If you don’t know what that means, consider yourself lucky. If you do, consider the plight of Cody J. Bertram and Nicole Bertram, Docket No. 1265-25S, filed 7/3/25. Cody was on TDY in FL when the SNOD was mailed to his last known address in TX; Nicole was having serious health issues at the time.

The petition was 90 (count ’em, 90) days late.

Ch J Patrick J. (“Scholar Pat”) Urda: “…we note that the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. sections 3901 et seq., postpones or suspends certain types of civil deadlines for eligible military service members. That statute, however, does not apply to extend the period for timely filing a Tax Court petition. See 50 U.S.C. § 3936(c) (the SCRA does not extend periods of limitation prescribed by or under the internal revenue laws of the United States). We further note that I.R.C. section 7508(a)(1)(C) extends the time to file a Tax Court petition in response to a deficiency notice if an individual is in military service in a combat zone or contingency operation. However, this provision does not appear to apply to Mr. Bertram’s temporary military duty assignment.” Order, at p. 2.

Equitable tolling fails, as Cody and Nicole are in 5 Cir.

We finally get a post-BBA 2015 full-dress T. C., JM Assets, LP, A-A-A Storage, LLC, Partnership Representative, 165 T. C. 1, filed 7/2/25, with Judge Ronald L. (“Ingenuity”) Buch getting the OK from 17 (count ’em, 17) of his colleagues.

M was selling off real estate and IRS was increasing Section 1231 recapture of depreciation. IRS wants partial summary J that the NFPA (Notice of Final Partnership Adjustment) was timely per Section 6235. “The Commissioner relies on Treasury Regulation § 301.6235-1(b)(2), which defines the period the Commissioner has to issue the FPA in the event a partnership requests a modification of an imputed underpayment pursuant to section 6225(c).” 165 T. C. 1, at p. 3.

Spoiler alert! IRS loses!

IRS audited, proposed changes, M riposted with a Form 8980 modification request, IRS bought all M’s requests, but then changed its mind and hit M with the NFPA with all the old increases, plus chops.

M claims IRS is too late with the NFPA, per Section 6235(a)(2). IRS says yeah, we goofed, but we’re timely.

Judge Buch lays out the new procedures in 165 T. C. 1, at pp. 8-9. First there’s a notice of proceeding to the Representative, who alone appears and can bind all partners. After audit, the Notice of Proposed Partnership Adjustment (NOPPA). Rep has 270 days to request modifications via Form 8980 with attachments; see 165 T. C. 1, at p. 9, Footnote 3, for a list of modifications. IRS eyeballs any modification requests and issues a Notice of Final Partnership Adjustments (FPA). Rep must petition within 90 days to USTC, Court of Claims, or USDC.

When a modification request of imputed underpayment under section 6225(c) is timely made, IRS must mail FPA no later than 3 years after the date that is 270 days . . . after the date on which everything required to be submitted to the Secretary pursuant to such section is so submitted. IRS has promulgated Reg. Section 301.6235-1(b)(2), which says date everything submitted is 270 days when partnership can request modifications; M says the statute says it’s when they actually submitted everything, as long as it’s less than 270 days after the NOPPA.

It’s time for the Supremes’ gift of discipline to tax law. Cue Loper-Bright.

“As applied in this case, there is a direct conflict between the statute and the regulation on which the Commissioner relies. Section 6235(a)(2) provides the period for when the Commissioner can make an adjustment for a partnership in the event a modification request for the imputed underpayment is submitted to the Commissioner. The plain text of that statute states that date is ‘270 days . . . after the date’ everything required for a complete modification request under section 6225(c) ‘is so submitted.’ I.R.C. § 6235(a)(2). The regulation interprets that date to be 270 days after ‘[t]he date the period for requesting modification ends.’ Treas. Reg. § 301.6235-1(b)(2)(i)(A). As is made evident in this case, those are different dates, and the regulation must give way to the statute.” 165 T. C. 1, at p. 13.

IRS claims statute gives broad authority to promulgate regulations. Yeah, says Judge Buch, but not to rewrite the statute that gives IRS that authority. And M never filed the Form 8981 waiver, shortening the 270-day cutoff. But M didn’t want to waive, and nothing in the statute says a waiver filing is necessary to shorten the 270-day cutoff.

IRS blew the cutoff.

“Factually, there is no genuine dispute that JM Assets submitted everything required to be submitted under section 6225(c) on February 14, 2023. That was the date JM Assets submitted Form 8980 to request modification of the imputed underpayment. At no time after that did JM Assets submit further information, nor did the Commissioner request additional information. And the Commissioner approved the modification request. Taken together, these facts establish that JM Assets submitted everything required to be nsubmitted with its initial submission. Under section 6235(a)(2), the Commissioner had 270 days from receipt of that submission to issue an FPA. The date that is 270 days from February 14, 2023, is November 11, 2023, a Saturday. Thus the 270-day period lapsed on Monday, November 13, 2023. See I.R.C. § 7503. The FPA issued on December 1, 2023, was untimely.” 165 T. C. 1, at p. 14.

IRS tries a goal-line stand, seeking to amend the answer to allege substantial understatement of income, triggering 6SOL. M says it did disclose the sale terms on its Form 6252 filed with its return. IRS says the understatement arose from the Section 1231 recapture. But misstating cost or basis isn’t an understatement; see Home Concrete and my blogpost “Colony Lives,” 4/26/12. No amendment to answer.

Once again, the famous words of Judge Cardozo echo in Tax Court. IRS threw to the wrong base, sending the SNOD for Moxon Corporation, 165 T. C. 2, filed 7/2/25, to an address other than last known address. Hence Moxon owes no tax, as it had no chance to contest liability and SOL had run.

But Moxon was a partner in AD Global, a TEFRA-era dodge, wherein the TMP stiped out the Section 6662(h) 40% gross valuation misstatement chops. Moxon is fighting a NFTL and a NITL for the chops, as IRS conceded collecting the tax.

But after somber reasoning and copious citation of precedent, Judge Goeke finds that while deficiency procedures and proceedings apply to affected items, now-repealed Section 6230(a)(2)(A)(i) takes chops out of the mix.

“…petitioner was obligated to report the tax at issue on its [years at issue] tax returns and was obligated to pay that tax at the time required by Congress. That petitioner generated tens of millions of dollars in purported losses through AD Global, failed to comply with its reporting and payment obligations, and then was fortunate in that respondent mailed the SNODs to an incorrect address does not mean that petitioner ‘was never obligated to pay [the taxes] in the first place.’ Petitioner’s argument on this point is based on a fiction and is unconvincing.” 165 T. C. 2, at pp. 14-15.

As with SOL, the government’s remedy may be gone, but the right remains.

Moxon owes the chops; while IRS’ blunder lets Moxon walk on paying the tax, it’s still owed, and the chops stick.

Judge Travis A. (“Tag”) Greaves, master of discovery, marries the 1982 Mel Gibson – Sigourney Weaver romadrama to Reg. Section 1.170A-13(c)(5)(iv)(F) in Carters Lake Land, LLC, f.k.a. Sassafras Point II, LLC, Piedmont Private Equity Manager, LLC, Tax Matters Partner, et al., Docket No. 1034-21, filed 7/2/25, lead case in a consolidated Dixieland Boondockery.

IRS served a blockbuster subpoena duces tecum (paper, not person) on appraisal firm Integrity, claiming their employee, whom I’ll call DM, wasn’t a qualified appraiser.

IRS wanted documents for years immediately prior to acquisition, acquisition, easement granted, and easement reported. Integrity claims this involves tons of documents, all of which its trusty attorneys need to scan for privilege and relevance, even after IRS offers a couple restrictive search terms (hi, Judge Holmes).

Integrity is down with providing documents relating to the three (count ’em, three) consolidated petitioners.

“Details regarding DM’s appraisal work, the clients he served, and Integrity’s relationship to petitioners are relevant to the issue of whether DM meets the definition of a qualified appraiser under section 170(f)(11)(E). This Court will allow respondent some latitude in its investigation to establish the relationship between petitioners and Integrity, ensuring the development of comprehensive legal arguments. The value and need for this information weigh against the motion to quash.” Order, at p. 5.

Except.

“Respondent’s request implicates potentially privileged information over a period of nearly four years. We disagree with respondent that such an extensive period is needed to determine whether someone is a qualified appraiser. Treas. Reg. section 1.170A-13(c)(5)(iv)(F) provides the relevant period — “the taxable year”. We will limit the temporal reach of the subpoena to the taxable year at issue. Integrity shall provide the relevant documentation for [taxable year at issue].” Order, at p. 6.

For the checklist for qualification and disqualification of an appraiser for Section 170 charitable giving, see Order, at p. 5.

Whatever you may lack at a CDP, paper should not be one. When the AO asks for documents, provide them. In this electronic age, storage should not be an issue; scanners and hard drives are cheap compared to a lien or levy.

Chad T. Mackland and Tina M. Mackland, T. C. Memo. 2025-69, filed 7/1/25, might have made out a case for CNC on hardship grounds if they provided the nine-page Fannie/Freddie Form 1003 loan application to the AO during the seven (count ’em, seven) months between hearing and confirmation of the NITL, showing attempt to draw on equity in home to pay down tax liability. T. C. Memo. 2025-69, at p. 8.

“Although the AO’s notes include a CNC code suggesting that collection of the liability would create a hardship for petitioners, the AO apparently determined, in requiring petitioners to borrow against the equity in their house, that the economic hardship exception did not apply.” T. C. Memo. 2025-69, at p. 12.

Judge Rose E. (“Cracklin'”) Jenkins says nonproof of attempt to realize on equity equals refusal to do so.

“Petitioners contend that the existence of a federal tax lien made it difficult to complete the loan process; however, there is no indication in the administrative record that petitioners made any request for the IRS to subordinate the tax lien under section 6325(d). In any event, any difficulty in obtaining a loan should not have prevented petitioners from providing proof of their attempts to secure the loan as requested by the AO. Although petitioners did not explicitly refuse to borrow against their home, and in fact claimed they were attempting to do so, their failure to provide any solid proof of their attempts could be understood as a refusal.” T. C. Memo. 2025-69, at pp. 14-15.

Judge Morrison could have saved a lot of electrons had he simply stated the above in Anaheim Arena Management, LLC, H&S Investments I, LP, A Partner Other Than the Tax Matters Partner, T. C. Memo. 2025-68, filed 6/30/25. AAM had a management contract with City and County to run Honda Arena, a major entertainment venue.

AAM was managing the Honda Arena for a piece of the action. But when revenue fell short of operating expenses plus capital repairs and replacements, AAM advanced money. There were promissory notes galore, with stated interest and repayment dates, and events of default and acceleration clauses. Problem was, only AAM signed as lender; the debtor was stated as “Honda Arena.” Except Honda Arena is a building, not an individual, trust, estate, partnership, association, company or corporation.

We get the full-boat eleven (count ’em, eleven) factor 9 Cir debt-vs-equity analysis, which AAM flunks on every measure. It’s all advances to keep the management agreement with the City and County alive. Although Judge Morrison seems confused that the source of repayment of the alleged debts is limited to profits from the Honda Arena means “this factor does not indicate that the advances are not debt.” T. C. 2025-68, at p. 47. I think you meant “this factor does not indicate the advances are debt,” Judge; otherwise, AAM did win on one factor.

Judge Morrison bars IRS from claiming the notes became worthless in a year other than AAM claimed, as IRS raises this too late, thus ambushing AAM.

AAM does avoid penalties, as they leveled with their hotshot CPAs (who had much experience and creds) and showed good faith reliance.

There’s a jurisdictional scrap over whether H&S was the TMP, and thus should have petitioned in the 90-day window, rather than in the 60-day add-on for notice partners, but caselaw says a TMP can file as a notice partner even if they miss the 90-day window. T. C. Memo. 2025-68, at p. 41.

If you want to read a management contract for a major entertainment venue, Judge Morrison has digested this one at pp. 4-16.

Edited to add, 7/8/25: Judge Morrison corrected the error I noted, and one I missed, in Order, 7/8/25.

Ex-Ch J L. Paige (“Iron Fist”) Marvel isn’t deciding it yet, but even though they haven’t opposed IRS’ motion to toss both their NITL years at issue, Mark Homnick & Aksana Homnick, Docket No. 16834-23L, filed 6/27/25, they might get a chance for a CDP instead of an equivalent hearing, because the NITLs didn’t state their country of residence, Belarus.

Mark & Aksana petitioned after the 30-day cutoff. Therefore, the AO gave them an equivalent hearing, although they’d asked for a CDP. The AO tossed the NITL for Year One, as Mark & Aksana had paid in full. Ex-Ch J Iron Fist grants IRS’ motion to toss Year One, as IRS seeks no collection activity for that year.

Year Two remains in play.

The AO was going to give Mark & Oksana a CDP based on equitable tolling (Mark & Aksana were only 22 days late), but went with the equivalent hearing after consulting with TAs and ATMs. Order, at p. 3.

“Although petitioners have not responded to respondent’s Motion, they alleged in their Petition that they resided in Belarus, did not receive the levy notices until the hearing request deadline had passed, and immediately made a hearing request upon receiving the levy notices. According a presumption of truthfulness to petitioners’ allegations, we could conclude that equitable tolling is warranted. Cf. Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005) (‘Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way.’). Depriving petitioners of potential discovery on the issue of whether respondent properly issued and mailed the [Year Two] levy notice would be unwarranted and premature, even though that issue bears on our jurisdiction.” Order, at p. 6.

Parties can’t stipulate to jurisdiction, which only Congress can bestow. But the parties can stipulate to the facts that give rise to jurisdiction. Settlement negotiations are apparently ongoing, but even if they settle, they still have to establish the bases for jurisdiction. So ex-Ch J Iron Fist tells the parties to prepare for trial; and Mark & Aksana, be prepared to establish diligence and extraordinary obstacles.

The longest-running title in this my blog’s history appears for the eighth (count ’em, eighth) time in fourteen (count ’em, fourteen) years, as Judge Travis A. (“Tag”) Greaves so admonishes trusty attorneys for nonparty P in Amgen Inc. & Subsidiaries, Docket No. 16017-21, filed 6/27/25.

Last month P’s trusty attorneys sought to seal a bunch stuff (hi, Judge Holmes) which Judge Tag Greaves denied. Trusty Attorneys sought leave, but failed to lodge the document they wanted to file if leave was granted. I didn’t blog this, as it seemed a routine attorney miscue.

Two weeks ago “P filed a Motion for Leave to File Motion for Reconsideration of Order and lodged the Motion for Reconsideration. Neither the motion for leave nor the motion for reconsideration set forth the specific portions of testimony P seeks to seal nor corresponding justifications. Instead, P argues that we failed to consider whether its confidential business information was sufficient justification to warrant sealing the testimony. P alleges that failing to seal the unidentified portions of testimony will cause irreparable harm to P.” Order, at p. 3. (Name omitted).

Judge Tag Greaves disputes trusty attorneys’ assertion that courts routinely seal stuff.

“Contrary to P’s claim that courts ‘routinely and regularly’ seal this confidential business information, courts impose a high bar on those that seek to limit public disclosure and do not often grant such requests.” Order, at p. 4.

The public have the right to know what’s going on in the courts. P’s trusty attorneys pled only that this was important stuff, but didn’t say what specifically was important, nor how it was important, nor how disclosure would irremediably injure P. That doesn’t get it.

But trusty attorneys will get another chance.

“Because of the defects in P’s motion limiting our review and the importance of protecting confidential business information when warranted, we will grant P’s Motion for Leave to File Motion for Reconsideration of Order… and file the lodged Motion for Reconsideration of Order as of the date of this Order. However, P’s Motion for Reconsideration remains deficient. The declaration setting forth the specific requests to seal and justification has been stricken from the record. Therefore, we again can only consider P’s arguments in the abstract. We will order P to supplement its motion for reconsideration with the specific requests to seal sought, including any redactions also sought by Amgen, and corresponding justification for the redaction. We note that the previously filed declaration only generally alleges harm without a concrete basis for each request. We expect P to specifically justify why sealing each portion of the transcript… is warranted, particularly considering that the information P seeks to seal is squarely at issue before this Court. We also expect P to specifically set forth why its interests in sealing these portions of the transcript are not adequately protected by Amgen’s aligned interests.” Order, at p. 5. (Citation omitted).

Takeaways: Note the primacy of business information as against personal information when sealing is on the menu. Note also whether the parties can adequately protect the nonparty’s interests without the nonparty’s intervention. Finally, note when essential issues must be resolved, the public and the appellate courts need to know on what bases the trial court’s resolution rests, so sealing is even harder to get.

So be specific.

Over the years I’ve argued for some form of judicial uniformity in handing out Section 6673 frivolity chops, lest some frivolite claim arbitrary and capricious on appeal or reargument. I am surprised no frivolite has tried this on before now, at least during the fourteen (count ’em fourteen, and I have) years I’ve been running this blog. Now it seems we are getting a more or less uniform approach.

Judge Cary Douglas Pugh doesn’t schedule the previous appearances of Paul H. Christiansen, T. C. Memo. 2025-67, filed 6/26/25, although she does refer to the T. C. Memo. his last USTC venture generated (and which I did not blog, as it was the usual protester/defier jargon and jive).  And Judge Adam B. (“Sport”) Landy did caution Paul (who appeared with spouse Terre) back in March.

Judge Cary Douglas Pugh gave Paul plenty of warning this time.

“In our Order granting the parties’ joint Motion to Submit Case Pursuant to Rule 122, we cautioned petitioner that a section 6673 penalty might be imposed if he advanced arguments that this Court and others have deemed frivolous. This Court also warned him in Christiansen, T.C. Memo. 2025-21, at *8, that ‘a penalty may be imposed in any future case before this Court should [petitioner] continue to pursue [his] misguided positions.’

“Petitioner did not heed our warnings, instead offering similar arguments in his opening and answering briefs. We therefore will impose a penalty of $1,000 pursuant to section 6673(a)(1) on petitioner. We again warn him that if he does not abandon these misguided positions in future filings before this Court, a greater penalty may be imposed.” T. C. Memo. 2025-67, at pp. 4-5. (Footnote omitted).

The omitted footnote says T. C. Memo. 2025-21 was filed two weeks before Paul filed his frivolous opening brief. So Paul can’t claim he wasn’t warned.

Witnesses testifying remotely have been quite the hot topic lately. Tax Court favors the tense present, watching body language and other tells as the witnesses speak their speech “trippingly on the tongue.”

Marc Lore and Carolyn Lore, Docket No. 8259-23, filed 6/25/25, are back, this time with their crosscountry witness who needs to testify remotely. Judge Courtney D. (“CD”) Jones needs more from the witness, whom I’ll call BG. Trial is set for the day after Labor Day in Hartford, CT.

BG “works for a global financial advisory firm, but he works remotely from California. According to [BG], he suffers from severe anxiety related to air travel and heights. He also states that he is unable to fly or be present in tall buildings. Thus, [BG] requests that he be permitted to testify remotely in this matter. According to the Motion, the parties do not object.” Order, at p. 1.

Unfortunately, that’s not good enough for Judge CD Jones. She orders that “…non-party [BG] shall file a supplemental declaration addressing: (1) how long he has been under care for anxiety that prohibits him from flying or being above the ground floor in buildings; and (2) the date of his last travel by airplane. [BG] may include any additional information that he believes would assist the Court in reaching its decision.” Order, at p. 2.

And while they’re waiting on BG’s supplement, the parties can file their own responses (joint or several), wherein they shall “set forth their respective position(s) regarding (1) [BG]’s request to testify remotely during trial; and (2) a video deposition of [BG] in lieu of his remote testimony at trial.” Order, at p. 2.

And serve copies of the whole thing on BG’s trusty attorney at a NY whiteshoe.