I was wrong back on January 10 a year ago, when I predicted that Giorgio P. Martinelli, Docket No. 4122-18, would vanish without the human-interest story I wanted to bring y’all. See my blogpost “Copy,” 1/10/20.

Well, right now, in the Honolulu Zoomie courtroom, Giorgio is on the stand testifying to his brother’s poor health and how the offshore account really belongs to his brother. IRS’ counsel is putting up a good show, and FRE 803(4) just slowed down The Great Chieftain of the Jersey Boys, but Giorgio is a good witness.

I wish Frantic Frankie had tipped me off, but I guess he had other things on his mind.

Anyway, having to dig for copy keeps the blogger on his toes.

Four more get the ‘ollow square treatment today at The Glasshouse Vic Built. The only interesting note is found in Randy Godin, the second of the orders.

Ch J Maurice B (“Mighty Mo”) Foley explains a difference between Tax Court practice and one State’s (CA’s) approach.

Mr. G got a conditional suspension from the CA authorities. He asks Tax Court for reciprocal treatment.

Ch J Mighty Mo says “no.”

“This Court, however, does not impose conditional or temporary suspension as a form of discipline. We will suspend Mr. Godin as reciprocal discipline based upon his suspension in California. Mr. Godin may file a petition for reinstatement to practice before this Court upon his reinstatement to the practice of law in California.” Order, at p. 1.

No, this is not the score of a qualifier match for the FIFA 2022 World Cup. If it were, the cheers of the victors and the imprecations of the vanquished would be heard around the world.

Today this my blog got its second view from Zimbabwe. The first was in 2013.

Bolivia has yet to score on my pitch.

Is Ohama?

It’s been nearly four (count ’em, four) years since I referred to Saul Steinberg’s celebrated New Yorker cover, which showed our N’Yawk insular view of America. See my blogpost “Everything West of the Hudson Is Kansas,” 7/5/17.

While ex-Ch J L Paige (“Iron Fist”) Marvel, a native of the Old Line State, might be considered a Right Coaster, present Ch J Maurice B (“Mighty Mo”) Foley is, according his biography on the Tax Court website, a Prairie Stater by birth.

So I was surprised to see that he set Mike Garber, Docket No. 7942-21, filed 5/21/21, down for trial thus: “Ohama, NE is designated as the place of trial in this case.” Order, at p. 1.

Like many a pro se, Mike didn’t fill in the place-of-trial Form 5 when he petitioned.  

Maybe when one becomes Chief Judge, and spends one’s working life in The City of the Stateless, everything west of the Potomac is Ohama.

Judge Mark V. Holmes has “a couple of conclusions” from the precedents he cites in Katherine Mason, et al., 2021 T. C. Memo. 64, filed 9/20/21, at p. 29. And the SO has clearly abused her discretion by not considering Katherine’s OIC, notwithstanding COIC’s return thereof (nonreviewable in Tax Court).

Unfortunately, Judge Holmes backslides when he points to “a couple helpful examples of when an OIC should be returned” in the IRM, 2021 T. C. Memo. 64, at p. 20. But I must encourage him to respect the partitive genitive.

Katherine and spouse were $155K behind for years at issue, and RO J threatened to seize their house, notwithstanding that Section 6334(e)(1) requires a USDJ to sign off, and the IRM requires area director and area counsel to sign off as well, Internal Revenue Manual (IRM) pt. 5.17.3.5.5 (Aug. 29, 2017). See 2021 T. C. Memo. 64, at p. 5. (Name omitted).

IRS liened and sent NITLs, so Katherine sent in an OIC, but the RO sent in a report nixing same, claiming Katherine just filed it to delay collection, so COIC just returned the OIC without reviewing it. Katherine asked for a CDP and raised the OIC, but the SO said it was returned and didn’t consider it. And Katherine’s CDP is bounced, so she petitions.

True, Tax Court has no jurisdiction to review COIC’s returns or rejections. But when one is not even considered at CDP, there is discretion, unless it is obvious to an impartial observer that there is no basis for the OIC other than to delay collection. After all, a CDP and a petition from a NOD delay collection.

The SO should have considered Katherine’s OIC offer, and that her and her spouse’s nearing retirement should have been in the mix.

“A recently updated provision of the IRM shows the Commissioner takes substantiated, imminent retirement into consideration when calculating a taxpayer’s current and future earning potential. See IRM pt. 5.8.5.20(4) (Mar. 23,2018). While we aren’t sure if a similar provision preceded this one, we do know that RO J didn’t find the current retirement of Mr. Mason and nearing retirement Mrs. Mason to be a valid consideration or special circumstance when she sent in her RO report recommending that the they be found to have submitted their OIC ‘solely to cause delay.’” 2021 T. C. Memo. 64, at p.31, footnote 16. (Name omitted).

If the SO was unhappy with the information in the OIC or at the CDP, she could have asked. But she needed to review the OIC independently, as it was raised at the CDP, and all collection alternatives raised there need to be considered there.

That doesn’t mean either IRS wins or that Katherine wins.

“We can’t guarantee that taxpayers like the Masons will have their offer accepted or their tax liabilities compromised, but we can ensure that they get a fair shake and that the decisions made by the Commissioner’s employees aren’t ‘grounded in an error of law.’ We therefore conclude that SO R abused her discretion by sustaining the proposed collection action without first independently reviewing the Masons’ offer.” 2021 T. C. Memo. 64, at p. 32. (Name omitted).

A Taishoff “Good Job” to Eric William Johnson, Esq., who once again provides “Honest tax representation at reasonable rates.”

Connie Sue Heston, 2021 T. C. Sum. Op. 13, filed 5/19/21, is the latest beneficiary of a retroactive lump of Social Security Disability Income to take her Affordable Care Act (Section 36B) lumps when she receives said award.

When Judge Elizabeth Crewson Paris goes through the arithmetical gyrations, it turns out Connie Sue is only at 316% of Federal poverty, so her excess Advance Premium Tax Credit is only $1275 per month, and not the $1428.66 that Judge Paris’ calculations extract.

Connie Sue also claimed a net Premium Tax Credit, but that gets wiped out.

Judge Crewson cites Abrego, for which see my blogpost “The 2% Solution,” 6/16/20, and Johnson, for which see my blogpost “Oh MAGI, I Wish I’d Never Seen Your Face,” 3/11/19.

How the ordinary taxpayer, who evidently is so disabled as to merit a retroactive award of three (count ’em,, three) years’ SSDI, is supposed to unscramble the arithmetic frittata that Congress has cooked up, and Judge Paris has served up, is nowhere stated.

Connie Sue claims paying the $1602 deficiency would cause her a hardship. Before my well-heeled readers remark that they pay more than this per annum for their daily grande with soy latte and bran muffin, remember ex-Ch J L Paige Marvel’s injunction to “add a zero.” Maybe we should all add a couple zeros (hi, Judge Holmes).

Howbeit, Judge Paris, while sympathetic, can only tell Connie Sue that “…she is free to submit to the IRS, at any time after the entry of this decision, for its consideration and possible acceptance, a collection alternative in the form of an installment agreement or offer-in-compromise, supported by the necessary financial information.” 2021 T. C. Sum. Op. 13, at p. 18.

Alas, this is a nonpolitical blog, so I am under a self-imposed embargo on stating my opinion of this legislation.

“Do It Yourself’

That’s Judge Gale’s motto, as we saw in my blogpost “Even The Baristas Can’t Get It Right,” 3/29/21. And he stands by the same, as he revisits (metaphorically, of course, as Ragh is still in the slammer) Kiran Rawat, Petitioner and Raghvendra Singh, Intervenor, Docket No. 11350-18, filed 5/18/21.

Judge Gale has plenty to do. First, he must correct IRS’ answer. Judge Gale told IRS to move for summary J, and they did; but they got their papers wrong.

“…respondent has moved for partial summary adjudication in his favor based on, among other things, the doctrine of res judicata. However, Rule 39 provides that an affirmative defense such as res judicata must be ‘set forth in the party’s pleading’. This defense does not appear to be in the Answer, and respondent has not moved for leave pursuant to Rule 41(a) to amend the Answer to assert this defense.” Order, at p. 1.

So if IRS still wants to assert res judicata, they should move for leave per Rule 41(a), lodge and serve the proposed amended answer on Kiran and Ragh; if the latter have anything to say, they can do so, but Judge Gale tells Kiran what to put in any response she may make to IRS’ hypothetical motion for leave to amend.

“Petitioner’s response shall explain how the granting of respondent’s motion for leave to amend the answer would result in prejudice to petitioner. In view of the fact that respondent’s Motion for Partial Summary Judgment filed on March 23, 2021, has put petitioner on notice of the issue of res judicata and afforded her an opportunity to assert her position against its application in this case, the prejudice that petitioner must show is not how the application of res judicata would disadvantage her, but rather how the raising of the issue in May 2021, rather than in August 2018, when the Answer was filed, would disadvantage her. Petitioner’s response shall also explain how any prejudice could be remedied, if respondent’s motion for leave to amend the answer were to be granted.” Order, at p. 2.

Meantime, the case is on for Zoomie trial before the motion for leave to amend (if any) gets served and Kiran and Ragh respond (if they do). So what to do? Trust Judge Gale; a lesser jurist might continue the trial, but not he.

Judge Gale orders “…the scope of the remote trial in this case at the Knoxville, Tennessee trial session, at a date and time certain of 1:00 p.m. (EDT) on June 8, 2021, shall be limited to the issue of whether petitioner is entitled to equitable relief from joint and several liability pursuant to section 6015(f) for the 2010 taxable year.” Order, at p. 3.

And he tells the Clerk to serve Ragh at the address Judge Gale sussed out in March.

My colleague, Peter Reilly, CPA, has called me a “grumpy old man.” Well, if the cliché fits, I’ll wear it. And to show there’s no hard feeling on my part, I’ll provide lunch next week in his home town.

But if grumpy old man I may be, I’ll share a grump with y’all, my patient readers. Tax Court Judges often lament that wits, wags and wiseacres consume scarce judicial resources, burden IRS’ hard-laboring counsel, teletubbying away, striving from home to prepare and try cases remotely, and delaying the good-faith petitioner who, though maybe mistaken, honestly believes in her or his case. And maybe sometimes is right, and wins.

All this is true. But what price Alero O. Olomajeye, Docket No. 4034-19, filed 5/17/21? Alero isn’t an explicit defier or protester; no all-zeros return or Hendricksonian blather. Alero twice refuses to stip per Rule 91, so got defaulted. She moves to vacate the default, but never comes up with either argument or proof that the SNOD she got was wrong.

“Since the filing of the petition on February 25, 2019, Ms. Olomajeye has offered no evidence nor legal argument that credibly challenges respondent’s determinations. The petition argues that ‘there is applicable tax law’ and ‘other equitable reasons’ rendering the deficiency determination erroneous, however, Ms. Olomajeye never identifies the relevant tax law or equitable reasons in question.” Order, at p. 2.

“At other points in the course of this litigation, Ms. Olomajeye declined opportunities to present specific legal arguments or allege facts demonstrating respondent’s deficiency determination erroneous. Ms. Olomajeye submitted no pretrial memoranda nor exhibits for trial on the occasions such material was called for. Relatedly, on the two occasions Ms. Olomajeye’s case was called from the calendar, she did not proceed to try her case.” Order, at p. 3. I’ll pardon Judge Courtney D (“CD”) Jones the neologism “relatedly.”

Alero got a notice from Collections that tax had not been assessed, so claim she owes none. Wrong. “When a taxpayer files a petition in this Court, the IRS may not assess nor collect the deficiency at issue until after the decision of the Court becomes final. See sec. 6213(a). Thus, any deficiency amount would not yet appear assessed and due on Ms. Olomajeye’s account at this time, nor at the time of the referred to notice.” Order, at p. 4.

Alero claims she hadn’t time to get information about the early drawdown of her IRA. Except she had two years.

“Lastly, the Court indeed prohibited Ms. Olomajeye’s husband, Rick Johnson (Mr. Johnson), from advocating on Ms. Olomajeye’s behalf. Notwithstanding the executed power of attorney, Mr. Johnson is not admitted to practice before the Court pursuant to Rule 200. A power of attorney alone does not permit Mr. Johnson to represent Ms. Olomajeye in this Court. Even assuming arguendo that it does, we note that the executed power of attorney submitted to the Court does not appear to confer Mr. Johnson any authority over Ms. Olomajeye’s taxes.” Order, at p. 7. Alero didn’t initial the form POA at the “taxes” bloc, leading me to surmise that the POA is a State-specific form and not Form 2848.

So after two (count ’em, two) years of this, Judge CD Jones finds for IRS.

Before you ask “Where were the LITCs and the calendar call commandos?” I’ll let Judge CD Jones tell you, in a footnote.

“…the Court has encouraged Ms. Olomajeye to secure counsel at various points in this case. On two occasions in 2019 and once in 2020, the Court forwarded Ms. Olomajeye notices containing the contact information for low-income taxpayer clinics within the Legal Aid Society of Greater Cincinnati and the Center for Great Neighborhoods. At calendar call on March 29, 2021, Ms. Olomajeye was also advised of the availability of a volunteer attorney, and the Court arranged for her to meet with one such volunteer in a virtual breakout room. See Transcript of Proceedings on Mar. 29, 2021, 3:20-5:21 (index #32). While she was able to speak with a volunteer attorney, none were available to represent her at trial given the eleventh-hour nature of her request. Nonetheless, Ms. Olomajeye had ample time and opportunity to secure legal representation since filing her petition more than two years ago. Her failure to do so cannot be used as a backdoor to continuance.” Order, at p. 5, footnote 7.

And I haven’t chronicled here more than half of Alero’s maneuvering.

Judge, I most respectfully submit that in my opinion Alero is playing. While this petition is pending, IRS can’t collect. And Alero has stopped a shaved inch short of delay of the game. So without any available sanction, what is to prevent similar gaming?

I feel the judicial pain here. “Our well-publicized case load is attributable in part to taxpayers who fail to judiciously prosecute their cases. Preparing a case for trial also consumes this Court’s limited resources. Repetitive delays by a single taxpayer also hinders other taxpayers from having their cases timely adjudicated.” Order, at p. 4, footnote 5.

So just maybe possibly there might be a couple Section 6673 chops pour encourager les autres?

In my blogpost “No Comment – Redivivus,” 2/2/21, I promised I would follow Montgomery-Alabama River, LLC, Parkway South, LLC, Tax Matters Partner, 2021 T. C. Memo. 62, filed 5/17/21.

All y’all will recollect that my colleague KJ’s firm wanted to certify the question of whether the holder of an easement in gross had a real property interest (compensable in condemnation or a contract right (not so compensable) to the AL Supreme Court per that Court’s Rule 18. If not compensable under State law, the cutout of improvements in this conservation easement case wouldn’t matter, per Reg Section 1.170A-14(g)(6)(ii).

And pore l’il ole Tax Court is enough of a “court of the United States” to qualify for an AL Supreme Court certified answer.

Judge Albert G (“Scholar Al”) Lauber don’t need no AL Supreme Court to tell him what AL law says.

“In 1997 Alabama enacted its version of the Uniform Conservation Easement Act. That statute defines the interest of the donee of a conservation easement as the ‘nonpossessory interest of a holder in real property.’ Ala. Code sec. 35-18-1(1). Consistently with the statute, the Deed in this case explicitly grants the Foundation ‘a real property interest, immediately vested in Grantee at the time Grantor conveys this Conservation Easement to Grantee.’ Because Alabama law now treats conservation easements as property rights, the Foundation, as the holder of a conservation easement, would be entitled to compensation in an Alabama condemnation proceeding ‘in the same manner as any other [holder of a] property interest.’ See Ala. Code sec. 35-18-2(e).” 2021 T. C. Memo. 62, at pp. 10-11.

If KJ (or anybody else) wishes to comment for the record, I’ll be glad to hear from them.

Edited to add, 5/19/21: If anyone does want to comment, please use the “Comment” link at the foot hereof. That avoids all the data protection stuff, with which neither I nor the US gov’t can comply.

That’s Vincent J. Fumo, 2021 T. C. Memo. 61, filed 5/17/21; my readers will remember VJ from my blogposts “Good Job, Judge Lauber,” 10/14/16, “Good Job, Judge Lauber – Part Deux,” 2/28/20, and “Greenberg’s Express Stops in PA,” 5/7/20. Today’s episode features Judge Albert G (“Scholar Al”) Lauber examining VJ’s role in the 501(c)(3) community beautifier that ran out of his government office.

VJ was neither officer nor director nor member. His staffers (he was a PA State legislator) incorporated and served as nominal officers and directors. But without VJ, the 501(c)(3) wouldn’t exist (2021 T. C. Memo. 61, at p. 6). VJ called the shots and raised money. Since it did exist, VJ used to siphon off around $1.2 million for his farm and family. IRS wants to hit VJ with Section 4958 excise taxes thereon, as he is a “disqualified person” from receiving “excess benefits” from the 501(c)(3).

VJ claims a “disqualified peraon” is only an officer or director or member, and he was none of the above. Judge Scholar Al disposes of that by reading the Regs.

So IRS gets summary J on VJ’s disqualification, but not on what “excess benefits” VJ got from the 501(c)(3). That’s for the trial.