Candidates for admission to the United States Tax Court Bar via the biennial non-attorney examination should carefully study the limits of Tax Court jurisdiction, as this will doubtless appear to slaughter the innocents.

Ronald W. Boone, Docket No. 18319-23S, filed 2/13/25, is fighting with IRS about the application of a tax refund. After agreeing about a lot, but not everything, each side submitted their own motion for entry of decision.

CSTJ Lewis (“Cool Name”) Carluzzo will neither.

“As was explained to petitioner during the above-referenced proceedings, the Court has no jurisdiction to review respondent’s application of the portion of his 2020 income tax refund to his apparent 2017 federal tax liability. See I.R.C. §6512(b)(4). We doubt that he is satisfied with our explanation.” Order, at p. 1.

But CSTJ Lew does find “the case is most certainly settled with respect to matters that are within our jurisdiction.” Order, at p. 1.

So he enters decision that Ron owes neither tax nor chops for the year at issue, and was entitled to (and was paid) that part of the refund that IRS allowed.

Ron has filed a claim with IRS for refund of the disallowed portion of the refund, but the Section 6511(b)(2) limit for IRS to allow or deny hadn’t run when the SND Ron petitioned was mailed. Hence no jurisdiction.

It’s well-settled that lawyers can’t add, but when they become witnesses, they really throw themselves into the job. Ex-Ch J L. Paige (“Ironfist”) Marvel surveys the expert’s report of G, Esq., and finds only two (count ’em, two) sentences that provide legal conclusions. Those she strikes.

“As an initial matter, notwithstanding petitioners’ dim view of licensed attorneys, ‘merely being a lawyer does not disqualify one as an expert witness. Lawyers may [even] testify as to legal matters when those matters involve questions of fact.’ Askanase v. Fatjo, 130 F.3d 657, 672 (5th Cir. 1997); see also Estate of Climer v. Commissioner, T.C. Memo. 1994-29, 1994 WL 17919, at *8–9 (discussing expert testimony provided by two real estate attorneys in relation to a deed).” Richard B. Stillahn & Lisa R. Lang Stillahn, Docket No. 13492-20, filed 2/12/25, at p. 3.

Oh, the two offending sentences?

“We agree with petitioners in two limited respects, however. Page 45 of the G Report states in part in relation to certain transactions in which petitioners engaged, ‘There does not appear to be a legitimate business purpose to enter into this type of arrangement.’ Page 62 of the G Report states in part, ‘The deferral of income taxes appears to be the purpose of this arrangement . . . .’ Statements about a transaction’s legitimacy or a taxpayer’s subjective purpose fall outside the proper scope of an expert witness’s role.  We will strike these statements from the record, just as we would strike them if they had been made at trial. Cf. Rule 143(g)(2) (stating that an expert witness report is generally ‘received in evidence as the direct testimony of the expert witness’). We do not, however, view these isolated statements as detracting from the overall character of the G Report as a helpful and reliable analysis of installment sales and other transactions.” Order, at p. 9. (Citation, name, and footnote omitted).

The expert’s report goes in.

Stewart Weston, T. C. Memo. 2025-16, filed 2/12/25, claims he was robbed by his business partner. It’s a tangled fact pattern, so I’ll leave it as a characterization of investor vs. operator. And if you’re going to claim a theft loss, file a police report, especially when your lawyer suggests you do so.

But I’ll focus on the dispute about whether the deficiency resulting from Stewart’s disallowed theft loss was properly set forth in the SFR which IRS prepared.

Judge Elizabeth A.(“Tex”) Copeland has to provide the recipe for an SFR.

“To constitute an SFR, the document prepared by the IRS must be subscribed, it must contain sufficient information from which to compute the taxpayer’s tax liability, and it must purport to be a ‘return.’  The combination of Form 13496, Form 4549–A, and Form 886–A, as included in each SFR prepared for the Westons, suffices to constitute a valid SFR under section 6020(b). There is no requirement that an SFR include a Form 1040 executed on behalf of the taxpayer.” T. C. Memo. 2025-16, at p. 17. (Citations omitted).

Judge Christian N. (“Speedy”) Weiler brings us to the end of the Green Valley road, as Green Valley Investors, LLC, et al., Bobby A. Branch, Tax Matters Partner, T.C. Memo. 2025-15, filed 2/11/25 leads in three (count ’em, three) other Dixieland Boondockeries claiming a total $90 million syndicated conservation dodges. The issue is chops: Boss Hossery to start, and overvaluation for the main course.

Of course, this is a long running saga. See my blogpost “Listing is Legislating,” 11/9/22*, for the Notice 2017-10 story.

Judge Speedy Weiler seems confused. Though the St. Louis law firm Bryan Cave rendered a tax opinion (T. C. Memo. 2025-15, at p. 10), Mr. Cave (that’s Rhodes Cave, Esq.) became a partner in 1917; I doubt he was writing anything in 2015.

Otherwise, it’s the usual story: Boondocks bought for $2.2 million, mining evaluation and appraisal from the usual suspects follow, a private placement memo supposedly suggesting getting rich in mining crushed rock but a charitable deduction as the main course, and $22 million deduction claimed. IRS buys petitioner’s expert’s “after” valuation. Judge Speedy Weiler brushes aside a minor miscue on the Penalty Lead Sheets, so Boss Hossery is satisfied.

The valuation trial is a walkover for IRS.

But it’s the usual kicker: “It is likewise difficult to accept that Mr. Branch, who acquired the underlying 607 acres of land for some $2,500 an acre or approximately $2.2 million, could objectively conclude that just three years later this same property was in fact worth more than $160,000 an acre for a total collective value of $91 million.” T. C. Memo. 2025-15, at pp. 38-39.

40% on the overvaluation, 20% on anything over the actual allowable deduction.

Edited to add: I cannot close without recognizing the trusty attorneys for the Green Valleys, led by Dixie’s answer to the Jersey Boys, Vivian D. (“Golden”) Hoard, Esq. Never dismayed, Ms. Hoard fights on. Be the sun ever so hot, and the IRS hotter; be the ice ever so thin, and her experts thinner, Ms. Hoard won’t quit. Only good ones lose the toughest ones

* https://taishofflaw.com/2022/11/09/listing-is-legislating/

That’s the fate Michael Romanovsky, Docket No. 1546-25, filed 2/11/25, is trying to avoid with his motion to seal. Mike filed redactred versions of his papers, and “requests that the Court redact his last name, mailing address, email address, and telephone number from the Petition and Attachment to Petition filed in this case; the redacted versions of these filings reflect petitioner’s request.” Order, at p. 1.

Mike’s concern is not wholly unfounded.

“‘Petitioner seeks this redaction due to the increasing risks associated with widespread data scraping by automated systems that collect and distribute personal  information from public records.’ He argues that the inclusion of this information in the public record ‘presents a significant risk’ of ‘Identity theft and fraud,’ ‘Unsolicited contact and harassment,’ and ‘Loss of personal privacy.'” Id., as my expensive colleagues would say.

A source tells me that data scraping refers to automatically extracting information or data from various sources, not necessarily limited to web or user interface content. The process can involve collecting data from various sources, including databases, documents, spreadsheets, text files, and other structured or unstructured data repositories.  AI is supposedly especially good at this.

Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan says Mike complied with the redaction Rule 27(a), and that’s all he gets.

“To determine whether the sealing of any documents is appropriate, we must weigh the public’s interest in access to the documents against the taxpayer’s interests. The party seeking to seal the case must produce ‘appropriate testimony and factual data’ to support claims of harm that would occur as a consequence of disclosure, and may not rely on conclusory or unsupported statements to establish good cause.” Order, at p.1. (Citations omitted).

Mike falls short.

It’s a reprise of a gambit that’s been tried and failed, but Habitat Green Investments, LLC, MM Bulldawg Manager, LLC, Tax Matters Partner, et al., Docket No. 14433-17, filed 2/10/25, are at it again.

Section 170(e)(1)(A) limits any charitable contribution by excluding any gain in value that is not capital gain; IOW, inventory gets valued at donor’s basis, and Section 724(c) keeps inventory donated to a partnership as inventory.

Once again, Habitat Greeners’ trusty attorneys are in there pitching. They claim the “easement” the Habitat Greeners donated is different from the land which they retained. While the partners may have donated inventory land (that is, land held for sale to customers in the ordinary course of business), they still have the land. All they gave to the 501(c)(3) guardian is an easement, which they say is only a “restriction,” and the Habitat Greeners don’t sell easements in the ordinary course of business to customers or anyone else. Like Alice in Wonderland, they donated the grin, not the cat.

Judge David Gustafson: “Petitioner’s position would create odd, even perverse, consequences if it were adopted. By petitioner’s reasoning, if it had donated its entire property in fee simple, then the property donated would have had inventory character, and section 170(e)(1)(A) would have reduced the amount of its deduction to be no more than its basis. But since petitioner donated merely an easement and retained the remainder of the property interest, then (says petitioner) it avoids section 170(e)(1)(A) and gets an unreduced deduction for the value of its donation. It is not clear why Congress would have created such an advantage for land owners who donate only partial interests.” Order, at p. 4.

Besides, contrary to the Habitat Greeners’ claim this was never before Tax Court, the argument failed in Oconee Landing Property, LLC, Oconee Landing Investors, LLC, Tax Matters Partner, T.C. Memo. 2024-25, filed 2/21/24. I blogged the opinion, but not on that point.

Today brings two (count ’em, two) recurring Taishoff incantations.

First, stipulate, don’t capitulate. Whistleblower 16459-22W, filed 2/7/25 did not heed (perhaps did not read) the well-worn incantation. Hence FiveNiner (as I will designate him/her hereinafter) gets no more than the augmented $139K discretionary award s/he got per Section 7623(a). Problem is, FiveNiner and trusty attorney stiped to the administrative record, which showed restitution only, no open assessments. Hence Section 7623(b) mandatory award was off the table. So STJ Diana L. (“Sidewalks of New York”) Leyden tosses FiveNiner’s motion for discovery to see if IRS got more.

“Petitioner in petitioner’s Motion to Compel Discovery seeks to discover whether the IRS opened a civil examination of either Taxpayer A or Taxpayer B. Apparently, the purpose for this is to see if additional amounts of tax and penalties were collected. However, the stipulated administrative record is clear—the IRS did not pursue a civil examination (audit) of either Taxpayer A or Taxpayer B. Accordingly, the record supports respondent’s assertion that the proceeds in dispute—the restitution award—did not exceed $2 million.” Order, at p. 3. Took fifteen (count ’em, fifteen) years from Form 211 to decision.

Next, the Dixieland Boondockery summary J smokeout. I’ve extolled the merits of summary J often enough before now.

The petitioners’ counter to IRS’ standard Boss Hoss signoff summary J is the qualified appraiser, qualified appraisal summary J. Case in point:  St. Andrews Plantation, LLC, Joseph N. McDonough, Tax Matters Partner, Docket No. 20849-17, filed 2/7/25. The StAndy’s get the appraiser qualified, subject only to Reg. Section 1.170A-13(c)(5)(ii), the “guilty knowledge” exception, which knocks out appraisals if the donor had knowledge of facts that would cause a reasonable person to expect the appraiser to falsely overstate the value of the donated property. But who knew what when is for the trial.

The StAndy’s have some substantial compliance claims, but those are for trial. Judge David Gustafson denies their vague Loper Bright claims with respect to the appraisal summary regs with citation to the Deficit Reduction Act of 1984, which specifically authorizes the specific regulation.

STJ Diana L. (“Sidewalks of New York”) Leyden cannot deal with the Employee Retention Tax Credit (ERTC) allegedly due Peoplease, LLC, T.C. Memo. 2025-14, filed 2/6/25, especially since Peoplease doesn’t challenge the $11 million Form 941 tab that underlies the NITL here.

Peoplease didn’t originally claim at Appeals that the ERTC would offset the Form 941 tab. IRS now wants summary J sustaining the levy. Peoplease ripostes with the ERTC, and wants time to get it and pay the tab therewith.

“Petitioner did not raise the asserted submitted amended returns and unprocessed claims for ERTCs for periods not in issue at the CDP hearing. The Court does ‘not have authority to consider section 6330(c)(2) issues that were not raised before the Appeals Office.’ Section 6330(c)(2) issues are ‘any relevant issue[s] relating to the unpaid tax or the proposed levy,’ including, among other things, challenges to the appropriateness of collection actions and challenges to the underlying liability under section 6330(c)(2)(B).

“Further, in a CDP case the Court does not have jurisdiction to determine an overpayment of an unrelated liability. A mere claim of an overpayment is not an available credit and thus cannot be taken into account in a CDP hearing to determine whether the underlying tax in issue remains unpaid.” T. C. Memo. 2025-14, at p. 4. (Citations omitted).

John 20:23 doesn’t apply in US Tax Court.

Unhorsing the Boss Hoss by means of the Nirvana fallacy fails despite the attack of the trusty attorneys for Habitat Green Investments, LLC, MM Bulldawg Manager, LLC, Tax Matters Partner, Docket No. 14433-17, filed 2/6/25, despite another audacious effort to scuttle chops via summary J, led by Vivian D. (“Golden”) Hoard, Esq.

Judge David Gustafson agrees that Mr. B, who supervised RA E (names omitted) throughout the examination of the Dixieland Boondockery at issue, was best fitted to give the hoofprint that sealed the chops. But Mr. B had been superseded as Boss Hoss by Ms. V when he sought and got approval from her, and thereafter communicated same to the Greens.

“We can assume (as petitioner asserts) that Mr. B was the immediate supervisor during all of the substantive work of the audit and that he would have been the ideal and most knowledgeable supervisor to evaluate the proposed penalty determination. However, the statute does not require the ideal. All it requires is that the approver be the immediate supervisor. Under Rule 121 we assume that Ms. V was the supervisor at the time she signed the approval; and under that assumption, section 6751(b)(1) is satisfied.” Order, at p. 1.

Once again, the actual is the enemy of the ideal.

Away back on 12/17/19, I stated that “I’m not saying that Barb and Hal are, or are not, injured innocents, nor that they are, or are not, gameplaying rounders. Without seeing all the papers, there’s no way I can say.” See my blogpost “Was Justice Scalia Right?”* of even date therewith, as my expensive colleagues would say.

Well, five (count ’em, five) years on, Judge Courtney (“CD”) Jones is beginning to think along those lines, at least as far as Hal is concerned. See Harold Kupersmit, Docket No. 6691-23L, filed 2/5/25.

Hal has petitioned a bunch stuff (hi, Judge Holmes), for most of which he has either had a chance to contest and lost at 3 Cir, or else never got tickets to Tax Court. And he never gave the AO the Form 433-A and the rest of it for the NITL for which he had properly petitioned.

Apparently no one at IRS or at Tax Court checked out Hal and spouse Barb’s previous history, or read my blog.

So Judge CD Jones can do nothing beyond the Section 6673 yellow card, with emphasis.

“Although the Court will not impose a sanction at this time, we caution Mr. Kupersmit that if he continues to pursue frivolous arguments in this or any subsequent proceeding, he may be sanctioned in an amount up to $25,000.” Order, at pp. 8-9. (Emphasis by the Court).

* https://taishofflaw.com/2019/12/17/was-justice-scalia-right/