“Stuff happens” has become a cliché, although the precise phraseology often used has no place in a blog intended for reading around the family dinner table. Judge Benjamin A. (“Trey”) Guider, III, has a checklist (not in tabular form) for such mishaps in Simon Gradisnik & Marcia Pena Gradisnik, et al., Docket No. 3262-22, filed10/6/26.

With trial set for 10/19/26, long-time trusty attorney has medical issue. Si & Marcia try to file timely motion for continuance thirty-two (count ’em, thirty-two) days out (see Rule 133, penultimate sentence), but allege they “experienced issues with the United States Postal Service.” Order, at p. 1. 

You’re not alone, guys, I have a prescription refill sent eight (count ’em, eight) days from NJ and addressed to me at this Minor Outlying Island off the Coast of N. America, which this morning is sitting at a USPS distribution center in Fargo, ND. Don’t ask. Anyway, FedEx to the rescue.

Judge Trey Guider, III, is sympathetic, even though IRS says the parties haven’t yet begun the stipulation process. And this is the fourth continuance since consolidation.

So continuance (that’s adjournment for you State courtiers) granted.

Except.

Report by trial date plus ten whether and when petitioners’ counsel will resume work on these cases or whether petitioners intend to retain new counsel or proceed pro se, and describe petitioners’ plan to begin, or their efforts regarding, the stipulation process with respondent.

In short, get counsel, old or new, on board or go it alone, and hit the bedrock of Tax Court practice, the stips.

In this case, Taishoff says it helps that trusty attorney is an old-timer with 49 (count ’em, 49) years of experience at the Tax Court Bar.

Two (count ’em, two) gifts that keep on giving, Raju J. Mukhi, Docket No. 4329-22L, filed 10/5/26, making his fifth appearance in this my blog, and Section 6751(b) Boss Hossery, that hardy perennial, meet before Judge Christian N. (“Speedy”) Weiler.

Raju is fighting about Appeals’ verification that Exam properly Boss Hossed the chops bestowed upon him, and whether the RA at Exam had indeed done so. “We see these as two separate issues.” Order, at p. 2. Note the RA may have done it right, but the AO may have blown verification.

Raju’s trusted (and trusty) advocates and litigators object to IRS’ motion to remand to Appeals, claiming it will delay the January trial.

Isn’t remand supposed to give the taxpayer a chance to fill in whatever was left out the first time around, and to supplement the record for judicial review?

Yss, but.

“Generally, we remand a case to the Appeals Office when a taxpayer did not receive a proper hearing, and the new hearing is necessary or will be productive. The resulting section 6330 hearing on remand is not a new hearing, but rather ‘provides the parties with the opportunity to complete the initial section 6330 hearing while preserving the taxpayer’s right to receive judicial review of the ultimate administrative determination.’. As noted earlier, we have remanded a case to the Appeals Office to clarify the record regarding an officer’s determination that a notice of deficiency was properly mailed.” Order, at p. 2. (Citations omitted).

Nevertheless, Judge Speedy Weiler, true to his cognomen, tells the parties to get ‘er done before the trial date.

Misquoting Rudy Kipling’s famous footslog, Ronald Michael Henke & Elizabeth Henke, Docket No. 27610-22L, filed 10/2/26, find out the bad news from Judge Kashi (“My or the High”) Way. I note the tax years here because they matter.

“The Court agrees with respondent that AO M did not abuse his discretion in concluding that the liabilities for tax years 2007, 2015, and 2016 could still be collected. The liabilities for tax years 2015 and 2016 that remain at issue constitute priority tax claims within the meaning of 11 U.S.C. § 507(a)(8)(A)(i), and such priority taxes generally are not discharged in bankruptcy pursuant to 11 U.S.C. § 523(a)(1)(A). The liability for tax year 2007 was an assessment made based on a substitute return prepared by the Commissioner pursuant to section 6020(b) and is excepted from bankruptcy discharge pursuant to 11 U.S.C. § 523(a)(1)(B)(i). Moreover, by failing to respond to the Motion or appear at the trial session, petitioners have abandoned any argument that AO Matthews abused his discretion in concluding that the liabilities for tax years 2007, 2015, and 2016 remain at issue.” Order, at p. 7. (Name omitted).

Note petitioners petitioned in bankruptcy (Ch 7) 4/30/18, triggering the 11 USC §507(a)(8)(A)(i) three-year lockout. The SFR (not filed by petitioners) for 2007) opens the 11 USC §523(a)(1)(A) door.

Yeah, I know Ch J Patrick J. (“Scholar Pat”) Urda has to send off Parliament House of Augusta, Inc,, Docket No. 6410-26S, filed 10/2/26, notwithstanding its pathetic plea that IRS has thoroughly scrambled its Section 941s and garnished its account because IRS can’t read or add. And Letter 4384C isn’t a NOD or SND, so pore l’il ol’ Tax Court, trammeled in Congressional swaddling clothes and leading strings, can only help in a matter bounded and described in the boilerplate laundry list in the hereinabove aforesaid order set forth, as my expensive unretired colleagues would say.

But please permit this beaten-up, beaten-down, battered single-shingle oldtimer the dubious luxury of second-guessxing the august Chief Judge of the equally august Unitd States Tax Court.

Instead of just suggesting the Parliament work with IRS, why not suggest a wee word with Erin M. (“Erinys”) Collins or one of her trusty minions at the Taxpayer Advocate Service? 

Even if the path less traveled guides not to salvation, it might afford Parliament a glimmer of hope.

William M. Scott, T. C. Memo. 2026-104, filed 10/1/26, claims a Section 7623(b) blow award because he tipped off IRS that a private prison company’s tax-exempt bonds were bogus. IRS checked out the bonds, concluded they weren’t properly tax-exempt, and settled.

Company paid nothing but called in the bonds and issued replacements that were taxable. IRS agreed not to look for back taxes for the eleven (count ’em, eleven) years the dubious bonds had paid out. The Ogden Sunseteers bounced William’s claim, saying the collected nothing. William says IRS will collect a bundle going forward, wants discovery, and claims Ogden’s bounce constitutes a new issue shifting BoP.

Nope, says Judge Benjamin A. (“Trey”) Guider, III, only much more elegantly.

The “new” explanation only fleshes out the expressed rationale. The bondholders got the tax break; the Target was the prison company, which got none. Collecting from the Bondholders going forward would require monitoring a large, shifting population for many years, some of whom might be tax-exempt or have offsets like NOLs themselves, obviously infeasible.

Shands and Lissack say merely pointing out a Target isn’t enough, even if IRS collects. Blower must home in on the specific grounds whereunder IRS collects. And Targets who straighten up and fly right before IRS takes enforcement action don’t entitle blowers to an award. 

Going against the Bondholders isn’t a “related action” within the meaning of Reg. Section 301.7623-2(c)(1)(ii) and (iii); “Even assuming an IRS Operating Division were to investigate and discover the identity of the Bondholders and determine the taxes they have paid or will pay, the identities of the Bondholders would not be found without the Operating Division’s having to independently obtain additional information beyond that provided by petitioner.” T. C. Memo. 2026-104, at p. 16. Taishoff says that assumes the deal between IRS and Bondholders exonerating previous years doesn’t include the Bondholders as third-party beneficiaries to that extent.

Mr. Scott wants to see the trust indenture for the new bonds because IRS mentioned it. Not enough, says Judge Try Guider. The Administrative Record need include only what IRS relied upon, not something mentioned for its mere existence and no more. 

No payout for Mr. Scott as the company slipped its surly bonds.

Allen Shay, T. C. Memo. 2026-103, filed 9/30/26, moved $24K from “Other Income” on his year-at-issue return to Sched E Rents Received on his 1040X, claiming a RA told him to do it. So when IRS claims a deficiency of $24K unreported income, Allen says he’s being taxed twice.

Except.

IRS proves to Judge Cathy (“NCY =. No Cognomen Yet”) Fung’s satisfaction that there’s 24K unreported per bank deposits analysis. See table at p. 4.

“Petitioner stipulated that his taxable income was $187,301. Respondent’s bank deposits analysis showed that petitioner’s taxable deposits were $212,401, which is $25,100 more than petitioner’s stipulated taxable income. Respondent conceded $1,100 in taxable income and now requires petitioner to include the remaining $24,000 in taxable income. This $24,000 reflects the amount that petitioner reported as ‘Other income’ on Line 21 of his original return and subsequently omitted from his amended return. In conducting his bank deposits analysis, respondent considered all known nontaxable sources of income, specifically deposits from petitioner’s Ameritrade and Bank of America accounts. Therefore, it is petitioner’s burden to prove respondent’s bank deposits analysis was unfair or inaccurate. See Price, 335 F.2d at 677 (‘If taxpayer felt that the Government’s [bank deposit method] was unfair or inaccurate, the burden was on him to show such unfairness or inaccuracy.’). Petitioner did not prove respondent’s reconstruction was in error and therefore did not carry his burden.” T. C. Memo. 2026-103, at p. 10.

Here’s the real problem.

” The Court recognizes that the similarity in numbers may be confusing. Simply stated, petitioner contends that the disputed $24,000 results from his moving approximately $24,000 of Property C rental income from Line 21 of his original return to Schedule E on his amended return as $24,420. Respondent conducted a bank deposits analysis, showing $25,100 of unreported income. And, after conceding $1,100, respondent correctly determined that petitioner still failed to report $24,000 of income. The similarity in amounts does not establish that they are the same income. Accordingly, we hold petitioner is liable for tax on $24,000 of income….” T. C. Memo. 2026-103, at p. 13.

No, not Jesse Mitchell III and Darrilyn W. Mitchell, T. C. Memo. 2026-102, filed 9/30/26. And ex-Ch J Kathleen (“TBS- The Big Shillelagh”) Kerrigan is far too well-bred to say what Alfonso Bedoya did say in the 1948 John Huston classic “We ain’t got no badges.” The most-quoted version conflates two separate lines.

But it turns out IRS ain’t got no badges. Of fraud, that is, so 3SOL puts paid to Jesse’s SND.

Jesse fell into the clutches of a dodgeflogger who peddled phony deductions, but escaped. His return for year at issue did have some dodgy deductions, but he concealed nothing, filed returns, didn’t have a pattern of understating income or overstating deductions, he made no inconsistent explanations, he and his preparer testified honestly on the trial, didn’t deal in cash, and didn’t conceal assets. The only neutral badge is the phony deductions taken at the advice of the dodgeflogger, but “(P)etitioner relied upon the advice of others. He testified that he was ‘impressed by [flogger].’ Petitioner probably should have known the [flogger’s] Marketing Plan was too good to be true. From his testimony we conclude that petitioner did not have scienter and that his actions were not sinister.” T. C. Memo. 2026-102, at pp. 17-18.

True, Jesse did get an A in the income tax course he took at Ole Miss Law School. But his practice was plaintiffs’ PI, and he never prepared returns or gave tax advice. Taishoff says I’ve seen enough plaintiffs’ PI lawyers get Section 104 wrong, to say nothing of the rest of the IRC and Regs. Even one as famous as F. Lee Bailey. An A in a law school course years ago doesn’t qualify an attorney to discuss taxes. I was lucky to get a hook minoo sixty-plus years ago and swore at the time I’d never do taxes. Look at me now. 

No, Barry Holmes Fine and Monica Dias, 167 T. C. 13, filed 9/30/26, are neither of them the intrepid gearjammers of the arctic lakes whose adventures delight the couch cable crowd. It’s their trusty attorney, to whom I award a Taishoff “Good Try, First Class.” Even though said trusty attorney is not a Jersey Boy, he is of the same breed: be the sun high and the ice creaking, he triple-clutches his rig and dashes across the ice, flames shooting three feet high from the stack. “No guts, no glory” is engraved on his front bumper.

Said trusty attorney claims the Form 872-T Notice of Termination of Special Consent to Extend the Time to Assess Tax, his client sent terminated the last of the three (count ’em, three) Forms 872 theretofore exchanged with IRS. Hence, because the SNDs at issue here were issued more than 90 days after IRS got the 872-T, 3SOL had run.

Except.

Judge Tamara Ashford says true, 11 Cir didn’t comment on that when they affirmed Coggin v. Commissioner, T.C. Memo. 1993-209, 1993 Tax Ct. Memo LEXIS 215, at *51–52, aff’d, 71 F.3d 855 (11th Cir. 1996) on other grounds. And Barry and Monica are Golsenized to 11 Cir. Wherefore Kelley v. Commissioner, 45 F.3d 348 (9th Cir. 1995), aff’g T.C. Memo. 1990-15 which mentioned a Form 872-T knocking out a Form 872 doesn’t apply. Anyway, 9 Cir “merely recited the specific facts of that case, not opining as to the legal effect of using Form 872–T to terminate Form 872. Even if the Ninth Circuit did opine as to whether Form 872–T could be used to terminate Form 872, such a holding would be persuasive at best and would have no binding effect on this case, which is appealable to the Eleventh Circuit.” 167 T. C. 13, at p. 9, footnote 6.

The key is the difference between Form 872 Consent to Extend the Time to Assess Tax, and Form 872-A Special Consent to Extend the Time to Assess Tax. Special means special. Form 872-A is an open-ended extension. Form 872 is a fixed-date deal. Even though SOL extensions are waivers and not contracts, Judge Ashford allows contract principles to play a role here.

Open-end contracts are cancelable on reasonable notice. Fixed performance limits are just that…fixed.

Even Form 872-A is clear. “Form 872–A explicitly states that it can be terminated by signing and remitting to the IRS Form 872–T. Likewise, Form 872–T requires a taxpayer to check a box indicating that he or she is using the form to terminate Form 872–A. Indeed, both the IRS and numerous courts have stated that Form 872–T was designed to terminate Form 872–A.” 167 T. C. 13, at p. 8. Copious citation of precedent follows. And the Form 872-T that Barry and Monica submitted checked the Form 872-A box, because there is no Form 872 box. Forms don’t govern statute and regs, but the logic is clear.

Practitioner, negotiate those 872s (if you can).

Except Sometimes

Summer H. El Deeb, T. C. Memo. 2026-101, filed 9/29/26, claimed in her petition that she is “entitled to a $3,000 credit for an estimated tax payment for taxable year 2021 or an amount applied from taxable year 2020.” T. C. Memo. 2026-101, at p. 1.

Before my ultrasophisticated readers cry out with one voice “So what? Sections 6211(b)(1), 6402(b), and 6513(d),” that’s what Judge Courtney D. (“CD”) Jones says.”Furthermore, even if we had jurisdiction to consider this issue, Ms. El Deeb has conceded that she is not entitled to the $3,000 claimed credit for either an estimated tax payment or an amount carried over from a prior-year return.” T. C. Memo. 2026-101, at p. 7.

I know I’ve pointed out flaws in their approaches before, but never with an intent to show anyone up. I’m trying to teach, however imperfectly, so maybe someone else doesn’t make the same miscue. Emese Hasznos, T. C. Memo. 2026-100, filed 9/29/26, is out $311K because her divorce lawyer didn’t require her loved-once to transfer title to the real estate that was her share of the divorce split to her.

Judge C-Doug Pugh does a deep-dive into FL divorce and real estate law. I never had a FL ticket, so I leave her disquisition to FL lawyers to scope out.

At close of play, Emese gets innocent spousery and 50% of the net proceeds of sale. The divorce judgment provided for sale of the real estate, but Judge C-Doug Pugh found sufficient indicia of ownership remained in loved-once that he had an interest therein, encumbered by the IRS NFTL, such that, although Emese was entitled both to innocent spousery (uncontested) and to 100% of net proceeds of sale, 50% thereof had to go to IRS.

And this, notwithstanding “…petitioner’s anticipated difficulties in obtaining relief from Mr. Munro, but Mr. Munro’s indemnification is her only avenue for payment.” T. C. Memo. 2026-100, at p. 11. (Footnotes omitted, but they say loved-once left the US of A and cannot be found, and all Emese gets is what the law allows; pore l’il ol’ Tax Court has no equitable powers).Takeaway- If one spouse is out of the real estate, do a title search for IEDs, and get him or her out of title.