More music criticism, since Tax Court is closed tomorrow, and I won’t recycle Harry Golden’s “A Klug Zu Columbus’n” story yet again.

Nadine Sierra was in top form last night at the Met as Amina in Vincenzo Bellini’s La Sonnambula, and Ricardo Frizza conducted a taut, gripping performance. I am a Sierra fan, and she gave an incandescent performance.

The big hit came from Lawrence Brownlee’s brilliant performance as Elvino, coming in relief of Xabier Anduaga. The cause of the call to the bullpen is a puzzlement, but the audience was not disappointed. Brownlee and Sierra kept the tension, both dramatic and musical, despite one of the silliest plots in opera, which has no scarcity of unbelievable stories beautifully sung.

I must mention Deborah Nansteel’s strong performance as Amina’s foster mother Teresa. Sydney Mancasola was a strong Lisa, making the most of a cardboard character.

The casting last night was truly splendid, true bel canto and not the unfortunately too prevalent con belto.

The singers were so good I even forgot to loathe the minimalist sets and the tacky bed-in-the-air stunt. While Niara Hardister danced well, her talents would be best employed somewhere else. Alexander Vinogradov sang so well at stage level that I forgive the cutesy ladder-climbing stunt. Bellini goes better without acrobatics.

That’s the question about Orbital Tracking Corp., whose stock was traded on an interdealer over-the-counter market. And it matters to Michael Brauser & Betsy Brauser, Docket No. 20434-23, filed 1010/25, because they want the carryover Section 170 deduction for the 1.576 million shares of OTC they donated to a 501(c)(3).

OTC was of the type we used to call “letter stock,” now subject to SEC Rule 144, which restricts trading in certain shares, which were issued without full SEC registration to sophisticated investors and venture-vultures. But notwithstanding anything to the contrary or at variance with the foregoing, as my expensive colleagues would say, you can still donate such shares to a 501(c)(3) and get the Section 170 write-off, and value same without a Form 8283 appraisal,  if the shares are publicly-traded, per Section 170(f)(11)(A)(ii)(I).

But to reach the publicly-traded safe harbor, one must navigate the exceptions to the exceptions that festoon the Regs. If the shares are traded on a national or regional OTC for which published quotations are available, they’re not publicly-traded if there are substantial restrictions on trading that affect marketability or value. Moreover, they’re not publicly-traded if the amount claimed as a deduction is different from the amount listed in the market quotations that are readily available on an established securities market. And, in any case, the fair market value of a publicly traded security is not necessarily equal to its market quotation, its average trading price, or its face value, if any.

Mike & Betsy want summary J that OTC is publicly-traded and that, if it isn’t, they have reasonable cause (following advice of trusty, long-term CPA) why want of appraisal doesn’t torpedo their deduction.

Anyway, Mike & Betsy say that using a price ($1 per share) lower than the quoted price ($1.25 to $1.30 per share) to calculate their deduction did not violate Reg. Section  1.170A-13(c)(7)(xi)(C), either because they substantially complied with the rule or, with a tip of the Borsalino to Loper Bright,  because the rule is invalid.

Judge Emin (“Eminent”) Toro has no difficulty finding questions of fact.

“Among other things and to varying degrees, there are disputes of material fact regarding the extent to which the Orbital Tracking shares were regularly traded on an over-the-counter market, the extent to which quotations on the over-the-counter market were attributable to interdealer quotation systems, whether any of the steps that would have been required to remove the SEC Rule 144 legend from the shares either affected their value or prevented them from being freely traded, and whether reasonable cause existed for the failure to attach an appraisal to Mr. and Mrs. Brauser’s tax returns.” Order, at p. 6.

Now I do love summary J, as I’ve often stated here. But there comes a point where it’s an obvious waste of time, money, and client and judicial resources.

That’s the cri de cœur of Benjamin A. Rogovy & Carol J. Castellon Miranda, Docket No. 17513-24, filed 10/10/25, but it’s Ben’s story.

Ben was an early blockchainer, a cryptocurrency devotée whose permanently-ledgered dealings will survive, unchanged and unchanging, even the extinction of humanity (or so one of my nearest-and-dearest who actually understands this stuff tells me) so long as electromagnetism lasts.

Ben fears his personal cryptocurrency dealings, if revealed on the trial, will enable cryptovillains to track and defraud him.

Who but Judge Ronald L.  (“Ingenuity”) Buch, from whom no puzzlement is long immured, to solve Ben’s problem?

This he does by casting the cloak of Rule 103 upon any and all documents containing “(A)ny identifying information relating to Petitioners’ activity, or the activity of any of Petitioners’ affiliates, with respect to digital assets, including: a. Wallet addresses; b. Public keys; c. Private keys; d. Transaction hashes; e. Any account information on any exchange (including usernames, account numbers, and email addresses associated therewith; and f. Exact quantities of digital assets transferred in a particular transaction.” Order, at p. 4. To the extent any thereof are needed to decide Ben’s case, they should be submitted enclosed with a Motion to Seal.

Here’s Judge Ingenuity Buch writing his own “Bitcoin for Idiots.”

“Bitcoin exists on a blockchain, which is a public ledger of cryptocurrency transactions. A Bitcoin wallet holds private keys which represent ownership of the Bitcoin that exists on the blockchain. The wallet address is a shortened version of the public key, which is a long string of alphanumeric characters. When Bitcoin is transferred on the blockchain from one wallet address to another, a unique identifier called a ‘transactional hash’ is generated and recorded on the blockchain. Public keys, wallet addresses, transactional hashes, specific transactional amounts, and balances all exist publicly on the blockchain.” Order, at pp. 1-2. (Footnote omitted).

And here’s the kicker, which may well serve as a template for the Bitcoin tsunami that I confidently predict is boiling up.

“This case involves the question of whether transactions involving digital assets led to unreported income by Petitioners. Information concerning the nature of Petitioners’ cryptocurrency transactions may be necessary to deciding this case and of public interest. But the wallet addresses, transactional hashes, and precise amounts of the Bitcoin transactions do not fall within the public interest and their exposure may result in annoyance or embarrassment.” Order, at p. 4.

Thus, while as IRS argues, a lot of this stuff may be publicly available (see Order, at p. 3), personally-identifiable information should be protected.

Armond Garibyan, et al., T. C. Memo. 2025-105, filed 10/9/25, ran with his brother a hospice providing outfit that didn’t care for patients, but shuffled money from government and insurers to nursing homes, and kept books. Their trusty non-CPA accountant told them to use accrual method accounting, but their prior business experience (running a barbershop, among other things) ill-suited them for the task.

Even the RA who had to go to bank deposit reconstruction got it wrong, so Judge Mark V. (“Vittorio Emanuele”) Holmes finds that about $7K that Armond claimed was shuttling money from one account to another truly was, and not unreported income. And some of their corporation’s claimed nontaxable deposits were indeed that.

So there’ll be a Rule 155 to try to sort it all out.

Armond and bro do avoid chops, however.

“The Garibyans’ bookkeeping system for [their Corp] left much to be desired during the years at issue. The Garibyans work in an industry where competent recordkeeping is especially important to getting paid and avoiding administrative audits. See Patacsil v. Commissioner, T.C. Memo. 2023-8, at *16 (contrasting the taxpayers with those required to keep fewer records or with greater organizational skills).

“But we also find that the Garibyans aren’t college educated and relied on two accounting professionals during the years at issue to keep their books and prepare their returns. One of them, Channels, advised them to keep their books on an accrual basis, and we find it was the source of the bizarre entries in Lakeview’s general ledger that rendered that ledger unreliable.” T. C. Memo. 2025-105, at p. 19.

Judge Holmes says it’s a close question, but he says they acted in good faith and relied on the bookkeeping system these professionals told them to use.

For Patacsil, see my blogpost “The Shoebox RedWeld System Breaks Down,” 1/17/23.

I’ll spare you my rant on our bizarre healthcare system; after you read Judge Holmes’ opinion, I’m sure you can compose one of your own. If this is what Congress is fighting about…but this is a non-political blog.

As the late great William James Basie was wont to direct. Tom Gonzales, T. C. Memo. 2025-103, filed 10/8/25, and his trusty attorney, whom I’ll call Mike, try to fight an old battle o’er, but 9 Cir blew them away seven (count ’em seven) years ago.

Tim is trying to wiggle into the interstice between partnership and partner levels in the old TEFRA régime. He claims his deficiency case, which preceded the FPAA, started the clock, but he stiped that away back then. Next he claims the TMP didn’t have authority to twice waive 3SOL, except he intervened in the FPAA case, and could have raised the TMP’s want of authority then, but didn’t. Issue preclusion then shuts Tom out. Affected items (no SND needed when partner-level hit comes directly from partnership-level determination) does the rest.

I doubt the post-BBA 2015 scenario would yield a different result. What’s fascinating is that years at issue go back nearly 25 (count ’em, 25) years to the nearly-forgotten Son-of-BOSS days.

Chas. Dickens’ immortal words come back to me now.

“This scarecrow of a suit has, in course of time, become so complicated that no man alive knows what it means. The parties to it understand it least, but it has been observed that no two …lawyers can talk about it for five minutes without coming to a total disagreement as to all the premises. Innumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it. Scores of persons have deliriously found themselves made parties in Jarndyce and Jarndyce without knowing how or why; whole families have inherited legendary hatreds with the suit. The little plaintiff or defendant who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled has grown up, possessed himself of a real horse, and trotted away into the other world. Fair wards of court have faded into mothers and grandmothers; a long procession of Chancellors has come in and gone out; the legion of bills in the suit have been transformed into mere bills of mortality; there are not three Jarndyces left upon the earth perhaps since old Tom Jarndyce in despair blew his brains out at a coffee-house in Chancery Lane; but Jarndyce and Jarndyce still drags its dreary length before the court, perennially hopeless.” Bleak House, Ch. 1.

Though it cuts a wide swath in criminal cases, ineffective assistance, by counsel or otherwise, cuts no whole-grain CDP Dijon at Appeals or at US Tax Court.

Judge Kashi (“My or the High”) Way makes this clear to Horizon Health Services, Inc., T. C. Memo. 2025-104, filed 10/8/25. HHSI had unpaid income and employment taxes, both SND’d and unpetitioned, so their CDP excluded challenge to liability.

HHSI also was behind on current tax filings, and failed to provide Form 433-B and backups.

Judge Way: “Petitioner argues that it was negatively affected during the CDP process by ‘ineffective assistance of counsel.’ Petitioner contends that this ineffective counsel precluded AO Clark from ‘mak[ing] an effective review of Taxpayer’s offer.’ Assuming that were the case, ineffective assistance from counsel does not bear upon an AO’s review and determination as to whether an AO abused his discretion. See Rutherford v. Commissioner, T.C. Memo. 2008-227, 96 T.C.M. (CCH) 220, 222 (discussing the purview of an AO’s role regarding the assistance a taxpayer receives during the hearing).” T.C. Memo. 2025-104, at p. 7.

Briefly, it is not the AO’s job to decide if petitioner’s counsel is doing a good job. It is a rational presumption that any admitted attorney or USTCP is familiar with ABA Model Rule of Professional Conduct 1.1, and would appear only if s/he can provide “the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”

Tax Court announces “If the federal Government shutdown continues through October 14, 2025, at 5:00 p.m. (Eastern Time), the United States Tax Court will cancel trial sessions for the weeks of October 20, 2025, and October 27, 2025.”

Justice delayed is…but you know the rest.

No, President Trump is not a petitioner, as far as I can tell. All the record shows is that he has appointed a couple judges (hi, Judge Holmes). But Melvyn Duane Salter, Docket No. 3771-23, filed 10/7/25, thinks he should be.

Melvyn Duane Salter, RFC (Rounder First Class), has made five (count ’em, five) trips to USTC before now, and Judge David Gustafson, obliging as always, gives us the rundown.

“This Court’s records show that Mr. Salter has been the petitioner in five previous cases, i.e., No. 15398-97 (stipulated decision entered 07/06/1998); No. 12442-12L (tax year 2012, order and decision entered 09/12/2014 in petitioner’s favor (Gustafson, J.)); No. 21045-15L (tax years 2009-2010, bench opinion served and decision entered 11/03/2016 (Gustafson, J.), appeal dismissed as untimely, No. 17-1957 (4th Cir. 10/20/2017)); No. 553-18L (tax years 2009-2011, order and decision entered 02/05/2019, aff ’d, No. 19-1250 (4th Cir. 08/26/2019)); and No. 13343-19 (tax years 2012-2013, dismissed 11/06/2019 for failure to state a claim).” Order, at p. 1.

Taishoff says going 1 for 5 in this league is good hitting. I didn’t blog the win, and only tangentially dealt with 21045-15L; see my blogpost “Pro Se? Oy Vey!” 8/15/17. I can claim I was prescient; see infra, as my expensive colleagues would say.

“However, the issues in those previous cases are not before us now.” Order, at p. 1. Judge Gustafson previously ordered Melvyn Duane to show cause why he shouldn’t be tossed for want of prosecution, and why IRS’ Rule 91(f)(2) proposed facts and documents shouldn’t be deemed admitted into evidence.

“…the Tax Court received from Mr. Salter a document… that did not comply with either of our orders to show cause. Rather, Mr. Salter’s document (addressed ‘To: Donald Trump, President of the United States of America’, with ‘CCs’ indicated to the Tax Court, among others) sought (apparently from President Trump) various forms of relief that are outside the jurisdiction of the Tax Court in this case, including damages of $3.5 million and other relief against the IRS, several named IRS employees, the Tax Court, and ‘those responsible from 2011 forward’, including ‘the United States Tax Judges who have weighed in on my case through the years without thoroughly examining my documents that I have sent in a[nd] especially Judge David Gustafson …’.” Order, at p. 3.

Melvyn Duane wants a stay of trial until next July, so President Trump can investigate.

No, says Judge Gustafson, and orders and decides that Melvyn Duane owes the taxes and add-ons.

Will President Trump intervene? Let me know your thoughts in the Comments section below.

Computer Sciences Corporation, 165 T. C. 8, filed 10/6/25, says RA Supe G. didn’t do it when RA H suggested a five-and-ten 20% chop, but Judge Albert G. (“Scholar Al”) Lauber says Boss Hossery is an essential part of any deficiency case where chops are invoked, not a stand-alone, so the Puters have plenty chances (hi, Judge Holmes) to make their case for reasonable cause.

The Puters did a Section 368(c) shuck-and-jive with Bank of Tokyo-Mitsubishi UFJ that generated a $651 million capital loss, which IRS blew up. Dropping the Section 6662(a) negligence chop four years into the program, IRS stuck with the five-and-ten 20% understatement chop, on which RA Supe G signed off four (count ’em, four) times during the four years this rattled around between Exam and Appeals.

It’s old home week for Boss Hoss caselaw going back to Chai and Graev. How could you have a Boss Hoss faceoff without Belair, Kroner, Raifman, Palmolive, and a ride on Laidlaw’s Harley Davidson?

I’ve blogged ’em all. Pore l’il ol’ 5 USC §706(a)(2) hasn’t got a prayer.

The Puters collapse in this Hebrews 12:1 barrage.

I’ll save ya my usual rant on this statutory disaster.

Just about a year ago, I invited Mr. Paul Streckfus, the EO expert, to weigh in on the 501(c)(4) Texas gated communities joust bubbling up in Tax Court. Well, Mira Vista Homeowners Association, Inc., T. C. Memo. 2025-102, filed 10/6/25, concludes that if everybody can’t go in, no 501(c)(4) treatment, despite however many other of these enclaves have previously received the nod.

For backstory, see my blogposts “Common Good, All In,” 9/25/24, and “Taking Supplements,” 1/28/25.

Judge Christian N. (“Speedy”) Weiler says that hosting charity golf matches in their affiliated country club (even nonresidents allowed), private security, and “cooperation with local government, including the City of Fort Worth, relating to water usage, garbage and recycling collections, streetlight maintenance, and other general access to the Mira Vista development,” T. C. Memo. 2025-102, at p. 2, isn’t enough.

“While ‘the IRS has been something less than fully successful in establishing the precise limits of a Section 501(c)(4) exemption,’ the prevailing logic courts have embraced when addressing this matter is ‘that an organization that operates for the exclusive benefit of its members does not serve a ‘community’ as that term relates to the broader concept of social welfare.’ Flat Top Lake Ass’n, Inc. v. United States, 868 F.2d 108, 111 (4th Cir. 1989). T. C. Memo. 2025-102, at p. 7.

The Miras argue that public benefit, rather than public access or use, is the determining factor of a section 501(c)(4) exemption. They claim the general public receives a benefit through its efforts to benefit the residents and guests of the Mira Vista development. They claim these benefits arise from the existence of several facilities and services, including but not limited to a fishing lake, a dock, a playground, outdoor restrooms, physical access to events hosted by the Country Club, and a private patrol service.

These public benefits, says Judge Speedy Weiler, if any, are incidental, not principal as the law requires. The lake and the adjoining recreational venues are primarily for the benefit of the Miras; and like the rest of the grounds they are not generally accessible to the public. In accordance with Mira’s bylaws and rules, the gates are opened only for members, residents, and guests of each with the sole exception of those charitable events hosted by the country club. Even when the public is permitted entry to attend the country club’s charitable events, however, the facilities listed are not a part of, nor are they intended for, those events.

Judge Speedy Weiler points out that Section 528 is sufficient Congressional largesse, T. C. Memo. 2025-102, at p. 1, footnote 2.