I’ve written a lot about sealing documents in Tax Court because it’s an evergreen. Many a petitioner comes to grief there, and not a few practitioners. I’ve seen motions seeking sealing do more harm than just riding head-down under cover of all the other pleadings and other documents.

Weidong Zhang, Docket No. 15356-20W, filed 9/25/25, being a whistleblower, gets special treatment. Section 6103, the guardian of taxpayer information, lifts the shield when needed for judicial or administrative proceedings pertaining to tax administration in Section 6103(h)(4).

Judge Rose E. (“Cracklin'”) Jenkins sets forth the safeguards when IRS hands over third-party or nonparty Section 6103 information to petitioners for trial prep.

“(w)henever petitioner intends to provide for trial preparation to any person(s) any Protected Documents, petitioner must first provide a copy of this Order to any such person(s), inform such person(s) that he or she must comply with the terms of this Order, and obtain on a copy of this Order the name, the business or home address of such person(s) at which service of process can generally be made during business hours, and the signature(s) of such person(s). Petitioner shall retain the signed copy of this Order until one year after the decision in this case becomes final within the meaning of section 7481(a). After petitioner has complied with the first sentence of this ordered paragraph, petitioner may provide for trial preparation to any person(s) described in the first sentence any Protected Documents.” Order, at p. 2.

Given the pace of Tax Court litigation, that holding period could be a very long time.

A docket search shows Weidong Zhang is pro se. Judge Jenkins doesn’t state who Weidong Zheng might have engaged to help with trial prep. If any is not covered by Section 7525 confidentiality or litigation prep privilege, I wonder what cover they have.

Judge Albert G. (“Scholar Al”) Lauber stiches up the career of ex-PA-Senator Vincent J. Fumo, T. C. Memo. 2025-97, filed 9/24/25, as “Senator R2–D2” (T. C. Memo. 2025-97, at p. 22) gets hit both for unreported income on his 1040, and for Section 4958 excess benefits he got from the 501(c)(3) he created.

Most of the information in this case comes from the criminal trial in USDCEDPA, wherein Sen. Fumo went down on 137 (count ’em, 137) counts “including mail fraud, wire fraud, obstruction of justice, conspiracy to obstruct justice, and violation of section 7206(2) for willfully aiding or assisting in filing false tax returns.” T. C. Memo. 2025-97, at p. 4.

Sen. Fumo padded his payroll, aided by the chief clerk of the PA Senate who routinely accepted whatever senators said. And while the cash didn’t go into Sen. Fumo’s pocket, what it bought was valuable.

“By diverting excess compensation to his staff, petitioner garnered more than ‘political capital.’ He sought to assure—and he in fact obtained—unquestioning loyalty from his staff, especially when the going got tough. He incentivized his employees’ compliance in rendering personal services that directly benefited him and his political allies. And he ‘bought their silence’ about improper or illegal behavior in which he was engaging, including the use of Senate resources for his political Campaigns. These benefits plainly had economic value. And while the fair market value of these benefits might be hard to calculate in isolation, petitioner has not shown that it was ‘arbitrary or erroneous’ for the Commissioner to use the excess compensation he engineered for his staff as an index of the value he received from them.” T. C. Memo. 2025-97, at pp. 44-45.

There’s a lot more. His ostensible staff, paid for by the taxpayers, were his personal servants, the taxpayers paid for his travel, tools, farm equipment, cars, cellphones, and girlfriends, and the 501(c)(3) paid for the rest, though he was careful to trash all the records.

Of course, some of the staff actually worked in appropriate situations, and Judge Scholar Al carves these up as best he can. If any reader works for a corrupt politician and needs a template for dividing the padded staff wages, read T. C. Memo. 2025-97, at pp. 46-61. And any of you who practice in the criminal fraud arena will find this useful too.

As for the money given to family, friends, and political allies, that’s still income to Sen. Fumo, as he could choose where to divert what he stole.

The Section 4958 excess benefit excise tax is extensively dealt with. I leave that to Mr. Paul Streckfus, the EO expert, to discuss.

As for Section 6663 chops and the open fraud SOL, Sen. Fumo has enough badges to qualify for eagle status. Wiping your e-records goes a long way. And Sen. Fumo failed to file Form 4720 to report his excess benefits.

“The Form 4720 is admittedly an exotic species: The obligation to file this return––unlike the obligation to file (say) Form 1040––is far from common knowledge. Petitioner maintains that he had reasonable cause for his failure to file because he lacked any concept of the terms ‘constructive income’ or ‘disqualified person.’ He assertedly had ‘no inkling that he may have obtained a taxable . . . benefit’ during the years at issue.

“We are not persuaded. Petitioner was an attorney, a bank chairman, and a highly sophisticated actor. He caused his Senate staff to create [the 501(c)(3)] as a tax-exempt charity, and it was operated out of his office. He is charged with knowledge of the basic rules governing the operation of public charities.” T. C. Memo. 2025-97, at p. 89.

Master cartoonist Carl Rose’s immortal line about the little girl’s book report (“This book told me more about penguins than I wanted to know”) echoes in Judge Alina I. (“AIM”) Marshall’s exhaustive (and exhausting) trudge through Jackson Stone South, LLC, Jackson South Investments, LLC, Tax Matters Partner, T. C. Memo. 2025-96, filed 9/23/25.

After 146 (count ’em, 146, and I have) pages, wherein donative intent (long since demolished), appraiser qualifications (the cut isn’t hard to make), shortened holding period (new matter, which IRS stiped away), qualified appraisal (errors which IRS claims torpedo its validity notwithstanding, as these go to weight, not qualification, but watch out for those mesic hardwood forests and no, I don’t know what those are either, and oak-pine-hickory types), and the new flavor du jour comparable sales which destroy discounted cash flow, the Jacksons get the 40% gross overvaluation chop plus an evaporated deduction.

Yes, this is granular Dixieland Boondockery, with all the usual suspects among the landowner-seller (longtime Jones County real estatenik) and promoters.

But the kicker is the following, in a footnote, as usual.

“The tax opinion letters warned prospective investors: ‘PARTICIPANTS IN THE PROPOSED TRANSACTION WILL NOT BE ABLE TO RELY ON THIS OPINION TO ESTABLISH A REASONABLE BELIEF THAT THE TAX TREATMENT OF THE PROPOSED… CONSERVATION EASEMENT TRANSACTION WAS PROPER OR FOR ANY OTHER PENALTY PROTECTION PURPOSES.’” T. C. Memo. 2025-96, at p. 27, footnote 27.

Translation: “Hook up, head for the jump door, and don’t even wait for the green light.”

Not equine treats, rather the story of Wesley E. Young and Janet S. Young. T. C. Memo. 2025-95, filed 9/22/25, who combined team roping (Wes) and pecan farming (Jan) with their home and a wedding venue to end up with massive deficiencies for two (count ’em, two) years at issue.

Mr. Peter Reilly, CPA, here’s another hobby loss case.

While the heavy-duty losses to offset the even heavier-duty income from the aircraft parts business Jan inherited from her late husband form the top line, the bottom line is want of records and the trappings of a business operation. Again and again ex-Ch J L. Paige (“Iron First”) Marvel is unable to tie in deductions, even when substantiated, with the years in which they were paid or incurred.

And there’s insufficient evidence to show that land appreciation was economically integrated with the rest of the horsing and pecaning to satisfy the special rule in the last two sentences of Treasury Regulation § 1.183-1(d)(1) pertaining to farming. Anyway, the land appreciation wasn’t the primary purpose; they testified they fell in love with the ranch.

The 43 (count ’em, 43) pages of ex-Ch J Iron Fist Marvel’s prose are too fact-specific for me to quote for the general reader,  but lead to the same conclusion: if you want to treat an activity as a profit-making activity, paper (or electrify) it as a business. Draft your business plan before you’re audited. Invest in bookkeeping software and use it. Don’t use your personal checking account for business and pleasure; get a separate business account even if you don’t get cash for opening it. Tie your trial testimony into your records; a great deal of trial testimony gets rough treatment because the documentary evidence, such as it is, contradicts or fails to support. If you’re relying at trial  on what you heard and did with other people, make sure they testify. And of course, merely retaining a CPA to prepare your returns from the materials you provide doesn’t prove good-faith reliance.

Note that events from out years are admissible when they show patterns and course of conduct.

While farmers do get some indulgence when it comes to recordkeeping, Wes and Jan are too hip to qualify (Jan has a BBA degree).

They’re judges who substitute or deputize for the king, presiding over trusts, wills, estates, adoptions, guardianships, and the like, s/a/k/a probate judges. While their decisions and orders have State weight, the same don’t preclude Judge Emin (“Eminent”) Toro from brushing off a settlement decree in Surrogate’s Court,  New York County.

It looks like an up-and-coming source of blogfodder, Estate of Patrick Heiniger, Deceased, William A. Cahill, Jr., Ancillary Administrator c.t.a. and Alicia Heiniger, Ancillary Executor, Docket No. 8096-17, filed 9/19/25. The AA and AE, and the late Patrick’s longtimer whom I’ll call Hana, want summary J, and none of them get it.

At issue are a condominium unit in prestigious Olympic Tower and some eight (count ’em, eight) works of art. Hana and the AA and AE settled out in Surrogate’s Court, and want the deal to bind IRS so as to avoid estate tax.

“We disagree with Ms. Stevens and the Estate as to the effect of state trial court decisions on adjudications concerning the federal estate tax. The Supreme Court’s decision in Commissioner v. Estate of Bosch illustrates how state law and state court decisions should be treated when making federal estate tax determinations:

‘It follows here then, that when the application of a federal statute is

involved, the decision of a state trial court as to an underlying issue of

state law should a fortiori not be controlling. This is but an application

of the rule of Erie R. Co. v. Tompkins, [304 U.S. 64 (1938)], where state

law as announced by the highest court of the State is to be followed. . . .

If there be no decision by that court then federal authorities must apply

what they find to be the state law after giving “proper regard” to relevant

rulings of other courts of the State. In this respect, it may be said to be,

in effect, sitting as a state court.'” Order, at pp. 3-4 (Citations omitted).

Here we don’t have a case litigated and decided. All Judge Eminent has is a stip. If a litigated lower court decision doesn’t bind Tax Court, no way can a deal between the parties. Taishoff says moreover, IRS wasn’t a party to the litigation or the deal.

And the parties were brandishing all kinds documents (hi, Judge Holmes) allegedly written by the late Pat before he became the late Pat.

“Determining who owned the artwork and the condominium at the time of Mr. Heiniger’s death would require us to resolve questions about the authenticity, timing, and content of Mr. Heiniger’s writings, including holographic wills and letters supplied as exhibits to the declarations filed by Ms. Stevens and the Estate.” Order, at p. 4.

Summary J is issue-finding, not issue-determining. Here, reasonable questions of fact preclude summary J.

Taishoff Footnote: A quick online search of NY land records shows the condominium unit owned by a corporation; I expect we’re taking about stock ownership thereof. The corporation is called Hodet Corp., apparently the alter ego of Odette Heiniger, a previous owner. Hodet, where is thy sting?  And since there’s a Section 6662(a) chop here, do we get Boss Hosiery? Oh Graev, where is thy victory?

Sorry guys, the devil make me do it.

I want to give the trusty attorneys for Southland Aggregate, LLC, Green Creek Resources, LLC, Tax Matters Partner, Docket No. 2148-24, filed 9/18/25, whose names are set forth at p. 8 of said order, a Taishoff “Good Try, Hail Mary Division, Third Class, with Titanium Clasp.”

It’s another Rule 248(b)(4) last-minute jump-in, when the motion for entry of decision in the settled Dixieland Boondockery is about to be inked. I’m not going to link to my blogposts, which have beaten this move to death. Judge Adam B. (“Sport”) Landy cites all the relevant caselaw, which said trusty attorneys seem to have missed (see infra, as my expensive colleagues would say).

This one has the wannabes voting in favor of settlement, but now claiming it will cost them money. As usual, they don’t claim the TMP misled or ghosted them.

But the trusty attorneys come into their own when they claim to be ready to try the case in January, and then walk it way back. Judge Sport Landy is positively douce.

“When questioned by the Court about the timing of a trial on the merits in this case, counsel for the Objecting Nonparticipating Partners indicated they would be ready for trial in January 2026. Upon further questioning, however, counsel for the Objecting Nonparticipating Partners became noncommittal on timing, stating that once this case is calendared for trial ‘[they] can hit the ground running and proceed with the case, [they] would have a better idea of what would – what’s needed to get to trial. So I don’t want to say conclusively that January [2026] [they]’d be ready.’ Counsel for the Objecting Nonparticipating Partners indicated during the hearing that they understood the risks of litigating this case on the merits and were prepared to see it through to any potential appeals. However, they admitted that they had not read several recent Court decisions that are relevant to many of the issues in this case. We also note that counsel for the Objecting Nonparticipating Partners acknowledged that they have never tried a conservation easement case. Given that the Objecting Nonparticipating Partners have not conducted any independent discovery or engaged any expert witnesses, read any of the pleadings in the case, or taken any steps to review the 2017 Form 1065 return and its accompanying appraisal, we determine that the Objecting Nonparticipating Partners would not be ready for trial by January 2026. While the Objecting Nonparticipating Partners may be willing to proceed to a trial on the merits in this case, they failed to demonstrate their readiness and ability to do so.” Order, at p. 7.

No, not a typographical error in the title of the tome that gave birth to the celebrated line “Tell ’em what they want to hear and you’ll make the deal.” Judge Emin (“Eminent”) Toro tells Estate of Patrick Heiniger, Deceased, William A. Cahill, Jr., Ancillary Administrator c.t.a. and Alicia Heiniger, Ancillary Executor, Docket No. 8096-17, filed 9/18/25 part of what they wanted to hear, namely, that they and IRS’ counsel can work on redacting personally identifiable information from their filings, but a blanket seal is off the table. Likewise, Tax Court might seal discovery material that never makes it to trial, but sealing what evidence goes in needs a strong case, like trade secrets. And petitioners here aren’t in a trade or business.

The late Patrick had an art collection to die for, and he did. Both ex’r and adm’r, and intervenor (whom I’ll call Hana, who is alleged to have removed some of the artistic goodies from the estate), want the titles of the works and the names of their creators sealed, lest this information embolden the Matthew 6:19 types, or worse, chill the FMV of these masterpieces.

Judge Eminent: “The Estate and intervenor claim that, absent a protective order, the market value of identified artwork might decrease and the likelihood of attempts to steal identified artwork will increase. But the Estate and intervenor supplied only their own statements in the Motions, and a declaration from intervenor herself, to support their claims of harm. They have not provided factual data or other evidence to corroborate or support those claims. Such conclusory and unsupported statements are insufficient to establish good cause.

“Moreover, the Estate and intervenor have not demonstrated that their interests in protection from alleged harms outweigh the ‘strong common law presumption in favor of access to court records.’ Willie Nelson Music Co., 85 T.C. at 921. Our Court routinely discusses works of art, including their titles, the artists who created them, and their value, in its opinions. See, e.g., Lio v. Commissioner, 85 T.C. 56, 59 (1985) (providing the names of the artwork in dispute and the fact that the taxpayer donated the artwork); WT Art P’ship LP v. Commissioner, T.C. Memo. 2025-30, at *3, 7 (providing the names and valuations of five pieces of art donated by the taxpayer to the Metropolitan Museum of Art in New York City as well as the names and sale prices of comparable works of art).” Order, at p. 5. (Citation omitted, but for WT Art P’ship, see my blogpost “Antiques Roadshow It Ain’t” 4/9/25).

I get appeals from time to time to delete blogposts. Mostly I don’t; Tax Court is public and none of those who make such appeals to me have the public persona of Willie Nelson. To save any prospective applicants their time, I’ll just quote Judge Eminent Toro.

“The principles governing the sealing of records before this Court are set forth in Willie Nelson Music Co. and subsequent decisions. As a general rule, the official records of all courts are to be open and available for public inspection. Willie Nelson Music Co., 85 T.C. at 917 (citing Nixon v. Warner Communications, Inc., 435 U.S. 589,597 (1978)); see also United States v. Amodeo, 44 F.3d 141, 145 (2d Cir. 1995). The presumptive right to access, however, ‘may be rebutted by a showing that there are countervailing interests sufficient to outweigh the public interest in access.’ Willie Nelson Music Co., 85 T.C. at 919. Therefore, the public right to judicial records is subject to the discretion of the presiding court to control and seal upon an appropriate demonstration of good cause. Id. at 917–918; see also Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)(discussing discretion under [FRCP] Rule 26(c)). In exercising such discretion, the court “must weigh the interests of the public, which are presumptively paramount against those advanced by the parties.” Willie Nelson Music Co., 85 T.C. at 919.” Order, at p. 3.

You can’t unring a bell.

And a word to practitioners: Remember, before you blithely counsel a client to send in the sixty Georges and a petition, your client is going public. Yes, personally identifiable will be redacted and whistleblowers will mostly get cover, but in deficiencies and CDPs years, amounts, what was income and what deductions, business dealings, and much else will be out there for anyone to see for a nominal fee to the Glasshouse Copycats. A casual motion to seal won’t get it. And Taishoff might could just maybe so pick it up. And you might get The Phone Call.

You’d best make a substantial showing per Rule 248(b)(4) when you show up on eve of entry of decision in a settled TEFRA case. Yes, the partners in Blomquist Holdings, LLC, Crestlawn Investors, LLC, Tax Matters Partner, 165 T. C. 6, filed 9/17/25 have a statutory right to participate, but only per Court Rules, Section 6230(l). Had the Blomquists been timely with their participation petition, they could have come in without qualification. But to wait until entry of decision, with no allegation that the TMP kept the objectors in the dark about the litigation, doesn’t get it.

Chimney Rock, which I blogged under the title “The Perpetuity Punt – Part Deux,” 5/1/25, and which Judge Elizabeth Crewson Paris quotes extensively in Blomquist Holdings, tells the rationale.

The 39 (count ’em, 39) wannabes (scheduled in 165 T. C. 6, at p. 3, footnote 5) haven’t explained why they were free-riding on the TMP, nor shown that the TMP was conflicted out. What isn’t said is that the TMP got as decent a settlement as I’ve yet seen in a Dixieland Boondockery. “Respondent proposed (1) to disallow $53,830,000 of the charitable contribution deduction Blomquist claimed for its conservation easement donation, (2) to disallow $1,405,000 that Blomquist claimed as an ‘other deduction,’ (3) to allow an ‘other deduction’  of $11,657,800, (4) to impose a section 6662(h) accuracy-related penalty of only 10% and concede the remaining penalties, and (5) to refrain from imposing the 2% of adjusted gross income floor under section 67 on the allowed ‘other deduction.’” See 165 T. C. 6, at p. 4.

Practice tip: “The individual Motions and Notices filed by the 38 partners were filed with the Court as a single document, rather than separately filed. The Court determined that the Motions were timely filed but did not conform to the Court’s Rules. Therefore… the Court directed each Objecting Nonparticipating Partner to separately file a Motion for Leave to File a Notice of Election to Participate and to lodge therewith a separate Notice of Election to Participate.” 165 T. C. 6, at p. 5. Separate checks, but there’s a reason here. Each partner is separately situated; the capacity of one to litigate the case effectively differs from the others. Some may make the cut, others not.

The above illustration of multitasking reflects my frustration with such orders as Estate of  Mark L. Butler, Deceased, Michael L. Bangs, Executor, Docket No. 12489-23, filed 9/16/25. A motion by the ex’r’s trusty attorneys, the sort of omnibus pretrial deck-clearing motion found in State and Federal courts gets tossed by Judge Tamara W. Ashford.

” Pursuant to Rule 51 of the Tax Court Rules of Practice and Procedure, petitioner’s… motion is not proper, however, because what he seeks should have been stated in separate motions and not joined in one motion. Accordingly, we will deny the motion but note that a motion to compel responses to interrogatories and a motion to compel production of documents may be separately filed with the Court, which the Court will act upon in due course. Additionally, we will direct the parties to inform the Court in a joint status report what weeks… they would be amenable to having this case scheduled for trial at a Special Session of the Court in Philadelphia, Pennsylvania.” Order, at pp. 2-3.

The ex’r’s trusty attorneys asked for responses to interrogs, doc prod, and what looks like a run-of-the-mill scheduling order. Nothing exotic.

But the Rule 51 rationale is strange. The Rule speaks of a “more definite statement” where a pleading is “so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading.” Rule 51(a).

The 1973 notes to Rule 51(a) state “(A) pleading may be sufficiently definite or represent a sufficient statement, and yet the adverse party may be entitled to further Information for other reasons. In that event, other procedures, such as those to which cross-reference ls made in this Rule, should be used rather than the motion for a more definite statement.” 60 T. C. at p. 1092.

As no reference is made to indefinite or ambiguous language in the specific omnibus motion at issue here, I cannot tell how IRS’ counsel (for whom this is obviously not their first trip to the pitcher’s mound) cannot respond. One would assume that they encountered omnibus motions in USDC, USCFC, or CCA. Or maybe even in law school.

I can understand that where self-representeds are involved, omnibus motions should not be allowed. One the one hand the omnibus motion might be a harassment tool for the defier/protester/rounder. On the other, the good faith but hapless pro se might crumple when confronted by an IRS blockbuster.

In a case, as here, where both IRS and the petitioner have sent out the first team, and the Tax Court bench, which is as skillful as any bench anywhere, is on the job, the omnibus might save time and scarce judicial resources.

Three (count ’em, three) procedural orders useful for crammers for the biennial Tax Court non attorneys’ admissions exam (s/a/k/a Slaughter of the Innocents).

Duane P. Kuck & Cindy-Leigh Kuck, Docket No. 13724-24, filed 9/15/25, and called off-side by STJ Diana L. (“Sidewalks of New York”) Leyden. Seems trusty attorneys for Duane & Cindy-Leigh served their Branerton demand too soon. “A necessary predicate to a motion to compel is that a party must make a formal discovery request, and that request must be made after a case is at issue but not before 30 days after the case is at issue. See Rule 38 and Rule 70(a)(2). Petitioners served formal discovery (i.e., an interrogatory) on respondent 5 days after the case was at issue and thus, failed to comply with Rule 70(a)(2). Accordingly, because petitioners’ formal discovery was premature the Court must deny petitioners’ Motion to Compel.” Order, at p. 2. Of course they can try again, but if what they want is a conclusion of law, that won’t get past STJ Di. Order, at p. 3.

Ricky T. Burningham, Docket No. 19625-22L, filed 9/15/25, has his previous Tax Court appearances scheduled by Judge Mark V. (“Vittorio Emanuele”) Holmes; Ricky’s batting average isn’t great, but he does win one year. Appeals can’t produce the USPS 3877 for the SND for the one year in the four (count ’em, four) years that Ricky is contesting. The “Form 3877 is a standard post-office form that lists certified mail, the address of the recipient, and is stamped with a postmark.” Order, at p. 3. According to Hoyle, that means Ricky and IRS go back to Appeals so the SO can figure out what basis s/he had to determine that IRS sent the SND to Ricky by certified mail. If s/he can’t find proper basis, the lien is invalid, but Ricky doesn’t get to contest the amount of his liability. “The failure by the Commissioner to prove that he assessed that liability only after he mailed a notice of deficiency to Mr. Burningham is a failure to prove that he assessed the liability correctly. Without that, the lien itself would be invalid as to the [year at issue].” Order, at pp. 3-4.

Southwest Emergency Physicians, PLLC, The Real Kahuna Corporation, Tax Matters Partner, et al, Docket No. 8795-16, filed 9/15/25, but there are eight (count ’em, eight) conjoined cases here. The case goes to show what happens when cases drag on for years. IRS demands documents that the Southwesterners claim they already provided, and anyway they conceded the disallowed deductions (this is a microcaptive insurance case). All they’re fighting about now is chops, and most of what IRS wants is unrelated to chops. Besides, it’s burdensome, the PLLC is out of business, and most of the partners are dead. So Judge Travis A. (“Tag”) Greaves denies IRS’ motion to compel production without prejudice. “Respondent may narrow the scope of his request to only those documents related to the penalty issue. If a mutual agreement is not reached, respondent may use his discretion to file a motion to compel with this Court.” Order, at p. 3. Taishoff says I wonder why the Southwesterners’ trusty attorneys, for whom this is not their first rodeo, didn’t get some concessions out of IRS’ counsel on the chops before conceding the deductions.