I’ve often criticized the vagaries of DAWSON’s creek, from. the months-long shutdown that preceded its opening to its teething pains and later glitches. But Sergio Martinez and Arely Tolentino, et al., Docket No. 18467-24, filed 2/17/26, though stymied by DAWSON, reveal the lacking human element.

Ch J Patrick J. (“Scholar pat”) Urda tells the story. Note the dates.

“On August 28, 2024, petitioners filed in paper form an imperfect Petition to commence the case at Docket No. 13995-24. By Order issued August 28, 2024, the Court directed petitioners to file a proper amended petition. After having received no response from petitioners, on November 19, 2024, the Court entered at Docket No. 13995-24 an Order of Dismissal for Lack of Jurisdiction and that case was closed. The Order of Dismissal stated that, if petitioners filed an amended petition within 30 days, the Court would consider vacating the dismissal and reinstating the case.

“On November 25, 2024, without having eAccess to their above-referenced case, it appears petitioner Sergio Martinez attempted to electronically file the amended petition. That action resulted in a separate Petition being filed to commence the case at Docket No. 18467-24.” Order, at p. 1.

Taishoff says notwithstanding Sergio’s electronic miscue, a docket search shows the amended petition filed 11/25/24 as stated.

IRS moves to toss that stealth amended petition 1/7/26. 

The same docket search shows that a year went by with a SPTO, a change of address for one of IRS’ counsel, an EoA (no counsel stated for Sergio; must be IRS counsel), and a Notice of Trial for venue Sergio requested.

IRS apparently assigned three (count ’em, three) attorneys to this case.

No crosschecking. No followup.

Ch J Scholar Pat has to straighten this out.

No comment.

Sources inform me that “Presidents’ Day” is a popular misnomer for the Federal holiday created by statute in 1879. The statute designated the day as set forth hereinabove at the head hereof (as my already-on-the beach-in-an-undisclosed-location colleagues would say, between sips of their piña coladas).

So, whether as purist you call Monday, 2/16/26 Washington’s Birthday, or as a populist name it Presidents’ Day, Tax Court is closed.

I am silent.

I’ve been chronicling Tax Court’s fighting retreat from Boechler in deficiency cases, sticking to Sanders and Hallmark Rsch. Collective even as 2 Cir. crumbles to Buller, 3 Cir caves first with Culp, and 6 Cir collapses with Oquendo. Of course, the Supremes gave cert. den. to Culp, so anyone lifting their eyes to those hills will find that from thence cometh no salvation.

Now Ch J Patrick J. (“Scholar Pat”) Urda, with the determination of the famed Australian militiamen defending the Kokoda Track, scheduling all those defeats yet stoutly refusing to retreat an inch, sends off Francene Elizabeth Stewart, Docket No. 15421-25, filed 2/13/25, for being a day late and more than a dollar short. Her petition was due by 6:00 EST, 11/10/25, but wasn’t efiled until 9:30 p.m. EST, 11/11/25.

“In her Objection to Motion to Dismiss for Lack of Jurisdiction… petitioner argues that “the delay in filing was caused by extraordinary circumstances during a federal government shutdown, which created confusion regarding filing obligations,’ and that the principles of the Court’s opinion in Guralnik v. Commissioner, 146 T.C. 230 (2016), should apply in this case. We disagree. As petitioner herself concedes in her Objection, the Clerk’s Office remained open for eFiling and paper filing during the federal government shutdown that occurred from October 1, 2025, through November 12, 2025. And the Court’s records show that our electronic filing and case management system, DAWSON (Docket Access Within a Secure Online Network)—which petitioner used to file the Petition in this case—was operational at all relevant times. Because the Clerk’s Office was accessible throughout the federal government shutdown, Guralnik has no application here.” Order, at p. 2.

For the story of Felix Guralnik, see my blogpost “Neither Equity Nor Designation,” 6/2/16. Note Guralnik was a pre-Boechler CDP NOD case, which Boechler would clearly have saved. 

Since Francene is Golsenized to 11 Cir, Ch J Scholar Pat points to Pugsley to support the jurisdictional bar in Section 6213(a), but Taishoff says see my blogpost “‘Justified’? – I’ll Say!” 12/5/25. The reference in Pugsley to Section 6213(a) was a throwaway, without any discussion of claims-processing-vs-jurisdiction, decided years before Boechler. While the last thing I ever want to do is stir up litigation, someone should take a trip to 11 Cir from a Tax Court deficiency jurisdictional shoot-down (with sympathetic facts, of course) and see what 11 Cir does with Pugsley now.

Anyway, fairness and equity are off the table. If you’re on the wrong side of a State line.

“Petitioner also argues that ‘equity and fairness warrant treating the petition as timely filed.’ To the extent this is an argument that the filing deadline set forth in section 6213(a) for deficiency cases is nonjurisdictional and subject to equitable tolling, we also disagree.” Order, at p. 2.

Beveled Edge Insurance Company, Inc., et al., Docket No. 19821-16, filed 2/12/26, is lead petitioner in 14 (count ’em, 14) microcaptive deficiency cases. The owners of this corporate squadron want summary J that the micros, organized under the laws of KY, are separate entities for tax purposes. They cite Moline Props., 319 U.S. 436 (1943).

OK, says Judge James S. (“Big Jim”) Halpern, but that’s only half the question here. Corporations are separate entities when they satisfy the statutory minimum requirements to become an insurance company under its State of incorporation. That that is especially so when the corporation is not a wholly-owned subsidiary of the insured.

“… respondent does not dispute that [the Corps] were validly formed under Kentucky law. Respondent objects to the Motion on the grounds that there remain genuine disputes as to whether the three corporations satisfy the conditions for—and avoid the exceptions from—application of the general rule of Moline Properties (that separate entities will be respected for tax purposes). Respondent points out that petitioners exclusive list of material facts fails to address the business purposes or continuing business activities of the three corporations, nor does it aver facts to conclude that the corporate forms should not be disregarded because sham or unreal. See Moline Properties, 319 U.S. at 438-39.

“Respondent is correct. Petitioners have failed to address facts that are material if we are to rule that the [each of the Corps]’ respective status as separate state-law entities is to be disregarded for federal tax purposes. For that reason, we will deny the Motion.” Order, at p.6. (Footnote omitted).

Here’s the missing footnote: “In passing, we observe that we do not see the purpose of respondent’s objection that [two of the Corps] be considered separate entities for federal tax purposes. Respondent has determined deficiencies in each’s income tax for [year at issue], which determinations would seem in jeopardy if the entity status of the corporations were disregarded for federal tax purposes.” Order, at p. 6, footnote 5.

A corporation can be separate and have a separate deficiency, but if it is a sham the deficiency will rebound on the owners.

The old cliché of the shoemaker’s children going shoeless should be retired on account of age. But when a tax preparer gets chopped for fraud like Jack Goodwill-Oikerhe, T. C. Memo. 2026-18, filed 2/11/26, maybe it’s the clients who are the real targets.

Judge Nega’s 37 (count ’em, 37) pages of prose tell the story, so I won’t cut-and-paste or paraphrase, except for his peroration. 

“Petitioner is a well-educated businessman and an experienced tax return preparer, and yet he significantly overstated the deductions to which he was entitled on his and [Sub S]’s returns for each of the years in issue. During the examination, he required RA C to summon his bank records, failed to provide promised documents and meetings, and ultimately provided RA C with only minimal documentation to support the claimed deductions. And during trial petitioner provided the Court with no documentation or other corroborating evidence at all with respect to his testimony.

“Petitioner also made implausible and inconsistent statements throughout the course of the examination and trial, as repeatedly demonstrated throughout our analysis of the disputed deductions…, including statements surrounding his employee business expenses that were refuted. And we have found incredible his assertions that whatever books and records he did maintain were destroyed in a flood or absconded with by RA C.” T. C. Memo. 2026-18, at p. 36. (Name and citations omitted).

I wonder how many of the 700 returns that Jack prepared for his cash-paying customers, and how many thereof he signed as preparer, over a three-year span (see T. C. Memo. 2026-18, at p. 5) were of the same quality as the returns he prepared for himself and his Sub S. IRS might want to get a list from Jack, and audit a few those returns (hi, Judge Holmes).

I cannot think many, if any, of my readers are hanging breathless on the outcome of the trial in Lola Marie Hussey, Docket No. 5981-24L, filed 2/11/26. Few, again if any, will remember STJ Lewis (“Whatever Shall I Do When He Retires?”) Carluzzo’s rejection of IRS’ summary J motion for confirmation of Appeals’ NOD, so, if you care, check out my blogpost “Milk Run,” 11/26/25 for the scanty backstory.

STJ Lew has two (count ’em, two) questions to resolve, even though Lola Marie thoroughly defaulted (no briefs, no appearance). Was what Lola Marie filed a “return” within the meaning of Section 6702? And was the issuance of the NOD ustaining the collection process an abuse of discretion? Yes and no.

Yes, it was a return, but it was an “all-seros.” She also claims Section 6702 is unconstitutional, but provides no argument in support.

Yes, the chops were Boss Hossed, and Lola Marie’s insistence at the CDP that only liability should be considered is a nonstarter. Anyway, “(B)ecause petitioner refused to have such issues considered at the administrative hearing, we will not consider her challenge to the process here. But if we did, we would find that respondent’s evidence shows that in all respects respondent proceeded as required by section 6320 and section 6330.” Transcript, at p. 8.

This blogpost appears as a matter of record. I can find better subjects for this blog; I don’t want to be accused of milking the milk run.

Juliet R. El, T. C. Memo. 2026-17, filed 2/10/26, got her year-at-issue 1040 right, thanks to her trusty electronic preparer. She claimed an Additional Child Tax Credit of $4K, to which she was indisputably entitled. Whereupon IRS’  creaky hardware gave her a $15K refund because it transposed her earnings as reported on her Schedule 8812 to the credit due line. IRS woke up before the SOL and gave Juliet a $15K deficiency.

Juliet’s trusty attorney claims this is a nonrefundable rebate because IRS didn’t recalculate Juliet’s tax due, hence Section 6212 is out and IRS must sue in USDC per Section 7405. IRS says yes we did recalculate.

Judge Nega says that’s not the issue.

“Respondent and petitioner both make a fundamental error in analyzing whether a ‘substantive recalculation’ occurred in this case. Both incorrectly direct their attention to whether the error (substituting $17,164 for the ACTC) was a ‘substantive recalculation’ instead of whether the error led to a substantive recalculation of petitioner’s tax imposed. Petitioner argues that a simple substitution error does not involve calculation at all and cannot be a ‘substantive recalculation.’ Respondent defends his mistake as a recalculation without offering any explanation more plausible than its being a mistaken transposition of numbers on the return (the $17,164 being listed elsewhere by petitioner as her earned income).

“Without reaching the question of whether a transposition or substitution error is a ‘substantive recalculation,’ the record amply supports the position that respondent substantively recalculated petitioner’s overall tax imposed. And this is the only correct place to direct the analysis: whether the taxpayer’s tax imposed was recalculated.  A refund is a rebate refund if it is based on a ‘substantive recalculation’ of the tax imposed that shows the taxpayer owes less tax than the amount shown on the taxpayer’s return. In this case, the refund is a rebate refund because the rebate was based on a substantive recalculation of petitioner’s tax imposed.” T. C. Memo. 2026-17, at p. 7. (Citations and footnote omitted).

The issue isn’t how the mistake occurred, it’s what impact the error had on tax due. Now Juliet admittedly owed nothing on her return. But Section 6211(b)(4) was amended in 1988 to deal with refundable credits when tax due was zero, so taxpayers could challenge erroneous disallowances in Tax Court. Hence this is a deficiency case, and Juliet owes the incorrect overpayment.

If this sounds familiar, see my blogpost “The Rebate Debate – Innocent Spousery,” 7/17/24.

It never fails. Just as I’m leaving the party, the host brings out the good stuff. I’m at the elevator door, or down the stairs, or standing in the street, whereupon out comes the tiramisù or profiteroles or the Cuvée Elisabeth Salmon Rosé or the Louis XIII. So it is that the IRS Nationwide Tax Forum announces its return to this Minor Outlying Island off the Coast of North America this August, after I retire. Ya can’t win.

Ingrid Maria Persson, T. C. Sum. Op. 2026-2, filed 2/9/26, furnishes another example of the traps laid in the path of the unwary by the Affordable Care Act, officially the Patient Protection and Affordable Care Act together with amendments made thereto by the Health Care and Education Reconciliation Act of 2010. It’s the usual over-400% of poverty, to which is added Ingrid Maria’s failure to file 1040 MFJ with spouse.

There’s a wrinkle. Ingrid Maria entered into an IA for a math error covering the year at issue, before the SND for the APTC, so not covering it.

“Petitioner acknowledges there were issues with her tax return. Petitioner suggests that the review of the return which disclosed a math error before the installment agreement should have resulted in the correction of all issues in her tax return. She contends that the installment agreement should cover all amounts for the tax years listed on the agreement, including the deficiency stemming from the APTC. Petitioner contends that determination of a deficiency for [year at issue] outside of the installment agreement is a breach of contract. Petitioner also claims she was informed by Ms. F that the installment agreement considered all adjustments for the listed years and was a final agreement.

“Respondent asserts that while the installment agreement included [year at issue], it included only the adjustment related to the math error and did not include the deficiency determined by adjustment to the APTC. Respondent asserts that the deficiency stemming from the APTC was not yet determined when the installment agreement was processed.

“Respondent asserts that an installment agreement allows a taxpayer to satisfy a preexisting liability over time; consequently, it lacks consideration on the part of a taxpayer and, therefore, does not give rise to contract formation.” T. C. Sum. Op. 2, at p. 6. (Citation and name omitted).

STJ Peter “HB”) Panuthos is sympathetic, but IRS didn’t breach the IA per Section 6159.

Whenever I see these ACA cases, I want to jump in with a political comment. But in these times, when feelings run high and AI-generated social media stokes the ring of fire around rational comment, I can only say that I know how Jeremiah felt.

As AI is supposed to make legal research by humans obsolete, we see the Phantom Citation swimming into memos of law like a destructive invasive species. The critter has gotten into Tax Court, as Judge Mark V, (“Vittorio Emanuele”) Holmes judge-‘splains in Peter L. Clinco, Deceased, C. M. Barone-Clinco, Successor in Interest, and C. M. Barone-Clinco, T. C. Memo. 2026-16, filed 2/9/26.

It’s an unreported income and unsubstantiated deductions case, the usual bank deposits reconstruction after discrepancies with 1099s, plus depreciation deductions unsupported with dates placed in service and purchase price (with adjustments to basis). And that IRS didn’t challenge depreciation in subsequent (out) years doesn’t validate them for year at issue.

But the big story is the made-up citations.

“Mr. Wagner, Clinco’s attorney, cites four cases in support. Three appear to be hallucinations generated by a large language model AI.” T. C. Memo. 2026-16, at p. 6.  Judge Holmes says these are unacceptable.

And even after IRS’ counsel blows the whistle on these inventions, Wagner continued to cite them, T.C. Memo. 2026-16, at p. 7.

Judge Holmes lets Wagner off with a warning in a footnote.

“It is not absolutely clear from the record whether Mr. Wagner used generative AI to secure legal precedent for his arguments. A bit of embarrassment for failure to citecheck, failure to ‘fess up, and (if it occurred) use of AI to write a section of the brief is enough for now.” T. C. Memo. 2026-16, at p. 8, footnote 8.

Judge Holmes catalogues these machine-made monstrosities in T. C. Memo. 2026-16, at p.7, footnote 6.

Taishoff says these are a fraud on the Court, and per se professional misconduct.