Section 6015(c) apportioned relief generally (love that word!) requires successful requestor to recognize his/her own items, even while requiring non-requestor to retain their own.

IRS does seem to allow a cutoff in Manuela C. Smith, Petitioner and Ulysesus A. Hodge III, Intervenor, T. C. Sum. Op. 2025-6, filed 6/12/2025. Manuela and Uly were separated and lived apart during year at issue. Although Manuela assembled the documents for the paid preparer of their 1040 MFJ, Uly never gave her the 1099-MISC for his SE nor the 1099-C for his written-off debt.

They always had separate bank accounts, never any joint account.

On the hearing, Uly asserted that Manuela must have known he had other income, as she “had access to his bank account; as he put it, she could not have been ‘completely oblivious’ to it.” T. C. Sum. Op. 2025-6, at p. 5.

Not good enough for CSTJ Zachary S. (“High-Rise”) Fried, making his debut as CSTJ. Actual knowledge, not constructive knowledge, is the test. All Uly’s separate income documents were sent to Uly’s separate address.

“Actual knowledge is not to be inferred from evidence that the electing spouse merely had reason to know of the omitted income. See S. Rep. No. 105-174, at 59 (1998), reprinted in 1998-3 C.B. 537, 595 (‘[A]ctual knowledge must be established by the evidence and shall not be inferred based on indications that the electing spouse had a reason to know.’).” T. C. Sum. Op. 2025-6, at p. 5.

But Manuela did have income of her own. CSTJ Fried’s disposition thereof is the reason for the headline first abovewritten at the head hereof (as my expensive colleagues would say). And of course it’s in a footnote.

“During [year at issue] petitioner received wages of $2,850 from ZMF that were not reported on petitioner and intervenor’s joint federal income tax return…. At the beginning of trial, respondent’s counsel indicated that the income was de minimis and was thus not excluded from the relief under section 6015(c) that respondent was conceding. Intervenor does not argue that, because the income was allocable to petitioner, she is not entitled to relief under section 6015(c) relating to the portion of the deficiency for [year at issue] which is attributable to that income. Under the circumstances, we do not consider that question.” T. C. Sum. Op. 2025-6, at p. 5, footnote 3.

Taishoff says, c’mon Judge, that’s piling on. Uly may or may not be a sympathetic character, and maybe his testimony was less than candid (see T. C. Sum. Op. 2025-6, at p. 5; I didn’t see the hearing), but he was pro se, and IRS folded. Sticking him with Manuela’s unreported income, de minimis or not, when he can’t appeal, is a bit much.

I’ve often commented before now on the leisurely (not to say lackadaisical) pace of Tax Court litigation. As Hal David memorably wrote “Weeks turn into years, how quick they pass.”

Edisto Georgia, LLC, Golden Eagle Capital Investments, LLC, Partnership Representative, Docket No. 8478-23, filed 6/12/25, is following that path. Petition filed 5/20/23, noticed for trial 4/8/24, twice continued (that’s “adjourned” for us State Courtiers) and now, with trial date in the October session at Columbia, SC (and do I remember October in Columbia, SC, fifty-eight (count ’em, fifty-eight) years ago!), the parties move to continue once more.

I can find no scheduling order on the Tax Court docket page, so one might assume the parties are Branertoning at speed. Or maybe not.

Of course, as trial venue is laid in Columbia, SC, Judge David Gustafson, a Palmetto State native, deals with this latest can-kick, as immediately set forth hereinbelow (as my expensive colleagues would say).

“The motion explains the parties’ work to date and the reasons the case will not be ready for trial in October 2025. In view of their agreement, we will continue the case. However, they ask for trial to be set to begin in 20 months on February 22, 2027. On the one hand, we appreciate the parties’ willingness for the Court to impose a schedule that will prod them to prepare the case for trial; but on the other hand, the case appears to be in the very earliest stages of development, and in such circumstances, setting a trial for a date so far distant is problematic. Doing so would effectively block the Court from setting any other trial session in Columbia that would overlap with that one; but experience teaches us that when a case not ready for trial is set for trial so distant in time, the likelihood that a trial will actually occur on that schedule is low.” Order, at p. 1.

Judge Gustafson grants the third continuance, but sends the case to the general docket.

Taishoff says in State Court we have administrative judges, who scan trial judges’ dockets with the zeal of Hurricane Hunters, seeking dilatory litigants and pushing the assigned judges to clear their dockets. “Select or settle!” they cry. “Pick a jury and try the case, or compromise and stip out.”

This case may present so tangled a fact trail that discovery requires years: somehow I doubt it.

Tax Court is resetting the June 16, 2025, Los Angeles CA hybrid small claims session from live to Zoom.

The reset is attributed to “the result of ongoing law enforcement activity in and around the Roybal Federal Courthouse in Los Angeles.”

This being a resolutely nonpolitical blog, I will not comment.

Madeleine L’Engle’s 1962 young adult classic once again figures at Appeals in a CDP, but unlike Jacob & Marsha Rozbruch, who starred in my blogpost “A Wrinkle in Time,” 2/3/23, wanting Appeals to consider only long-past info and leave out what was found on remand, Manntej Sra & Jasmine Sra, Docket No. 5919-24L, filed 6/10/25 claim Appeals abused discretion by not considering events occurring after CDP concluded and NITL confirmed.

Man & Jas say they sold assets and paid down some of the tax due (which they admit was due) after the CDP, the AO miscalculated the QSV of their principal residence and never gave them a chance to refinance or make an unforced sale. Selling more assets would only give them more tax liability and cause economic hardship.

But Man & Jas were behind on their 1040-ESs at the CDP.

They are Golsenized to 9 Cir, which is strict record-rule territory. What was brought forth at the CDP and made it into the administrative record is “all ye know on earth, and all ye need to know,” as a much greater writer than I put it.

Judge Cary Douglas (“C-Doug”) Pugh has this one.

“But regardless of whether SO B’s calculations were correct petitioners were not eligible for an installment agreement at the time of SO B’s determination because they failed to make the requisite quarterly estimated tax payments as required under section 6654(c)(2). Rejecting their offer was not an abuse of discretion therefore and we need not consider SO B’s calculation of the QSV or petitioners’ other alleged challenges to her review.” Order, at p. 5. (Name omitted).

At a CDP, make sure you’re current and play every card you’ve got. That’s your trial.

Dr. Inga I. Kramarenko, T. C. Memo. 2025-61, filed 6/9/25, is an expert with highly technical skills, including but without in any way in limitation of the foregoing (as my expensive colleagues say) signal transduction in highly specialized cells, T. C. Memo. 2025-61, at p. 5.

Doc Inga, or shall we say post-Doc Inga, because she was a post-doctoral fellow at Medical University of South Carolina, wasn’t “from around here, are ya?” as they say in SC.  Doc Inga was from Russia, here on a J-1 visa as an “Exchange Visitor.” Doc Inga was resident alien because substantially present the magic number of days, and the payout from MUSC was of course effectively connected.

But does Article 18 of Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, Russ.-U.S. (“Treaty”), June 17, 1992, T.I.A.S. No. 93-1216 bail out post-Doc Inga from US income tax?

Since post-Doc Inga case is located in SC, whom else but Judge David Gustafson, son of the Palmetto State, to pronounce the result.

Sorry, post-Doc Inga.

Judge Gustafson begins with the flush language of Article 18: only “payments made ‘with respect to the grant, allowance, or other similar payments’ are exempt from US tax. While post-Doc Inga got paid for her lab stints out of research grants, so were the people who cleaned the floors. But that post-Doc Inga was designated as an “employee” in the bushelbasket of MUSC papers doesn’t make her an employee.

What does is that she got a quid pro quo. True, she got valuable training and mentoring. But she also did work that provided a real benefit to MUSC, which retained whatever results post-Doc Inga got.

“MUSC received the benefit of Dr. Kramarenko’s full-time skilled labor working on specific research projects as a condition of Dr. Kramarenko receiving ordinary compensation in the form of a salary (with regular increases) and various other benefits incidental to employment. In other words MUSC required a substantial quid pro quo from Dr. Kramarenko in the form of her services.” T. C. Memo. 2025-61, at p. 19.

As for good faith to avoid penalties, post-Doc Inga fails that course.

“On the sole basis of her reading of the Treaty and on her conversations with colleagues, and without the advice of a tax professional, Dr. Kramarenko filed income tax returns for years… showing zero taxable income, on the ground that (she concluded) her entire salary from MUSC was excluded from taxation under the Treaty—contrary to the position reflected on the Forms W–2 that MUSC issued to her every year.

“In addition to erroneously omitting her salary income, Dr. Kramarenko made several misrepresentations on her [years at issue] income tax returns, including using a filing status of ‘single nonresident alien’ when she was in fact a married resident alien. Dr. Kramarenko also misrepresented on Forms 8840 attached to her income tax returns that her tax home was Russia and that she had a closer connection to Russia than to the United States, even though at the time she was preparing those returns she had lived with her American husband in their marital home in South Carolina….” T. C. Memo. 2025-61, at pp. 20-21.

It’s more than seven (count ’em, seven) years since Judge Holmes’ concurrence in Graev forecast exactly what did happen; see my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17. Almost every big-ticket SND chop petitioned features IRS’ summary J motion establishing that Section 6751(b) got the “in the breach than in th’ observance” treatment.

And since 11 Cir has said “any time before supe loses charge of RA,” every supe seeing a penalty approval lead sheet gets the e-stamp ready for the moment the senior counsel at OCC signs off. But it’s the RA and his/her supe who are the determinator and the immediate supervisor.

Judge Albert G. (“Scholar Al”) is down with that in Ivey Branch Holdings, LLC, Ivey Branch Investors, LLC, Tax Matters Partner, T. C. Memo. 2025-63, filed 6/9/25. He twice brushes off the objections from Vivian D. (“Golden”) Hoard, Esq., and her team as “frivolous,” T. C. 2025-63, at pp. 6 and 8, respectively.

If the supe cleaned up the RA’s recommendations, it was still he (RA) and not she who made the initial determination. If the supe asked the TEFRA Coordinator for advice, the supe was still the supe. OCC senior counsel just fly-specked the already determined documents for form.

“In his capacity as the reviewing Chief Counsel attorney, Mr. F had no familiarity with the substance of the Ivey Branch examination. His advice, like Ms. [TEFRA Coordinator]’s, was purely technical in nature, designed to ensure that the FPAA package met all formal requirements.” T. C. Memo. 2025-63, at p. 7. (Names omitted).

And Ms. Hoard gets no discovery. “The record conclusively establishes that RA N made the ‘initial determination’ to assert the penalties in question and obtained timely supervisory approval from Ms. C. We have repeatedly held that a manager’s signature on a penalty approval form, without more, is sufficient to satisfy the statutory requirements.” T. C. Memo. 2025-63, at p. 9. (Names omitted).

So Section 6751(b) is reduced to a ritual rubberstamp, which does nothing to further its ostensible purpose of requiring a coolheaded second look before dropping chops to bludgeon settlements out of taxpayers.

And the silt-stir blunges on.

See also Bear Creek LKB Holdings, LLC, Bear Creek Investors II, LLC, Tax Matters Partner, Docket No. 16378-21, filed 6/9/25. Judge Christian N. (“Speedy”) Weiler gives even shorter shrift to the Bear Creekers.

I think we have an old copy of the Guinness Book of Records somewhere. I haven’t looked at it in years, but I doubt it has an entry for most filed supplements to an amended motion in US Tax Court. Howbeit, the trusty attorney for Jaak S. Vandensype & Eni Z. Vandensype, Deceased, Docket No. 15462-24L, filed 6/6/25, whom I’ll call Dee, is surely getting up there.

Dee is building, or rather, rebuilding, the administrative record, and Judge Cathy Fung is keeping the record straight.

“ORDERED that petitioners’ Fourth Amended First Amended Motion to Complete or Supplement the Administrative Record (Doc. No. 55), filed June 2, 2025, is recharacterized as petitioners’ Fourth Amendment to First Amended Motion to Complete or Supplement the Administrative Record. It is further

“ORDERED that petitioners’ Fifth Amended First Amended Motion to Complete or Supplement the Administrative Record (Doc. No. 56), filed June 2, 2025, is recharacterized as petitioners’ Fifth Amendment to First Amended Motion to Complete or Supplement the Administrative Record.” Order, at p. 1.

If any of my longtime readers knows of more than these, please dish.

I scan the Tax Court website every working day for something new. I’m sure my readers join me in the Acts 17:21 routine.

Today I must disappoint. I found three (count ’em, three) T. C. Memo.s, with nothing but protester jive.

The closest approach to novelty was Albert Mark Fonda, T. C. Memo. 2025-60, filed 6/5/25. Albert Mark claims he isn’t him, T. C. Memo. 2025-60, at p. 3, despite admitting having been born in NYC and living in TX. The rest is the usual Subtitle A – Subtitle C mishmash. Judge Albert G. (“Scholar Al”) Lauber needs little scholarship to invoke Crain and Wnuck. And because “(P)etitioner’s litigating strategy has required the Court to issue at least 25 pretrial Orders and conduct a lengthy discovery hearing,” T. C. Memo. 2025-60, at p. 4, Scholar Al gives Albert Mark a $7500 Section 6673 frivolity chop at no extra charge.

 Judge Rose E. (“Cracklin'”) Jenkins draws a simple wages-aren’t-taxable in Christopher L. Huber and Ashley M. Huber, T. C. Memo. 2025-59, filed 6/5/25. It’s Ashley’s wages. She conflates Section 6702 frivolous returns (not subject to deficiency procedures) with Section 6213 deficiencies; see T. C. Memo. 2025-59, at p. 7. In any case, Ashley loses, and gets the Section 6673 yellow card at no extra charge.

But Kent Trembly, T. C. Memo. 2025-58, filed 6/5/25, gives Judge “Cracklin'” Jenkins a look at Kent’s third appearance on this my blog. The previous appearances related to IRS tactics of which I disapproved, but now Appeals has cleaned up its act when AO 1 thought a restitution-based assessment was the subject of a deficiency, when it was really Section 6663 fraud chops after Kent pled to Section 7206 filing false returns in USDCDNE.

“…(A)cknowledging that this Court may find his arguments frivolous, he advances arguments about the IRS not being an agency of the U.S. government. He also states: ‘After we received [the First AO’s Initial NOD] . . . [the First AO] NEVER answered his phone and I left him one or two voice mail messages. I believe he steadfastly refused to answer my calls . . . .'” T. C. Memo. 2025-58, at p. 6.

Kent follows this with repeated stalling at the supplemental hearing, claiming he needs time to find a tax lawyer.

As to the unresponsiveness of AO 1 “(T)he First AO did not abuse his discretion by not speaking to petitioner after the case was closed and the Initial NOD was issued, particularly given that petitioner did not provide the financial information that the First AO requested. The Court has found that when Appeals provides a taxpayer a reasonable deadline to provide information, the taxpayer is expected to meet that deadline, and it is not an abuse of discretion for Appeals to reject collection alternatives and sustain the proposed collection action if the taxpayer fails to meet that deadline.” T. C. Memo. 2025-58, at p. 15.

For the frivolous arguments checklist, see p. 16.

Four (count ’em, four) T. C. Memo.s today, but two are consolidateds (mother and son used car dealers). Not a lot new here, so I’ll be brief.

Hani G. Ataya, T. C. Memo. 2025-55, filed 6/4/25, is consolidated with Mom Inaam Ataya; Mom was a real estate broker “and holds a bachelor’s degree in information systems. She previously worked for California’s Employment Development Department, which oversees collection of payroll taxes in the state.” T. C. Memo. 2025-55, at pp. 2-3. Hani never finished college, but had years of running used car businesses, buying at auction and reselling. Mom and Hani ran the C Corp used car operation. After stiping out the unreported dividends and unjustified deductions, the issue is good faith reliance on experts to defeat the 6662(a) and (b)(1) accuracy and negligence chops.

Judge Kashi (“My or the High”) Way isn’t buying the Atayas’ tale of CA seizing whatever part of their records they hadn’t lost, which seizure took place when the Atayas shut down the C Corp. “First, the deficiencies in these cases have been settled under Rule 91(e). Petitioners cannot now, after trial, circumvent the conclusive admissions in their jointly filed Stipulation of Settled Issues. Additionally, petitioners have not had entered into evidence or otherwise adequately shown that their corporate records were seized by California. While the Court accepts the stipulation that the bulk of [C Corp]’s records have been lost, the Court cannot find that California has interfered with their ability to litigate these cases.” T. C. Memo. 2025-55, at p. 8. (Citation omitted). Besides, Hani was an experienced businessman and Mom had been exposed to taxes. There’s no evidence of the qualifications of the attorney and bookkeepers they used or upon what advice they relied.

Judge Travis A. (“Tag”) Greaves doesn’t show the Section 6673 yellow card several times without consequences. Michael Austin French and Dawn Michelle French, T. C. Memo. 2025-57, filed 6/4/25, repeatedly asserted frivolous arguments both in pretrial proceedings and at trial, despite warnings from IRS counsel and Judge Tag Greaves.

“Given the public policy interest in deterring abuse and waste of judicial resources, the Court is given considerable latitude in determining whether to impose a penalty under section 6673 and in what amount. As we have found, petitioners’ arguments are frivolous and have been consistently rejected by courts. Throughout the pretrial proceedings, petitioners repeatedly asserted these arguments in various filings, motions, and hearings despite warnings that they risked a section 6673 penalty. This Court specifically warned petitioners of the possible imposition of a section 6673 penalty at the motion hearing… and at the start of the … trial session. Respondent also put petitioners on notice and cautioned them that their behavior could warrant a penalty imposed by this Court. Nevertheless, they repeated the same frivolous arguments and continued to advance them at trial, wasting the Court’s and respondent’s time and other resources. As a result, we will require petitioners to pay a section 6673 penalty of $1,000. We warn petitioners that they risk a much more severe penalty if they advance frivolous positions in any future appearance before this Court.” T. C. Memo. 2025-57, at pp. 6-7. (Citations omitted).

The one story which evokes some sympathy is Joanne A. Horsham, T. C. Memo. 2025-56, filed 6/4/25. Joanne gets two different stories from IRS about the NFTLs she got for the three (count ’em, three) years’ worth of reported but unpaid taxes. The SO at Appeals told her that, although her IA was accepted, NFTLs would be filed for all years; Joanne says she doesn’t remember that. Especially since another IRS employee (at a call center; how she got through must be quite a tale) told her that since her unpaid balance was then below $50K, there would be no liens, although the liens had already been filed. The explanation may be found in a footnote from Judge Albert G. (“Scholar Al”) Lauber: “In her Response to the [IRS summary J] Motion petitioner urges that ‘the left hand of the IRS did not know what the right hand was doing.’ The communication problem may have arisen because the Form 668(Y)(c) was prepared on… the same day that petitioner submitted her IA. The SO noted in her case activity record that the call site employee with whom petitioner spoke “could not see [the NFTL request] at that time” because that employee “does not have access to the system that the offer examiner works on.”” T. C. Memo. 2025-56, at p. 7, footnote 3.

Anyway, if Joanne keeps paying on the IA, she’ll be down below $25K by year-end, so the liens may go away even if she can’t prove how they hurt her.

Local radioheads and sports fans in and around this Minor Outlying Island off the Coast of North America will hardly need me to remind them of that signature halloo, which echoed around these parts for nigh on twenty years.

But Marc Lore and Carolyn Lore, Docket No. 8259-23, filed 6/3/25, reject that call and raise a squawk when IRS tries to introduce a videotape from CNBC’s Wall Street morning report thus entitled. Marc and Doug McMillon did an interview thereon, wherein they discussed the transaction at issue. IRS wants to show Marc’s and Doug’s state-of-mind.

Marc’s trusty attorneys yell hearsay. Judge Courtney D. (“CD”) Jones clears the objections shortly.

Admission against interest, FRE 801(d)(2). Anything you say will be taken down and used…but you know the rest. When the mike is thrust before you, the urge to gab is your worst enemy.

The tape was edited, hence inaccurate. Rule of completeness: “… although the rule of completeness allows the opposing party to introduce the remainder of a document or video without additional foundation, the rule does not prohibit the admission of incomplete documents. Thus, even if the video footage is edited, the rule of completeness is inapplicable at this stage of the proceedings and would not prohibit introduction of an edited video clip.” Order, at p. 2. (Citations omitted). In short, IRS can put in the edited tape, and Marc can put in the whole one.

Finally, the tape will show Doug McMillon’s state of mind, not the truth of what he or Marc said. FRE 803(3) lets proponent show intent, plan or motive.

As Doug McMillon (a/k/a Doug McBillion) is President and CEO of Walmart, this must be quite a deal. Seems the deficiencies for the two years at issue come to $15,656,849 and $6,946,309 respectively. Plus chops, of course.