No, I’m not giving you an essay about cost-to-carry, time-value-of-money, or a contango shift in the futures market. Such gambles are beyond my limited scope.

Rather, we have today Sean Patrick Ihndris, Docket No. 6361-19L, filed 3/2/20. No, that date is not an “inadvertent clerical error,” at least, not by me.

Judge Morrison’s order, reposted today on the Tax Court website, reads as follows: “ORDERED that this case will be set for hearing during the calendar call of the Court’s March 23, 2020 Trial Session in Los Angeles, California beginning on Monday, March 23, 2020 at 10:00 a.m. in Room 1167, Edward R. Roybal Center & Federal Building, 255 E. Temple Street, Los Angeles, CA 90012.” Order, at p. 1.

Except.

That calendar call appearance was canceled on 3/11/20. And that order was posted that date. A docket search reveals that the order was reposted today, for what reason I cannot tell.

That’s real backwardation.

I was rereading my blogpost “Make It Easy,” 8/21/20, when I recollected something. I said then to pay attention. I should have taken my own advice.

So I checked the dates in my blogpost aforementioned, and the recollection set off an alarm.

You’ll remember that IRS asked for an extension of time, and got no opposition. That’s absolutely par for the course, because our New York Civility Rules call for granting extensions if reasonable and no prejudice to our client, and I’m sure other jurisdictions have similar prescriptions.

But the date which IRS sought and got unopposed just happens to be the same date when petitioners’ response was due. And IRS’ counsel offered petitioners no additional time.

See my blogposts “Play Nice or Go Home,” 3/20/20, and “Time Sensitivity,” 4/13/20.

Now Judge Gustafson was his usual genteel self in the first of the foregoing instances, and Judge Gale did likewise in the second. Both granted petitioners more time.

But enough is enough. To try to wrongfoot your opponent by getting more time for yourself and using their courtesy to grab time from them is wrong.

I’ve twice called out IRS attorneys for this gameplaying, but apparently the message hasn’t gotten through. So I’ll call out Shannon E. Craft, Esq.

And I’ll give a heads-up to practitioners. If IRS asks for an extension, ask them to stip to additional time for you. And if they refuse, oppose. And tell the Judge that Taishoff sent you.

We’ve noted the Thanksgiving to Christmas electronic lockdown of the Glasshouse while the new whizbang or whatever it is gets rolled out, ramped up, energized, and dropped before the American taxpayer who never did Tax Court any harm. Judges are issuing orders changing deadlines to avoid the holiday void.

Until I spoke with a colleague based in The City by the Bay this afternoon, I was unaware that the new-improved-jazzy case management system that will accompany turkey-and-Santa may omit designated hitters.

Splendid. Top-hole, A-number-one, top of the heap. Perhaps you hear my teeth grinding.

This would make my job materially and substantially harder, and exactly what it would do to help Tax Court operations is nowhere apparent. IRS gets all orders automatically and routes them to the appropriate persons; big law firms and accounting conglomerates can well afford to have an impecunious first-year read 150 to 200 orders and whatever opinions may be every day, digest same and inform the High Command.

I don’t. I can’t. There’s just one of me, and as Sergeant Longry used to say when inappropriately addressed by mere cannonfodder, “I ain’t no sir, I work for a living.” A designated hitter often knocks an hour off my workload. And I’m on deadline.

Of course, there was no beta of this brilliant eruption, as there was none for the new, only-slightly-improved, jazzy website. None of the Glasshouse elite bothered to ask for comment, or inquire of us practitioners and journalists, apparently the meanest of serfs, what we might like to see. The genius barflies, whose sole experience with tax is probably a walk-in and shoebox drop-off at an H&R Block franchise, have decided this on their own.

This impending fiasco brings back a recollection from forty years ago. I can hear a favorite phrase of my late law partner Sid (may he rest in peace), in his cigar-throat rasp redolent of the Lower East Side where he grew up, “Whaddit they do, have a conference wit’ demselves in duh mens’ room?”

IRS wants info more than ten (count ’em, ten) years old made public, but Medtronic, Inc. & Consolidated Subsidiaries, Docket No. 6911-14, filed 8/21/20, says that’s trade secret stuff. And Judge Kathleen Kerrigan, having been assigned trial duty by 8 Cir, buys at least some of Medtronic’s tale.

I’m sure you remember that 8 Cir bounced Medtronic back to Judge Kerrigan, with her 144 (count ’em, 144) pages of carefully-wrought opinion eviscerated in just 13 pages of appellate disdain. No? What a pity! Then see my blogpost “Cut Uncut,” 8/17/18.

Expert testimony will be required, and IRS wants the existing Rule 103 order modified to take the wraps off any info more than 10 years old. Medtronic says no, the stuff is still classified. But Judge Kerrigan having sent the parties off to a play-nice, they agree to some unwrapping.

“Rule 103(a) provides that, upon motion and for good cause, ‘the Court may make any order which justice requires’ to ensure that ‘a trade secret or other information may not be disclosed or be disclosed only in a designated way.’ A protective order is appropriate where the material is the type of information that courts will protect and the requesting party shows good cause for protecting it. Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3rd Cir. 1984); Estate of Murphy v Commissioner, T.C. Memo. 1990-346, 60 T.C.M. (CCH) 73, 75. The goal of this Court is to provide as robust a record as possible while protecting petitioner’s proprietary information.” Order, at p. 2. (Footnote omitted).

Age does not wither nor custom stale what Medtronic wants suppressed from view. Judge Kerrigan crafts cut-outs and overlays, which would be helpful if we had some idea what was covered. But the public should mind its own business when it comes to Medtronic’s secret  business.

Judge Kerrigan knows her every move is being eyeballed from on high. “Taking into consideration the Court’s opinion in this case (T. C. Memo. 2016-112), the Eighth Circuit’s opinion, and the Court’s May 3, 2019 Order, the Protective Order will be modified appropriately, including modifications related to the Pacesetter Agreement.” Order, at p. 3.

Although he subsequently got disbarred, a former associate in the firm wherein I was a partner taught me a very useful lesson (besides don’t lose your license). “If you want somebody to do something, make it easy.”

Now that Obliging Jurist, Judge David Gustafson, is the very embodiment of that principle, which is why I have so styled him.

But today he expresses the wish, I had almost said plaintively, that litigants would do likewise.

First, the background. And the dates matter here. “Our order of August 3, 2020 (Doc. 38), required the Commissioner to file a response to petitioners’ motion for reconsideration (Doc. 37) by August 28, 2020, and required petitioners to file a reply by September 18, 2020. On August 19, 2020, the Commissioner filed an unopposed motion for extension of time (Doc. 39), requesting that we extend his deadline by 21 days (i.e., until September 18, 2020). The motion is silent as to petitioners’ reply deadline.” Order, at p. 1.

The case is Habitat Green Investments, LLC, MM Bulldawg Manager, LLC, Tax Matters Partner, et al., Docket No. 14433-17, filed 8/21/20. Yep, it’s one of those.

Now pay attention, as Judge Holmes would say. Judge David Gustafson has the floor.

“Best practice for such a motion for extension would be for the motion to address not only the deadline at issue but also subsequent deadlines. This would create an occasion for the parties to agree on a schedule and would enable the Court to grant the motion by ‘stamp’ rather than composing an order.” Order, at p. 1.

Nevertheless, and you can almost hear the judicial sigh, Judge Gustafson orders “…that the Commissioner’s motion for extension of time is granted, and that the Commissioner shall file a response to petitioners’ motion for reconsideration no later than September 18, 2020, and that petitioners shall file a reply no later than October 2, 2020.” Order, at p. 1.

Chaps, I don’t want to seem to be piling on after the whistle, but you’ve got heavy-duty bucks on the table, with the prospect of The Phone Call if you blow this case. Why annoy the judge, even one so obliging and even-tempered as Judge David Gustafson?

Besides, the phoneathon with IRS to work out the schedule is billable time.

A correspondent from that august body, the Tax Section of the American Bar Association, the sacred precincts of which I have never entered, asked me how I derive cognomens for judges. I haven’t yet replied, because I’m not entirely sure how I come up with these. For sure, there is no hard-and-fast rule.

Some are easy: Judge Elizabeth A. (“Tex”) Copeland, though not born a Texan, spent the greatest part of her illustrious career in that State. STJ Diana L (“Sidewalks of New York” a/k/a “The Taxpayer’s Friend”) Leyden was formerly New York City Department of Finance Taxpayer Advocate. Ch J Maurice B (“Mighty Mo”) Foley had been informally known as “Mo” to certain practitioners, and those practitioners passed that on to me long before his election to the Chieftainship. Judge Mark V Holmes got “The Great Dissenter” from his namesake Justice Oliver Wendell Holmes, Jr., who was so called.

CSTJ Lewis Carluzzo was easiest of all. Our forename, given to us to avoid confusion with relatives who otherwise spelled our forename, is a point of pride.

But ex-Ch J L Paige (“Iron Fist”) Marvel was extremely difficult. I even ran an online competition. Finally, when I settled on “Iron Fist,” I was dubious, until I heard from a source that her clerks had placed a sculpted iron fist on the Judge’s desk. Likewise finding a cognomen suitable for ex-Ch J Michael B (“Iron Mike”) Thornton was difficult, until I saw in person his laser-sharp focus as he ran the Tax Court Judicial Conference at Duke University some years ago; no detail, however small, escaped him, even in seemingly casual conversation.

That of Judge Mary Ann (“S.E.C. = She Eschews Cognomens”) Cohen is self-explanatory. I asked the Judge once; following an exalted personage, her “nay was nay.”

Judge David Gustafson is The Obliging Jurist because of his obliging nature.

When I applied “Big Jim” to Judge James S Halpern, a colleague who had known the Judge socially from years ago questioned me, because the Judge is not exceptionally tall. I confess I was nonplussed, and still am. In my defense, when it comes to gravitas, Judge Big Jim is second to none.

Now-retired STJ Robert N Armen was “The Judge With a Heart” because of a Sum. Op. back in 2011, when he let someone who raided the kids’ 529s but put the money back after his wife’s tearful intercession off the 10% whatever.

Some take time. And a lot of thought. To obtain light touch, with no disrespect, isn’t easy.

And as there was neither opinion nor designated hitter today, I thought my correspondent might appreciate a public reply.

I miss my visits to various ballparks; the overpriced beer, the spilled nachos, hauling myself upright for people to pass, collapsing into my seat and hauling myself up again for the late-comer, the earsplitting loudspeakers. There’s something about a summer night at a bank-sponsored elliptical heat sink, watching the moths in the floodlights.

But most of all it’s the game I miss.

I long for the great moment when the down-and-outers spark a rally, and claw their way back, run by run, chasing starter, middle-distance, and even threatening the closer. Finally, with tying and go-ahead runs on base, “and the last man in,” closer faces hitter, and the hoots-and-hollers of the fans reach crescendo.

What a let-down, when the hitter chases a split-finger with the count 3-and-2, and grounds out 4 to 3, ending the inning and the rally.

And today I’m reminded of what I’ve lost this summer, as a promising rally peters out (although the STJ is not Peter Panuthos, but Lewis (“The Name is a Home Run”) Carluzzo).

Here’s Faith Lynn Brashear and Hendel N. Thistletop, 2020 T. C. Memo. 122, filed 8/19/20.

This one started out showing real promise. See my blogposts “‘Got To Be There’ – Part Deux,” 8/26/16, and “A Court of Limited Jurisdiction,” 10/25/16.

Well, Faith Lynn and Hendel finally shucked their erstwhile lawyer DJ and went to trial. You can read STJ Lew’s blow-off of unsubstantiateds. It’s too disheartening for me.

And no designated hitters today.

Another quick jotting from my notebook.

There’s just one opinion today, a Sum. Op. from STJ Panuthos, and there really isn’t much to say about it that hasn’t been said many times before. A claim is not a credit; IRS can apply payments how they wish if you don’t specify; you can’t fight about out years in a CDP or petition therefrom; and the SOL for refund claims is a real quick kick.

So you can read Robert William Porporato, 2020 T. C. Sum. Op. 24, filed 8/18/20. And perhaps you can extract more from his plight than I just did. If you do, I’d be glad to know what I missed.

Perhaps the moral is what the stick-and-string sailors say: “If you let the boat fall off to leeward, you have to make it all back at compound interest.”

It might could be that some bright person has figured out how to do a legitimate extinguishment bailout in a conservation easement. Of course, Oconee Landing Property, LLC, Oconee Landing Investors, LLC, Tax Matters Partner, Docket No. 11814-19, filed 8/18/20*, can’t wangle partial summary J out of Judge Albert G (“Scholar Al”) Lauber. But neither can IRS Oakbrook or Coalholder the Oconees into taking a knee.

For those coming late to this party, see my blogposts “They Always Must Be With Us,” 5/12/20, and “Diamonds Are Forever,” 10/28/19.

It’s the usual markup of some GA scrub. But it’s the improvements, or lack thereof, that give the Oconees a soft landing.

“The deed prohibits any form of residential, commercial, or industrial development as well as exploration for or extraction of oil, gas, or minerals. The deed states that there were no existing structures or man-made features on the Property when the easement was granted, and it generally prohibits construction on the Property ‘of any buildings, structures (including mobile homes), or other improvements.'” Order, at p. 2.

It gets even better for the preservationists.

“Oconee reserved the rights to engage in forestry and recreational activities on the Property, including hunting, shooting, boating, fishing, camping, hiking, biking, and horseback riding. In connection with the latter Oconee reserved the right to ‘construct, repair, relocate, and remove small “Recreational-Only Structures” * * * such as deer stands, hunting blinds, emergency shelters, [and] play structures for children.’ The deed prohibits the use of such structures for residential purposes, bars the construction of utilities to serve such structures, and provides that the area of such structures within the Property could not exceed 150 square feet.

“Paragraph 4(e) of the deed, captioned ‘Improvements,’ reserves to Oconee the right to construct a ‘nature trail,’ for use by hikers and bicyclists, in a 42-acre portion of the Property comprising hardwood forest. Any nature trail had to be made of permeable materials (gravel or mulch) and closed to motorized vehicles (except those necessary for people with disabilities, emergency response, and trail maintenance). The deed lists no other permissible improvements that Oconee could make to the Property.” Order, at p. 3.

The syndicators go wild.

As for prior claims, those get paid out of the Oconees’ cut of extinguishment proceeds. Unhappily, value of future improvements is out of the extinguishment maths, but therein lies the question of fact, namely, viz., and to wit, are any permissible future improvements worth anything? And what does GA law do with prior claims when there’s a split of proceeds? Once again, substantial brain cells are decomposed for an event “so remote as to be negligible.”

Of course, the Oconees have so limited what can be done on the Property as to take them out of the Coalholders or Oakbrook.

The Oconees trot out the old PLR200836014 (Sept. 5, 2008) meets Auer argument, but Section 6110(k)(3) puts paid to that. PLRs are for the requesting taxpayer, for the requested transaction, and for the requested year(s). No others need apply.

No summary J either way, in whole or in part.

But before you go, note that 97% of this sylvan wilderness was sold to the Oconees for $3.7 million. Eight (count ’em, eight) days later, the easement deed was recorded. Whereupon the Oconees took a $20,670,000 write-off.

Section 6662(h) 40% overvaluation chop is on the table.

*OCONEE Landing 8 18 20

I know I stole this line from a CA practitioner, to whom I must apologize both for lifting his bon mot and forgetting his name, but it’s really so good that any attempt at paraphrasing would dilute it: “Every taxpayer needs two advisers – one to tell them what the law is, and the other to tell them what they wish the law was. Then they can choose whose advice to follow.”

Well, Nirav B. Babu, 2020 T. C. Memo. 121, filed 8/17/20, only needs one adviser, because “(D)uring law school he took courses in tax law, participated in a tax clinic that assisted low-income taxpayers, and finished ‘with a pretty good understanding of tax.’” 2020 T. C. Memo. 121, at p. 3. And Nirav also ran a franchised tax prep service that he built up after his mentor’s service was enjoined from tax prep by DOJ in USDCSDOH for “engaging in and facilitating extensive and pervasive tax fraud.” 2020 T. C. Memo. 121, at p. 4. He also subcontracted work for the mentor’s successor.

Nirav was a real success story. Except he didn’t bother to disclose about $2.9 million of income from his mentor’s successor’s firm, from which he had unlimited cash drawing rights.

Nirav fesses up after IRS nails him for unreported income. In fact, after confessions and concessions, all Judge Albert G (“Scholar Al”) Lauber has left to decide is whether Nirav is up for a five-and-ten substantial underpayment chop.

Nirav has five (count ’em, five) lawyers against IRS’ three in Tax Court, but when it came to preparing his individual return, he relied on only one, and on the stand she doesn’t do so good.

“Ms. Rebeck obtained a law degree…and had been practicing law full time for less than a year…. Petitioner hired Ms. Rebeck to represent him in a dispute with the IRS involving the assessment of penalties for alleged violation of section 6695(g), which requires return preparers to exercise due diligence regarding claims for the earned income credit. …she filed a Form 2848, Power of Attorney and Declaration of Representative, to represent him before the IRS in that matter.” 2020 T. C. Memo. 121, at p. 8.

Nirav’s adviser, Ms. Rebeck, told him he didn’t have to report the $2.9 million. Judge Scholar Al is less than convinced this was good advice.

“Petitioner’s testimony was self-serving, and Ms. Rebeck did not strike the Court as an objective or candid witness.

“Petitioner and Ms. Rebeck had mutual business interests, insufficiently explained, that involved large sums of money. Ms. Rebeck acquired former [mentor’s] franchises that appeared to have used [Nirav’s]’s software to process returns. … she and petitioner started a law firm whose bank account balances exceeded $3.8 million [in less than a year]. In early 2018 petitioner transferred $500,000 to Ms. Rebeck for unexplained reasons. At some point she transferred to petitioner a 99.9% interest in an LLC for no consideration. Petitioner and Ms. Rebeck were codefendants in a lawsuit filed in 2019 involving alleged misappropriation of funds. For these and other reasons, we found that Ms. Rebeck’s testimony was likely to be biased in petitioner’s favor.” 2020 T. C. Memo. 121, at p. 9.

Ms. Rebeck posited the $2.9 million was repayment of loans, but had no documentation. Likewise the claim that there were offsetting bad debts.

“The theories she enunciated at trial struck the Court as post hoc rationalizations for petitioner’s erroneous reporting.” 2020 T. C. Memo. 121, at p. 14.

As for Nirav, his heavy-duty experience makes it incredible that he didn’t know that diverting an entity’s income to his personal benefit generated taxable income.