Any lawyer who cannot find an ambiguity in any document or situation should find another way to make a living. Judge David Gustafson should not worry he chose the wrong profession: he has found plentiful ambiguities in Form 656 (OIC), when a single-member disregarded LLC and its member try to compromise the obligations of both member and  LLC.

One-size-fits-all doesn’t work very well for Appeals or for All Is Well Homecare Services, LLC, Docket No. 21210-19L, filed 12/22/22, or for sole member Dinah Opoku-Manu. AIW and DOM try to compromise both the $360K FICA/FUTA that AIW owes, plus DOM’s TFRPs and personal income tax debts, covering some nine (count ’em, nine) separate tax years.

DOM’s rep filled out both Sections 1 and 2 of the 656, although the instructions say not to.

At the same time DOM’s rep requested a CDP for the NITL IRS gave DOM and AIW. The NFTL/NITL issue I covered in my blogpost “Judge Gustafson’s Punt,” 12/15/22.

The one-size-fits-all Form 656 causes Appeals any amount of confusion. They treat the OIC as being for DOM only, not AIW, and it goes downhill from there. COIC gets into the act, and the result is a communications tangle that ends with Appeals claiming that the 656 was unprocessable and sustaining the NITL. AIW and DOM petition.

“The Commissioner is certainly correct in asserting that ‘the Court is unable to order the IRS to process and accept an otherwise deficient OIC.’ (Doc. 25 at 5.) We do not contemplate ordering IRS Appeals to accept an OIC. But we do have authority to evaluate IRS Appeals’ process and to determine whether IRS Appeals has abused its discretion not by declining to accept an OIC but by failing even to process an OIC,  which is the issue now before us.” Order, at p. 9.

Note that IRS wants summary J, so all DOM and AIW have to do is raise a question for trial, not prove their case.

Now complexity invites ambiguity, and imperfections in a form designed to cover the multiplex problems of individuals and disregardeds perforce must have ambiguities. But Form 656 is the lawyer’s delight.

“The instructions on Form 656 use ‘should’ and ‘must’ in a manner that may be misleading. When an individual (with a Social Security number (‘SSN’)) who owns an LLC (with an employer identification number (‘EIN’)) proposes to compromise her individual income tax issues and trust fund recovery penalties associated with her SSN and the employment tax liabilities associated with the EIN, she sees the apparently non-mandatory instructions in Section 1 telling her that she ‘should‘ fill out Section 1 (which does include lines for employment tax liabilities); but she also sees the apparently mandatory instruction in Section 2 telling her, ‘If your business is a[n] . . . LLC, . . . and you want to compromise those debts, you must complete this section.’ (Emphasis added.) When Ms. Opoku-Manu did what the instructions in Section 2 of the form said she “must” do (i.e., complete that Section 2 for the LLC), IRS Appeals deemed the form unprocessable.

“The Commissioner maintains that the instructions above Section 1 should govern (‘but not both’), but even that might be unclear: First, those instructions, too, are apparently non-mandatory (saying, ‘You should fill out either Section 1 or Section 2, but not both’). Second, the “but not both” instruction may appear to be contingent, since it says ‘but not both, depending on the tax debt you are offering to compromise’. A reader might construe the form to mean that the ‘not both’ instruction ‘depend[s]’ on whether one is offering to compromise just business liabilities or individual liabilities (in which case, fill out only the relevant section) or instead is offering (like petitioner here) to compromise both business and individual (in which case, do fill out both?). Third, the Section 2 instructions for a business remind the taxpayer to include ‘a separate $186 application fee’, perhaps suggesting an application fee ‘separate’ from the application submitted for the individual named in Section 1.” Order, at p. 12.

Actually, COIC deemed the 656 unprocessable, but I don’t blame Judge Gustafson for being confused at this point.

If Appeals or COIC had a flexible attitude, the ambiguities might be resolved, at least to the extent of letting the form be processed. But Appeals claimed the form was unprocessable, bounced it, demanded a second set of fees for a resubmission, and offered no defense for this double whammy.

That’s enough for Judge Gustafson to deny summary J without prejudice, and send the parties off to decide whether to remand or try the case.

What a wonderful blueprint for wits, wags, and wiseacres this order provides, to bombard Appeals and COIC with internally contradictory Forms 656, and tell ’em Judge Gustafson sent them.

Billy Gilbert’s invocation of the Chief of the London Fire Brigade doesn’t help Erik Schwartz, T. C. Memo. 2022-125, filed 12/21/22. Erik is back from remand, when the admin record from his CDP was too scanty to evidence a prior chance to contest four years ago.

Erik sought a credit elect for an overpayment made pursuant to his divorce decree, but didn’t file for that year (hereinafter “Year of Divorce”) because he thought an interlocutory decree of State court prevented him from filing. On remand, the AO said the epistolary volleying between Erik and IRS didn’t constitute an informal request to apply the remaining balances of the overpayment from Year of Divorce to the five (count ’em, five) subsequent nonconsecutive years Erik claims.

First issue, this is a real credit. Erik did pay, IRS credited Year of Divorce but put the rest in an excess collections account, and never issued a Section 6532(a)(1) notice of disallowance.

Second, the credit Erik wants to apply is a credit against income tax, the tax for which the overpayment was made, not some unrelated liability. The problem is whether Erik’s letter-writing and telephonic campaign constituted an informal request to apply the overpayment from Year of Divorce to the subsequent years within the Section 6511 lookback.

Judge Vasquez: “It has long been recognized that a writing which does not qualify as a formal refund claim nevertheless may toll the period of limitations applicable for refunds if (1) the writing is delivered to the Commissioner before the expiration of the applicable period of limitations, (2) the writing in conjunction with its surrounding circumstances adequately notifies the Commissioner that the taxpayer is claiming a refund and the basis therefor, and (3) either the Commissioner waives the defect by considering the refund claim on its merits or the taxpayer subsequently perfects the informal refund claim by filing a formal refund claim before the Commissioner rejects the informal refund claim.” T. C. Memo. 2022-125, at p. 14. And there’s “copious citation of precedent,” so get it for your memos of law.

IRS said they were too busy to reply, but they wrote Erik that he didn’t need to do anything else. And IRS’ logs showed Erik’s phonecalls. IRS waived formal notice.

But all Erik establishes is a credit elect for Years Two and Three. Years Four, Five, and Six took place after a two-year gap. The gap puts paid to Erik’s cascade.

“The record does not establish a chain of cascading credit elects linking petitioner’s [Year of Divorce] overpayment to his [Years Four, Five , and Six] liabilities. To be sure, the [Year of Divorce] overpayment resulted in credit elects for [Years  Two and Three], and petitioner elected to apply his [Year Two] overpayment against his [Year Three] estimated tax. However, tax returns for [Years Two and Three] are not in evidence. Although respondent’s transcripts show no tax liabilities for those years, it is unclear whether petitioner elected to apply his [Year Three] overpayment for [Year Four] and his [Year Four] overpayment for [Year Five]. Moreover, the return information for petitioner’s [Year Five] tax year does not reference a credit elect from [Year Four] and does not include an election to apply an overpayment against his estimated tax for [Year Six]. Because there is no evidence of cascading credit elects from [Years Three, Four, and Five], we cannot link the [Year of Divorce] overpayment to any years beyond [Year Two].

“Accordingly, we are without jurisdiction to direct the application of credit elects against petitioner’s [Four, Five, and Six] liabilities unless petitioner has an ‘available credit’ from an unrelated nondetermination year. The record does not include any transcripts or other evidence showing such a credit. We therefore sustain respondent’s determinations not to apply the [Year of Divorce] overpayment against petitioner’s [Years Four, Five, and Six] liabilities nondetermination year. The record does not include any transcripts or other evidence showing such a credit. We therefore sustain respondent’s determinations not to apply the [Year of Divorce] overpayment against petitioner’s [Years Four, Five, and Six] liabilities.” T. C. Memo. 2022-125, at p. 12.

To avoid the fate of Captain Shaw in the Gilbert opus, each level of the cascade must be proven. Don’t count on IRS’ transcripts. There’s no substitute for copies of the returns themselves.

No, not the one who takes back your car; this is Robert Lewis Starer and Merle Ann Starer, T. C. Memo. 2022-124, filed 12/20/22. Robert Lewis transferred parcels of land owned by his Sub S corp. to various business associates subject to repurchase agreements, whereby the purchaser could compel the Sub S to repurchase the property at the original price. Robert Lewis claims these were loans, to allow the associates to mortgage the properties for cash, but IRS changes the deals to sales per Section 481.

Judge Wells isn’t buying the loan story.  And the IRS change affects timing, not ultimate receipt, so it involves a material item, not an overall change to the Sub S’s accounting method. While Robert Lewis and Merle Ann transferred much of their shareholdings in the Sub S into a couple grantor trusts (hi, Judge Holmes), they never elected electing small business trust treatment per Section 1361(c)(2)(A)(v), so there’s no showing that any tax incidents flow to the trusts.

The Sub S owned the house where Robert Lewis and Merle Ann lived rent-free, so constructive dividend. Likewise the transfer of one plot of land to son-in-law, the claim of joint venture failing for want of Luna principles. And a transfer for no consideration to a long-term business associate, who promptly mortgaged it and used the proceeds for other ventures (although transfer tax was paid on a marked-up value) fails as a loan for want of documentation, so is a gift of appreciated property taxable to Robert Lewis and Merle Ann, per Section 1386(b).

And a bad debt claim from an advance to a controlled entity fails for want of documentation, and some wonderful trial testimony. “According to petitioners, [related] never formally requested a loan from [Sub S]. Instead, Mr. Starer described how [controlled] would request a loan from {Sub S] by testifying that ‘Bob Starer, CEO of [controlled], would say to Bob Starer as CEO of [Sub S], “let me have some money.” Petitioners cannot create a deduction simply by deciding to record an intercompany debt without formalities and then canceling it.” T. C. Memo. 2022-124, at pp. 26-27.

But IRS matches Robert Lewis and Merle Ann, by playing the Michael Corleone gambit, main line Boss Hoss variation.

“In the instant case, respondent did not file a motion to supplement the record addressing the effect of section 6751(b) on this case. Neither did he direct the Court on brief or otherwise to any evidence of section 6751(b) supervisory approval in the record.  Consequently, respondent has failed to satisfy his burden of production to establish compliance with section 6751(b); therefore, petitioners are not liable for accuracy-related penalties under section 6662.” T. C. Memo. 2022-124, at p. 28.

And Take Suzanne Jean With You

I am sure Judge Nega is too well-bred to frame his order in Suzanne Jean McCrory, Docket No. 3443-18W, filed 12/20/22, in such terms.

But the effect of said order is exactly that, as Judge Nega chronicles the end of the road for Mandy Mobley Li, the highly-credentialed blower who blew any hope for judicial review of an Ogden Sunseteer no-cash shootdown, however arbitrary or capricious John W. (“Hoppin’ John”) Hinman’s myrmidons might have been.

Suzanne Jean, ex-GAO auditor, is a serial blower whose activities have provided much blogfodder. She had been tossed on Li grounds back in July, but played the certiorari gambit, and got reinstated per Section 7481. Incidentally, Suzanne Jean played the same gambit in another blow back in October before Judge Elizabeth A. (“Tex”) Copeland; see my blogpost “‘No’ Deid Yet’ – Part Deux,” 10/1/22.

Well, Judge Nega delivers the coup de grace.

“By order issued October 31, 2022, the Supreme Court denied the whistleblower’s petition for a writ of certiorari in Li. A review of the Supreme Court docket in Li reflects that a petition for rehearing of the order denying the writ of certiorari has not been docketed, as of the date of this Order. See U.S. Sup. Ct. Rule 44(2) (providing that such a petition must be filed ‘within 25 days after the date of the order of denial’). Order, at p. 2.

Judge Tex Copeland, please copy.

So march out, Mandy Mobley, and take Suzanne Jean with you.

Except.

Hey Supremes, you’ve furnished us all with some wild and crazy decisions this year. How ’bout finishing up with a wee bit equitable tolling?

Judge Albert G (“Scholar Al”) Lauber is, I have often noted, a man of many attainments. Although an East-Coaster in his youth, he is familiar enough with Los Angeles traffic at rush hour to remark that staying in a hotel in Santa Monica to avoid a 60-mile commute to Irvine “might well have been a rational choice” T. C. Memo. 2022-123, at p. 7.

In fact, it’s enough to spare Section 6662 five-and-ten chops for the hotel bills that IRS disallowed amidst the massed indocumentado deductions of Kambiz Aryia, T. C. 2022-123, filed 12/19/22.

Kam was a long-time car salesman, managing a Honda dealership in Santa Monica, CA. He claimed to be a “consultant” and filed Sched C, but was really an employee, so at best he would have gotten unreimbursed employee business expenses for the last year those were deductible, if he could prove them.

He did prove the hotel bills, but those were for his convenience. His tax home was where he worked. But he did have a good faith belief he could deduct those. And had a winning personality on the trial; no surprise, few grumpy car salespeople last very long.

“Petitioner had comprehensive and accurate documentation for these expenditures. His trial testimony convinced us of his belief that he could not successfully discharge his duties as manager of the Honda dealership if he spent three to four hours every day commuting from Irvine. He understood that he could not deduct commuting expenses. But we think he genuinely believed that his lodging expenses were different and had a logical business nexus, enabling him to work the 60 hours per week required to hold on to his managerial job. We accordingly conclude that petitioner is not subject to penalty on the portion of the underpayment attributable to disallowance of his $40,174 lodging expense deduction.” T. C. Memo. 2022-123, at p. 12.

Ex-Ch J L. Paige (“Iron Fist”) Marvel says that’s all a Boss Hoss immediate supervisor needs to do. It doesn’t matter the document whereon the signature appears: here, it’s a thirty-day letter, Letter 950, and even though the chop numbers were wrong, and a CPAF issued three (count ’em, three) months later corrected the errors and added a new penalty, it’s enough to show compliance with Section 6751(b).

Rudy Kipling got it right. Once the Boss Hoss signs, “The door is shut/We may not look behind.”

 There’s “somber reasoning and copious citation of precedent” in support thereof, in Luis A. Castro and Judi A. Chavez-Castro, T. C. Memo.  2022-120, filed 12/19/22, but most of the cases are the usual suspects.

Not the corporate type, rather the drafting boilerplate we all learned in Law School Year One: “This Agreement [Mortgage][Deed][Contract] sets forth the entire agreement of the parties hereto. This [ditto] may not be modified, amended, or canceled, nor may any provision hereof be waived, otherwise than in writing and signed by the party against whom said modification, amendment, cancellation, or waiver is asserted.”

Except somebody blew it in Kenneth M. Brooks and Anita Wolke Brooks, T. C. Memo. 2022-122, filed 12/19/22. And Judge Wells is all over it. This is another GA boondockery.

Yes, a deed can serve as a contemporaneous written acknowledgement that a transfer is gift if it states no consideration or merely nominal consideration. But while that’s necessary, it isn’t sufficient. “…silence in a deed serves as the CWA that the donee provided no goods or services as consideration, in whole or in part, only if the deed also qualifies that the terms of the deed are the entire agreement.” T. C. Memo. 20223-122, at p. 11.

Note that the ten dollars and other good and valuable consideration is mere boilerplate, and ignored.  Somebody let poor Randy Schrimsher know. See my blogpost “Valuable Consideration?” 10/3/12.

Ken’s and Anita’s appraisal is a wee bit dodgy, both as to description of the property and its development potential if rezoned. And the Form 8283 states a cost basis for property other than the donated parcel in addition to that of the donated parcel.

IRS gets to wildcard in a CPAF seven (count ’em, seven) days before trial, despite the 14-day rule to stip to documents per the SPTO. Judge Wells says “no hurt no foul.”

“Petitioners did not raise compliance with section 6751(b)(1) before or, substantively, during trial and nevertheless received the form before the record was closed. It is therefore even more appropriate to accept the form into evidence..” T. C. Memo. 2022-122, at p. 18.

Taishoff says the burden is on IRS. Congress placed it there. Letting in wildcards is sharp practice and shouldn’t be allowed.  But Judge Wells is the judge, so Ken and Anita get the 40% gross valuation misstatement chop.

Ken and Anita lived in VA when they petitioned, so this one goes to 4 Cir, not 11 Cir. Should be an interesting appeal, if they take one. Don’t undertake to follow it, though.

I’d thought epistolary jousting was gone when IRS finally took my (and others’) advice and issued whistleblower shootdowns that said “game over, we’re done, petition.” But IRS seems to have revived the sport when it comes to denying appeals from Section 6699(a) S Corp late-filing chops.

CSTJ Lewis (“Great is the Name and Great is the Fame”) Carluzzo, manifesting his magnanimous  character, shuffles through the IRS’ paper barrage, with intermittent counterbattery fire from Brighton Construction Enterprise, Docket No. 35599-21SL, filed 12/19/22. Brighton was late for two (count ’em, two) consecutive years. Appeals claims Brighton had a prior opportunity to dispute when they try to raise reasonable cause at the CDP on the NITL.

I won’t try to summarize the volleying. There are letters without dates, with strange references, and with omitted enclosures. There is a back-and-forth between IRS offices in KY and PA, but nowhere is it clear in the record that the liability issue had been considered anywhere.

So CSTJ Lew has three (count ’em, three) choices: review the record de novo and decide that Brighton had reasonable cause; reject the NITL without reviewing whether Brighton had reasonable cause; or remand for Appeals to consider reasonable cause.

“Fairness to petitioner suggests that we do not go with the first option. For various reasons we can understand why the parties did not focus on the point, but the record is not complete enough to make a finding on reasonable cause. Fairness to respondent suggests that the second option might preclude respondent from collecting a tax that might rightfully be due.

“Perhaps influenced by a children’s fairy tale, it occurs to us that the third option is just right.” Order, at p. 12.

Back to Appeals.

Here’s CSTJ Lew’s roadmap: ” (1) If upon further review and investigation respondent’s settlement officer establishes that petitioner had a meaningful prior opportunity to challenge the penalty assessments by participating in an Appeals conference that considered its claims for abatement, then respondent may supplement the record with that information, and petitioner would, as respondent argues here, be precluded from raising the issue in this proceeding. Because we have already found that in all other respects respondent’s settlement officer has proceeded as required by section 6330, that would result in decision being entered for respondent; (2) if upon further investigation or review, respondent’s settlement officer is unable to establish that petitioner had a meaningful prior opportunity to challenge the penalty assessments at an Appeals conference, then respondent’s settlement officer should conduct a further administrative hearing that addresses petitioner’s claim to reasonable cause in support of petitioner’s requests for abatements. After further consideration, if the parties agree, a stipulated decision could be submitted to the Court [edited by me: nudge nudge, wink wink]; or  (3) if after further administrative review, the parties are unable to resolve petitioner’s abatement claim, then the Court will allow either party to supplement the record with additional evidence directed to petitioner’s claim of reasonable cause and proceed accordingly.” Order, at pp. 13-14.

Just finished an enlightening CLE on Our Fair State’s Freedom Of Information Law (Public Officers Law §§84-90), especially the provision for legal fees (§89(4)(c)(i) and (ii)). In any case “…against such agency involved, reasonable attorney’s fees and other  litigation  costs reasonably incurred  by such person in any case under the provisions of  this section in which such person has substantially prevailed, and when  the agency failed to respond to a request or appeal within the statutory  time;  and  (ii)  shall assess, against such agency involved, reasonable  attorney’s fees and other litigation costs reasonably incurred by such  person  in  any  case under the provisions of this section in which such  person has substantially prevailed and the court finds that the agency  had no reasonable basis for denying access.”

And our Courts have held that if the agency folds when they’re sued, the person who brings the case has still “substantially prevailed.”

I’ll bet Bryan Edward Menge, Docket No. 12155-21L, filed 12/16/22, would like to have a similar provision in Sections 6702 and 6320, as IRS concedes the Section 6702 false return chop, and the SNOD, and released the NFTL they gave him at no extra charge. There was also a NITL, but that’s off the menu here.

So all Judge David Gustafson can do is dismiss Bryan’ Edward’s petition as moot, since there’s neither SNOD nor NOD to consider, and IRS has agreed not to reimpose the Section 6702 chop, unlike Matty Vigon, whose tale I told in my blogpost “Crafty – Akin to the Weasel,” 7/24/17.

Sidetrack: The laughing little girl I described in the foregoing blogpost just paid us a visit, which gladdened my heart. She’s back home in TX now.

Judge David Gustafson rings the changes.

“…we see no aspect of this case that is not moot. Collection itself is moot, because the liabilities have been abated and the NFTL has been released. There is thus no liability to collect, and the assessment that would be the predicate for collection is missing entirely. Assuming that “underlying liability” issues, see sec.  6330(c)(2)(B), are not precluded from this lien case by virtue of Mr. Menge having had a prior ‘opportunity’ to litigate them in the levy case, No. 17117-18L (an assumption that seems improbable), those liability issues are also moot here because re-assessment of the liabilities could not occur. Re-assessment of the [Year Two] tax liability would, because of the passage of time, be barred by the statute of limitations, sec. 6501(a); and although the section 6702 penalty is understood to have no statute of limitations, re-assessment of that penalty is foreclosed by the Commissioner’s motion. This is not an instance like Vigon, in which ‘[t]he defect [in the Commissioner’s showing of mootness was] not simply that he fails to persuade us that in fact he will not really reassess; rather, he does not even assert that he will not reassess. He asserts instead that “it is not clear whether respondent will reassess”.’ 149 T.C. at 111. In this case, by contrast, the Commissioner states unequivocally: ‘Respondent affirms that he will not reassess the [Year One] frivolous return penalty against petitioner with respect to frivolous submissions already received by respondent with respect to [Year One]’. (Doc. 17, para. 8.).” Order, at p. 3.

OK, so march out Bryan Edward, you won.

Except Bryan Edward says he didn’t.

“Petitioner timely filed his petition in T.C. docket No. 12155-21L therefore petitioner asserts he has a due process right to be heard in the T.C on the over 1600 hours of his time spent defending himself against unlawful policies and procedures implemented against BM [i.e., petitioner Bryan Menge] and BEM [Bryan E. Menge Construction] by federal contractors, state actors, the RI Superior Court, HUD, the DOL,  the IRS since 2011, the Federal District Court for the District of RI and the T.C. [Doc. 23 at 16.].” Order, at p. 3.

And Bryan Edward has been here before with the same story. See my blogpost “SMH,” 12/15/21.

No luck this time either.

“No such claims by Mr. Menge or his company against any of these entities could fall within our jurisdiction in this case—except his claims against the IRS regarding the liens for his 2013 and 2014 liabilities, but those, as we have shown, are moot.” Order, at pp. 3-4.

It’s a rainy day here on this Minor Outlying Island off the Coast of North America, so I’m feeling awash with wet silt.  Wherefore, I chronicle Judge Gustafson, the master crafter of the lockout of the Hallmark Researchers’ equitable SNOD toll, who now has to deal with what ex-Ch J Maurice B (“Mighty Mo”) Foley started back in April, with Ha Tran (as to whom see my blogpost “Ya Can’t Make This Stuff Up – Part Deux,” 4/29/22).

All is not well with All Is Well Homecare Services, Inc., Docket No. 21210, 19L, filed 12/15/22. AIW got hit with a doubleheader, a NFTL and a NITL, for the same $131K in payroll taxes. AIW petitions both; everyone agrees the petition for the NITL is timely. The argy-bargy is about the timeliness of the NFTL petition.

AIW claims that the OIC they put in stays the 30-day SOL. Nope, says Judge Gustafson. “We are unaware of any authority to support the proposition that the submission of an OIC would affect the due date of a CDP request, and we cannot think of any arguable reason that it would.” Order, at p. 3, footnote 5.

AIW next claims that three (count ’em, three) days should be added to the 5 business days plus thirty days of Section 6320(a)(3)(B), to account for the time it takes the recording officer to docket and file the NFTL. That also is a nonstarter. “We do not know of any support for this 3 business days addition to the deadline.” Order, at p. 4.

IRS doesn’t move to toss; IRS moves for summary J, stating in their papers that AIW is late. AIW raises the shot-down arguments heretofore stated. Judge Gustafson parses the timeline, coming up with the conclusion that if the date IRS says was the filing date, AIW is two days late.

Except.

Judge Gustafson is under the impression that IRS prepares both NFTL and CDP notice at the same time. If that’s so, then the date of filing cannot be known then; what the IRS puts in the CDP notice is a guess.

Hence Boechler.

“…the 30-day deadline of section 6330(d)(1) is a non-jurisdictional rule subject to equitable tolling, Boechler, P.C. v. Commissioner, 142 S. Ct. 1493 (2022). A remaining question is whether Boechler should affect the application of the rule of that one has the right to request a CDP hearing during the 30-day period of section 6320(a)(3)(B). That is,  it could be argued that a taxpayer whose CDP hearing request for an NFTL is otherwise untimely might nonetheless be entitled to a CDP hearing if equitable considerations would result in the tolling of the deadline. If so, then standards or criteria should be stated by which IRS Appeals should make a decision about the appropriateness of such tolling in a given instance. There would then arise a question about the standard by which the Tax Court would review IRS Appeals’ decision whether to apply equitable tolling.” Order, at p. 5.

In English, Boechler had to do with a late petition; AIW has to do with a late Letter 12153 (CDP request). If Boechler applies to CDP requests (nudge nudge, wink wink), then how does Appeals do the sheep-and-goats number on the latecomers? And how does Tax Court review Appeals’ decision?

Is Judge Gustafson going to sort this out his own self? Nah; he has a Christmas present for IRS and AIW. Let IRS’ counsel file a supplemental memo by 1/10/23.

“…the Commissioner shall file a supplemental memorandum in support of his motion for summary judgment (and, if it would better reflect his position, a motion to dismiss) that shall discuss the matters raised in this order and shall confirm or correct the statements we have made here. In particular, that memorandum shall include a statement of the Commissioner’s position as to (1) the proper means for calculating a deadline under section 6320(a)(3)(B), (2) the date on which the NFTL was actually filed as a matter of fact, and the information supporting that fact, (3) whether the deadline of section 6320(a)(3)(B) is subject to equitable tolling, and if so, (4) the standards IRS Appeals should use in determining whether tolling applies in a given case and the standard by which the Tax Court should review such a determination by IRS Appeals.” Order, at p. 5.

And AIW gets until 2/17/23 to reply with their own version.

What a punt!