No ticket to Tax Court is formed by the conjunction of Notice CP220J and Letter 227-N. It’s surely excusable if you’re unfamiliar with these adjuncts of the much-contemned Patient Protection and Affordable Care Act. They’re IRS’ shots-across-the-bows per Section 4980H(d)(1), which provides for collection of the Employer Shared Responsibility Payment Penalty.

Check out the statute and see if you understand it. Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan says it means this penalty is assessable, that is, IRS can assess it (mark it on IRS’ books) off the bat; it doesn’t require a SNOD, just notice and demand.

Assistive Choices, Inc., Docket No. 14347-23, filed 7/2/24, asserts otherwise.

“… petitioner agrees that no notice of deficiency was issued to petitioner…. Instead, petitioner contends that respondent was required to issue a notice of deficiency to petitioner prior to assessing the ‘Employer Shared Responsibility Payment Penalty’. Petitioner maintains that, since the ‘Employer Shared Responsibility Payment Penalty’ is found in Chapter 43 of the Internal Revenue Code, section 6212(b)(1) requires a statutory notice of deficiency be issued prior to assessment.” Order, at p. 1. (Footnote omitted).

But once again, “as-if” comes into play. Section 4980H(d)(1) says “‘[a]ny assessable payment provided by this section shall be paid upon notice and demand by the Secretary and shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68′.” Order, at p. 2.

No SNOD needed, and no assistance for Assistive Choices, but a Taishoff “Good Try, Third Class,” to the Assistives’ trusty attorney, whom I’ll call Jay.

Jon K. Palsgaard and Kimberly A. Kelly, T. C. Sum. Op. 2024-11, filed 7/1/24, exhibit a never-say-die attitude, despite not being represented by their trusty attorney from the before-time, MTW.

For their previous foray six (count ’em, six) years ago, where MTW ran the Section 86 checklist straight into the brick wall erected by Judge Albert G. (“Scholar Al”) Lauber, see my blogpost “Secure and Taxable,” 6/14/18.

It’s the same story for a different year, but Jon and Kim (that’s Doc Kim, M.D., disabled) try again.

STJ Zachary S. (“Highrise”) Fried shows the becoming modesty that is the hallmark of the Special Trial judiciary.

“But for the years and amounts involved in the prior proceedings, the evidence parallels the evidence in this case. We could repeat the reasoning of the prior opinions here, but it is unlikely that we could improve upon it.” T. C. Sum. Op. 2024-11, at p. 4.

No, not a theatre review of the 1961 Michael Shurtleff groundbreaker that joined Alvin Ailey and Robert Duvall. This is the tale of “James Lindor,” Docket No. 217-23, filed 7/1/24. I use inverted commas, because, as CSTJ Lewis (“That Is His Rightful Name”) Carluzzo points out, “‘James Lindor’ is not petitioner’s name.” Order, at p. 4.

CSTJ Lew deals here with a flurry of motions, “James Lindor” goes 0 for 6, but does get couple byes (hi, Judge Holmes). IRS did fail to redact some PII, but covered up before any Nosy Parker tipped the Copycats for a sneak peek, so no sanctions. Order, at pp. 1-2.

And while “James Lindor” did get a Section 7345 certification for a passport grab, IRS’ motion to toss that part of his petition thereof for failure to state a claim didn’t mention any attempt to get a more definite statement.

“Although the petition is not as precise as we would like, and although we tend to agree with much of respondent’s motion, we consider dismissal at this point in the proceedings to be inappropriate given petitioner’s status as a self-represented litigant. Respondent has missed the opportunity to move for more specificity in the petition before answering the case. See Rules 36(a) and 51. At this point, informal and/or formal discovery can be used to focus on the exact nature of petitioner’s challenge to the certification process. Once identified, the matter can properly be prepared for trial, resolved by summary adjudication, or resolved upon agreement of the parties.” Order, at p. 3.

And as for the pseudonym, that doesn’t cut it in Tax Court.

“The Tax Court Rules of Practice and Procedure do not allow for the use of pseudonyms in the captions of cases commenced in this Court. See Rule 23(a). If petitioner’s use of the pseudonym is intended to allow him to proceed anonymously, then he must make an appropriate motion to do so. Within 30 days from date of service of this Order, unless petitioner submits (1) a motion to proceed anonymously, supported by sufficient grounds for such relief, or (2) a motion to voluntarily dismiss the case, the Court will amend the caption of this case to show petitioner’s proper name.” Order, at p. 4.

Though he didn’t ask me, I’d tell “James Lindor” that he’d better have some awful good reasons to seek anonymity (like tangible threats to life, health, and livelihood). Anything short gets short shrift. “Public’s right to know,” y’know. Section 7461 and all that.

I don’t report IRS bulletins or, as a rule, decisions of courts other than Tax Court. The trade press and blogosphere get there first, with resources I don’t have.

But the latest IRS E-news for Tax Professionals has two (count ’em, two) items that foretell whence two sources of blogfodder might spring.

First, IRS announced that anyone filing an amended return to claim a refund for taxes paid under Section 280E (the potters’ field), because certain herbal medicaments are State-legal, will get a swift right-about-face from IRS. More refund cases in Tax Court?

Second, IRS is sending settlement proposals to some of those enmeshed in syndicated conservation easement deals and like dodges. Except those with filed petitions, and those not selected by IRS to come and join the dance, cannot participate. I don’t know if the letters go only to TMPs or representatives (who presumably can bring the rest of their crew with them or not), or whether individual partner-levels can settle out. But the IRS Notice IR-2024-174, June 26, 2024, does the Acts 9:1 number on the non-settlers.

Warms my jagged old heart…more blogposts to come.

The Genius Baristas are cranking it up, as Judge Ronald L. (“Ingenuity”) Buch heads up a lineup straight from the DAWSON’s mouth. The new DAWSON petition generator is front-and-center, with the DAWSON owner hisself to tell you all about this latest self-representeds’ friend.

Looking for a test drive? Click here: https://ustaxcourt.gov/resources/outreach/Petition_Generator_Webinar_June_2024.pdf

IRS’ batteries haven’t ceased fire on Albero Holdings, LLC, Albero Investors, LLC, Tax Matters Partner, Docket No. 16284-21, filed 6/27/24. As we saw just two (count ’em, two) weeks ago, IRS’ bombardment has reached Albero’s rear areas (see my blogpost “A New Weapon From Washington?” 6/13/27).

The latest burst lands among two of the regulars in support, Messrs. VS and W, appraisers, who have appeared in several Dixieland Boondockery battles. It’s the usual: show up with documents, and dish. And the usual response: motion to quash, and to seal said motion.

Judge Elizabeth Crewson Paris does. And IRS to respond next month.

What were originally probing attacks have mutated into set-piece battles. Sixteen (count ’em, sixteen) lawyers for petitioner and IRS combined, plus (who else?) the Jersey Boys for Messrs. VS and W.

La partie continue.

Doc Gale was an optometrist, whose practice, between slow-pay insurance reimbursements and internet competition, was going south. He did pay employees first, rent second, and himself third. We all did that when we owned businesses. And, like us, Doc Gale definitely paid FICA/FUTA/ITW ahead of everyone else.

But he wrote checks to himself and Mrs. Doc Gale for the wages they would have gotten, based on the withholdings, except he didn’t sign some of the checks or cash any, signed or unsigned. And his business, which was a C Corp, deducted the amount of the unsigned and uncashed checks.

IRS allowed the C Corp’s deduction, hitting Doc Gale for those amounts as unreported income. Except Doc Gale never got the money.

This is a natural case for Judge Mark V. Holmes. And he deals with it in an off-the-bencher, Gale Stead, Docket No. 15925-21, filed 6/26/24.

The statutes are ambiguous, and the caselaw mostly involves solvent C Corps and their owners. While Doc Gale’s operation isn’t shown to be insolvent, cashing those checks might just put it there.

Judge Holmes takes a novel tack. Unfortunately, once again the Genius Baristas have made it impossible for me to cut-and-paste the language.

In short, there is no obligation from the C Corp to Doc Gale, no employment contract, declared dividend, or self-rental. But what would happen if a receiver, or bankruptcy trustee, or lien creditor succeeded to Doc Gale’s rights? Could they just sign and cash the checks for any amount? No, but they could cash the signed checks.

So Doc Gale has income to the extent of FICA/FUTA/ITW which the C Corp paid for him, and for any checks signed but uncashed. Unsigned, uncashed checks, no, not income.

Rule 155 to sort this all out.

Taishoff says this is the right emotional result. Fortunately, IRS can’t appeal, because if the C Corp was solvent when the unsigned checks were drawn, IRS could argue there was income and an immediate, nondeductible capital contribution. And I bet IRS would so argue in a similar case that is not a small-claimer.

Whatever sins, or discipline, it may have brought in its trail, Boechler, P. C. brought a great field of somber reasoning and copious citation of precedent in search of jurisdictional-vs-claim-processing statutory limitations. Judge Travis A. (“Tag”) Greaves is tasked with sorting out for Tax Court bench whether the 90-day cutoff for Section 7436 worker reclassification (EE vs IC) is or isn’t jurisdictional.

Boechler and its predecessors squelched off-the-cuff “drive-by” jurisdictional rulings. Hence the footnote in SECC cuts no ice; see my blogpost “Classified,” 4/3/14 for that one.

Judge Tag Greaves finds Section 7436(b)(2) goes to the rights of the parties, not the right of the court to decide. Thus the belated filer (it’s the usual day-late, dollar-short here, with a non-blessed PDS delivering a day late) is out unless the court finds some way to let them in.

Section 7436(a) bestows jurisdiction without mentioning the 90-day cutoff, and there’s no cross-referencing between (a) and (b).

For law review writers (and I need hardly remind my readers that I never was one), Judge Tag Greaves sorts through how the Supremes have divined what Congress meant, from noscitur in sociis (no) to prior construction (Congress using same magic language from prior statutes found to be jurisdictional in a subsequent amendment to the statute). Of course, since Section 7436 never made it to the Supremes, and hasn’t had a lot of icetime in Tax Court either, there’s not a lot to go on. 8 Cir did, but it was a drive-by. See my blogpost “Drill and Classify – Up In the Air,” 1/13/15. Judge Tag Greaves blows it off.

There’s preliminary argy-bargy about the USPS Form 3877, Firm Mailing Book For Accountable Mail, which is missing a USPS stamp, but Judge Tag Greaves buys the book because the two entries on either side of the disputed entry are properly stamped.

So Tax Court has jurisdiction.

Taishoff says, while this jurisdictional tohubohu makes great blogfodder (and long may it flourish), people’s rights and obligations and how to secure the “just, speedy, and inexpensive determination” thereof should depend on more than haruspicy. If Congress means to stamp out equitable tolling in Tax Court, let them say so. If only for Section 6213 deficiency cases, they should say so.

Btw, the case is Belagio Fine Jewelry, Inc., 162 T. C. 11, filed 6/25/24. And Judge Tag Greaves, while finding no jurisdictional bar here, expressly leaves equitable tolling for another day.

A new form of relief has made its debut on the Tax Court scene. Judge Mark V. Holmes has granted Com’r Danny Werfel leave to “amend his hearing” even though no hearing was scheduled.

See Vallory A. Rosenbledt, Docket No. 16851-21, filed 6/25/24, Order, at p. 2. Exactly how this is to be done is nowhere stated.

What drew me to mention this novelty was an additional, more intentional novelty, a “new form of alleged tax shelter” (Order, at p. 1).

I wish Judge Holmes had been more explicit, even if he threw in a few disregarded possessive genitives at no extra charge. How I yearn for, long for, anything but more phony partnerships, Dixieland Boondockery, enhanced research credits, juiced-up art appraisals, closely-held stock put-and-takes, DADs, sons-of-BOSS and other mix-and-match Bialystoks.

But alas! Judge Holmes wants to know if expert witnesses will be involved. See Order, at p. 1. I do hope not!

A new breed of dodge, hopefully without dueling appraisers, would be as welcome as the Deuteronomy 32:2 treatment.

Dixieland Boondockery churns up silt by the cubic meter. And Tax Court furnishes the cauldron. Here’s Desoto Holdings LLC, Desoto Investors LLC, Tax Matters Partner, Docket No. 13013-20, filed 6/24/24. Of course, chops rain down like an everflowing stream. Judge Elizabeth Crewson Paris has the laundry list.

“… accuracy-related penalties for gross valuation misstatement under section 6662(a) and (h) and, in the alternative, substantial valuation misstatement under section 6662(a), (b)(3), and (e), reportable transaction understatement under section 6662A, substantial understatement of income tax under section 6662(a), (b)(2), and (d), and negligence or disregard of rules or regulations under section 6662(a), (b)(1), and (c).” Order, at p.1.

Of course, it’s a motion for summary J, and with a $25 million claimed deduction on tap, the Destos’ trusty attorneys leave no stone unturned. Who spoke to whom, who supervised whom, who decided what (if anything), who communicated, all is dragged out. Of course, 11 Cir learning gets a good workout; as long as the supe signed while still in charge of RA, whenever before assessment, game over.

Judge Paris reviews the quibbles even though she says she doesn’t have to. And if she doesn’t have to, I certainly don’t.

I said it seven (count ’em, seven) years ago.

“Section 6751(b) is a statutory one-off, a hapax legomenon as that classicist Judge Lauber and that Master of Tohubohu Judge Holmes put it. It’s intended to keep lower-level RAs and Examination types from bludgeoning settlements out of terrified taxpayers by threatening chops.

“But it doesn’t work. It speaks of ‘assessments,’ but the vast majority of those happen automatically, nay, even electronically. Except where IRC says there must be a pre-assessment notice (primarily SNODs, and not even all of those; remember jeopardy assessments), assessments don’t need any advance warning to the taxpayer. And SNODs get reviewed de novo; the past isn’t even prologue. Mox nix what happened at Examination or anywhere else prepetition. Except now it does.

“Besides, the greatest majority of low-level IRS RAs and Exam types are below the radar when it comes to bludgeoning. There never is a deficiency most times. What Tax Court don’t see, Tax Court can’t fix.”

See my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17.