.” 2021 T. C. Memo. 97, at pp. 14-15.

Scholar Pat says “So what?”

“Assuming, arguendo, that the Abrahams are correct in each regard, we nonetheless will uphold the settlement officer’s decision to reject the Abrahams’ OIC. We have previously explained that ‘even if the settlement officer made errors in calculating * * * [the taxpayer’s] RCP, we will uphold his decision when the taxpayer’s offer is far less than the correct RCP.” 2021 T. C. Memo. 97, at p. 15. (Citations omitted).

Scholar Pat runs the numbers, gives Jerry his claimed amounts, and still Jerry is offering one-sixth of what he owes, and can pay.

Jerry’s claim that he might file bankruptcy doesn’t help.

“In their response to the motion for summary judgment the Abrahams also contend that the settlement officer abused her discretion by not performing a bankruptcy analysis, as purportedly required by IRM pt. 8.23.3.3.2.3(2) (Aug. 18, 2017), in response to Mr. Abraham’s statement at the CDP hearing that he ‘may file bankruptcy.’ The IRM ‘does not have the force of law and does not confer rights on taxpayers.’ In any event, IRM pt. 23.3.3.2.3(2) states that ‘[s]hould the taxpayer state an intent to file bankruptcy’, the settlement officer should ‘make a general analysis of collectibility and the liabilities that would be discharged.’ As explained at length, such an analysis had been performed by the offer specialist and adopted by the settlement officer, and that analysis demonstrated that the Abrahams could fully pay their outstanding liabilities.” 2021 T. C. Memo. 97, at pp. 15-16, footnote 7. (Citation omitted).

Finally, that Jerry cashed out his gov’t retirement twenty-five years ago, so he wouldn’t get a pension, isn’t a special circumstance.

If you remember the debut of The Fleetwoods’ hit thus entitled, you definitely qualify for Social Security. Today we have a reprise of Rule 34(a)(1), 11/30/18 amendment, as it maybe applies and maybe doesn’t, as more particularly bounded and described in my blogpost “The Stealth Rule,” 8/2/21.

Once again, Ch J Maurice B (“Mighty Mo”) Foley is insisting upon paper filing of amended petitions. Once again, I am confused.

Here’s Jenny A. Stewart, Docket No. 16161-21, filed 8/3/21.

“…petitioner shall, on or before September 14, 2021, file with the Court in paper form (not electronic) a Ratification of Petition bearing an original signature (not a photocopy), preferably in blue ink….” Order, at p. 1.

Can petitions and amendments thereto be filed electronically? If so, does the rule we learned so long ago, that any permanent mark a person makes, however they make it, that evidences an intention to be bound, is a valid signature, still apply?

Or in Tax Court, do we call you Mister Blue?

The biennial balloon has descended, and those wishing to clamber aboard on November 17 can read all about it.

Here’s the skinny: https://www.ustaxcourt.gov/resources/forms/Admission_Nonattorney_Info_and_Form_18A.pdf

Note the fees. It isn’t cheap, and the pass rate is way less than any Bar exam I know of.

Anyway, it’s open season for applications. So study hard. Time management and knowing the FRE cold are the keys.

Best of luck to the candidates.

I had noted before now the speed at which Judge Christian N. (“Speedy”) Weiler undertook his duties; see my blogpost “Fastest Promotion on Record,” 9/10/20. Today he has a full-dress T. C., Mary T. Belair, 157 T. C. 2, filed 8/2/21, but I’m not sure what in this case is so novel that a full-dress T. C. is called for.

The Robinette-Keller clash (de novo 8 Cir v record-rule 9 Cir; see 157 T. C. 2, at p. 3, footnote 3) seems to have been settled by van Bemmelen (the link here is to the opinion reported on a general freebie internet site, as the Genius Baristas (or 18Fs) at DAWSON have blocked it on the Tax Court site). C ‘mon, guys, get it together.

Maybe Judge Speedy Weiler wants to make it clear that the van Bemmelen summary J rationale applies to CDP cases, since van Bemmelen was a whistleblower. See 157 T. C. 2, at p. 11.

Anyway, Mary Belair is out. She hadn’t filed a couple delinquent returns (hi, Judge Holmes), and that would be enough to torpedo her IA, and even the OIC that SO gratuitously suggested she try, unless she filed the returns.

The only real novelty here is Mary Belair’s story about the “corrupt” AUSA in CT and her $20 million judgment, but I’ll leave that for you to read.

I note that Tax Court website announces today that the website guidance for self-representeds (pro ses) is now available as a PDF download. While this is doubtless a help, I fear it is just an addition to the “those who need it won’t read it, and those who read it don’t need it” file jacket.

Nevertheless, I breezed through it, and found this entry at p. 10 thereof: “You may also file a petition electronically. Efiled petitions will be submitted electronically through the DAWSON case management system.”

And the Case-Related Forms page likewise lists Form 2 (the simplified petition) and its pendant forms (Forms 4 and 5) as Efilable.

Moreover, today’s orders feature the usual plethora of “File an Amended Petition”, but none seems to require paper filing.

Can it be that Rule 34(a)(1), as amended 11/30/18, has been finally implemented?

I echo words from a much more exalted personage even than Ch J Maurice B (“Mighty Mo”) Foley: “Can any good thing come out of DAWSON?”

Edited to add, 8/2/21: Maybe I spoke (or wrote) too soon. Check out Fred J. Flanders & Twylla G. Flanders, Docket No. 15804-21, filed 8/2/21. Ch J Maurice B (“Mighty Mo”) Foley still wants wet ink and paper, notwithstanding the new, improved (ha ha ha), jim-handy DAWSON electronic filing largesse.

A year ago Alex B. Kabor & Kathy E. Kabor, Docket No. 10410-19, filed 7/30/21, gave me the basis for a lament about the paucity of interesting Tax Court materials on Fridays. See my blogpost “Friday, Friday,” 7/10/20.

I must thank Judge David Gustafson for his contributions, then and now, to eliminating the lament today, by tossing Alex’s and Kathy’s counsel, incidentally giving me as good a headline as I ever unleashed on the world. And hopefully a chuckle to everyone who struggled through Latin.

Read the order. It’s a cautionary tale for lawyers, and a warning to clients.

I never had one in my young day on The Hill Far Above. Perhaps one kindred spirit would have got me a higher place in our graduating class.

Well, if a reader is prepping for the SEE or similar, and wants a study buddy for FICA/FUTA TFRPs, look no further than that Obliging Jurist, Judge David Gustafson. Even though Donald Edward Nunn, Jr., 6617-20L, filed 7/30/21, doesn’t bother to reply to IRS’ summary J motion, Judge Gustafson lays upon him the whole nine yards.

Read all eight (count ’em, eight) pages of this order. But I want to draw your attention to the “low-hanging fruit” option for the challenge to computation and responsible personhood. While the Appeals hearing offered in the Letter 1153 is your only hearing, because Congress wanted to prevent double-dipping, there is a Plan B.

“(If this outcome seems harsh, it must be evaluated in this light: As we have previously noted, ‘the section 6672 penalty is divisible, so that a taxpayer may litigate the penalty after having paid an amount corresponding to the tax withheld from a single employee’. See Weber v. Commissioner, 138 T.C. 348, 363 n.12 (2012) (citing Davis v. United States, 961 F.2d 867, 870 n.2 (9th Cir. 1992), and Bland v. Commissioner, T.C. Memo. 2012-84, slip op. at 22 n.13). Thus, the taxpayer whose liability is upheld in the Letter 1153 proceeding before IRS Appeals can make a small “token” payment towards the section 6672 penalty, file a refund claim with the IRS, and, if the refund claim is denied, file a refund suit in a Federal District Court or the Court of Federal Claims.)” Order, at p. 7.

In Davis, supra, as my expensive colleagues would say, the plaintiff only had to stump up $100 out of a $70K bill, and IRS counterclaimed for the rest.

So if you have a case and you lose at Appeals, you might want to consider paying the lowest amount IRS claims, making sure your cover letter says to what employee and what amount and period it applies, file for a refund, and if refund denied, sue.

I’m sure readers have awaited as eagerly as I some Tax Court learning about unreimbursed employee business deductions in the Age of Teletubby, those employees working remotely, especially from home. And while the Tax Cuts and Jobs Act of 2017 put paid to the 2% Misc from and including 1/1/2018, there remain back years in the pipeline. Besides, who knows? Congress might actually deal with this some day (don’t bet large bucks).

In this Age of COVID, I saw some performing artists do split-screen Hollywood Squares type television performances from home. The adjustment remains for them and for certain disabled persons and fee-based-compensated gov’t workers locked out of their offices. So unreimbursed employee expenses isn’t entirely a dead letter.

So CSTJ Lewis (“Now Where Have I Heard That Name Before?”) Carluzzo has some small-claimer don’t-quote-me sidelights for Leila Saedian,  2021 T.C. Sum. Op. 23, filed 7/29/21.

Leila was an account exec with Coca Cola in CA. She had no office, and her terms of employment required her and her fellow Coke teletubbies to have “a remote office location where they can work safely without interruption, distraction, or undo (sic) risk of injury to self or third parties, and with reliable phone and internet access.” 2021 T. C. Sum. Op. 23, at p. 3, footnote 4.

Leila had to travel to customers, but Coke had a reimbursement policy that covered most expenses, so Leila’s car, food, and office supplies deductions are disallowed.

Leila does get home office, as she turned one of the two bedrooms in her 1288 sq. ft. flat into an office. But how she got her numbers baffles CSTJ Lew.

“According to petitioner, 33% of her apartment was used as her office. We are at a loss with respect to how petitioner arrived at that percentage. She was unsure of the dimensions of the bedroom used as her office but roughly estimated it to be 300 square feet. Simple math reduces the percentage to 23%, and from the photographs submitted into evidence, we suspect that the office/bedroom might have been smaller than that.

“All things considered, we estimate and find that petitioner used 20% of the apartment for her home office.” 2021 T. C. Sum. Op. 23, at p. 9 (footnote omitted).

CSTJ Lew allows Leila the 20% of rent, but notes she didn’t claim anything for renters’ insurance.  Does renters’ insurance cover a commercial use like a home office? Mine doesn’t, except for minor, occasional.

Coke required Leila to maintain her own internet and cellphone at her own expense, so she does get her cellphone and internet, although CSTJ Lew revives a 1913 comic monologue to do a Cohan on the telephone (sorry, guys).

“Petitioner’s records substantiate that the internet and cell phone expenses have been paid. Petitioner testified that her internet was used 85-90% for business purposes, but she did not distinguish between business and personal use with respect to her cell phone. We consider it reasonable that 75% of petitioner’s internet and cell phone use was related to her employment with Coca-Cola, and therefore she is entitled to a $1,728.75 deduction for internet and cell phone expenses.” 2021 T. C. Sum. Op. 23, at pp. 10-11. (Citations omitted).

Leila loses her medicals (less than 10% AGI) and charitables (no receipts). IRS does concede the chops.

I note that, although only $7K is at issue, Leila managed to secure the assistance of a “prestigious law firm” in the Brentwood Wilshire area. Well played, Mr. C.