Stanley Michel & Mireille D. Michel, Docket No. 22959-18, filed 11/5/20, took out a reverse mortgage. This is a deal where a senior citizen puts up their appreciated dwelling, but instead of getting a lump sum on the appraised value of the mortgagor’s equity, gets an income stream based thereon, interest accruing, both principal and interest being non-recourse. If mortgagor dies, moves, or sells, principal and accrued interest is due.

Stan & Mireille deduct the interest that accrued in year of issue. Stan & Mireille say “they could deduct the interest that accrued on the reverse mortgage because the promissory note did not say otherwise.” Order, Transcript, at p. 5.

Well, doesn’t Section 163 say “paid or accrued”?

Yes, but.

Section 461 says individuals like Stan & Mireille are cash-basis. Judge Albert G (“Scholar Al”) Lauber man-‘splains: “When a cash basis taxpayer owes interest on a loan and gives the creditor a note to cover the interest, the taxpayer has not paid interest for Federal income tax purposes. That is what petitioners did here, by having the accrued interest on their reverse mortgage added to the principal of the promissory note. Because petitioners are cash basis taxpayers, they may deduct only the mortgage interest they actually paid during [year at issue]…. They cannot deduct the… interest that accrued on their reverse mortgage, because a deduction is allowed only when the interest is actually paid in cash or a cash equivalent.: Order, Transcript, at p. 6.

But Stan & Mireille claim that short-changes them. Since their note runs until 2096, they are concerned that they can never deduct the interest in their lifetimes.

But Reg Section 1.691(b)-1(a) puts that right, although, as with the shotgun guard on the Dover Mail in Mr. Dickens’ two-cities tale, it may not be in their lifetimes.

“That regulation provides that, if a taxpayer dies before a deduction is allowable, either the taxpayer’s estate or the taxpayer’s heirs will be allowed the deduction when the amount is paid. Thus, an interest deduction will be allowed at some point. It is true that this deduction will be deferred, but that is what petitioners opted for when they executed a reverse mortgage rather than a conventional mortgage.” Order, Transcript, at p. 7.

So the mortgage is a reverse, but so is the deduction for the year at issue.

It’s just another indocumentado and unreported income small-claimer, of the type I’d bypass and let Judge Travis A (“Tag”) Greaves dispatch in ten pages or less, but Yohannes Teka Lakew and Seble Bete, 2020 T. C. Sum. Op. 27, filed 11/4/20, has a novel evidentiary twist.

It’s Yohannes’ idea, to explain why his gross receipts from his driving school shrunk so drastically, while his Sched C showed only $7K gross receipts, no returns or allowances, and a net loss of $4K. The 1099-K from Yohannes’ scheduling and payment contractor showed Yohannes got gross receipts of $29K. 2020 T. C. Sum. Op. 27, at pp. 3-4.

“Petitioners do not dispute that Mr. Lakew received the money reported on the Form 1099-K but contend that the driving school’s gross receipts should be reduced by unreported cash refunds that Mr. Lakew paid to customers.” 2020 T. C. Sum. Op. 27, at p. 4.

Yohannes’ recordkeeping is a wee bit casual. Our old pal Ben Trovato is in on the play.

“Although Mr. Lakew issued cash refunds in connection with his driving school business, petitioners provided us with very little, if anything, in the way of credible evidence upon which to make a rational finding or estimate of the amounts of those refunds. Mr. Lakew could not produce any receipts, bank account statements, or other financial records of any kind relating to the business to support his claimed refunds, even though he remained under a clear obligation to do so. The only record of the refunds that Mr. Lakew introduced into evidence was a single document entitled Istar Driving School: Annual Summary Income Tracking Sheet (tracking sheet). This vague and uncorroborated tracking sheet, together with Mr. Lakew’s testimony, are not, however, ‘sufficient records’. The tracking sheet does not indicate what year it relates to, and petitioners did not testify as to when it was prepared. Mr. Lakew testified that he found the tracking sheet only a few days before trial. None of the figures provided in the tracking sheet can be tied to either petitioners’ return or the Form 1099-K. The tracking sheet cannot be credibly cross-checked against any other document or information with respect to even a single transaction in the [year at issue] relating to Mr. Lakew’s business, including such pertinent information as payor, payee, date, and amount for any of the claimed refunds.” 2020 T. C. Sum. Op. 27, at pp. 6-7.

But Yohannes has that darling of the Internet, Yelp, an online review of everything and anything.

“Mr. Lakew also introduced Yelp reviews, including one from a customer dated December 17, [year at issue], which stated that Mr. Lakew ‘said that he was going to refund the money and we are still waiting for this’. The Yelp reviews offer little support that Mr. Lakew actually issued all of the claimed refunds. We therefore conclude that petitioners failed to satisfy their burden, and we sustain respondent’s redetermination.” 2020 T. C. Sum. Op. 27, at p. 7.

And IRS don’t need no Boss Hoss, because the computer that sent out the CP2000 that Yohannes and Sebele ignored also issued the SNOD, so it was all electronic. Thus, Yohannes and Sebele get the five-and-ten chop.

Yelp doesn’t help.

It’s almost six (count ’em, six) years since I saw a Tax Court case that actually parsed a streamlined innocent spouser per Rev Proc 2013-34, 2013-43 RB 397, through to conclusion. See my blogpost “Streamliner,” 12/4/2014, for the debut.

Today, Colleen Michelle Leith makes the cut, as Judge Vasquez gives us Colleen Michelle Leith and Oraine J. Leith, 2020 T. C. Memo. 149, filed 11/4/20. IRS concedes Colleen Michelle’s Section 6015(f) plea; of course she flunks Section 6015(b) and (c) to get there.

Fact specific, of course, so you’ll need to parse Judge Vasquez’s grind through “the daily grist of judicial life,” 2020 T. C. Memo. 149, at p. 25. Anyway, Colleen Michelle’s account of Oraine’s abusive behavior carries the day with Judge Vasquez, even though Tax Examiner B (name omitted) paid little attention to Colleen Michelle’s tale of woe. Maybe TE B’s skepticism had some colorable foundation, because Colleen Michelle first filed her Form 8857 with “No” checked for spousal abuse, but filed a fresh Form 8857 a month later with the box checked “Yes.” 2020 T. C. Memo. 149, at p. 10.

Both Colleen Michelle and Oraine tried to wild-card some documents after trial. Judge Vasquez slaps them both down, even though this case was filed pre-Section 6015(e)(7) strict-record amendment, 2020 T. C. Memo. 149, at p. 3, footnote 2. Now, post-amendment, if you’re going streamliner in your case, build and guard that administrative record; make sure everything goes in at CCISO, and keep good lists of whatever IRS or CCISO tries to leave out.

I’ll just reiterate the streamliner rules as Judge Vasquez did.

“For the portions of the liabilities for which petitioner is eligible for relief under section 6015(f), Rev. Proc. 2013-34, sec. 4.02, sets forth circumstances under which the Commissioner will make a streamlined determination granting equitable relief to the requesting spouse. The requesting spouse is eligible for a streamlined determination by the Commissioner only in cases in which the requesting spouse establishes that she (1) is no longer married to the nonrequesting spouse (marital status requirement), (2) would suffer economic hardship if not granted relief (economic hardship requirement), and (3) did not know or have reason to know that the nonrequesting spouse would not or could not pay the underpayment of tax reported on the joint income tax return, or did not know or have reason to know that there was an understatement or deficiency on the joint income tax return (lack of knowledge requirement). Id. The requesting spouse must establish that she satisfies each of the three elements to receive a streamlined determination granting relief. Id.” 2020 T. C. Memo.149, at pp. 21-22.

Note that economic hardship (item 2 hereinabove in the immediately preceding paragraph set forth, as my paid-by-the-word colleagues would say) means either income of requesting spouse is below 250% of Federal poverty limit or monthly income of requesting spouse exceeds basic living expenses by less than $300. Colleen Michelle met the second of those.

As always, YMMV, prior results do not predict future performance, and, in the immortal words of the RAF Milverton base commander, then-Group Captain, later Air Chief Marshal, Sir Francis J. Fogarty, in Harry Watts’ immortal 1941 film, “Go in and flatten it…and good luck to you.”

When one ignores them. Counsel for David Terrazas, Docket No. 2498-19, filed 11/3/20, was scheduled for trial back in April, along with a companion case, but COVID-19 put paid to that.

I’ll defer to Judge Elizabeth A (“Tex”) Copeland to tell the story of said counsel’s delictions.

“During February 2020, respondent’s counsel attempted to contact petitioners’ counsel, TB, about the cases but did not receive a response. On May 19, 2020, the Court ordered status reports to be issued on July 6, 2020 and every 60 days thereafter. Mr. B did not provide any status reports. After respondent timely filed his July 6, 2020 status report and Mr. B failed to provide a status report, the Court made several attempts to contact Mr. B for a telephone conference with the parties. The Court made attempts on or around July 10, 2020 through July13, 2020 and left voicemail messages each time. When a representative of this Division of the Court finally spoke with Mr. B, on or around July 14, 2020, he misinformed the Court that the cases had been resolved and that the parties would be settling. Respondent had not agreed that the cases had been resolved; in fact, respondent had not heard from Mr. B since October 2019.

“Respondent filed Respondent’s Status Report on September 4, 2020. Again, the Court attempted to contact Mr. B on September 4, 2020 and September 5, 2020, leaving messages for a conference call with the parties to the cases.

“The Court then ordered a conference call for October 19, 2020. Mr. B did not show for the ordered conference call.” Order, at pp. 1-2. (Name omitted).

Judge Tex Copeland orders Mr B to get with it or get tossed. And his clients are getting a copy of this order. Note Judge Tex Copeland’s forbearance in not showing Mr B the Section 6673 yellow card.

My professional career has been a search for enlightenment. In my first five minutes on The Hill Far Above, I learned that answering a hypothetical with “Plaintiff wins” earns a failing grade. The right answer is why plaintiff wins. Now, fifty-seven (count ’em, fifty-seven) years after that memorable occasion, the search (and the adventure) continues.

Just last week I asked what purpose Form 6 served. See my blogpost “A Bad Day for Lawyers – Part Deux,” 10/30/20. For those new to the game, Form 6 is the Ownership Disclosure Form for nongovernmental corporations, large partnerships or large LLCs, wherein the entity must state that it is parentless or parented, and whether or not fewer than 10 percent of its shares are held by a publicly-held. For a large partnership or large LLC, any publicly-held ownership must be disclosed. A PDF online fillable version of the form is available on the Tax Court website.

Today Arkanada Corporation, Docket No. 19153-19, filed 11/3/20, is on the verge of an eve-of-trial stipulated decision. Trial was set for 11/9/20 when two weeks ago IRS reported the settlement.

Ch J Maurice B (“Mighty Mo”) Foley orders either a stiped decision or a status report by 1/19/20, a special date in our family.

But Arkanada still hasn’t filed Form 6, although Ch J Mighty Mo twice told Arkanada to file before now. And even gave them a form to fill out. So now let them do it.

Arkanada is pro se, of course. And even if they had an attorney, the odds on Arkanada getting the form right, or even filing it at all, are by no means a laydown. And even if Arkanada files and gets it right, who is enlightened thereby?

BTW, a quick-peek Google search shows Arkanada dissolved in 2018 because of some default in franchise tax. An equally quick-peek docket search shows petition filed 10/24/19. Wouldn’t the Internet solve the problem without the form?

Judge David Gustafson might well be thinking of the 1971 Carole King hit, as he tries to explain how to establish the last-known address of Brenda Reddix-Smalls, 17975-18L, filed 11/2/20. And this is a designated hitter, so as to let everybody know not to change your address at Appeals.

Brenda is up for four (count ’em, four) years’ worth of assessed but unpaid, with a NITL. She went to Appeals, but there the story becomes fuzzy. Brenda says that during her phonecon “… she orally informed the Appeals Settlement Officer (“ASO”) that her address had changed to the address in Durham and (b) that the ASO stated that she must file a notice of change of address. (The Commissioner disputes this account, pointing to the contemporaneous notes of the ASO from the CDP hearing and the summary and recommendation attached to the notice of determination, which both repeatedly state that petitioner ‘declined’ to provide her new address when prompted by the ASO. There was no trial in which we could resolve this dispute of fact, but even in the absence of an agreement about what petitioner told the ASO–and assuming the accuracy of petitioner’s account–we are able to rule on the Commissioner’s motion.)” Order, at p. 2.

Brenda had filed a change of address with USPS in February, 2017, giving an address in Durham, NC. But in April, 2018, she and her husband filed MFJ, showing an address in Columbia, SC. Brenda’s phonecon with Appeals, when she says she told the ASO she was back in Durham, NC, took place in July, 2018.

ASO affirms the NITL Brenda was contesting, but Brenda is one day late mailing in her petition.

Brenda claims the affirmance wasn’t sent to last known address. IRS says whatever Brenda told (or didn’t tell) the ASO, “… the ASO does ‘not have access to IDRS, the program that manages the information in the Service Master File, and cannot change a taxpayer’s address’ unless the ASO follows a certain procedure by which the ASO fills out a Form 2363 and sends it to Account and Processing Support (Doc. 22, paras. 4-7). (Emphasis added). The Commissioner showed that the ASO in petitioner’s case did not have access to the service master file and that the ASO did not attempt to utilize the procedure to change petitioner’s address by sending a Form 2363 to APS.” Order, at pp. 2-3)(Footnote omitted, but apparently only Appeals Technical Employees can prepare Form 2363, Master File Entity Change, and send it to Account and Processing Support, which alone can lay its hallowed hands upon the Service Master File).

“Petitioner disputes neither of these contentions.” Order, at p. 3.

I doubt that there exists any sane human being outside the guarded domain of the Master Service File who has the foggiest idea what this means, much less how to dispute it.

And here’s the formal statement.

“Clear and concise oral notification is a statement made by a taxpayer in person or directly via telephone to a Service employee who has access to the Service Master File informing the Service employee of the address change. In addition to the new address, the taxpayer must provide the taxpayer’s full name and old address as well as the taxpayer’s social security number, individual taxpayer identification number, or employer identification number. The Service employee must follow established procedures to verify the taxpayer’s identity. The Service employee also will inform the taxpayer that the new address, and not the former address, will be used by the Service for all purposes.

“Rev. Proc. 2010-16, 2010-19 I.R.B.664. (Emphasis added).” Order, at p. 4.

Brenda is out for lack of jurisdiction.

Exactly how anyone is supposed to know this is nowhere stated. So it’s up to you, practitioner.

Ya Still Gotta Do an Appraisal Joust

It’s been suggested that the extinguishment torpedo sinks the overvalued conservation easement without the need for “lengthy and expensive trials,” and therefore IRS should use same liberally (in a non-political sense, of course).

Well, that doesn’t happen in Glade Creek Partners, LLC, Sequatchie Holdings, LLC, Tax Matters Partner, 2020 T. C. Memo. 148, filed 11/2/20. Yes, the fixed-price ex-value of improvements clause in the deed sinks Glade Creek crew; the Coalholders, PBBM-Rose Hill, and Oakbrook are all in on the play. If you don’t know who they are, you’ve come late to the party, so check out the cites Judge Goeke gives you as set forth at 2020 T. C. Memo. 148, at p. 25, in the paragraph immediately preceding the following.

“The deed improperly subtracts any value attributable to posteasement improvements from the extinguishment proceeds before determining the Conservancy’s share. It does not properly allocate extinguishment proceeds to the Conservancy in accordance with the proceeds regulation. The proceeds regulation is not satisfied, and the easement’s conservation purposes are not protected in perpetuity. Glade Creek is not entitled to the easement deduction.”  2020 T.C. Memo. 148, at p. 25.

OK, so march out the Glade Creek crew, right? Except.

IRS wants the 40% excessive overvaluation chop. The Glade Creek crew syndicated a $17.5 million conservation easement deduction, plus a $35K charitable to the 501(c)(3) protector, preserver and defender of same. IRS nixes the whole, but the IRS appraiser gets shredded on the stand.

His appraisal “was nothin’ much before, an’ rather less than ’arf o’ that be’ind,” as a much finer writer than I put it. IRS’ appraiser’s “after” value uses a 10-yr old CA article. His “before” used a couple logging sites (hi, Judge Holmes), not homes, such as the predecessors to the Glade Creek crew were building before The Black ’08.

The Glade Creek crew had two (count ’em, two) appraisers, who both did a much better job, but still came in north of $16 million. Judge Goeke decides that residential development is the highest and best use. So he does a cost-benefit analysis that shows if he retires from Tax Court, he has a great future as cost estimator for a national homebuilder. He does an analysis of builder’s profit margin worth reading, 2020 T. C. Memo. 148, at pp. 49-52.

Judge Goeke concludes the easement, if properly drafted (which it wasn’t), would be worth north of $8 million. So the Glade Creek crew only gets the 20% overvaluation chop, not 40%. And IRS conceded any misstatement chop, so the 20% only applies to the overstatement above $8 million.

But they do get the $35K charitable to the 501(c)(3). That got paid in escrow at closing, but only got to the 501(c)(3) the next January. IRS says there must be unconditional delivery for a deduction to be taken. “Ordinarily, a charitable contribution is made when its delivery is effected. Sec. 1.170A-1(b), Income Tax Regs. When delivery is effected through an agent acting on behalf of the donee or donor, the critical question is whether the donor has relinquished dominion and control.” 2020 T. C. Memo. 148, at p. 26 (Citation omitted).

Enter our old chum, Reg. Sec. 1.170A-1(e), “so remote as to be negligible.” But IRS says the escrow agreement never got into the record, so must infer that it would show there were conditions.

“Under the circumstances of this case, we find such an inference unwarranted. Ministerial escrow tasks are generally not considered substantial limitations or restrictions on a taxpayer’s receipt of funds and are not conditions precedent of the type that precludes the transfer of control. The chance that the settlement agent would not pay the escrowed funds to the Conservancy was so remote as to be negligible. Once the funds were deposited into escrow, they were not under Glade Creek’s control. Glade Creek had directed their payment to the Conservancy and could no longer use or redirect the funds. We find that Glade Creek is entitled to deduct the $35,077 donation for [year at issue].” 2020 T. C. Memo. 148, at p. 28.

Judge, I’ve been escrowee enough times to know that no condition is “so remote as to be negligible,” especially where I would be liable for any erroneous payment. I once had to track some beneficiary down years after the closing to get fifteen grand out of my former firm’s escrow account, so we could settle up what was due to each of us when I left. They weren’t wrong, and neither was I.

Or the Electrons

Judge Gale has a designated hitter that makes my day. Laura B. Walker, Docket No. 3136-20S, filed 10/30/20, is regrettably unable to manage her own affairs, but I am grateful to her for the vindication of my long-standing campaign for recognition that a power of attorney is a piece of paper or a concatenation of electrons. It follows therefrom that the human being who is appointed by said paper or electrons is either a Representative (see Form 2848) or an agent (see, e.g., See 20 Pa. Stat. and Cons. Stat. Ann. secs. 5601.1, 5604(a) (Westlaw through 2020 Reg. Sess. Act 79)).

Laura B., prior to becoming so unable, appointed Kimberly Walker Fuller as her agent. Judge Gale elucidates.

“The Petition in this case was filed by Ms. Fuller, acting as petitioner’s agent, to seek redetermination of a deficiency determined for petitioner’s … taxable year. Attached to the Petition is a copy of a power of attorney authorizing Ms. Fuller to act as petitioner’s agent for a variety of purposes, including ‘[t]o pursue claims and litigation’ and ‘[t]o pursue tax matters’. The power of attorney also provides that it ‘shall not be affected by * * * [petitioner’s] subsequent disability or incapacity’, and that it is governed by Pennsylvania law.” Order, at pp. 1-2.

Here in NY we have something like this, but check your local laws for correct forms and nomenclature; as always, YMMV. BTW, an amendment to our statute has passed the Legislature, but somehow has failed of delivery to the Governor for signature. Given our State’s Byzantine legislative process, I’m not surprised.

Howbeit, IRS wants Judge Gale to extend Next Friendship to Kimberly. Judge Gale does a boot-scoot through Pa. Stat. and Cons State Ann., finding that the Penn’s Woods Commonwealth allows Kimberly to “‘…protest and litigate tax assessments’, ‘claim, sue for and collect tax refunds’, and ‘waive rights and sign all documents required to settle, pay, and determine tax liabilities’.” Order, at p. 2.

So Kimberly, formerly agent, is now next friend. But never Power of Attorney.

How’s that for a question on the next Tax Court admission exam? Under what circumstances can a State form of Power of Attorney authorize a non-admitted person to appear in Tax Court for another?

That’s Judge Buch’s view of the plight of Peter Hoskey, Docket No. 17570-19L, filed 10/30/20. Pete is up against it; he tried to take his grandchildren as dependents, IRS gave Pete a SNOD which he never petitioned, and he defaulted on the IA he entered into thereafter.

IRS gives Pete a NITL at no extra charge, which Pete CDPs claiming inability to pay, but provides no Form 433-A and doesn’t show for the phone conference or answer the last-chance letter. Appeals NODs the NITL, and Pete petitions Tax Court. Here’s Judge Buch’s off-the-bencher: “At trial, Mr. Hoskey testified about his efforts to provide information to the Commissioner and his current collectability status. Mr. Hoskey was, at some time, responsive to the Commissioner. It is likely that he was responsive during an earlier time, for example, when getting his installment agreement. But there is no evidence that he responded to the Appeals Officer during this collection proceeding. As for collectability, Mr. Hoskey had stopped making payments on his liability because he could no longer afford to do so.” Order, Transcript, at p. 6.

I have a certain amount of sympathy for Pete’s story. The old pilot’s Big Three “Aviate, Navigate, Communicate” is as true on the ground as in the air. First, don’t crash, fly the plane; second, find your way out of trouble; only then go on the air. But Appeals, even though independent of IRS, shares IRS’ proclivity to get peeved when ignored.

Pete’s tale gets sadder.”In the time since the Commissioner issued his notice of determination, matters have only gotten worse.  Mr. Hoskey had been earning income selling produce along the roadside. We glean from Mr. Hoskey’s testimony that his truck was impounded, and as a result, he lost that source of income. The result is that Mr. Hoskey remains unable to pay his liability or make the payments on the installment agreement.” Order, Transcript, at pp. 6-7. The Commissioner’s notice of determination? I thought Appeals was independent.

Howbeit, maybe so it’s time for Churchill. No, not Winston, although Judge Buch has nothing to offer Pete but blood, toil, tears, and sweat. I mean John L. Churchill, as to whom see my blogpost “Back to the Future,” 8/1/11, where John L.’s divorce earned him a remand back to Appeals.

“In limited situations, we can remand a case to appeals for further consideration even if the Commissioner did not abuse his discretion. One such instance occurs where a taxpayer has undergone a material change in circumstances after the Commissioner issued a determination. A material change in circumstances occurs when the taxpayer’s ability to pay has decreased such that Appeal’s determination would have differed had the circumstance been present at the time of the hearing.” Order, Transcript, at p. 10. (Citations omitted, but get them for your memos of law file).

Alas, that doesn’t help poor Pete. He was broke when he went to Appeals, so losing his truck and his produce-pushing gig makes him broker, but that isn’t remandable.

“In this particular case, Mr. Hoskey’s change in circumstances is not material under this standard. At the time Mr. Hoskey requested a collection hearing, he did not have the ability to pay the taxes owed. The Appeals Officer sustained the levy because Mr. Hoskey failed to provide the requested documentation substantiating his financial situation. If he could have afforded to pay and the subsequent loss of income made him uncollectible, this likely would have constituted a material change. However, Mr. Hoskey claimed to be unable to pay at the time he requested Appeals consideration, and his loss of income does not alter his claimed inability to pay. If he was uncollectible beforehand, his reduction in income does not change that material fact – that he was and remains uncollectible.” Order, Transcript, at pp. 10-11.

Pete could have requested CNC, but he provided no information, so the AO had nothing to go on. Pete can always go back to Appeals with documents in hand, and request CNC, but Judge Buch can’t give that to him on this record.

This is a classic case for a LITC, but Pete needs to be told to go to one.

Maybe the end of Daylight Time is causing judicial grumpiness at The Glasshouse On the Street Where Taxation Lives. I cannot tell, but something is causing the Tax Court Bar to be on the receiving end of a bunch rebukes (hi, Judge Holmes).

First, counsel for Mark Yagalla, Docket No. 12152-20L, filed 10/30/20.”… improperly filed a Redacted Petition in paper form. No motion to be exempt from electronic filing (eFiling) accompanied the paper filing.

“Petitioner’s counsel is reminded that eFiling is mandatory for most documents filed by parties represented by counsel. If petitioner’s counsel wishes to be exempt from the eFiling requirements, he must file a motion and show good cause why he should be exempt from eFiling. See Rule 26(b),Tax Court Rules of Practice and Procedure.” Order, at p. 1.

And of course Ch J Maurice B (“Mighty Mo”) Foley, apparently taking his text from Luke 11:52, tosses the paper.

Taishoff says said counsel could easily have become confused by reading all the orders where self-representeds had their electronic petitions tossed. And only the very old technophobes can gain exemption from electrofiling. See my blogpost “(Old) Technophobes, Rejoice!” 12/28/13.

Next, Beanstalk Computing, Inc., Docket No. 7850-20S, filed 10/31/20. It’s our old chum Form 6, a notorious stumbling block. Ch J Mighty Mo admonishes the Beanstalks thus: “…the Court directed petitioner to file an Ownership Disclosure Statement on or before October 5, 2020. To date, no such statement has been received by the Court, despite petitioner being represented by counsel. Petitioner is also reminded of the Court’s electronic filing (eFiling) requirements.” Order, at p. 1.

Taishoff asks exactly what purpose this document serves except to confuse self-representeds and some counsel, as 99% of the corporations coming into Tax Court are closely-held Sub Ss, which cannot have publicly-helds as shareholders, and 90% of such petitioners are not subsidiaries.

Finally, Parkerson Church Reserve, LLC, Stuckey Timberland, Inc., Tax Matters Partner, Docket No. 11686-20, filed 10/30/20. Here the object of Ch J Mighty Mo’s bawling-out is an associate in a well-known tax white-shoe, who, prior to shedding his lace-ups for slip-ons, served as an Honors Attorney in the IRS Office of Chief Counsel where he represented the IRS in Tax Court litigation as lead counsel and trial team co-chair.

Notwithstanding the foregoing and anything hereinabove or hereinbelow, express or implied, to the contrary or at variance therewith (as I’m sure said counsel and his high-priced colleagues would say), Ch J Mighty Mo observes said counsel’s miscue and responds like many a drill sergeant I had the dubious pleasure of encountering long ago.

“[Mr P.] improperly filed an Entry of Appearance as counsel for petitioners in paper form. An Entry of Appearance must be electronically filed. See Rule 26(b), Tax Court Rules of Practice and Procedure. The Entry of Appearance was not accompanied by a motion for exception from electronic filing. Accordingly, we will strike as improperly filed Mr. P’s Entry of Appearance.” Order, at p. 1. (Name omitted).

And he can file electronically if he wants to stay in.

A copy of this order goes to his firm. And to the client, of course. I expect the PIC (partner in charge) will receive The Phone Call.

I wonder if twenty pushups will follow. On the gravel-strewn Company Street.