William H. Evenhouse and Nelle L. Evenhouse,, T. C. Memo. 2023-113, filed 9/7/23, got back to CA on the same day IRS sent them a SNOD, which was mailed to their CA address. But IRS didn’t get Bill & Nelle’s petition until 148 (count ’em, 148) days after SNOD mailing. Judge Albert G. (“Scholar Al”) Lauber, confronted with IRS’ USPD Form 3877 showing date of mailing and Bill’s & Nelle’s travel documents showing they returned to The Land of the Free from Turkey on said date of mailing, didn’t allow Bill & Nelle the 150-day out-of-country SOL, but went all Hallmark Collective, saying Section 6213 is jurisdictional as to SNODs, and Section 6213(a) “if the notice is addressed to a person outside the United States,” doesn’t apply. T. C. Memo. 2023-113, at p. 3.

Game over, right?

Maybe not. Bill & Nelle, living in The Bear Republic, are Golsenized to 9 Cir. And 9 Cir says Section 6213 cutoffs are jurisdictional. Judge Scholar Al reviews 9 Cir precedents in T. C. Memo. 2023-113, at p. 3, footnote 2. But there’s more than that.

“Therefore, we need not address a recent ruling by the U.S. Court of Appeals for the Third Circuit that the statutory filing deadline in deficiency cases is a non-jurisdictional “claims-processing” rule. See Culp v. Commissioner, No. 22-1789, 2023 WL 4612024 (3d Cir. July 19, 2023.” Ibid., as my expensive colleagues would say.

Culp? Seriously? See my blogpost “No Time for Modesty,” 2/15/22. But little did I then know that the Fogg of the Legal Services Center of the Harvard Law School would descend upon, and the Boechler, P. C., fog would envelop, 3 Cir.

Wait until the Supremes get their hands on this one.

What a darling silt-stir!

No, not the further tribulations of the brown-headed nuthatch or the denseflower knotweed (for which see my blogpost “A Nuthatch, A Knotweed, A Fox Squirrel, and A Busted Benderdinker,” 10/17/22). Judge Mark V. (“Vittorio Emanuele”) Holmes has found a new candidate for conservation easement protection.

No, not properly dated IRS documents.

Ardan Holdings, LLC, Ardan Investors, LLC, Tax Matters Partner Docket No. 17483-21, filed 9/6/23, “…is one of many syndicated-conservation-easement cases before the Court, and we continued it because the parties needed a considerable amount of discovery. They have been cooperating in informal discovery ever since, but recently petitioner moved to calendar this case for trial, because scheduling these cases has become increasingly difficult; and respondent moved to consolidate docket number 8164-23 with this case, because the newer case alleges the same highest-and-best use, features the same alleged promoter and appraisers, is derived from the same parent parcel, and is in the same county as this case.” Order, at p. 1.

Sounds like a perfect candidate for joint trial, briefing, and opinion, no?

But therein lies the rub.

“The problems with calendaring are a shortage of courtroom space, especially in Atlanta where courtroom availability is an endangered species; the fiscal constraints on respondent’s ability to retain an expert witness this late in the fiscal year; and the number of trials looming for counsel on both sides.” Order, at p. 1.

Atlanta is Ground Zero for high-profile State law trials and the Dixieland Boondockery tsunami.

So maybe try Columbia, SC, or agree for 8164-23 to be bound by the outcome in 17483-21.

Expect a major knock-on effect.

Judge Mark V (“Vittorio Emanuele”) Holmes dismisses the petition of Emmanuel D. Pacquiao, Docket No. 20835-19L, filed 9/5/23, without prejudice. IRS does not object.

I remain, after many years, at a loss how a petition in a lien/levy case (hence the “L” in the docket number) can be dismissed without prejudice. Section 6320(b)(2) allows but one (count it, one) fair hearing (CDP) per taxable period specified in the NFTL; Section 6330(b)(2) has an identical limitation for CDP in NITL cases. Section 6330(d)(1), applicable both to NITLs and NFTLs (the latter pursuant to Section 6330(c)), provides for the thirty-day SOL on petitions from both classes of CDP.

Yes, I know about equitable tolling. Boechler, P. C. resonates loud and clear. But if Emmanuel wants to try another petition later, why not seek a continuance, get his act together, and seek leave to amend later? Why drop the current petition, file a new one, pay another sixty Georges, and take the not-inconsiderable chance that the claim of equitable tolling doesn’t fly because he already timely petitioned, so why does he need equitable relief?

And why does IRS consent, unless they’re playing “gotcha!”, and will grab Emmanuel’s property now that the stay provided by Section 6330(e)(1) is lifted?

Puzzling. Any reader have any ideas? I see Emmanuel is represented by counsel; if they made a deal with IRS, why not enter a stiped decision?

The headline first written at the head hereof should come as no surprise to the greatest part of the readers of this my blog; even the most casual among you know that today is Labor Day, a Federal holiday observed in the Wannabe State, hence circumscribed by Rules 10(d) and 25(a)(5)(A).

Wherefore there is nothing here.

No, not an airshow flyby; this is Bruce S. Harris, Deceased, Docket No. 7474-23S, filed 9/1/23. STJ Diana L (“Sidewalks of New York”) Leyden orders 75 (count ’em, 75) pages which accompanied the petition of the late Bruce (presumably filed before he became the late Bruce) to be sealed, as they contain personally identifiable information. Moreover, STJ Di orders IRS to proffer proofs of Section 6751(b) Boss Hossery, failing which either IRS folds the chops or both parties shall file status reports.

As a docket search shows no motion to substitute parties and amend the caption has been filed, exactly how is the late Bruce to proceed? That “great gulf fixed” elucidated by an even greater Authority than US Tax Court still remains unbridged, and is likely to remain so.

So it might be time to get a fiduciary/ex’r/adm’r in for the late Bruce.

I was able to offer telephonic congratulations today to STJ-designate Jennifer E. (“Publius’) Siegel, on her elevation to CSTJ Lewis (“The Great Name”) Carluzzo’s “few, happy few.”

Her successor to the post which she has held so long and in which she served so well has not yet been named. No date can now be determined when her successor will be named. In the meantime, the contact information for Public Affairs on Tax Court website will remain the same.

That’s a SNOD, says Judge Christian N. (“Speedy”) Weiler, to Michael J. Watson & Tracey L.Watson, et al., Docket No. 12220-21, filed 8/31/23, the als being a platoon of insurance companies, which I guess are microcaptive cashstashes.

Mike & Tracey claim all kind of malfeasance and malpractice at Exam, and violations of the Taxpayer Bill of Goods, but de novo is the Tax Court mantra when it comes to SNODs, and the past isn’t even prologue.

“A proceeding before this Court to redetermine a deficiency is a proceeding de novo, and we generally will not look behind a notice of deficiency to examine the Commissioner’s procedures in making the determination. Our decisions are based on the merits of the record before us, and not on the record developed at the administrative level. 

“Accordingly, our review of petitioners’ tax liabilities is not limited to the administrative record, nor will it be based on the RA’s examination. On the facts before us, we decline to look behind the notices of deficiency to consider the actions of the Commissioner and his RA.” Order, at pp. 4-5.

As for the “simple cryptic letter” above cited, which Mike & Tracey claim isn’t a SNOD, “(A)ll that is required is that the notice advise a taxpayer that the Commissioner has in fact determined a deficiency. ‘Thus, all a notice of deficiency need do is identify the taxpayer, show that a deficiency was determined, state the taxable year involved, and set forth the amount of the deficiency.’” Order, at p. 5. (Citations omitted).

Seems like Section 7522(b)(3) is an orphan. Appeals never gets mentioned in these cases; maybe that’s also a throwaway.

It may be elementary, my dear Watsons, but it’s still a SNOD.

I’ve dealt with the Taxpayer Bill of Goods, s/a/k/a the Taxpayer Bill of Rights before, principally in my blogpost “The Taxpayer Bill of Goods,” 4/17/19. Moya, a particularly badly-litigated case, is cited here, as is the Jersey Boys’ attempted stretch (see my blogpost “The Taxpayer Bill of Goods – Part Deux,” 6/20/19, where I said “Be the ice thin and the sun hot, they will go for it.”). 

Nothing new here: no new rights, no separate cause of action.

As for due process, whatever Exam didn’t give them, Judge Speedy Weiler will give Mike & Tracey both barrels and a reload.

Judge Albert G. (“Scholar Al”) Lauber goes past the simple “we got nothing, so you get nothing” beloved of the Ogden Sunseteers in Andrew Bill Katakis, T. C. Memo. 2023-112, filed 8/30/23.

Andy B. says Target (the putative bad guys, not the department store) “engaged in money laundering through real estate transactions. He included a spreadsheet listing hundreds of such transactions, showing for each the buyer, the seller, the sale price, the property address, the transaction date, etc. For some transactions he appended ‘WB Comments,’ e.g., ‘Where did the down payment come from and who is making the loan payments and what is the current loan balance[?]’ He did not allege any specific violation of any Federal tax law.” T. C. Memo. 2023-112, at p. 2.

The OS did send Andy B’s disquisition over to SB/SE for a classifier (that’s a subject matter expert) to unscramble said frittata, but the classifier found no way of determining year(s), or source documents, to show what tax hadn’t been paid, so the OS bounced Andy B. without sending his stuff to Exam.

Andy B. petitions, but of course is denied.

“In Li v. Commissioner, 22 F.4th 1014, the D.C. Circuit delineated this Court’s jurisdiction to review cases (like this one) where the IRS has issued a threshold rejection of a whistleblower’s claim. In Li the WBO rejected a whistleblower’s claim on the ground that the information she submitted was ‘vague and speculative.’ Id. at 1017. The WBO did not forward the claim to an IRS examination team for further review, and no action was taken against the target taxpayer.

“The D.C. Circuit held that the Tax Court lacked jurisdiction in these circumstances because the IRS had made no ‘award determination’ within the meaning of section 7623(b). Li v. Commissioner, 22 F.4th at 1017. As the court explained, ‘an award determination by the IRS [under section 7623(b)] arises only when the IRS ‘proceeds with any administrative or judicial action described in subsection (a) based on information brought to the Secretary’s attention by [the whistleblower].’” T. C. Memo. 2023-112, at p. 3.

So according to DC Cir, whatever happens in Ogden stays in Ogden, unless some money winds up with IRS.

I’ve hammered Mandy Mobley Li enough before now, and DC Cir’s rather unusual (to be charitable) decision equally. That said, I can’t but feel that the entire Tax Court bench is not thrilled to bits with Li. Is Tax Court’s only function to review how the Ogden Sunseteers divvied the swag? Is that really why Congress enacted Section 7623?

If the answer to the two foregoing questions is “yes,” why does Judge Scholar Al discuss what happened before the OS kicked Andy B’s Form 211?

I await further enlightenment.

Judge Christian N. (“Speedy”) Weiler loses no time in finding IRS’ counsel guilty of bad faith in continuing to rely on a backdated lead sheet for chops, while keeping knowledge of same concealed from Tax Court and Lakepoint Land II, LLC, Lakepoint Land Group, LLC, Tax Matters Partner, T. C. Memo. 2023-111, filed 8/29/23.

IRS’ thirteen (count ’em, thirteen) attorneys claim “… his actions—and those of his counsel— fall short, but he contends that these actions do not rise to the level of fraud or bad faith and therefore do not warrant the imposition of any sanctions. Respondent argues that his counsel has complied with ABA Model Rule 3.3(a)(1) and (3) and with Rule 201 requiring candor to the Court.” T. C. Memo. 2023-111, at p. 6.

Judge Speedy Weiler kicks IRS’ protestations to the cliché, vacates the summary J on chops he gave IRS back in March (which I didn’t blog because it looked like the usual), and unloads on IRS’ counsel.

“…we find respondent’s counsel knew or should have known, no later than November 2, 2022, that his representations made to this Court were less than accurate and lacked candor and that RA B’s Declaration was false. Under ABA Model Rule 3.3, respondent’s counsel has an ongoing obligation to correct these misrepresentations of fact but failed to do so. Rather than correcting this material misrepresentation found in respondent’s Motion for Partial Summary Judgment, respondent’s counsel sought to pivot and present additional evidence on an alternative legal theory without withdrawing or conceding the original legal theory for why summary adjudication was appropriate here. Furthermore, no other remedial action was taken with the Court to correct the error until April 10, 2023, which was after this Court had issued its Order granting respondent’s Motion.

“In sum we find respondent’s counsel failed to timely advise the Court of RA B’s erroneous Declaration. Accordingly, we find the actions of respondent’s counsel to be in bad faith and to have multiplied the proceedings in this case unreasonably and vexatiously. See I.R.C. §6673(a)(2). In fact the actions of respondent’s counsel have, among other things, resulted in petitioner’s retaining additional counsel to elicit the truth regarding the section 6751(b) issues in this case and have substantially increased the discovery and motion practice required. However, the actions of these actors should not be attributed to respondent directly.” T. C. Memo. 2023-111, at pp. 11-12. (Name and footnote omitted).

Hey taxpayers, note that these shenanigans “… brings down upon the United States, subjects the United States to, and makes the United States vulnerable to liability for the costs, expenses, and fees attributable to the services of the taxpayer’s attorney’s professional services that are required as an appropriate response to the misconduct. I.R.C. § 6673(a)(2). The United States incurs the attorney’s fees by operation of law under section 6673(a)(2)(B), just as a taxpayer incurs a penalty for his own misconduct under section 6673(a)(2)(A). T. C. Memo. 2023-111, at p. 13.

That means us, troops.

However, my suggestion back last week, about a Rule 104 sanctions order barring any evidence of Boss Hossery, (see my blogpost “La Commedia È Non Finita,” 8/22/23) is a no-fly. The Lakepoints were trying Rule 123(b) “decide against any party any issue as to which such party has the burden of proof.” “Inappropriate,” says Judge Speedy Weiler.

And Judge Speedy Weiler will decide what excess costs, expenses and attorneys’ fees were reasonably incurred after the trial.

I cannot think this is the last we’ll hear of this sort of jiggery-pokery. Here comes the silt.

I don’t know if Judge Courtney D. (“CD”) Jones is a Blake Shelton fan, but she’s telling Appeals that Austin is what matters. And that’s especially true when NEH-ETA is the flavor du jour, as in Randine Bickel, a.k.a Melba Schoolfield, Docket No. 22038-22L, filed 8/29/23.

Randine’s is a sad tale, a nogoodnik ex-husband who cons her into getting them a CO pottery license and grabs the gelt, leaving Randine with an astronomical tax bill because Section 280A anti-pottery. And Randine is depressed, drug-addicted, and otherwise incapable, although she’s got better than half-a-million to cover $306K tax and chops. Her OIC on non-economic hardship-effective tax administration (NEH-ETA) was $1K. Appeals bounces, and IRS moves for summary J sustaining.

Randine has a trio of trusty CO pot-wise attorneys, whose lead I’ll call Nic. Nic has the knack, urging Appeals at the CDP “to reevaluate the OIC on non-economic hardship (NEH) ETA grounds, and specifically regarding public policy and equity considerations. Ms. Bickel also stated that the OIC should have been forwarded to the special group in Austin, Texas that handles NEH-ETA offers (Austin Group).”  Order, at p. 6.

Now I didn’t know that either, so apologies to my ultra-hip readers who memorized IRM 5.8.11.3.2 – Public Policy or Equity Grounds  – in childhood’s earliest hour. But Judge CD Jones apostrophizes the Austin outfit, and bounces IRS’ summary J motion to sustain the NOD.

“The IRM provides that ‘[a] taxpayer who has submitted an offer under NEH-ETA or has requested consideration of any public policy or equity issues during the offer investigation must have those issues reviewed by the NEH-ETA group prior to rejection of the taxpayer’s offer or before a rejection is sustained.’ IRM 5.8.11.5.1(8) (Oct. 4, 2019) (emphasis added). After the Austin Group considers the public policy and equity issues, the group manager of the Austin Group must either explain why the taxpayer’s offer cannot be investigated or request that the matter be transferred to the Austin Group. IRM 5.8.11.5.1(5) (Oct. 4, 2019).” Order, at p. 12. (Emphasis by the Court).

Appeals knew they had to go to Austin, but held up because they didn’t calculate Randine’s life expectancy when they did the numbers, and all open matters have to be decided before sending the file to Austin per IRM 5.8.11.5.1(7) (Oct. 4, 2019). Appeals did a back-and-forth with the AO and his boss, and didn’t send Randine to Austin.

Judge CD Jones gives IRS a chorus of the Hot Country 100 special of 2001.

“… we cannot conclude that AO M did not abuse his discretion. As we have explained above, the record is devoid of an explanation regarding Ms. Bickel’s NEH public policy and equity arguments—including why the matter was not sent back to the Austin Group as required by the IRM and recognized by AO M—which frustrates the Court’s ability to discern Appeals’ reasoning and properly review its determination.” Order, at p. 13. (Citation and name omitted).

Remanded for Appeals to explain. I suggest the supplemental CDP include a trip to Austin.

Because as Nic might say, if this is Austin, I still love you.