Even that delightful luncheon companion, Chief Whistler Lee D. Marvin, seems unable to quench the Ogden Sunseteers’ Protean metaphysical urge to engage in epistolary ping-pong. And even when IRS’ counsel tries invoking untimely petitioning, the Ogden crew get railroaded back before Judge Albert G (“Scholar Al”) Lauber. Here’s Whistleblower 15488-17W, 2019 T. C. Memo. 23, filed 3/27/19.

Way back in September ’16, the Ogden crew gave 15488-17W the toss. “The Office told petitioner that his claim had been denied and stated: ‘This letter is a final determination for purposes of filing a petition with the United States Tax Court.  Under I.R.C. § 7623(b)(4), you have 30 days from this determination to file a petition with the Tax Court.’  Petitioner did not petition this Court within 30 days of the first letter.” 2019 T. C. Memo. 23, at p. 3

Nothing daunted, 15488-17W visited EDGAR, SEC’s on-line tell-all, and found that, around the same time the Ogdens were brushing him [Note: Judge Lauber says “him,” from which locution no inference should be drawn as to blower’s identity] off,  the blowee had filed a bunch of amended returns and dropped a cool $50 million on the fisc. And blowee’s filings said the story wasn’t over yet.

15488-17W leapt into print, and engaged the Ogdens again in epistolary discourse. The Ogdens replied they saw no need to change their prior, final brush-off, and didn’t even mention the new info.

15488-17W petitions that.

IRS says “too late, final determination long past.” Well, the Incomparable Comparinis taught us long ago that, in the immortal words of The Great Eight Behind the Plate, Lawrence Peter Berra, “It ain’t over till it’s over.” You remember the Comparinis. No? See my blogpost “Contra Proferentem,” 10/2/14.

Judge Scholar Al canvasses the letter-writing barrages of the great whistlers of the recent past.

“Our jurisdiction to review a ‘determination regarding an award’ does not depend on how the document is labeled.  See Comparini, 143 T.C. at 278, 281, 283; Cooper v. Commissioner, 135 T.C. 70, 75 (2010) (‘[T]he name or label of a document does not control whether the document constitutes a determination.’). The Office may issue multiple appealable ‘determinations’ with respect to a single matter.  See Myers v. Commissioner, 148 T.C. 438, 444 (2017) (‘[T]he Whistleblower Office may issue multiple determinations, on any of which our jurisdiction* * * may be based.”); Comparini, 143 T.C. at 283; sec. 301.7623-4(d)(2), Proced. & Admin. Regs.  Thus, the fact that the first letter was titled a ‘final determination’ did not prevent the Office from issuing a subsequent determination regarding petitioner’s claim that would create jurisdiction in this Court.  See sec. 7623(b)(4) (granting this Court jurisdiction over ‘[a]ny determination regarding an award’); Kasper v. Commissioner (Kasper II), 150 T.C. 8, 13 n.6 (2018) (‘[W]e have jurisdiction over any timely petitioned whistleblower determination, not just the first in time.’); Comparini, 143 T.C. at 281-283.” 2019 T. C. Memo. 23, at pp. 6-7.

As for Myers, see my blogpost “Forms and Letters,” 6/5/17. I’ve blogged Kasper too many times to count.

Well, 15488-17W found new evidence that something had induced blowee to drop $50 million into IRS’ lap, and reboot a bunch of returns. Just maybe so it was what he told IRS that triggered the drop and reboot. And the second letter, coming when it did, shows the Sunseteers knew what had happened after 15488-17W told them.

Anyway, he’ll get the chance to show it.

“In sum, under the principles enunciated in Comparini and Myers, we conclude that the Office’s second letter constituted a ‘determination regarding an award’ sufficient to confer jurisdiction upon this Court.  We have no occasion here to consider the outer limits of our jurisdiction over whistleblower cases because the Office’s second letter fell squarely within the universe of communications that we have previously held to constitute ‘determinations.’  Petitioner supplied new information, not available to him when the Office initially denied his claim, that arguably called into question the basis the Office had enunciated for denying his claim.  By dismissing the relevance of that new information, the Office made a determination regarding his claim.  He is entitled to seek judicial review of that determination.” 2019 T. C. Memo. 23, at p. 11, footnote omitted.

But the footnote shows how the Ogden Sunseteers were railroaded.

“This conclusion derives support from a recent opinion of the U.S. Court of Appeals for the D.C. Circuit, to which our whistleblower cases are normally appealable.  See sec. 7482(b)(1) (penultimate sentence); Kasper II, 150 T.C. at 11 n.1 (slip op. at 6 n.1).  In Stovic v. R.R. Ret. Bd., 826 F.3d 500, 502 (D.C. Cir. 2016), that court held that the Railroad Retirement Board’s denial of a request to review a previously denied claim for benefits was a ‘final decision of the Board’ subject to judicial review under 45 U.S.C. sec. 355(f) (2012).  Here, the Office’s second letter to petitioner amounted to a refusal to revisit its initial adverse determination despite his submission of newly discovered evidence.  Although the statutory schemes of section 7623(b) and the Railroad Retirement Act are somewhat different, the Stovic opinion supplies analogous support for our conclusion that the Office’s second letter constituted a ‘determination” that is subject to judicial review.” 2019 T. C. Memo. 23, at pp. 11-12, footnote 5.

Note that the DC Cir Judge who wrote the opinion in Stovic was Justice Brett Kavanaugh, now of the Supremes.

The calendar and that yellowing document on the wall tell me this is the fifty-second anniversary of my admission to the Bar of Our Fair State.

Fifty-two (count ‘em, 52) years.

Been quite a ride. And it ain’t over yet.

Judge Richard Posner has long since departed 7 Cir, so I cannot tell who will upbraid me for “prolixity and lame attempts at humor.” However, today I have yet another pun on the surname of Larry & Lorna Graev. Their name is their fame.

Their doings have provided me with six (count ‘em, six) years’ worth of blogfodder, for which I am endlessly grateful. When it comes to chops, their name is on every keyboard, save only the electronicuted.

Judge James S. (“Big Jim”) Halpern expatiates on the history of Graev in Hisham N. Ashkouri & Ann C. Draper, Docket No. 17514-15, filed 3/26/19. Hish & Ann tried their case two years ago last month, but then came Graev III. There’s no opinion yet, but clearly chops and Boss Hossery are on the menu.

I won’t abstract Judge Big Jim’s exhaustive exposition, but I recommend it to anyone not yet familiar with Section 6751(b).

Get Form 6 Wrong

I certainly do not include my colleague, and good companion at lunch, Peter J. Reilly, CPA, nor any of my good friends thus credentialled.

But GoodAccountants Com Inc, Docket No. 3578-19, filed 3/25/19, lets long-suffering Ch J Maurice B (“Mighty Mo”) Foley tell us again that even being good accountants doesn’t avail when confronted with disclosing your ownership.

“…petitioner filed in the above-docketed matter an Ownership Disclosure Statement. However, such statement is incomplete in that it contains no disclosures; rather, it bears only petitioner’s signature but is otherwise blank. As relevant here, the form directs petitioner to list all parent corporations and entities owning 10 percent or more of petitioner’s stock OR to state that there is no such parent corporation or entity.” Order, at p. 1.

I’ll say it again: Ch J, modify the form. Put in the language YOU CANNOT LEAVE THIS FORM BLANK. IF “NONE”, WRITE “NONE.”

I welcome a T. C. Memo. from Judge Patrick J. (“Scholar Pat”) Urda, his first on this my blog; I look forward to many more “monuments of unaging intellect,” as a much finer writer than I put it, from that source.

Today Judge Scholar Pat has Jon Robert Ludlam and Maria Louisa Ludlam, 2019 T. C. Memo. 21, filed 3/25/19. They claim IRS messed up one year, as to which they filed two years late, preventing them from filing for the subsequent year. They got no SNOD for Year One, but got a NFTL. In Year Two, IRS gave them a SFR, as they didn’t file for the reason aforesaid. They did get a SNOD, a NFTL and a NITL for that year, and late filing hits for both years.

Jon and Maria didn’t give Appeals either a collection alternative or any information for either year. Jon and Maria timely petitioned both years. IRS conceded Year One tax and removed NFTL.

Jon and Maria claim the Year One imbroglio prevented their filing for Year Two. They admit they got the SNOD for Year Two and didn’t petition that. IRS moves for (surprise, surprise) summary J.

“In their opposition to the motion for summary judgment and their supplement to that opposition, petitioners argue that they were unable to file tax returns for [Year Two] and later years because of their dispute with the IRS over [Year One]. This argument misses the point.  The pertinent question for purposes of section 6330(c)(2)(B) is whether petitioners received a statutory notice of deficiency for [Year Two].  Such a notice–often described as a ticket to the Tax Court–gives a taxpayer the opportunity to challenge in this Court the deficiency determined by the IRS.  See sec. 6213(a).  The notice is not contingent on the filing of a return. Petitioners here received a statutory notice for their [Year Two] liability but chose not to take advantage of their chance to contest that liability in this Court.  That choice comes with consequences dictated by Congress:  Petitioners cannot take a belated bite at liability during these CDP proceedings.  See sec. 6330(c)(2)(B).” 2019 T. C. Memo. 21, at pp. 8-9. (Footnote omitted, but it’s the standard McCormick pay-and-sue).

So we come to abuse-of-discretion. And while Jon and Maria want to do as the title of this little essay suggests, that avails them not. Judge Scholar Pat brushes their argument off with “somber reasoning and copious citation of precedent” in a footnote.

“Petitioners assert that they could not file their tax returns for [Year Two] and later years because they were in a dispute with the IRS over their [Year One] liability and feared perjury charges.  Our precedent makes clear that ‘a dispute concerning a taxpayer’s liability for a prior taxable year does not constitute reasonable cause for failing to timely file a return for the current taxable year.’  Hairston v. Commissioner, T.C. Memo. 1995-566, 70 T.C.M. (CCH) 1438, 1445 (1995); see also Robertson v. Commissioner, T.C. Memo. 2000-100, 79 T.C.M. (CCH) 1725, 1729 (2000), aff’d, 15 F. App’x 467 (9th Cir. 2001).  And a taxpayer ‘cannot assert a Fifth Amendment privilege against compulsory self-incrimination to justify the failure to file any tax return at all.’  Stubbs v. Commissioner, 797 F.2d 936, 938 (11th Cir. 1986); see also United States v. Sullivan, 274 U.S. 259, 264 (1927); Thompson v. Commissioner, 78 T.C. 558, 563 (1982).” 2019 T. C. Memo. 21, at p. 12, footnote 5.

In case you’re curious, I get my title from Carroll’s Semi-Centennial, written in 1887 in praise of Carroll County, MD, by Harry J. Shellman, a New Yorker. Worthy of a Joyce Kilmer Memorial award.

It’s common for pro se petitioners (and even Tax Court admittees, occasionally) to conflate poor l’il ole Article I Tax Court with its much more puissant companions, the Article IIIs, like the USDCs and CCAs. Today I have just one example, Victor Maurice Brown & Kimberly Denise Brown, Docket 20102-17, filed 3/22/19.

Vic & Kim want damages from Kim’s former employer. They want to litigate a year as to which IRS conceded the deficiency. They want withdrawal of a tax lien for a different year when they had a SNOD, which they didn’t timely petition, and a NITL, which they also failed to petition timely. They may have gotten a NOD from an equivalent hearing, but that avails them not.

So whatever IRS did after that is not for Tax Court. They also want filing fees for an amended 1040s for the two years, although they never filed such amendments or amended their petition. And they want an agreed set of facts.

Judge David Gustafson, whose obliging nature has furnished this blogger with a cornucopia of blogfodder, cannot help Vic & Kim.

“We do not have jurisdiction to adjudicate any disputes between the Ms. Brown and her former employer nor to award Ms. Brown any damages from her former employer. (Their citation in this connection to the Federal Rules of Civil Procedure is wide of the mark. The Tax Court operates under its own rules, which make no provision for ordering a third party to be a defendant.) In the absence of a timely CDP request, a notice of determination pursuant to section 6320(a)(1) or 6330(a)(1), and a timely petition challenging such a determination, we do not have jurisdiction over any contention as to IRS liens, levies, or other collection activity. We do not have jurisdiction to award fees for filing amended tax returns nor any other fees other than those that might be allowed pursuant to section 7430. In the Tax Court it is the judge who makes the findings of fact, see sec. 7459(b), and the Tax Court is not authorized to conduct jury trials. The Anti-Injunction Act (sec. 7421) generally prohibits injunctions against the IRS, and the Browns showed no exception applicable here to that general rule.” Order, at pp. 5-6.

It’s true Vic & Kim did raise one year timely, but that was the one IRS conceded. “By attaching to their petition the … notice of deficiency, the Browns did properly invoke our jurisdiction to redetermine the… deficiency that the IRS determined against them in [sic]. However, in view of the Commissioner’s concession of that deficiency, there is nothing left for us to decide.” Order, at p. 6.

IRS moves to toss Vic’s & Kim’s Rule 91(f) OSC, to enter decision and to quash a subpoena Vic & Kim served.

“The Browns’ response to the motion for entry of decision and their motion for an order to show cause state issues that they call ‘new matter’—a phrase they draw from Rule 142(a), which they believe to be issues we should decide in this case. They evidently misunderstand Rule 142(a), in which ‘new matter’ consists of issues raised by the Commissioner beyond what the IRS asserted in the notice of deficiency. Moreover, the Browns have never moved for leave to amend their petition to add any new basis for relief. However, we cannot tell whether any of the ‘new matter’ really is new or is instead a rehashing or elaboration of the allegations in their petition. In any event, we cannot discern in their filings any issue within our jurisdiction that relates to their [conceded] tax year and that would not be resolved by our entry of a decision of zero deficiency.” Order, at p. 6. (Emphasis by the Court).

As for the subpoena, Vic & Kim didn’t proffer the witness and mileage fees required by Rule 148, asked for the documents to be produced at IRS counsel’s office and not at the courtroom at trial, and was overbroad because it included requests for documents relating to the out-of-jurisdiction year. Anyway, it’s moot as the out-of-jurisdiction year is off the table, and the in-jurisdiction year is moot.

Tax Court – the “sixty-buck ticket to justice” – is a first-class minefield.

I’m really sorry just to give a passing nod to Edward G. Kurdziel, Jr., 2019 T. C. Memo. 20, filed 3/21/19. It’s just another indocumentado too-much-fun Section 183 hobby loss case. But how can you resist a Judge Holmes opinion that begins thus? “Edward G. Kurdziel is the only man in America licensed to fly a Fairey Firefly.  He is also the only man in America who has a Firefly to fly.” 2019 T. C. Memo. 20, at p. 1.

Judge Holmes has a whole history of the Firefly, of course; I might even have seen one when I visited HMS Victorious when she called on Our Minor Outlying Island in 1957. Marx Bros. fans will know why I wish Captain Kurdziel had called his aircraft “Rufus T.” . But he didn’t.

The other T. C. Memo. today is a yacht and an RV that flunk the documentation test, and the rehab and conversion to rental of taxpayers’ primary residence don’t cut it for Judge Nega. Since one of the taxpayers is an attorney who has litigated tax cases, the Section 6662(a) chops are in play, despite the taxpayers’ highly-qualified CPA. Taxpayers should’a known they didn’t tell CPA the whole story.

But we have another entry in my sporadic, no-prize, “best excuses” sweepstakes. Here’s Christopher J. Bard, Docket No. 4965-18S, filed 3/21/19. Chris wants a vacation.

“In his motion to vacate or revise petitioner, a Chicago police officer who commenced the present judicial proceeding on March 12, 2018, as a selfrepresented taxpayer, states that he ‘was completely shocked when he recently discovered that his case had been dismissed’ because, ‘based on a misunderstanding and miscommunication with his tax return preparer, an enrolled agent,’ he ‘mistakenly believed that his only obligation with respect to this tax court case was to file the petition at the beginning of the case and to do nothing more.’” Order, at p. 1.

But Chris got the usual notice setting trial, and a separate reminder thereof, from the Tax Court clerk. He also got the motion papers when IRS moved to dismiss for want of prosecution, alleging Chris being “generally non-responsive.” “Respondent’s statement above about petitioner being ‘generally non-responsive’ is consistent with a statement made by petitioner himself in his pending motion to vacate or revise, i.e., ‘Petitioner ignored all correspondence from the Service relating to this case’ because of his mistaken belief that ‘his only obligation with respect to this tax court case was to file the petition at the beginning of the case and to do nothing more.’” Order, at p. 4.

Then the Court got back in the act, sending Chris an order to show up and bukh about why he should not be tossed. He didn’t, and he was.

Now I’ve called STJ Robt N Armen “The Judge With a Heart.” But STJ Armen hasn’t much heart for Chris’ excuse in this designated hitter.

“As the record in this case makes abundantly clear, petitioner received multiple warnings from the Court about the need to appear in court…, and about the possible consequence if he failed to do so. Petitioner was also warned by the Court about the need to cooperate in the preparation of this case for trial and about the possible consequence if he failed to do so. None of these warnings were in ‘legalese’ or used arcane language. Rather, all of the warnings were clear, concise, and written in plain English, and would be easily understood by a reasonable person. Thus, petitioner’s allegation that he believed ‘his only obligation with respect to this tax court case was to file the petition at the beginning of the case and to do nothing more’ strikes the Court as disingenuous. Surely a police officer would know that when a court says to a party in a judicial proceeding that the party needs to ‘show up’, the party shows up. Petitioner failed to do so and, at the time, failed to offer any reason that might have excused his failure to do so. And in his motion to vacate or revise petitioner fails to offer a convincing reason to justify his failure to appear.” Order, at p. 5. (Footnotes omitted; emphasis by the Court).

One footnote says IRS also contacted Chris about cooperating in trial prep, and the other footnote says Chris sent some documentation to Appeals after he began the Tax Court case, which puzzles STJ Armen. If he needed to do nothing, why send anything to anybody?

Of course, as Chris is a police officer, maybe in his cases when the court says “show up” to one whom Chris and his colleagues have collared, the party takes off, and Chris and colleagues have to go chase. But as such excursions rarely end well for the perp, Chris must know that it won’t end well for him.

No vacation for Chris.

I’m a great fan of summary judgment. See my blogpost “Summary Judgment – A Causerie,” 3/13/14. But the present Rule 121 needs a tweak. It allows the motion after pleadings are closed, but not later than sixty days before the scheduled trial session, without leave of court. And while Rule 121 carries a caveat that the motion cannot delay the trial, it sure can disrupt trial prep.

I routinely see IRS making summary J motions just barely outside the 60-day pretrial cut-off.

Here’s Linda Archie, Docket No. 7124-18L, filed 3/20/19. Trial is set for 4/15/19, IRS moved for summary J 2/14/19, and Linda replies 3/18/19, with exhibits. So Judge Goeke orders the parties to show up at calendar call, argue the motion, and set a date and time certain for trial.

This is just an example, and I’m not picking on Judge Goeke, nor on IRS’ trial counsel. There are bushelbasketsful of such motions, timed thus. The Rules say what they say; if they help your side, use them.

Now I know nothing of the facts of Linda’s case. From a docket inquiry I see she has counsel, she petitioned last April, IRS answered last June, and notice of trial was served last November. There are no discovery motions, and none directed to the pleadings. Therefore, I assume the parties were happy with whatever they pled, and Branertoned with no problems.

So if they had no discovery problems, and they knew in November that trial was on for April, even with the Great Shutdown in between, had IRS not the slightest inkling that there were no material questions of fact until last month?

Maybe it’s a good tactic to move for summary J at the last second, if the other side needs to assemble witnesses and documents and prepare for trial. It’s rare that witnesses can show up at the last minute, especially if trial is not in their home town or place of work, even if transportation and lodging can be arranged. Plenty of trials cannot be concluded in a single day. And anyone who has ever tried a case with witnesses knows that, television shows notwithstanding, it’s not only kids who say the darnedest things.

Old Sun Tzu, China’s master military mind, said the best way to win was to disrupt the enemy’s preparations. Viscount Field Marshal Slim of Burma, who had perhaps not read Sun Tzu but knew his doctrines, used them effectively.

To forestall repetition, perhaps a revision of the summary J cut-off rule is something to consider.

STJ Daniel A. (“Yuda”) Guy has a reminder for those who opt for small case treatment. Since you can’t appeal, the notice-of-appeal extension of time in Section 7481 doesn’t help.

The reminder is a designated hitter, Victor M. Crown, Docket No. 030082‑14S L, filed 3/20/19. Vic lost a small claimer in April two years ago, which I didn’t blog.

Now he decides to try for a Rule 162 vacation. He’s late, of course.

Vic is out unless “…the decision is shown to be void, or a legal nullity, for lack of jurisdiction over either the subject matter or the party, (2) the decision was obtained through fraud on the Court, or (3) there is a need to correct a clerical error in the decision.” Order, at p. 2. (Citation omitted.)

Vic can’t do any thereof.

So a small-claimer becomes final on Day 30, because the 90-day push for filing notice of appeal is meaningless, as there is no right of appeal. Section 7463(b) places a Congressionally-mandated jurisdictional bar on the appellate courts.

I will spare my readers any allusion to the 1976 Meredith Willson Broadway musical hit; it’s late, I had a fun-filled day of art and music, and I’m tired.

Bur I owe it to my readers to tell them about River City Excavation, Inc., Docket No. 22751-18L, filed 3/19/19. River City’s troubles have to do with the Section 6721 chops for filing messed-up information returns. There must be a ton of them, because River City is complaining about three (count ‘em, three) years’ worth.

IRS wants to toss all three for untimeliness, and River City folds as to two, but claims they got a NOD for the third year, and that one they timely petitioned.

It seems River City petitioned everything, and the SO considered it all, although not formally joining everything. River City argues that Reg. 301.6330-1(a)(3), Q&A-D2, obliges Respondent to combine CDP hearings where practical, and deal with everything.

But if the NITL and NFTL for the two untimely years were joined with the timely year, doesn’t that oust Tax Court of jurisdiction? Isn’t the NOD for the timely year a supplemental NOD?

Ch. Judge Maurice B (”Mighty Mo”) Foley wants to know. After all, remember LG Kendrick, LLC. What, you don’t? Then see my blogpost “Be Careful What You Ask For – Part Deux,” 1/21/16. Now LG Kendrick LLC involved Form 941s, and the forms in this case are information only, not payment.

But maybe the rules are the same.

Let both sides discuss, but let IRS tell Ch J Mighty Mo if they’re going to issue a new NOD for the one open year.