Judge Ronald L. (“Ingenuity”) Buch furnishes us with a timely order in Jeffrey A. Hartman, Docket No. 3517-25, filed 7/10/26.

Jeffrey has two (count ’em two) cases, but this one has Jeffrey claiming additional gigwork income and deductions not shown in the SND. And he furnished particulars thereof to IRS counsel. 

Whereupon, respondent “filed a Motion for Leave to File Second Amendment to First Amendment to Answer (doc. no. 39, which we will retitle), in which he sought to amend his answer to assert an additional deficiency. Mr. Hartman objects. Because Mr. Hartman will not be prejudiced by the proposed amendment, we will grant the Commissioner’s Motion.” Order, at p.1.

The retitiling is that the Second Amendment to First Amendment becomes the Second Amendment tout court. 

“There is no unfair disadvantage to Mr. Hartman. The Commissioner will bear the burden as to any new matters or increases to the deficiency. And Mr. Hartman already raised and has the burden to establish his expenses.” Order, at p. 2.

Of course, as Jeffrey has already handed IRS particulars of his income unreflected in the SND, IRS gets the Matthew 11:30 treatment.

If you remember either, you have to remember both, and to do that you’d need to be a card-carrying member of Medicare. But in their time, the age of the studio star system, everyone who was anyone in American movies read their columns before anything else. They were the Queens of Gossip, malicious and malign.

Believe me, I have no intention of joining that journalistic genre. So when I pass along overlooked or obscure happenings at The Glasshouse in the City All About Algae, I’m after truly newsworthy items.

So here’s a hot tip: we’re getting closer to a major opinion.

Judge Courtney D. (“CD”) Jones is lining up exhibits and briefings in Marc Lore and Carolyn Lore, Docket No. 8259-23, filed 7/9/26. You remember Marc’s famous Squawkbox moment with Walmart Pres and CEO Doug McMillon (a/k/a Doug McBillion). What, no? Then see my blogpost “Let’s Go to The Videotape,” 6/3/25.

Briefing done by end of November. As I noted back a year ago June, 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.”

Yet another Taishoff prediction comes to pass, but it was too obvious for me to claim any credit. Judge Elizabeth A. (“Tex”) Copeland makes the trial of Craig Walcott, Docket No. 21820-22, filed 7/7/26, into a forty-page off-the-bencher.

As I said in May, “I expect we’ll hear more from Craig.”

He does avoid a Section 6673(a) chop, because, despite his frivolity, he does get a better deal than IRS put in the SNDs, getting all his COGS. and a couple bucks more (hi, Judge Holmes) of deductions. His rental realty sale is a break-even, so even though he doesn’t get the loss he claimed, he doesn’t get the gain IRS asserted.

His attempt to sanction IRS’ counsel would make good blogfodder, except the Genius Baristas have this in such format that I cannot copy-and-paste, so I must refer you to Transcript, at pp. 35-36.

For backstory, see my blogposts “Irrepressible,” 5/11/26, and “Doldrums?” 5/22/26.

The search for perfection is ever afoot in Tax Court. Judge Jeffrey S. (“Schwer”) Arbeit finds that Hough Beck & Baird, Inc., 167 T. C.2, filed 7/7/26, fail the test, even though they properly filed and paid the employment tax at issue. 

IRS accepted the return as filed, but erroneously assessed HB&B’s liability as zero, rather than the tax shown on the return. Then IRS refunded the (correctly owed) payment HB&B made with the return. It’s not like HB&B pocketed the refund and said nothing; when their accountant questioned IRS, he was told it was a COIVID Employee Retention Credit.

Two (count ’em, two) years later, IRS woke up and sent HB&B a letter requesting repayment. HB&B did nothing, so IRS made a Section 6204(a) supplementary assessment and gave HB&B a NITL at no extra charge.

 HB&B’s trusty attorney says IRS should have brought a Section 7405 erroneous refund civil action. Maybe so might could be SOL has run on that.

No, says Judge Schwer Arbeit, the assessment was not perfect, it was “imperfect or incomplete in any material respect,” just like Section 6204(a) says.

Of course, neither statute nor reg defines “imperfect” or “incomplete.” The only Tax Court case involved a Section 6651(a)(1) timely filing add-on that IRS abated but later discovered taxpayer had no reasonable basis for being late. So IRS put it back, and that was OK. See 167 T. C. 2, at p. 6. There are three (count ’em, three) USCCA cases that go IRS’ way, including a 9 Cir case, whence HB&B are Golsenized.

But there is an outlier, on which IRS and HB&B hang hats. There the parties stiped to assessed amount, which taxpayer paid without requesting a refund. IRS double-posted the payment and refunded the “overpayment.” There was nothing wrong with the assessment, the problem was the double-posted payment.

Here, there was one payment, properly posted, and an incorrect assessment. In the outlier, “the Court held that there was a ‘fundamental difference in character’ between the money the taxpayers received as a result of the Commissioner’s double posting error and the money they originally owed. Here however the money petitioner received as a result of respondent’s mistaken assessment is the same money petitioner originally owed. Petitioner’s employment tax liability has not been extinguished and remains outstanding.” 167 T. C. 2, at p. 8.

You’ll need to go to Google or your favorite search engine to find her, but she gives her name (now sometimes rendered as “Cinnamon”) to one who should’a gotten recognition as part of IRS’ winning team back in March. The opinion is Anthony A. Klein and Barbara N. Klein, T. C. Memo. 2026-29, filed back on 3/30/26. but now corrected as at 7/7/26.

I blogged the case as “Blowing Smoke,” 3/30/26, but you needn’t either reread my blogpost, nor read Judge Elizabeth A. (“Tex”) Copeland’s corrected fourteen (count ’em, fourteen) pages.

Judge Tex Copeland has kindly provided a one-page Order of even date herewith that tells the whole story.

The corrected T. C. Memo. “reflects the following revision on page 1: “Brian J. Sullivan and James H. Wonzy, for respondent.” is substituted with the following: “Keziah Dutchak-Leonard, Brian J. Sullivan, and James H. Wonzy, for respondent.” Order, at p. 1.

Sorry to nitpick, Judge, but I think James H.’s handle is “Wozny,” and not “Wonzy.”

Btw, Keziah, Job’s middle daughter, is a symbol of woman’s equality. See Job 42:14-15. She and her sisters get equal shares in Dad’s estate, rare back then.

I requested from Transcripts & Copies a copy of the Response to Order that within seven days petr. submit copies of Badaracco, more particularly bounded and described in my blogpost “AI AI, AI AI,” 6/12/26. Said Response was e-filed 6/18/26, but is not available otherwise than on request and payment of the fee.

I quote from the Preliminary statement (footnote omitted).

“I accept responsibility for the citation errors the Order identifies. The errors are mine, not the client’s, and they did not reach Petitioner’s post-trial briefing. Petitioner attaches the opinions the Order names (Exhibits A and B), withdraws the misquotations and misattributions the Order identifies, and submits this Response in compliance with the Order. The withdrawn material appeared in Petitioner’s papers opposing the Commissioner’s motions for partial summary judgment. Petitioner confines this Response to what the Order directs and does not reopen that briefing. Because the withdrawal removes material from Petitioner’s own papers, and the Court has, by Order served June 18, 2026, granted the Commissioner’s motions for partial summary judgment, Petitioner does not address the potential prejudice to Respondent.”

The senior attorney of the Petitioner’s legal team accepts personal responsibility at p 5 of the Response.

I will not comment.

With climate science mapping the retreat of glaciers, perhaps the old simile for slow progression should be retired. So I’ll propose “geological” for “glacial” to describe the pace of Possum Rock, LLC, Carrol Beavers, Tax Matters Partner, Docket No. 22637-22, filed 7/6/27.

This is a SCE from 2016 (pre-BBA), FPAA issued and petitioned in July, 2022. So we’re now four (count ’em, four) years into the process. A quick docket search reveals that two (count ’em, two) stips of fact and one of settled issues have so far been filed. So discovery should be about finished, right? After all, this Order says the case was set for trial in May, 2026 in Atlanta (except an Order dated 6/12/26 says May, 2027).

Not so fast, says Judge Morrison.

He lists fourteen (count ’em, fourteen) items, either facts or documents, unstiped and unprovided, which shall form a stipulation of (you should pardon the expression) basic facts. Like contracts of sale, deeds, reports, and what thereof was attached to the 1065 for year at issue. Of course, you might call the documents Proposed Trial Exhibits, but whatever the nomenclature, with a $19.8 million charitable deduction on the line and interest presumably running, y’all might want to put the pedal to the cliché.

From the United States Tax Court website, July 3, 2026:

Opinions are generally filed at 3:00 PM. If you are receiving this message after 3:00 PM, there are no opinions today.

No orders have been issued today.

John R. Dee, 167 T. C. 1, filed 7/2/26, got his whistleblowing info to IRS a month after they had finished auditing Target (the taxpayer, not the store), and had their agreed audit report undergoing internal review. John’s info related to three (count ’em, three) items in Target’s year at issue return, of which two resulted in no change and a $2 million deficiency in the third. But all this had been resolved and agreed to before John’s info got to Ogden. So Ogden bounced John’s Form 211.

John petitions and wants to put in additional extra-record evidence. Judge Nega undertakes the obligatory jurisdictional review.

“Under Li and Kennedy, the Court lacks jurisdiction over a petition relating to a whistleblower’s claim if that claim is rejected at the threshold (Li) or forwarded to an examination team and no examination occurs (Kennedy). Then under Estate of Insinga v. Commissioner, 149 F.4th at 718, the Court has jurisdiction over a petition relating to a whistleblower’s claim if that claim is forwarded to an active or open examination, regardless of whether action was taken based on the whistleblower’s claim. See Lissack v. Commissioner, 125 F.4th at 255 (holding that the Court has jurisdiction when the IRS ‘proceeds with’ an action under section 7623(b)(1)).” 167 T. C. 1, at p. 6.

But what happens after the audit is over? Insinga seems to say that once audit is done, there’s nothing to review. But Judge Nega says that’s a false bright line. Until anything taxpayer owed is paid, a lot can happen, and blower info could help rake in the cash.

Happily, Rev. Proc. 2005-32, § 4.01, 2005-1 C.B. 1206, defines what is a “closed case.” And this case isn’t “closed,” because internal review hadn’t yet concluded and no Section 7121 closing agreement had been signed. And if “unagreed,” assessment hadn’t yet occurred, so the case is definitely not closed.

Now before my ultrasophisticated readers cry out as one “So what?! Since when has Tax Court been bound by a Rev. Proc, even before Loper Bright?” Judge Nega says Rev. Proc.s still provide useful guidance.

John’s additional evidence wasn’t before Exam, and his memo of a purported phonecon with a WBO Analyst is neither necessary background information, nor deliberately or negligently excluded from the record, and it does not indicate a failure to fully explain the WBO’s actions so as to frustrate judicial review. 167 T. C.1, at p. 11.

Denial of award sustained.

Long-time Tax Court observers snap up judicial conundra, admiring the intellectual sinuosities that befuddle counsel and make them yearn for any off-ramp they can sell the client. Judge James S. (“Big Jim”) Halpern is no slouch in that department, so trusty attorneys for both IRS and Todd A. Govig & April M. McGrath et al., Docket No. 22991-22, filed 7/1/26, can consider their July Fourth weekend ruined by the nine (count ’em, nine) pages of conundra Judge Big Jim bestows upon them.

After telling them to brief a Loper Bright attack on the SDLIA reg (Reg Section 1.61-22(d)(2)(ii)), he sends them down a briefing rabbit hole via Section 83(h) and Section 419, telling them to emerge with QinetiQ Holdings, Inc. & Subsidiaries firmly within their grasp.

For the QinetiQ backstory, see my blogposts “Truth or Forfeits,” 7/22/15, and “Unbonded,” 10/30/18.

Oh, and of course trusty attorneys may brief anything else they think is to the point.

Taishoff offers this translation from the Halpernese: “Settle this case, guys. If y’all keep this up, y’all will not like the opinion you will make me write.”