My esteemed colleague and delightful luncheon companion (whom this pandemic prevents me from joining for lunch in his hometown), Peter Reilly, CPA, has suggested that my blogposts have become too elliptical. A schoolmate of his (and presumably of Judge Albert G (“Scholar Al”) Lauber) said my blogposts used too many obscure terms.

I reminded Mr Reilly of my blogpost “Maybe Not So Obvious – Part Deux,” 1/22/15, but that’s now so long ago that a refresher is called for.

As I said back then, no readers need play guessing-games here; Tax Court and tax law are sufficiently obscure.

So here’s a brief glossary of terms and abbreviations, with more to follow if time (and reader interest) permits. And if some items are really obvious, I nevertheless include them because, as G. M. Fraser once remarked, “someone, somewhere, is sure to clamor for enlightenment if I don’t.”

Appeals – Internal Revenue Service Independent Office of Appeals. See https://www.irs.gov/appeals/appeals-an-independent-organization

CAP – Collection Appeal Process. Like a CDP (see below), but no Tax Court review.

CDP – Collection Due Process hearing. See 26USC§6320 and 26USC§6330.

CFR – Code of Federal Regulations. All the published regulations of Federal Administrative Agencies. Available online from http://www.law.cornell.edu

Ch J – Chief Judge

Chops – Penalties, e.g., Sections 6662s, 6663, 6694.

CPA – Certified Public Accountant. For my non-US readers, the equivalent of a Chartered Accountant.

CSTJ – Chief Special Trial Judge. Section 7443A.

Designated Hitter – A Tax Court designated order. For more details, see https://www.ustaxcourt.gov/InternetOrders/TodaysOrders.aspx

EA – Enrolled Agent. See 31CFR§10.4.

EE – Employee.

“Elevenses” – United States Circuit Court of Appeals for the Eleventh Circuit.

FRCP – Federal Rules of Civil Procedure. Available online from http://www.law.cornell.edu

FRE – Federal Rules of Evidence. Available online from http://www.law.cornell.edu

Glasshouse – United States Tax Court courthouse, 400 Second Street, NW, Washington DC 20217

Glasshouse Gang – Those stationed at The Glasshouse

IC – Independent contractor.

NFTL – Notice of Federal Tax Lien.

NITL – Notice of Intent to Levy.

NOD – Notice of Determination. Usually from Appeals after a CDP or equivalent hearing, but can come from Whistleblower Office (the “Ogden Sunseteers”) determining a whistleblower claim. Sometimes also from revocation of 501(c)(3) status, worker classification, or disqualification of retirement or deferred compensation plans.

Off-the-bencher – A Tax Court opinion rendered from the bench after hearing. See 26USC§7459(b). The transcript of the Judge’s oral remarks is the opinion (or order and decision).

Ogden Sunseteers or OS – Personnel of the IRS Whistleblower office, located in Ogden, UT, who deny applications and  watch the sunset.

Partitive Genitive – A syntactical form carried over from Latin, where one shows an object as a part of a greater whole, as in “a cup of coffee”, “a couple of rounds of briefing”, etc. Much derided by His Honor Judge Mark V. Holmes

Reg – Regulation. Usually Treasury Regulation. See CFR above.

Reg. Section – Specific provision of CFR.

Rounder – A frequent Tax Court litigant. May or may not be found by the Court to make protester or frivolous arguments. IRS periodically publishes notices setting forth what it defines as frivolous arguments. See wits, wags and wiseacres, infra.

RTRP – Registered Tax Return Preparer. One who qualified under the now-extinct Shulman-Williams registration regime, abolished by Loving v IRS, No. 13-5601, USCADC.

Section – The Internal Revenue Code, Article 26 United States Code.

“Small Court” – United States Tax Court, but may be used for inferior courts created by Congress under US Constitution, Art. 1, s. 8.

SNOD – The Statutory Notice of Deficiency, also known as the “ninety-day letter” or “ticket to Tax Court”.

SOL – Statute of Limitations. There is none for nonfiling or fraud. For others, there are three-year and six-year SOLs, which I abbreviate 3SOL and 6SOL.

State Abbreviations – I use the United States Postal Service version, e.g., CA for California, AZ for Arizona.

STJ – Special Trial Judge. Section 7443A.

Summary J – Summary judgment. Judgment on the law without need for a trial, as no material facts are disputed. See FRCP§56 and Tax Court Rule 121. There is a précis on the Tax Court website: “What is a motion for summary judgment? How should I respond to one?” https://ustaxcourt.gov/petitioners_start.html?s=summary&r=3051#START39

TAS – Taxpayer Advocate Service. See https://www.irs.gov/advocate/the-taxpayer-advocate-service-is-your-voice-at-the-irs

The Hill Far Above – Location of Cornell University Law School.

The Supremes – United States Supreme Court. Sometimes also USSC.

USCA – United States Circuit Court of Appeals.

USCFC – United States Court of Federal Claims.

USDC – United States District Court. Usually followed by State (or District or Commonwealth or Territory) designation, and geographical designation, if any, i.e., E (Eastern), W (Western), N (Northern), S (Southern), or M (Middle). Thus, I’d write United States District Court for the Middle District of Tennessee as USDCMDTN, and United States District Court for the District of Rhode Island as USDCDRI.

USCAFC – United States Court of Appeals for the Federal Circuit.

UPS – United Parcel Service.

USPS – United States Postal Service

Wits, wags and wiseacres – Aspirants to, or candidates for, Rounder status, but not yet elevated thereto.

I award various titles to litigants for their maneuvers on a purely arbitrary basis. Examples are Taishoff “Good try” of various classes, Taishoff “Good job” for winners,  and Taishoff “Oh Please,” the last for extremely feeble arguments and maneuvers.

I introduce editorial comments with “Taishoff says.”

The Tax Cuts and Jobs Act of 2017 made alimony nondeductible to the payor and non-taxable income to the payee. But pre-2018 divorce agreements continue unchanged while unmodified (in which event further hoops must be jumped through), so Michelle L. Romanowski, Docket No. 15816-19S, filed 9/2/20, may yet be relevant.

Both Michelle and IRS want summary J. Neither gets all of it, but Michelle gets tossed, while IRS only gets some. Thereby hangs the tale.

IRS first stung Michelle’s loved-once with a deficiency, but he showed expenses paid per the temporary maintenance order. So IRS gave Michelle a SNOD, as she reported nothing.

Michelle’s loved-once made mortgage payments on family home that he vacated. But since Michelle claims she never saw loved-once’s numbers, she’s raised a question of fact. Loved-once claimed the interest deduction on his return, as well as claiming it as part of  the alimony he paid. Nice try. So calculating which was what is a question of fact. As for paydown of the mortgage, that secured Michelle’s dwelling, so she got a benefit. And since she and loved-once held title as husband and wife, by State law (NY) her interest in the family home ceases at her death, so further payments not for her benefit, satisfying Section 71(d).

Utilities for the family home, even though billed to loved-once, benefit Michelle, so they’re in. So are the lease payments on the Land Rover for the months she had it.

Unallocated cash payments are taxable to Michelle.” We have previously rejected the argument that unallocated support allocations are not alimony because they could be part of the payor’s child support obligations under State law. See Berry v. Commissioner, T.C. Memo. 2005-91, 2005 WL 950117, at *14; see also Okerson v. Commissioner, 123 T.C. at 264 (holding that whether the document characterizes a payment as alimony ‘has no effect on the consequences of that payment for Federal income tax purposes.’) (quoting Hoover v. Commissioner, 102 F.3d 842, 844 (6th Cir. 1996), affg T. C. Memo. 1995-183). And petitioner does not allege that Mr. Romanowski did not make these payments. Based on the undisputed facts before us, we conclude that the semi-monthly payments were taxable alimony payments.” Order, at p. 4.

Health insurance payments were made for both Michelle and kids, but the evidence shows only lump-sum, so question of fact which payments benefited only Michelle.

The Court-ordered professional evaluation fees (probably for determining child custody) are neither alimony, nor income to Michelle, nor deductible.

So the unallocated payments, the Land Rover lease rent, and utilities are in as alimony, and presumably deductions for love-once. Mortgage payments and health insurance are questions of fact. Professional evaluation fees are out both ways.

Does payee benefit is the question.

A commentator from The Land of the Conservation Easement lamented the long delay in a case I blogged only yesterday under the caption “Let the Spinnin’ Wheel Spin,” 8/31/20. The commentator remarked that the case involved one MFJ 1040 return for a single year, and once the Sub S and LLC were disposed of, the issue was simple.

What price the syndicated (or maybe not syndicated) conservation easement, the commentator asked, with multiplex taxpayers with multiple entities, documents by the terabyte, appraisals, dueling experts, et hoc genus omne? Will these cases be the new Jarndyce v Jarndyce?

Far be it from me to condone dilatory tactics on any side. Justice delayed is justice denied, and the old cry “There’s no difference between ‘some day’ and ‘never'” is as true today as sixty years ago.

But a brief review of the facts in the case I blogged via a docket search shows that the petition was filed six (count ’em, six) years after the year at issue, and the SNOD issued only after two attempts by IRS to settle per Announcement 2005-80, both of which taxpayers rejected. The SNOD followed only as the SOL was about to run, with no Form 872 or any other extender in sight.

There were voluminous exhibits on the trial. See Sean L. Daichman and Linda E. Daichman, Docket No. 14368-15, filed 8/31/15.

Finally, there were five (count ’em, five) volumes of pretrial and trial transcripts, compiled over two days.

So given that the petition hit five years after the audit, a nine-month pretrial continuance agreed to by both sides, and a two day trial to sort this out, the time lag wasn’t as bad as the commentator suggests.

As my late law partner Sid (may he rest in peace) would grunt between his cigar-laden teeth when confronted with delaying tactics, “Select or settle or get out.” He meant either select a jury, settle the case, or go home.

Maxwell Anderson, thou should’st be living at this hour, because, as he wrote, “the days grow short when you reach September/ When the autumn weather turns the leaves to flame/One hasn’t got time for the waiting game.”

Today STJ Diana L. (“The Taxpayer’s Friend”) Leyden is confronted by a masterpiece of IRS computerbabble, which seeks to prove that Boss Hossery is under the radar in Gregory Parker, Docket No. 1416-20S, filed 9/1/20, because AUR (CP2000), therefore electronic.

Wherefore neither has STJ Di got time for the waiting game, especially when IRS responds with the following after more than three (count ’em, three) weeks since STJ Di asks them for the Boss Hossery behind the chops wherewith they seek to slug Greg.

“Respondent attached as Exhibit A to his status report a copy of the Case History Transcript dated ’08/12/2020′. This Case History Transcript indicates an action of ‘IRS RECD’ dated “01/24/2020″ and includes the following information: under ‘CODE’ is the number 75, under ‘USER’ is the number 19B878, under ‘INPUT DATE’ is 10/17/2019, which date was before the notice of deficiency and after the date of the CP2000.” Order, at p. 1.

IRS has a week to put this into English.

Blood Sweat and Tears lead vocalist David Clayton-Thomas wrote the title hereof. And the group’s name is not a bad description of what Sean L. Daichman and Linda E. Daichman, 2020 T. C. Memo. 126, filed 8/31/20, are left with after Judge Paris demolishes the structure created by their dodger attorney, who cooked up a day-trading Sub S that was collapsed a few days after it started, with its holdings of cash and marketable securities showered on an LLC and family trust, and a claimed $2.1 million short-term capital loss to Sean and Linda.

Sean has much income from his power-plant refurbishing.

So his attorney sets up the Sub S, allegedly to day-trade, but Sean testifies he has neither time nor knowledge, and the trades are minuscule. But the Sub S gets Sean’s power-planting interests plus cash. The Sub S dissolves shortly after birth, with the goodies split between LLC and family trust. Since distributed goodies are claimed to be much discounted (marketability and control), Sean claims the big loss aforesaid.

Judge Paris: “… the transactions petitioners executed to generate the claimed loss deduction failed to alter their economic position in any way that affected objective economic reality. The transfers of assets were effectively a circular flow of funds among related entities used to generate an artificial tax loss to offset petitioners’ [year at issue] income. Petitioners transferred substantial assets to…their wholly owned S corporation, which then transferred those assets to Investment LP. … S Corp owned a 98% limited partnership interest in Investment LP, while petitioners, as cotrustees of the … Trust, owned the remaining 2% as general partners. Within days of the transfers to Investment LP, Trading S Corp dissolved, distributing its 98% interest in Investment LP (including the assets petitioners had contributed to …S Corp) to petitioners. Petitioners claimed a loss deduction on their [year at issue] tax return by calculating the values of the distributed partnership interests based on substantial discounts. Petitioners had constant control over the assets and entities at all relevant times, however, and neither the contribution to … S Corp nor its dissolution affected petitioners’ position or caused ‘real dollars to meaningfully change hands’. The form of petitioners’ ownership of the assets may have changed, but the substance did not. There was no realistic risk or possibility that the funds or assets would change hands at any point.” 2020 T. C. Memo, 126, at pp. 20-21.

Moreover, the S Corp. was collapsed almost from the get-go, and its activity was subminimal. Clearly, setting up a tax loss was its only reason for existence.

And Sean’s attorney was promoting such deals. “The Court is left with the conclusion that Mr. S offered petitioners a prepackaged tax strategy, one that he offered to numerous clients in [year at issue], designed to create an artificial loss through a circular flow of assets, the application of substantial discounts, and the misreporting of the resulting loss as an ordinary loss, rather than a short-term capital loss. When the initial loss calculation failed to eliminate fully petitioners’ income, petitioners had a second return prepared for … S Corp, increasing the discounts and thereby the loss, and offsetting all of petitioners’ income.” 2020 T. C. Memo. 126, at p. 24. (Name omitted).  I dare say Mr S has gotten The Phone Call.

IRS comes up short on the chops, as only the five-and-ten substantial understatement of tax gets properly Boss Hossed.

There are two varieties of settlement today. First is a full-dress T. C., wherein Judge Travis A. (“Tag”) Greaves discusses whether an interim Boss Hoss is the real deal when a RA offers Douglas M. Thompson and Lisa Mae Thompson, 155 T. C. 5, filed 8/31/20 a settlement of Doug’s and Lisa Mae’s distressed asset trust abusive shelter chops at the Announcement 2005-80 10% discount. Watch that 10% discount; it’ll show up again.

The RA sends a letter offering the 2005-80 settlement, but the letter does not “…identify a tax period or tax form to which it related, provide an underpayment amount, or request petitioners’ consent to assessment and collection.” 155. T. C. 5, at p. 5. A SNOD does all that.

Doug and Lisa Mae refuse, so the RA sends another letter two (count ’em, two) years later, offering a 15% chop, but if not, the RA will develop the case and lay the full boat (whatever that may be) on Doug and Lisa Mae. Doug and Lisa Mae decline. Again, this letter doesn’t identify period, form, amount of tax due, or request consent to assessment and collection. But the SNOD that follows this rejection does all the above. With full boat chops.

Doug and Lisa Mae petition, saying no Boss Hoss for either letter, and the sign-off for the SNOD came from the RA’s acting immediate supervisor, not a proper Boss Hoss.

Judge Tag says no Boss Hoss necessary for either letter, because nothing had been determined.

“Rather than determining that petitioners are liable for penalties of specific dollar amounts, subject to review by Appeals or the Tax Court, each letter offers to settle penalties arising from the DAT transaction on certain terms, including substatutory penalty rates, which are based not on an audit but on Announcement 2005-80. When petitioners failed to accept the offers, RA D still had work to do–the [second] letter explicitly says the IRS had not completed its examination or fully developed the facts of petitioners’ case. Furthermore, the [second] letter warns that declining the settlement offer would result in ‘applicable penalties,’ without stating which penalties, if any, might end up being ‘applicable to petitioners’ facts. An offer letter like the ones at issue does not require supervisory approval because it is not a ‘determination’ at all, but a preliminary proposal of the revenue agent within an ongoing examination.” 155 T. C. 5, at p. 10. (Name omitted; emphasis by the Court).

Taishoff says the whole aim of Section 6751(b) is to prevent Exam from bludgeoning taxpayers into settlements with threats of penalties. And what is more threatening than unnamed penalties for an unknown amount? When the bludgeoning takes place is nothing to the point. If IRS could bludgeon before even sending a 30-day letter, why bother? “Bludgeon early, bludgeon often” is what the statute is supposed to prevent.

As for Judge Tag’s dismissing legislative intent, (“As in Belair Woods, we will not let petitioner’s legislative history argument animate our decision,” 155 T. C. 5, at p. 11), CCAs can go there, even if Tax Court can’t. Remember Chai and Graev.

The acting Boss Hoss is good enough. She was RA D’s immediate supervisor when the SNOD went out. No Regno di Giorno problems.

The rule of lenity doesn’t help, because Section 6751 isn’t so vague that the Court can do no more than make a mere guess what Congress meant.

Next, I must once again acknowledge my debt to my colleague and delightful luncheon companion Peter Reilly, CPA. He kindly put me wise to IR-2020-196, 8/31/20, wherein the Coalholders become the Coalfolders, grabbing the settlement IRS offers, allowing them to deduct the $32.5 million they paid for this metziah (please pardon the arcane technical terminology) and getting only a 10% chop. The promoters, of course, go down big. Conservationists, read and heed.

Oh, if you missed the Coalholders’ tale, see my blogpost “Watch This, Guys  – Hold My Coal,” 6/15/20.”

It was the late Robert S. Pasley, Esq., on The Hill Far Above, in that long-ago autumn, who brought forth the ancient rule: a dog must be shown to have vicious propensities before its owner can be called to juridical account. Or, as a classmate put it, “every dog is entitled to one bite.”

It seems Tax Court has adopted this rule. We have a string of twenty-year petitioners, seeking to establish that IRS dealt them no SNOD or NOD for twenty, or maybe thirty, years. Our story begins with my blogpost “Only a Grand?” 8/26/20, when CSTJ Lewis (“Say That Name Again With Feeling”) Carluzzo lays a Section 6673 grand chop on a rounder who’s back for the second time.

CSTJ Lew was not hospitable to such stuff.  And Judge Buch gave his petitioner strike three in my blogpost “Paper Tiger?” 8/3/20; the dude was coming around for the third time, and the price was two grand.

Ex-Ch J L Paige (“Iron Fist”) Marvel let what appeared to be a first-timer walk in my blogpost “Lighting ‘Em Up,” 7/28/20, but she did have this to say: “This type of case forces the Commissioner to spend a considerable amount of time trying to verify the taxpayer’s allegations that the Commissioner has not issued either a notice of deficiency or a notice of determination for each of the years identified in the petition. The search foisted on the Commissioner, which takes a great deal of time and effort, often leads to the filing of a motion to dismiss for lack of jurisdiction, and may lead to the taxpayer pressing for the entry of an order that specifically states the taxpayer did not receive any notice for any of the years listed in the petition.”

But today Ch J Maurice B (“Mighty Mo”) Foley puts the work on IRS in Jeffrey Alan Kock, Docket No. 5046-20, filed 8/28/20.

Jeff wants IRS to go back to 1989 and root out any NOD or SNOD bearing his monicker, or else dismiss the case. And according to Ch J Mighty Mo, he includes 2020, a year for which individual returns won’t be due for seven months, unless we get another July shift.

IRS, locked-down and weary, says  “…he lacks sufficient knowledge or information to admit or deny whether petitioner was issued any deficiency notices or notices of determination for 1989 through 2002 [sic], but (2) states further he is conducting a search of respondent’s records to determine whether any such deficiency notices or notices of determination were issued to petitioner that would confer jurisdiction upon the Court in this case.” Order, at p. 1.

Maybe there’s a typo in there, but whether Ch J Mighty Mo or IRS I cannot tell.

Ch J Mighty Mo seems to think IRS is stalling, or something.

“… on or before September 17, 2020, respondent shall file a Response, if any, to petitioner’s above-referenced motion to dismiss. Failure to comply with this Order may result in the granting of that motion to dismiss.” Order, at p. 1.

Judge, that’s thirty-one (count ’em, thirty-one) years, if 2020 is on the table and thirteen years if 2002 is up. A not-so-quick docket search (that new website isn’t the best) shows Jeff is a first-timer, but, still and all, Jeff had thirty-one years to do something, and you just gave IRS less than three weeks.

If the rule is as the late Prof. Pasley enunciated it, let’s have a sliding scale. I propose one free kick, then a grand for each succeeding kick, cumulative. With an automatic press after four (Nassau, as the golfers say: bet doubles on the back nine).

Judge Elizabeth A. (“Tex”) Copeland has the bad news for David Casimer Brzyski, 2020 T. C. Sum. Op. 25, filed 8/27/20. It’s another upended dependency, HOH, child credit, and EITC. Dave claims these on account of minor offspring of Daniela, although they are neither his biologically nor by adoption.

Dave says he paid some money for the care of said minors, but they did not live with him for the whole year at issue (no qualifying relative per Section 152(d)(2)(H)).

Ordinarily, I’d hardly blog a case so commonplace, but Dave is inventive.

Dave and Daniela went to MO to visit his Mom in year at issue. “Mr. Brzyski claims that over the Thanksgiving holiday he and Daniela established a common law marriage by driving across the Missouri border to Kansas and declaring their marriage over dinner.” 2020 T. C. Sum. Op. 25, at p. 8, footnote 11.

Kansas then recognized (and for aught I know still does) commonlaw marriage. But just hitting the Dairy Queen across the line doesn’t get it for Judge Tex Copeland.

“The three factors that constitute a common law marriage in Kansas are: (1) the two individuals must have the requisite capacity to marry, (2) the individuals must have a present marriage agreement between themselves, and (3) the individuals must hold themselves out to the public as husband and wife. In determining the existence of a common law marriage, Kansas law requires that Mr. Brzyski, through ‘substantial’ evidence, prove that he and Daniela entered into a common law marriage. Kansas law further defines substantial evidence as that ‘such legal and relevant evidence as a reasonable person might accept as being sufficient to support a conclusion.'” 2020 T. C. Sum. Op. 25, at p. 9 (Citations omitted).

Dave didn’t make it.

Oh yes, Daniela’s dad took the minors as dependents on his return for the year at issue. 2020 T. C. Sum. Op. 25, at p. 5, footnote 9.

No, I have not abandoned my law practice to flog dubious vegetal extracts. Rather today’s full-dress T. C. shows the high bar blowers must clear to supplement the administrative record, and how easily their blowings will crater even if they do.

Here’s Michael van Bemmelen, 155 T. C. 4, filed 8/27/20. Even though he’s self-represented in IRS’ motion for summary J sustaining Mike’s toss, he was represented before the Ogden Sunseteers by his trusty attorney, whom I’ll call Casey.

Mike whistled a bunch of Virgin Islanders who supposedly bilked the fisc of billions. Mike first sent in a bunch stuff (hi, Judge Holmes) in 2012, and sent in more thereafter. Casey sent in a Form 211, but had no Form 2848, so the OS told Mike to speak to them directly. Casey later submitted a Form 2848.

The OS initial claims evaluater couldn’t find whatever Mike sent over the years, so bucked Casey’s stuff to an LB&I classifier, who found Mike’s original stuff, reviewed Casey’s, and decided Mike’s and Casey’s stuff was “…speculative and/or did not provide specific or credible information regarding tax underpayments or violations of internal revenue laws.” 155 T. C. 4, at p. 10.

All y’all know that “and/or” is not a favored locution at Tax Court in whistleblower cases, but ex-Ch J Michael B (“Iron Mike”) Thornton disses that in a footnote.

“The record is clear, however, that in classifying petitioner’s claim Ms. G [LB&I classifier] explicitly premised her recommended rejection of the claim on conclusions both that his allegations were ‘purely speculative’ and that ‘the claim does not have enough information to support the alleged violations.’ The ARM [Award Recommendation Memorandum] adopted these recommendations. Accordingly we review whether the WBO abused its discretion in rejecting petitioner’s claim under these rationales.” 155 T. C. 4, at p. 30, footnote 10. (Name Omitted).

Mike wants to supplement the administrative record with the 2012 material he sent and a 2019 account of stuff Mike gave to CID.

2019 is out. Mike hasn’t provided “clear” evidence to show “(1) if the agency ‘deliberately or negligently excluded documents that may have been adverse to its decision,’ (2) if background information was needed ‘to determine whether the agency considered all the relevant factors,’ or (3) if the ‘agency failed to explain administrative action so as to frustrate judicial review….” 155 T. C. 4, at p. 22 (Citations omitted).

2012 does get in. You need clear evidence for that, and Mike has it.

“Both the Form 211 that petitioner submitted in March 2018 and [Casey’s] cover letter referenced petitioner’s 2012 submission. Indeed, in response to the directive ‘Name and title and contact information of IRS employees to whom violation was first reported, if known’ petitioner’s Form 211 states: ‘Written claims submitted to IRS WBO, October 2012.’ Moreover, Ms. G’s classification checklist memorandum, as incorporated in the ARM, states:

‘The information obtained in this claim is referenced to the claimant’s original claim (2012-003653). The original claim was determined to lack substance. The supplemental information provided in this claim does not have enough information to support the alleged violations.’

“These statements, coupled with the contents of petitioner’s Form 211, constitute a substantial showing made with clear evidence that the 2012 submission is properly part of the administrative record. Accordingly, we will grant petitioner’s motion to supplement the record, as supplemented, insofar as it seeks to complete the record with the 2012 submission.” 155 T. C. 4, at p. 20.

Doesn’t help, though.

“The administrative record shows that the WBO received and reviewed petitioner’s claim before forwarding it to Ms. G, a classifier in LB&I, for further review. Ms. G reviewed petitioner’s claim and noted that it referenced an earlier 2012 submission which had been ‘determined to lack substance. The supplemental information provided in this claim does not have enough information to support the alleged violations.’ Ms. G recommended that petitioner’s claim be rejected on the basis that the ‘[a]llegations are not specific, credible, or are speculative–[a]llegations are purely speculative in nature.’ The WBO accepted Ms. G’s recommendation and issued its determination rejecting petitioner’s claim because “the information provided was speculative and/or did not provide specific or credible information regarding tax underpayments or violations of internal revenue laws.’ We conclude that the WBO did not abuse its discretion in rejecting petitioner’s claim on this rationale.” 155 T. C. 4, at pp. 29-30.  (Footnote omitted, but I quoted most of it hereinabove).

Mike talked of money laundering, but it wasn’t clear what tax laws were violated, or whether it was target or some third party who did the violating. And all the 2012 stuff said is that Mike would provide more information later. And the 2018 Form 211 did no better.

His motion to supplement seems to seek some kind of discovery and evidentiary hearing that the Ogden Sunseteers intentionally subverted the whistleblowing process. The last collapses for want of evidence, sort of son-of-Greenberg’s Express. You need strong evidence, and Mike hasn’t got that.

Mike’s claim the OS should have done more investigation founders on Pub. L. No. 109-432, sec. 406(b)(1)(C), which lets the OS talk to the claimant and counsel if it wishes, “in its sole discretion.” 155 T. C. 4, at p. 33. (Emphasis by the Court). There’s no standard for judicial review here.

Summary J for IRS.

While Judge Gale is sympathetic to a 78-year old petitioner who received a brain injury from a fall (and having survived such when some years younger, I can tell you as the car advertisements do, do not attempt), he sees a hint of the Hidden Spouse trick in James A Malone, Docket No. 13892-19, filed 8/27/20.

The status reports so far state that Appeals, tired of waiting for some information from Mr M, sent the file back to IRS counsel; Mr M’s counsel states that “family members” are helping Mr M find the stuff, and they hope to settle. But the status reports aren’t consistent, some numbers differ, and some issues from the SNOD aren’t addressed.

Mr M’s brain injury troubles Judge Gale. Might could be time to go to the bullpen for a next friend, especially as the trial prep seems to be stalled.

And Mr M filed MFS for the year at issue.

“…the Court is also concerned by petitioner’s counsel’s related assertion that unidentified members of petitioner’s family are “assist[ing] him in retrieving and organizing documents needed for this matter”, insofar as it raises the question of whether such family members may have a potential conflict of interest in this case. The notice of deficiency indicates that the filing status on the substitute return filed for petitioner for [year at issue] is married filing separate. In the event petitioner were to challenge respondent’s determination of his filing status by submitting a joint return with his spouse for [year at issue], petitioner’s spouse may have a conflict of interest in this case, unless he or she disavows section 6015 relief.” Order, at pp. 3-4. (Footnote omitted, but read it; it’s the playbook for the Hidden Spouse trick).

OK, I know you won’t go look at the order just to read the footnote, so here it is.

“See Millsap v. Commissioner, 91 T.C. 926 (1988) (holding that a taxpayer is entitled to challenge the Commissioner’s determination of filing status in a deficiency proceeding and that substitute returns filed by the Commissioner do not constitute ‘separate’ returns for purposes of sec. 6013(b)); see also Saltzman & Book, IRS Practice and Procedure, para. 4.02[1][b] (Rev. 2d ed. 2002 & Supp. 2020-1) (‘Similarly, for purposes of making an election to file a joint return, the Section 6020(b) return is not the taxpayer’s return when the taxpayer makes an election on a subsequently filed return. As a result, when the Service prepares a Section 6020(b) return for each of two spouses as married filing separately, and sends them a notice of deficiency, the husband and wife may petition the Tax Court, file a joint return, and challenge the Service’s determination of their fling status in the same manner as they contest the amount of the deficiency.”) (citing Millsap v. Commissioner).” Order, at pp. 3-4, footnote 10.

So Judge Gale orders the parties to dish on next friendliness, spousal situation, conflicts of interest, and what gives with every determination in the SNOD, including but not limited to chops.

For more about the Hidden Spouse trick, see my blogpost “Hidden Spouse,” 4/3/18.