Lunch and a couple Sam Adamses at the Union Oyster House with my colleague and friend Peter Reilly, CPA, from Forbes.com’s first team.

Today Judge Buch rolls out the first iteration of the amended Rule 24(c) in Chester E. Lemon & Gigi Lemon, 12437-20, filed 5/25/21. It’s nothing to do with Chet & Gigi; it concerns their trusty ex-attorney, whom I’ll call DAK.

DAK wants out, and Chet & Gigi have another lawyer on deck and ready to go. DAK gets to withdraw, and Judge Buch will spell out the steps.

“Counsel desiring to withdraw as counsel for a party may file a notice of withdrawal as counsel if: (A) more than one counsel entered appearances for that party and at least one counsel will continue to serve as counsel for that party; (B) the notice of withdrawal is filed no later than 30 days before the first day of the Court’s session at which the case is calendared for trial; and (C) there is no objection to the withdrawal.” Order, at p.1.

Everyone agrees to let DAK out.

Trial is set for October. Note that the notice of withdrawal has to be filed 30 days before the first day of the session whereat trial will take place, even if trial is noticed for a date certain later than the first date of the session, and no one shows for calendar call.

Now maybe we can work on a notice of appearance for law firms, and leave separate checks for lunch.

Speaking of lunch, see my next following blogpost.

Every practitioner has asked that question when trying to assemble the facts for the case at hand, both what s/he must prove, and what the adversary must prove. Today there’s some useful learning from Judge Nega, when IRS is trying to prove that they sent a SNOD they can’t find to the last known address of Stanislava Chrobak, Docket No. 20155-18L, filed 5/25/21.

Ms C claims she never got the SNOD, and is petitioning a NITL directly, with no trip to Appeals; and she’s late.

Howbeit, here’s Judge Nega.

“Respondent attached to respondent’s motion a copy of a Certified Mailing List (CML) as evidence that, on May 10, 2016, respondent mailed by certified mail, bearing reference No. 7014 2120 0003 5386 4501, a notice of deficiency for tax years 2007, 2011, 2012, and 2013, to petitioner’s last known address (i.e., the Palos Hills address). Respondent also attached a copy of the CML showing that, on May 10, 2016, respondent mailed by certified mail, bearing reference No. 70142120 0003 5386 4495, a notice of deficiency for tax year 2009 to petitioner’s last known address (i.e., the Palos Hills address).” Order, at p. 3.

As to “last known address,” here’s Judge Nega’s take. Note Ms. C put in no papers responding to IRS’ motion to toss for want of jurisdiction.

“With respect to tax years 2007, 2009, 2011, 2012, and 2013, respondent contends that the notices of deficiency, each dated May 10, 2016, were mailed to petitioner’s last known address (i.e., the Palos Hills address). Respondent explains that petitioner untimely filed her tax returns for tax years 2008 and 2009, which she signed on June 8, 2015, and were received by the IRS on June 15, 2015. Respondent continues that on petitioner’s tax returns for 2008 and 2009, petitioner listed the Palos Hills address as her current home address. Furthermore, respondent elaborates that there is no record indicating that petitioner filed a tax return for tax year 2015. Thus, respondent states, had petitioner filed a tax return for tax year 2015 listing an address different than the Palos Hills address, the notices of deficiency, each dated May 10, 2016, would have been mailed to that address.” Order, at p. 3.

If confronted with similar circumstances, here’s at least some of what IRS has to produce, and what you have to counter.

I was wrong back on January 10 a year ago, when I predicted that Giorgio P. Martinelli, Docket No. 4122-18, would vanish without the human-interest story I wanted to bring y’all. See my blogpost “Copy,” 1/10/20.

Well, right now, in the Honolulu Zoomie courtroom, Giorgio is on the stand testifying to his brother’s poor health and how the offshore account really belongs to his brother. IRS’ counsel is putting up a good show, and FRE 803(4) just slowed down The Great Chieftain of the Jersey Boys, but Giorgio is a good witness.

I wish Frantic Frankie had tipped me off, but I guess he had other things on his mind.

Anyway, having to dig for copy keeps the blogger on his toes.

Four more get the ‘ollow square treatment today at The Glasshouse Vic Built. The only interesting note is found in Randy Godin, the second of the orders.

Ch J Maurice B (“Mighty Mo”) Foley explains a difference between Tax Court practice and one State’s (CA’s) approach.

Mr. G got a conditional suspension from the CA authorities. He asks Tax Court for reciprocal treatment.

Ch J Mighty Mo says “no.”

“This Court, however, does not impose conditional or temporary suspension as a form of discipline. We will suspend Mr. Godin as reciprocal discipline based upon his suspension in California. Mr. Godin may file a petition for reinstatement to practice before this Court upon his reinstatement to the practice of law in California.” Order, at p. 1.

No, this is not the score of a qualifier match for the FIFA 2022 World Cup. If it were, the cheers of the victors and the imprecations of the vanquished would be heard around the world.

Today this my blog got its second view from Zimbabwe. The first was in 2013.

Bolivia has yet to score on my pitch.

Is Ohama?

It’s been nearly four (count ’em, four) years since I referred to Saul Steinberg’s celebrated New Yorker cover, which showed our N’Yawk insular view of America. See my blogpost “Everything West of the Hudson Is Kansas,” 7/5/17.

While ex-Ch J L Paige (“Iron Fist”) Marvel, a native of the Old Line State, might be considered a Right Coaster, present Ch J Maurice B (“Mighty Mo”) Foley is, according his biography on the Tax Court website, a Prairie Stater by birth.

So I was surprised to see that he set Mike Garber, Docket No. 7942-21, filed 5/21/21, down for trial thus: “Ohama, NE is designated as the place of trial in this case.” Order, at p. 1.

Like many a pro se, Mike didn’t fill in the place-of-trial Form 5 when he petitioned.  

Maybe when one becomes Chief Judge, and spends one’s working life in The City of the Stateless, everything west of the Potomac is Ohama.

Judge Mark V. Holmes has “a couple of conclusions” from the precedents he cites in Katherine Mason, et al., 2021 T. C. Memo. 64, filed 9/20/21, at p. 29. And the SO has clearly abused her discretion by not considering Katherine’s OIC, notwithstanding COIC’s return thereof (nonreviewable in Tax Court).

Unfortunately, Judge Holmes backslides when he points to “a couple helpful examples of when an OIC should be returned” in the IRM, 2021 T. C. Memo. 64, at p. 20. But I must encourage him to respect the partitive genitive.

Katherine and spouse were $155K behind for years at issue, and RO J threatened to seize their house, notwithstanding that Section 6334(e)(1) requires a USDJ to sign off, and the IRM requires area director and area counsel to sign off as well, Internal Revenue Manual (IRM) pt. 5.17.3.5.5 (Aug. 29, 2017). See 2021 T. C. Memo. 64, at p. 5. (Name omitted).

IRS liened and sent NITLs, so Katherine sent in an OIC, but the RO sent in a report nixing same, claiming Katherine just filed it to delay collection, so COIC just returned the OIC without reviewing it. Katherine asked for a CDP and raised the OIC, but the SO said it was returned and didn’t consider it. And Katherine’s CDP is bounced, so she petitions.

True, Tax Court has no jurisdiction to review COIC’s returns or rejections. But when one is not even considered at CDP, there is discretion, unless it is obvious to an impartial observer that there is no basis for the OIC other than to delay collection. After all, a CDP and a petition from a NOD delay collection.

The SO should have considered Katherine’s OIC offer, and that her and her spouse’s nearing retirement should have been in the mix.

“A recently updated provision of the IRM shows the Commissioner takes substantiated, imminent retirement into consideration when calculating a taxpayer’s current and future earning potential. See IRM pt. 5.8.5.20(4) (Mar. 23,2018). While we aren’t sure if a similar provision preceded this one, we do know that RO J didn’t find the current retirement of Mr. Mason and nearing retirement Mrs. Mason to be a valid consideration or special circumstance when she sent in her RO report recommending that the they be found to have submitted their OIC ‘solely to cause delay.’” 2021 T. C. Memo. 64, at p.31, footnote 16. (Name omitted).

If the SO was unhappy with the information in the OIC or at the CDP, she could have asked. But she needed to review the OIC independently, as it was raised at the CDP, and all collection alternatives raised there need to be considered there.

That doesn’t mean either IRS wins or that Katherine wins.

“We can’t guarantee that taxpayers like the Masons will have their offer accepted or their tax liabilities compromised, but we can ensure that they get a fair shake and that the decisions made by the Commissioner’s employees aren’t ‘grounded in an error of law.’ We therefore conclude that SO R abused her discretion by sustaining the proposed collection action without first independently reviewing the Masons’ offer.” 2021 T. C. Memo. 64, at p. 32. (Name omitted).

A Taishoff “Good Job” to Eric William Johnson, Esq., who once again provides “Honest tax representation at reasonable rates.”

Connie Sue Heston, 2021 T. C. Sum. Op. 13, filed 5/19/21, is the latest beneficiary of a retroactive lump of Social Security Disability Income to take her Affordable Care Act (Section 36B) lumps when she receives said award.

When Judge Elizabeth Crewson Paris goes through the arithmetical gyrations, it turns out Connie Sue is only at 316% of Federal poverty, so her excess Advance Premium Tax Credit is only $1275 per month, and not the $1428.66 that Judge Paris’ calculations extract.

Connie Sue also claimed a net Premium Tax Credit, but that gets wiped out.

Judge Crewson cites Abrego, for which see my blogpost “The 2% Solution,” 6/16/20, and Johnson, for which see my blogpost “Oh MAGI, I Wish I’d Never Seen Your Face,” 3/11/19.

How the ordinary taxpayer, who evidently is so disabled as to merit a retroactive award of three (count ’em,, three) years’ SSDI, is supposed to unscramble the arithmetic frittata that Congress has cooked up, and Judge Paris has served up, is nowhere stated.

Connie Sue claims paying the $1602 deficiency would cause her a hardship. Before my well-heeled readers remark that they pay more than this per annum for their daily grande with soy latte and bran muffin, remember ex-Ch J L Paige Marvel’s injunction to “add a zero.” Maybe we should all add a couple zeros (hi, Judge Holmes).

Howbeit, Judge Paris, while sympathetic, can only tell Connie Sue that “…she is free to submit to the IRS, at any time after the entry of this decision, for its consideration and possible acceptance, a collection alternative in the form of an installment agreement or offer-in-compromise, supported by the necessary financial information.” 2021 T. C. Sum. Op. 13, at p. 18.

Alas, this is a nonpolitical blog, so I am under a self-imposed embargo on stating my opinion of this legislation.

“Do It Yourself’

That’s Judge Gale’s motto, as we saw in my blogpost “Even The Baristas Can’t Get It Right,” 3/29/21. And he stands by the same, as he revisits (metaphorically, of course, as Ragh is still in the slammer) Kiran Rawat, Petitioner and Raghvendra Singh, Intervenor, Docket No. 11350-18, filed 5/18/21.

Judge Gale has plenty to do. First, he must correct IRS’ answer. Judge Gale told IRS to move for summary J, and they did; but they got their papers wrong.

“…respondent has moved for partial summary adjudication in his favor based on, among other things, the doctrine of res judicata. However, Rule 39 provides that an affirmative defense such as res judicata must be ‘set forth in the party’s pleading’. This defense does not appear to be in the Answer, and respondent has not moved for leave pursuant to Rule 41(a) to amend the Answer to assert this defense.” Order, at p. 1.

So if IRS still wants to assert res judicata, they should move for leave per Rule 41(a), lodge and serve the proposed amended answer on Kiran and Ragh; if the latter have anything to say, they can do so, but Judge Gale tells Kiran what to put in any response she may make to IRS’ hypothetical motion for leave to amend.

“Petitioner’s response shall explain how the granting of respondent’s motion for leave to amend the answer would result in prejudice to petitioner. In view of the fact that respondent’s Motion for Partial Summary Judgment filed on March 23, 2021, has put petitioner on notice of the issue of res judicata and afforded her an opportunity to assert her position against its application in this case, the prejudice that petitioner must show is not how the application of res judicata would disadvantage her, but rather how the raising of the issue in May 2021, rather than in August 2018, when the Answer was filed, would disadvantage her. Petitioner’s response shall also explain how any prejudice could be remedied, if respondent’s motion for leave to amend the answer were to be granted.” Order, at p. 2.

Meantime, the case is on for Zoomie trial before the motion for leave to amend (if any) gets served and Kiran and Ragh respond (if they do). So what to do? Trust Judge Gale; a lesser jurist might continue the trial, but not he.

Judge Gale orders “…the scope of the remote trial in this case at the Knoxville, Tennessee trial session, at a date and time certain of 1:00 p.m. (EDT) on June 8, 2021, shall be limited to the issue of whether petitioner is entitled to equitable relief from joint and several liability pursuant to section 6015(f) for the 2010 taxable year.” Order, at p. 3.

And he tells the Clerk to serve Ragh at the address Judge Gale sussed out in March.