Especially When A Judge Says What It Says

It’s been a byword for me for fifty years that one cannot discuss a document without having the document before one. Documents never say what one remembers they say.  Sometimes this is even more so when a judge says what it says.

Another façade designated hitter from Judge James S (“Big Jim”) Halpern. 901 South Broadway Limited Partnership, Standard Development, LLC, Tax Matters Partner, Docket No. 14179-17, filed 11/19/20. Two conflicting Deed paragraphs cause IRS to claim that the changes-to-façade-deemed-approved thirty-day quick kick defeats the reserved-in-perpetuity requirement.

“Respondent bases his argument on section 3.2(c) of the Deed. Section 3.1 prohibits the partnership, as Grantor, from making changes to the Building without the Conservancy’s ‘prior express written approval’. That same section allows the Conservancy, as Grantee, to withhold or condition its approval in its ‘sole discretion’. Section 3.2(c), however, provides: ‘All approval rights of the Grantee shall be exercised in the reasonable discretion of Grantee. Grantee further agrees to respond to any request of Grantor not later than thirty (30) days following receipt by Grantee of Grantor’s request. Failure of Grantee to respond to Grantor within the thirty (30) day period shall be deemed to constitute approval of Grantor’s request.'” Order, at pp. 3-4.

CA law says that when two paragraphs in a contract conflict irreconcilably, go with the first. So, say the Broadway Limiteds, absolute discretion rules. Par. 3.2 is inoperative.

But Judge Big Jim sees no irreconcilable conflict.

“…the approval of a request of the partnership by reason of the Conservancy’s inaction would not necessarily frustrate the easement’s stated purpose. Section3.l(a) of the Deed prohibits the partnership from making any change to the Building’s facade without the Conservancy’s approval. The deemed approval of a request to change the facade in a manner that would not ‘significantly impair or interfere with the Property’s conservation and preservation values’ would not contravene the Deed’s purpose as stated in section1.2. A conflict between section 3.2(c)’s deemed approval provision and the Deed’s stated purpose would arise only if that provision were read to apply to requests to alter the Building’s exterior in a manner inconsistent with its historical character. And that potential conflict can resolved simply by reading section 3.2(c) as inapplicable to any such request.” Order, at p. 7.

Yes, Judge, except that’s not what the Deed says. The thirty-day quick-kick doesn’t say “insignificant changes only.” And that the Conservancy can sue for an injunction if the change is significant and they blow the thirty-day cutoff is nothing to the point. Agreements to vary what is sought to be preserved have been frowned upon ever since Belk; see my blogpost “A Thing of Beauty – Accept No Substitutes,” 1/28/13.

But I’m not the judge. I’m only a journo, racing the floodwaters of Dawson’s Creek.

So IRS loses summary J.

Racing the Dawson’s Creek flash flood, Judge Holmes ends the saga of Kumar Rajagopalan and Susamma Kumar, 2020 T. C. Memo. 159, filed 11/19/20. All y’all remember that Kum and Sus were fighting over chops since 2015; if not, see my blogpost “The Ghoul at the Graev,” 2/1/18.

Well, as a parting gift, Judge Mark V Holmes finds that local tax records, real arms’-length sales, and bank loans substantiate that the diminution of value engendered by Kum’s and Sus’ conservation easement was at least what Kum’s and Sus’ return showed, so no deficiency equals no chops, Boss Hoss or no Boss Hoss.

Kum and Sus bought and sold in Western North Carolina, during the run-up to the Black ’08, when another frothy real estate market was bubbling over.

The battling appraisers are only there to let Judge Holmes mix-and-match his way to justify his analysis of admittedly arms’-length sales by Kum and Sus, banks’ appraisals, and local tax appraisal records. Apparently North Carolina’s assessors and bank appraisers are better than others. Howbeit, when Kum and Sus granted the easement, there was gold, or maybe dilithium crystals (hi, Peter Reilly), in them thar hills.

Finally, there’s a Holmesian reality check.

“This is an exceptionally unusual conclusion to reach in a conservation-easement case. The Kumars…benefit from timing their donation at what turned out to be very nearly the frothiest point on a local real-estate bubble that was even bubblier than it was in most parts of the nation. In valuing that donation, they get the benefit of the bubble even as the Commissioner would get the benefit of its bursting a couple years later. We recall the old aphorism among observers of the stock market that ‘bulls make money, bears make money, but pigs get slaughtered.’ Kumar… here took a return position that was very considerably subhyperporcine–they get to keep their deductions in full and owe no penalty.” 2020 T. C. Memo, 159, at p. 30.  

Before you ask about “qualified interest” and “perpetuity,” note that “…many of our recent opinions have focused on the… requirements–that the contribution be ‘a qualified real property interest,”’ see, e.g., Pine Mtn. Pres., LLLP v. Commissioner, 151 T.C. 247, 265-72 (2018), aff’d in part, rev’d in part, vacated and remanded, __ F.3d __, 2020 WL 6193897 (11th Cir. Oct. 22, 2020), and that the contribution be “exclusively for conservation purposes,” see, e.g., Oakbrook, at *14. Attacking the conservation deed on these technical grounds has allowed the Commissioner to deny deductions in full and even win penalties. The Commissioner disarmed himself of such arguments in these cases when he chose to stipulate that this easement was ‘exclusively for a conservation purpose.’ See supra p. 8. We enforce stipulations unless a party was misled, there was a mutual mistake, or justice requires…none of which has occurred here.

“The Commissioner argues as to the first requirement that the deed violates section 170(h)(2)(C)’s requirement that the restriction be granted in perpetuity. The deed does have an amendment clause that allows the parties to modify certain restrictions in the deed of easement. See supra p. 8. The Commissioner argues that this deprives the easement of the required perpetuity. We expressly rejected this argument in Pine Mountain, 151 T.C. at 280-81, and will follow that opinion here, as we must.” 2020 T. C. Memo. 159. at pp. 11-12.

And a Taishoff “Good Job” to Michelle A Levin, Esq., and the crew from Sirote & Permutt, P.C.

With The Glasshouse to submerge Friday under the floodwaters of Dawson’s Creek, Judge Albert G (“Scholar Al”) Lauber unloads a 244 (count ’em, 244, and I did) page spectacular full-dress T. C., The Coca-Cola Company & Subsidiaries, 155 T. C. 10, filed 11/18/20.

It’s the ultimate transfer pricing, Section 482 case, and Judge Scholar Al is the man to do it, tracing the history of Section 482 from Section 240(f) of the Revenue Act of 1926, and recounting in extraordinary detail Coke’s operations around the world, with twelve attorneys for Coke and seven for IRS.

In short, Judge Scholar Al finds the Secret Formula, the trademarks, trade dress, processes and procedures that Mama Coke grapples to her soul with hoops of steel means her offshore mixers of concentrate, which they sell off to bottlers, have nothing worth anything, so whatever they get belongs to Mama Coke. The independent bottlers have economic clout; the offshore mixers, known to the cognoscenti as supply points, are mere dust beneath Mama Coke’s shoes.

IRS’ lead expert does a great job, while Judge Scholar Al eviscerates Coke’s guys.

The fight is over the 10-50-50, which I’m sure all y’all were just about to mention. If you weren’t, see my blogpost “Things Go Better With Coke,” 12/14/17. Well, that was a settlement agreement, like a contract, and it expired by its own terms before the year at issue. So all bets are off.

Substantial compliance comes to the fore, to rescue Mama Coke from a double hit on the Section 987 dividend repatriation from its Mexican peso-adjustments. Whatever Mama Coke did was enough for Rev. Proc. 99-32, 1999 CB-2 296.

Judge Scholar Al blocks that block. Coke wants to fight over the blocked income regulation, which says foreign currency controls can be disregarded. After all, what would a full-dress T. C. be without one challenge to a reg.?

“As the parties have observed, the validity of section 1.482-1(h)(2), Income Tax Regs., has been challenged by the taxpayer in 3M Co. & Subs. v. Commissioner, T.C. Dkt. No. 5816-13 (filed Mar. 11, 2013). The Court has granted a motion to submit the 3M case for decision without trial under Rule 122, and the case is still pending. We will accordingly reserve ruling on the parties’ arguments concerning the blocked income regulation until an opinion in the 3M case has been issued.” 155 T. C. 10, at p. 185.

Finally, please excuse this late posting. But this opinion has an appendix of fourteen (count ’em, fourteen) pages containing experts’ resumes.

If there’s any more like this, I might be glad when Tax Court shuts down.

That’s Judge Mark V. Holmes to IRS, as he gives summary J to Carolyn E. Liao & George Liao, transferees, et al., 19035-13, filed 11/17/20; they’re not transferees, or even transferees of transferees, as the larcenous scheme of Charles Klink and Steven Block to outdo even MidCoast can’t satisfy the IA Uniform Fraudulent Transfer Act.

IRS couldn’t show that Charles’ and Steve’s shell-shill did a roundy-round with cash from Carolyn’s & George’s family corp, the PHC of Carolyn’s late Mom (basis zero, value immense). Carolyn & George and the als were facing a massive estate tax bill when Mom became the late Mom, with no cash. Charles and Steve offered an even bigger premium than MidCoast for the PHC’s shares, which led Carolyn & George and the als (plus their advisers) to think these deals were normal.

The shell-shill named in contract of sale never did nothing; Charles’ and Steve’s own corp got the money from somewhere, but never pledged any of the PHC’s assets, and there was no proof they borrowed anything. Post-purchase, Charles and Steve stripped the stock the PHC held, but left cash. This they stripped later, and tried a Rogers-style Brazilian bad debt dodge to bury the capital gain on both of the asset strips.

Of course, Charles and Steve weren’t novices. DOJ handed them a civil complaint, whereupon   “(A) few months after receiving the complaint, Klink and Block agreed in a stipulated injunction to knock it off.” Order, at p. 7.

The PHC didn’t liquidate for another year. And the PHC stock or the PHC’s assets weren’t pledged for the money to buy out Carolyn & George and the als. So though IRS may claim they’re Section 6901 transferees, they aren’t.

Unless.

IRS wants substance-over-form, or economic substance, to show that what really happened was that the PHC liquidated, and the assets distributed to Carolyn & George and the als. So they owe the capital gains taxes Charles and Steve never paid.

Caroilyn & George and the als reside in five (count ’em, five) different States, which brings in 5 CCAs, but Mom’s estate is domiciled in IA. Unfortunately for IRS, IA’s Uniform Fraudulent Transfer Act at the time the deal went down didn’t have the WIUFTA provisions about transferee good faith not being a defense. Remember Sandy Shockley? No? See my blogpost “Gude Faith, He Maun’ Fa’ That,” 6/22/15.

Judge Holmes cruises through a bunch of CCA and Tax Court precedent. For economic substance, prongification seems to be the issue, whether single prong (overall result) or double prong (subjective nontax intention and objective balance-sheet moving).

“Regardless of what version of the doctrine a court uses, determining whether a transaction has economic substance requires a close examination of the facts. When the Commissioner tries to recharacterize a premium stock sale as a liquidating distribution, courts tend to focus on three facts in particular: when the assets were sold, where the purchase money came from, and what the sellers knew. For example, when the shareholders of a corporation that’s already sold all of its assets subsequently sell their stock, there’s effectively just a trade of cash for cash, which suggests that the stock sale lacks economic substance even though the legal relationship between the corporation and the shareholders technically changes. And when the money used to buy the stock is from a short-term loan that’s collateralized by or immediately paid back with the purchased corporation’s cash, it still looks like the corporation is using its own money to pay its shareholders. Courts might recharacterize that type of transaction even if the purchased corporation doesn’t technically dissolve until years later.” Order, at p. 13. (Citations omitted).

Judge Holmes finds no willful blindness on Carolyn’s & George’s and the als’ part. Even if Charles’ and Steve’s corp did borrow against the PHC’s assets in order to buy the stock, so does every home buyer who gets a mortgage for part of the purchase price, and every driver who hocks his car to borrow the money to buy it. It’s the immediate unloading of the assets to pay the loan and grab whatever’s left that is suspect. That didn’t happen here.

“There is no genuine dispute that petitioners here didn’t liquidate this company’s assets before the stock sale, the cash they accepted didn’t come from fishy financing, and they didn’t know that [Charles’ and Steve’s corp] was up to no good. We therefore hold that the sale of [PHC] had economic substance, and was really a sale and not a disguised liquidating distribution.” Order, at p. 15.

That leaves substance-over-form. But remember, IAFCA as then applicable didn’t have the UFCA provisions negating intent of the transferee. Maybe Charles’ and Steve’s deal was phony, but Carolyn & George and the als didn’t know that. And there’s no evidence that the proceeds of the asset strip were used to pay off any loans Charles and Steve may have taken to buy the PHC shares.

Carolyn & George and the als claim that IRS nailed Charles and Steve for phony sales, so IRS is estopped from claiming liquidation and distribution.

” The Commissioner’s position isn’t clearly inconsistent with what the Justice Department said about Klink and Block. The complaint alleges they ‘fraudulently effect[ed] the purchase of stock of closely-held companies . . . in order to evade the payment of corporate income taxes’ through transactions that “ha[d] no economic substance . . . [and were] sham transactions.’ It also specifically mentioned the economic substance doctrine and sought to apply substance-over-form principles.

“There’s another reason these positions aren’t inconsistent: They aren’t about the same thing. The Justice Department’s case against Klink and Block was about a years-long pattern of behavior, not the specific transaction at issue here. Petitioners say it’s enough that the facts of this transaction more or less fit that pattern. But they cite no authority suggesting that we can estop an argument about a specific transaction just because that argument is inconsistent with what was said about the general behaviors of different parties in a different suit. We see no reason why the Commissioner can’t argue that the transaction here was really a liquidating distribution.” Order, at p. 17.

But consistent or inconsistent, IRS loses. This was a real sale.

For any IA lawyers reading this, check out Order at pp. 18-24, as Judge Holmes goes through the interface between Federal tax law (when does tax liability accrue, whether or not contingent) and the IAUFTA.

IRS wants a reopener to put in a couple affidavits (oh partitive genitive, where is thy sting?) about a shell-shell that played no part in the deal, and doesn’t get it.

But Judge Holmes says the real problem is the CLE classic “lose your case at discovery.” Remember, IRS was fighting summary J.

“The parties here did not file a stipulation. To support their arguments, they rely on affidavits, documents attached to those affidavits, and the Commissioner’s answers to requests for admission. The record is therefore less complete–and less reliable–than it would be if the parties had questioned the other side’s witnesses, obtained experts’ reports, or agreed on what at least some of the facts were. We can therefore deny the motion if the Commissioner shows that he can’t make his case or show that there’s a genuine dispute of material fact without subpoenaing and examining witnesses.” Order, at p. 2 (Citations omitted).

Until Dawson’s Creek Recedes

I learned in the earliest days of my apprenticeship that judges love settlements. Settlements clear dockets, gratify Ch Js and Admin Js, look good in the “dispositions” columns in annual reports; best of all, barring the occasional head-banger (of the litigants, not the judge), there’s only a couple conferences or phoneathons (hi, Judge Holmes) for the judge to deal with.

But The Glasshouse at 400 Second St, NW in The Wannabe State will submerge in Dawson’s Creek on Friday, thereby causing Susan Van Vleet Consultants, Inc., Docket No. 3871-18L, filed 11/17/20, to float until Dawson’s Creek subsides after Christmas.

I’ll defer to Judge Patrick J. (“Scholar Pat”) Urda.

“By Order dated August 13, 2020, the Court ordered the parties to file a status report no later than November 12, 2020.

“On November 12, 2020, the parties filed a joint status report indicating that they have come to an agreement and that they plan to file decision documents by December 3, 2020. Because of the Tax Court’s transition to a new case management system, the parties will not be able to submit decision documents between November 21, 2020 – December 27, 2020.” Order, at p. 1.

Now this is a lien/levy, and a quick peek docket search tells me there’s no issue of liability. The Vleets stiped to around $128K of tax (no add-ons or chops) for years ’08 and ’09 back in ’15. That same quick peek docket search shows that this collection case was first stalled by the Federal shutdown of ’18-’19; then remanded back to Appeals to review an IA; at the remand to Appeals it was twice continued to allow the Vleets to provide more info.

So, if I got this right (and if not, please let me know, and I’ll post a correction) now that there’s a deal for two years, the latter of which is now eleven years old, everything is stalled for at least three weeks more, while the Genius Baristas install the new DAWSON case management system.

I say “at least,” because everybody knows what happens when you install brand-new software.

Speaking of which, has anybody else installed Big Sur yet? Download took overnight, and install took two hours. Plus language unfit for this blog (or anywhere outside a combat zone).

Gurpreet S. Padda and Pamela B. Kane, 2020 T. C. Memo. 154, filed 11/16/20 complete today’s full house (five, count ’em, five) blogposts. Both Gur and Pam are doctors, but Gur is also materially participating via the 100-hour route in five restaurants and a brewery. Pam works in a pediatric clinic, so it’s all about Gur.

Gur’s practice involves Interventional Center for Pain Management, Inc., a C Corp., a pain-management practice. And he manages the pain of having his restaurant and brewery losses relegated to passive activity suspension by bringing before Judge Morrison such a great cloud of witnesses that paper, or even electrons, aren’t necessary.

Gur grouped some, but not all, so each stood on its own, so Gur roped in all the employees he could find to tell how he micromanaged them. IRS claimed Gur was too busy managing other peoples’ pain to do the chow-and-brew number.

“Padda did not use correspondence or emails with respect to the restaurants and the brewery. Instead he used the telephone and face-to-face meetings. Using these means of communications, Padda exercised tight control of many aspects of the restaurants and the brewery. In particular, he paid close attention to the quality and ingredients of the food and beverages. He also rigorously controlled the decor and appearance of the establishments. His employees confirmed his heavy involvement. They complained in their testimony about his micromanagement. Perhaps as a result of Padda’s efforts, the restaurants and the brewery were lavishly appointed. The food and beverages were of the highest quality. The restaurants and the brewery were also costly to operate. Year after year, they produced massive financial losses that largely wiped out Padda’s profits from his medical practice. Thus it was that Padda was a successful doctor and at the same time spent significant time on the restaurants and the brewery.” 2020 T. C. Memo. 154, at pp. 13-14.

And IRS stiped in Gur’s spreadsheets about the time he spent scoping out the restaurants.

Gur has a problem with a deemed distribution from the pain center. He used the Intervention credit card for personal stuff. He argues IRS allowed the deduction to Intervention. OK, says Judge Morrison, but y’all weren’t party to that.

“The duty of consistency is an obligation by which a representation made by a taxpayer to the IRS may be binding on the taxpayer if the IRS relies on the representation to its detriment. Even if the duty of consistency governs the IRS (as opposed to taxpayers), the record does not show that the IRS made a representation to Padda and Kane on which they detrimentally relied.” 2020 T. C. Memo. 154, at p. 19, footnote 8. (Citations omitted).

And of course they didn’t tell their trusty CPA the whole story (hi, Mr. Reilly), so they get a Section 6662 chop only for the year of the distribution from Intervention, as their chow-and-brew losses are allowed for all years at issue.

The conservation easement games are a gift that keeps on giving. As they say in GA, “whatever shall I do?” when Tax Court paddles up Dawson’s Creek on Friday? So I’ll gather my somewhat faded rosebuds whilst I may. And there are some growing in this designated hitter from St. Andrews Plantation, LLC, Joseph N. McDonough, Tax Matters Partner, Docket No. 20849-17, filed 11/16/20. That Obliging Jurist, Judge David Gustafson, is sorting disputed from undisputed factoids.

There are three (count ’em, three) iterations of the easement grant, a deed and two amendments. But Par. 4, never amended, leaves post-granting improvements to the servient tenement (that’s the property subject to the easement, not a crashpad for Fifty Shades of Grey extras) out of the extinguishment split. IRS says that craters the deal.

“However, in fact, paragraph 4 of the Deed, ‘Reserved Rights’, contains no provision that reserves to St. Andrews the right to construct or maintain any ‘improvements”, ‘buildings’, or ‘structures’. It likewise reserves no rights to construct or maintain any ‘permitted residences’.” Order, at p. 6.

There’s mostly slash pine, roads (that can’t be widened), and a metal fence. The St. Andy’s expert says that whatever rights the St. Andys have to do anything per the Deed as amended are worth bupkis (please pardon the arcane technical expression). And IRS doesn’t challenge that. Order, at pp. 7-8. While value doesn’t matter for perpetuity, the Deed does prevent any future improvements beyond what existed at granting. So Swiss cheesing, mining, homebuilding, et hoc genus omne are off the reservation.

Maybe the 501(c)(3) defender-preserver isn’t getting short-changed after all. But that’s a fact question. So no summary J for IRS.

But the St. Andy’s didn’t disclose their basis in their “see attached” 8283. So what, say the St. Andys, check out the 1065.

“Petitioner alternatively argued that the information disclosed with St. Andrews’ [year at issue] Form 1065 was sufficient to constitute substantial compliance. But even if petitioner is correct that the basis of the donated property might possibly be deduced from information reported on the return, a taxpayer’s making it possible for the IRS to deduce that basis is not equivalent to the taxpayer’s explicitly disclosing that basis. Moreover, deducing that information would require the IRS to make implicit assumptions about St. Andrews’s other activities during the tax year that require guesswork–i.e., ‘looking for clues about what the taxpayer’s cost basis might be’–to an extent that falls far short of compliance with the obligation to report the cost or adjusted basis of donated property on Form 8283.” Order, at p. 16. (Citation omitted).

But the St. Andys claim reasonable cause for the omission, so that’s another fact issue for trial.

The St. Andys also want to continue the fight over the validity of Reg. sec. 170A-13(c), but Judge Gustafson says Oakbrook buried that one.

So IRS wins on the omitted statement of basis. But the St Andys can still establish reasonable cause on the trial. The extinguishment split is still up for trial. And did I mention that since there’s a $16 million claimed deduction there’ll be a trial on the appraisal?

So much to which to look forward after Dawson’s Creek subsides.

No, neither psychological distress nor identity theft; today we have Lisa A. Bruno, 2020 T. C. Memo. 156, filed 11/16/20, wherein Judge Albert G (“Scholar Al”) Lauber cannot identify in what year Lisa got a theft loss (if CT law says it was theft, which it doesn’t). Lisa claims that when her loved-once failed to turn over property per their divorce decree, he stole from her.

Lisa’s uncoupling with loved-once involved dueling contempt citations (loved-once was one-time record-holder for most contempt citations in CT), property-grabs, cross-border LLCs, and bankruptcy adversary proceedings with loved-once’s Mama and Lisa’s successor in on the play both in bankruptcy court and the divorce court.

Although Lisa wants to deal with other years than the year at issue (including, without limitation, 2020, for which she hasn’t even filed a return), it boils down to two (count ’em, two) issues.

I’ll leave this to Judge Scholar Al. “Failure to transfer marital property is not an uncommon occurrence. Petitioner points to no caselaw or other Connecticut authority establishing that an ex-spouse commits embezzlement when he is held in civil contempt for failing to pay a marital property debt. Indeed, petitioner was herself held in contempt by the divorce court for her refusal to place in escrow Mr. Bruno’s $951,445 share of the proceeds from sale of the Spring Valley property. See supra p. 5. We doubt petitioner believes that she embezzled those funds, and it is not obvious that civil contempt orders directed against her ex-husband should produce a different result.” 2020 T. C. Memo. 156, at pp. 17-18. I’ll defer to CT counsel on that.

Next, even assuming a theft, what was the identifiable event that fixed the date the loss occurred? At year-end of the claimed loss year, Lisa had more than a million bucks she owed loved-once to offset what he owed her. Her lawsuit against Mama and successor was still ongoing. Lisa claims that when loved-once petitioned in bankruptcy in loss year, he claimed he had nothing but a claim against her.

Judge Scholar Al is too polite to reply “Yeah, roger that.”

“…(p)etitioner relies heavily on the assertion in his bankruptcy petition that he then had (apart from his claims against her) assets of only $2,500. We do not think that a reasonable person in petitioner’s position would have believed that assertion. Mr. Bruno was a successful financial professional whose annual income exceeded $2.1 million be- fore the divorce. At the time of the divorce he held assets of at least $5 million, corresponding to his and petitioner’s share of the marital property. Given Mr. Bruno’s profile as someone who repeatedly ignored judicial orders, the assertion that he had essentially no assets in October [loss year] was objectively implausible. And it is obvious that petitioner did not believe that assertion, because she proceeded to file a proof of claim against him in bankruptcy court, to file additional claims against [successor] in New Hampshire state court, and to participate in the bankruptcy trustee’s adversary proceeding against Mr. Bruno, [successor], and Mr. Bruno’s mother.” 2020 T. C. Memo. 156, at p. 21.

So there was a reasonable prospect of recovery, with the end not coming until after the last year at issue here.

Judge Travis A. (“Tag”) Greaves is laconic. He wastes no words in tossing Vahik Aghadjanian, 2020 T. C. Memo. 155, filed 11/16/20, for being three weeks (actually 23, count ’em, 23 days) late with his petition. IRS sought summary J, and Vahik didn’t respond.

My readers, counting the days until Tax Court shuts down its daily delivery of press releases, orders and opinions, will doubtless ask “Why does this need a T. C. Memo.?” In the ordinary course a simple order would do.

Except.

This is a Section 7623 Whistleblower case. And it took the Ogden Sunseteers four (count ’em, four) years to reject (or maybe deny; Judge Tag doesn’t say) Vahik’s claim. 2020 T. C. Memo. 155, at p. 2. Don’t strain yourselves, chaps.

Anyway, Vahik is out. All Judge Tag has to say is that he was late. True, Vahik never raised Myers or anything else. And a Rule 161 probably won’t help, as there’s no new facts or law.

But if Vahik reads this (a most unlikely occurrence), he should read my blogpost “For Whom the Equitable Tolls,” 4/10/20. And maybe so consider a Rule 161. Fast.

Takeaway- Those who need this won’t read this, and those who read this don’t need this. But raise any cognizable issue every time. You won’t get if you don’t ask.

Overseas contractors in war zones rarely win the Section 911(d) “abode” jumpball. Usually, the offshorenik’s ties to the Land of the Free outweigh their confined existence upon stronds afar remote.  But today, Judge Morrison gives us a small claimer, wherein Patrick L. Duke, Docket No. 25906-17, filed 11/16/20, comes away with the win, despite his confinements to base first at Camp Liberty, Baghdad, Iraq, and later the “U.S. Embassy’s Diplomatic Support Center in Baghdad, Iraq.” Order, Transcript, at p. 5.

Pat had first gone to Iraq in 2006, and only came back in 2020, because the base couldn’t treat a 60-year-old high risk patient for COVID-19. Order, Transcript, at p. 10.

During years at issue, Pat couldn’t leave either base. His life as a heavy-equipment jockey was circumscribed. “Duke lived in a shipping container unit on base. He lived in the same unit the entire time he worked on base. It was a 12 to 14 foot by 40 foot shipping container with two rooms and a bathroom in the middle. Duke lived in one of those rooms and shared the bathroom. He was not allowed to make any modifications to the unit. He did not hang pictures on the walls, for fear of them being knocked off the wall by explosions from incoming enemy fire.” Order, Transcript, at p. 6.

Pat kept his TX driver license, hunting license, and voter registration (although he didn’t vote in either year at issue). During his deployment but before the years at issue, he bought a house in Rosenberg, TX (which you have to visit with your grandchildren, if you are lucky enough to have them; the railroad museum was a blast). But he didn’t stay there much in the two years at issue. He went fishing mostly. Judge Morrison finds Pat and Mrs. Pat were separated during years at issue, and slept in separate bedrooms. Mrs. Pat resented Pat going to Iraq. He rarely interacted with family when home, and rarely Skyped. He kept and funded the US bank account, which Mrs. Pat used to pay the bills.

I’ve blogged a number of cases like this, and petitioner always lost. Not this time, not today.

“Considering the facts and circumstances of this case, we find that Duke’s ties to Iraq were stronger than his ties to the U.S. during the [years at issue]. Duke left for Iraq in 2006 and returned to the U.S. in 2020, some 14 years later. He only moved back to the U.S. because of the pandemic. His communications with his friends and family in the U.S. were few and infrequent. He returned to the U.S. only occasionally. He became estranged from his wife due to his living and working in Iraq for so long.

“We therefore hold that Duke’s abode was not in the U.S. and that his tax home was in Iraq.” ” Order, Transcript, at p. 13.

BTW, Pat and Mrs. Pat reconciled after he came back. Who says Tax Court Judges don’t go for a happy ending?