Judge Elizabeth A (watch this space) Copeland has the above advice for the SO in Julia Castaneda, Docket No. 7697-17L, filed 4/3/19. Julia rejected redaction last month in my blogpost “Unveiling Reveiled,” 3/8/19.

Today she’s fighting IRS’ standard summary J motion, but in record-rule 9 Cir IRS has a problem. Julie did file late for three of the four (count ‘em, four) years at issue. But she did file amended returns, and the SO only looked at the certificate of assessments, which showed what Julie put on the originally-filed returns, The SO had the amended returns for a year before issuing the NOD, but apparently never looked at them.

True, Julie never provided a Form 433-A nor copies of the amended returns she filed at the time of her CDP. The SO offered an expedited installment agreement, but Julia never accepted it. Instead, she submitted a lower offer, which was rejected. So for the unamended year she may be out.

Except.

Judge Copeland: “The consideration of amended tax returns could, at a minimum, change the calculation of an expedited installment agreement, which agreement can be entered into without providing full financial statements or a Form 433-A.

“In resolving doubts as to the existence of a material fact against the movant, we find that the existence of amended retums in the administrative file which were not reviewed by the SO, were they to be considered, could show a reduced tax liability. If so, that would require a trial do novo and new evidence to support the amended returns. For these reasons, we find at this juncture that Commissioner has not met his burden of proving that no genuine dispute exists as to any material fact. Consequently, we deny respondent’s Motion for Summary Judgment.” Order, at pp. 5-6.

Oh yes, the title hereof. Read The Amended Returns.

The Ogden Sunseteers even reopen cases without letters, and the question of remand from Tax Court (does remand imply a Tax Court order to IRS to commence a proceeding against the target when IRS has decided not so to proceed?) remains unanswered.

See my blogposts “A Hotly-Burning Question What Has Swept The Continent – Redivivus,” 7/28/17, and “Remand? You Can Whistle For It,” 1/31/18.

But Stanley H. (“Stan the Man”) Epstein, Docket No. 28731-15W, filed 4/2/19, star of the first-above-cited blogpost, is fighting IRS’ motion for summary J, even though he got a new letter from the Ogden brigade (apparently without remand, so the hereinabove referred to question remains unanswered) and timely petitioned same.

Judge Albert G (“Scholar Al”) Lauber has this one, and wishes Stan the Man to unconfuse him.

“In his response petitioner shall address respondent’s argument that this case is moot in light of the IRS’ decision to reopen his claim, the IRS’ issuance of a final determination with respect to the reopened claim, and his filing at docket number 2965-18W of a petition to challenge the IRS’ determination with respect to his reopened claim.” Order, at p. 1.

So apparently IRS can volley new determinations even when the old ones (which may be multiplex) have been petitioned and are before the Court. The epistolary bombardment goes on and on.

No, not George Orwell’s 1984 torture chamber (although some unsuccessful litigants might think it resembles same), but rather a place where all is laid bare and held up to the light, The Glasshouse at 400 Second Street, Northwest.

Once again, the public’s right to know o’ercrows Rule 27(a) and beats down Rule 103’s protective shield, in Clair R. Couturier, Jr. & Vicki Couturier, Docket No. 19714-16, filed 4/1/19, and it’s no April Fools’ joke.

Clair & Vicki have excise tax problems, and petition two Section 4973 chops. IRS wants summary J (natch), and Clair & Vicki respond, but simultaneously want to file under seal their 1040s for the first of the ten (count ‘em, ten) years at issue. Sounds like an IRA retroactively rejected.

All Clair & Vicki can say in support of sealing is that ”… disclosure would harm him. But petitioner provides nothing more than bare assertions of harm. For instance, in his motion to file his income tax return under seal, petitioner states only that ‘Notwithstanding the redaction of the taxpayer identification numbers, the [Year One] Tax Return contains confidential and sensitive information regarding Mr. Couturier’s finances, including his annual gross income and various taxes paid, which are not at issue in this case. Mr. Couturier would be harmed by the public disclosure of this sensitive information, and therefore requests leave to file it under seal.’ Petitioner’s motion to file his income tax transcripts is similarly spartan, stating only that they contain ‘confidential and sensitive information regarding Mr. Couturier’s finances that is not at issue in this case’ and that ‘Mr. Couturier would be harmed by the public disclosure of this sensitive information’.” Order, at p. 2.

All y’all will remember Willie Nelson, who made similar arguments years ago, and lost. If not, read ex-Ch J L Paige (“Iron Fist”) Marvel’s above-cited order.

“Without more, petitioner’s conclusory allegations of harm cannot overcome the public’s presumptive right of access to this Court’s records.” Order, at p. 2.

And ex-Ch J Iron Fist promptly unseals what had been temporarily sealed pending this order.

So anybody who objects to letting it all hang out, whether at 400 Second Street, NW, or any trial venue, or in the trade press or blogosphere, beware. Once you petition, unless you have a real good story, anything and everything is fair game. And it may just wind up on this my blog. Section 7461 sent me.

If someone reports a tax liability on their own return, and IRS assesses no more (but adds the late filing and late-payment chops), they can’t enjoin collection if they petition a SNOD previously issued based on a SFR.

Ch J Maurice B (“Mighty Mo”) Foley explains to Bradley Jerome Mitchell, Docket No. 14147-18, filed 3/29/19. Brad got a SNOD, which he petitioned, and when he petitioned sent IRS a delinquent 1040 for the same year, without payment. IRS assessed the tax shown, added the lateness chops, and sent collection notices. Brad wants to enjoin collection.

No dice, Brad; you said it.

Ch J Mighty Mo: “… the Commissioner is authorized to immediately ‘assess and collect the amount of taxes that are computed and shown due on a taxpayer’s original return, as well as the amount of any additional taxes computed and shown due on a subsequently filed amended income tax return.’ The Commissioner is likewise authorized to immediately assess and collect the additions to tax under sections I.R.C. sections 6651(a)(1), 6651(a)(2), and 6654, if such additions are measured by the amount of tax shown on the taxpayer’s return.  Such summary assessments are not subject to the normal deficiency procedures.” Order, at p. 2. (Citation omitted).

Because no difference between what Brad reported and IRS assessed, no deficiency,  so no stay of collection.

Takeaway- Might it not have been better if Brad petitioned the SNOD, and held off the 1040 and related info for the trial, where he could fight about what IRS said he owed, with collection stayed?

Today I blog the first of what I am sure will be many off-the-benchers from Judge Elizabeth A. Copeland, R&L Heating & Air Conditioning, Inc., Docket No. 5495-18L, filed 3/29/19.

The case is the usual small business running up massive nonpayments of withheld payroll taxes. After being hit with a NFTL for three (count ‘em, three) whole years, R&L goes to Appeals, and coughs up four more quarters’ worth of Forms 940.

“In addition, petitioner failed to make any federal tax deposits for these tax periods, failed to submit Forms 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, for tax years 2014 and 2015, failed to submit the proof of federal tax deposits in the then current quarter, failed to provide the specific basis for lien withdrawal, failed to provide the specific basis for the penalty and interest abatements, and failed to submit a proposal for resolution.” Transcript, at p. 5.

Ordinarily, reading this far, I’m sure my readers would echo The Commentator From Adelaide: “And we can stop here.”

But I think Judge Copeland might have spared one sentence to enlighten R&L.

R&L’s story is as follows. “”We are in the process trying to obtain a loan to pay [down] the outstanding tax liabilities[.]  [A]ny further action will hinder my ability to obtain the loan[.] We asking [sic] that the lien to be [sic] removed so it will be easier getting the loan[.] The penalties and interest assessment imposed on [the] firm very high [sic] and would it [sic] to be set aside[.]” Transcript, at p. 6. (Editorial emendations by the Court).

Judge Copeland gives R&L the skinny on summary J.

But R&L claims a factual dispute. “Petitioner supported with a document stating ‘there are factual issues that are in disputes [sic], therefore the summary judgment motion not [sic] appropriate.’ Petitioner further stated, ‘Work was completed [sic]on public buildings by our firm and never been [sic) compensated for this work. This created a hardship for this company causing us to fall behind with the taxes which is no fault of our own.’” Transcript, at p. 7. (Editorial emendations by the Court).

Now of course none of this excuses either nonfiling or nonpayment. So summary J is perfectly appropriate.

But it’s obvious R&L is neither an attorney nor a Tax Court admittee. So perhaps a word of explanation should have been considered, along these lines. “While R&L may have experienced difficulties, whether or not of their own making, nevertheless the monies withheld are not R&L’s property, and the statutory obligation to timely pay these taxes overrides whatever those difficulties might be.”

Just a suggestion.

Today Judge Pugh has me walking down memory lane, except memory lane is a red-clay road in SC fifty-plus years ago, with an NCO whose name I’ve mercifully forgotten reminding me that “there ain’t no use in lookin’ down” for the reason stated hereinabove at the head hereof, as my formerly-commissioned colleagues would say.

This discharge is cancellation-of-debt via a discharge in bankruptcy, except it isn’t for Charles K. Breland, Jr., 152 T. C. 9, filed 3/28/19. Chas had two (count ‘em, two) bankruptcies. It’s the earlier one, which was a Chapter 11, with which Judge Pugh and her colleagues are concerned.

Chas was duking it out with IRS over $800K of late-filing chops. IRS and Chas entered into a consent order in US Br Ct. The order determined how much were priority claims and how much general unsecured claims, and how and when Chas was to pay.

IRS did some discovery afterward and tried to amend its claim. IRS claimed Chas owes a further $45 million in tax on unreported income, but the BJ said “no, your claim is what you agreed to in the consent order,” USDCSDAL affirmed, and IRS and Chas stiped out of an appeal to 11 Cir.

Chas tried a Section 7430 admins-and-legals, but lost because IRS had reasonable doubt whether they could proceed separately for the $45 mil.

Well, IRS now hits Chas with a SNOD for the $45 mil, which Chas petitions, asserting claim preclusion (which I and my colleagues eligible for Medicare call “Reece Judy Carter”), or collateral estoppel  (that’s issue preclusion for you recent grads).

IRS says no claim preclusion, as 11USC§523 and 1141 make tax debts of this kind nondischargeable, whether or not they were part of IRS’ notice of claim. OK, so the Ch 11 reorg, even though approved, doesn’t get Chas off the hook, even though he paid what and when the consent order said.

But what about 11USC§505, where Bankruptcy Court can fix tax liabilities? Except Bankruptcy Court never held a hearing on Chas’ total tax liabilities. Bankruptcy Court dealt with IRS’ notice of claim (as amended), and how to handle the sums therein set forth.

Judge Pugh: “We now turn to what the consent order before us did and did not do. First, the consent order did not cite 11 U.S.C. sec. 505(a)(1) or otherwise state that it was issued pursuant to the bankruptcy court’s authority to determine taxes under that section. Nor did it include any factual recitations of petitioner’s income, deductions, and credits, or anywhere state his total Federal tax liability for any year before the court. Rather it was expressly entered to resolve the IRS’ objection to confirmation of the proposed plan of reorganization. By its terms, it: (1) fixed the priority tax claim that would be allowed and paid in the plan of reorganization; (2) capped the unsecured general claim for penalties and described how this disputed claim would be treated under the plan of reorganization; (3) set a hearing date for the adjudication of the unsecured general claim; (4) set a deadline for petitioner to comply with tax return reporting requirements for certain tax years–including those prepetition years that are the subject of this Tax Court proceeding; and (5) modified the plan of reorganization to include a default provision. Indeed, petitioner objected to the IRS’ proof of claim only insofar as he did not believe penalties were owed, and the consent order explicitly left that objection pending. Nowhere did the consent order state that it was intended to determine petitioner’s total prepetition Federal tax liability. And there is no indication that the IRS agreed to waive any of its unique rights under the Bankruptcy Code with respect to the tax debts that were excepted from discharge ‘whether or not a claim for such tax was filed or allowed’. 11 U.S.C. secs. 1141(d)(2), 523(a)(1)(A). We therefore see no basis for concluding that the consent order had the effect of a determination under 11 U.S.C. sec. 505. “ 152 T. C. 9, at pp. 18-19.

Now before anyone jumps on bankruptcy counsel with a “could’a would’a should’a,” remember that Chas may have been a wee bit less than candid with said counsel; but even if he dished, would it be good strategy to invoke 11USC§505 in this case? Especially when the facts might be less than one could desire. One might have had the issue precluded then and there, and not necessarily to the client’s liking.

If a takeaway is needed, it is that without prominent mention of 11USC§505, discharge may be only the beginning.

Even that delightful luncheon companion, Chief Whistler Lee D. Marvin, seems unable to quench the Ogden Sunseteers’ Protean metaphysical urge to engage in epistolary ping-pong. And even when IRS’ counsel tries invoking untimely petitioning, the Ogden crew get railroaded back before Judge Albert G (“Scholar Al”) Lauber. Here’s Whistleblower 15488-17W, 2019 T. C. Memo. 23, filed 3/27/19.

Way back in September ’16, the Ogden crew gave 15488-17W the toss. “The Office told petitioner that his claim had been denied and stated: ‘This letter is a final determination for purposes of filing a petition with the United States Tax Court.  Under I.R.C. § 7623(b)(4), you have 30 days from this determination to file a petition with the Tax Court.’  Petitioner did not petition this Court within 30 days of the first letter.” 2019 T. C. Memo. 23, at p. 3

Nothing daunted, 15488-17W visited EDGAR, SEC’s on-line tell-all, and found that, around the same time the Ogdens were brushing him [Note: Judge Lauber says “him,” from which locution no inference should be drawn as to blower’s identity] off,  the blowee had filed a bunch of amended returns and dropped a cool $50 million on the fisc. And blowee’s filings said the story wasn’t over yet.

15488-17W leapt into print, and engaged the Ogdens again in epistolary discourse. The Ogdens replied they saw no need to change their prior, final brush-off, and didn’t even mention the new info.

15488-17W petitions that.

IRS says “too late, final determination long past.” Well, the Incomparable Comparinis taught us long ago that, in the immortal words of The Great Eight Behind the Plate, Lawrence Peter Berra, “It ain’t over till it’s over.” You remember the Comparinis. No? See my blogpost “Contra Proferentem,” 10/2/14.

Judge Scholar Al canvasses the letter-writing barrages of the great whistlers of the recent past.

“Our jurisdiction to review a ‘determination regarding an award’ does not depend on how the document is labeled.  See Comparini, 143 T.C. at 278, 281, 283; Cooper v. Commissioner, 135 T.C. 70, 75 (2010) (‘[T]he name or label of a document does not control whether the document constitutes a determination.’). The Office may issue multiple appealable ‘determinations’ with respect to a single matter.  See Myers v. Commissioner, 148 T.C. 438, 444 (2017) (‘[T]he Whistleblower Office may issue multiple determinations, on any of which our jurisdiction* * * may be based.”); Comparini, 143 T.C. at 283; sec. 301.7623-4(d)(2), Proced. & Admin. Regs.  Thus, the fact that the first letter was titled a ‘final determination’ did not prevent the Office from issuing a subsequent determination regarding petitioner’s claim that would create jurisdiction in this Court.  See sec. 7623(b)(4) (granting this Court jurisdiction over ‘[a]ny determination regarding an award’); Kasper v. Commissioner (Kasper II), 150 T.C. 8, 13 n.6 (2018) (‘[W]e have jurisdiction over any timely petitioned whistleblower determination, not just the first in time.’); Comparini, 143 T.C. at 281-283.” 2019 T. C. Memo. 23, at pp. 6-7.

As for Myers, see my blogpost “Forms and Letters,” 6/5/17. I’ve blogged Kasper too many times to count.

Well, 15488-17W found new evidence that something had induced blowee to drop $50 million into IRS’ lap, and reboot a bunch of returns. Just maybe so it was what he told IRS that triggered the drop and reboot. And the second letter, coming when it did, shows the Sunseteers knew what had happened after 15488-17W told them.

Anyway, he’ll get the chance to show it.

“In sum, under the principles enunciated in Comparini and Myers, we conclude that the Office’s second letter constituted a ‘determination regarding an award’ sufficient to confer jurisdiction upon this Court.  We have no occasion here to consider the outer limits of our jurisdiction over whistleblower cases because the Office’s second letter fell squarely within the universe of communications that we have previously held to constitute ‘determinations.’  Petitioner supplied new information, not available to him when the Office initially denied his claim, that arguably called into question the basis the Office had enunciated for denying his claim.  By dismissing the relevance of that new information, the Office made a determination regarding his claim.  He is entitled to seek judicial review of that determination.” 2019 T. C. Memo. 23, at p. 11, footnote omitted.

But the footnote shows how the Ogden Sunseteers were railroaded.

“This conclusion derives support from a recent opinion of the U.S. Court of Appeals for the D.C. Circuit, to which our whistleblower cases are normally appealable.  See sec. 7482(b)(1) (penultimate sentence); Kasper II, 150 T.C. at 11 n.1 (slip op. at 6 n.1).  In Stovic v. R.R. Ret. Bd., 826 F.3d 500, 502 (D.C. Cir. 2016), that court held that the Railroad Retirement Board’s denial of a request to review a previously denied claim for benefits was a ‘final decision of the Board’ subject to judicial review under 45 U.S.C. sec. 355(f) (2012).  Here, the Office’s second letter to petitioner amounted to a refusal to revisit its initial adverse determination despite his submission of newly discovered evidence.  Although the statutory schemes of section 7623(b) and the Railroad Retirement Act are somewhat different, the Stovic opinion supplies analogous support for our conclusion that the Office’s second letter constituted a ‘determination” that is subject to judicial review.” 2019 T. C. Memo. 23, at pp. 11-12, footnote 5.

Note that the DC Cir Judge who wrote the opinion in Stovic was Justice Brett Kavanaugh, now of the Supremes.

The calendar and that yellowing document on the wall tell me this is the fifty-second anniversary of my admission to the Bar of Our Fair State.

Fifty-two (count ‘em, 52) years.

Been quite a ride. And it ain’t over yet.

Judge Richard Posner has long since departed 7 Cir, so I cannot tell who will upbraid me for “prolixity and lame attempts at humor.” However, today I have yet another pun on the surname of Larry & Lorna Graev. Their name is their fame.

Their doings have provided me with six (count ‘em, six) years’ worth of blogfodder, for which I am endlessly grateful. When it comes to chops, their name is on every keyboard, save only the electronicuted.

Judge James S. (“Big Jim”) Halpern expatiates on the history of Graev in Hisham N. Ashkouri & Ann C. Draper, Docket No. 17514-15, filed 3/26/19. Hish & Ann tried their case two years ago last month, but then came Graev III. There’s no opinion yet, but clearly chops and Boss Hossery are on the menu.

I won’t abstract Judge Big Jim’s exhaustive exposition, but I recommend it to anyone not yet familiar with Section 6751(b).

Get Form 6 Wrong

I certainly do not include my colleague, and good companion at lunch, Peter J. Reilly, CPA, nor any of my good friends thus credentialled.

But GoodAccountants Com Inc, Docket No. 3578-19, filed 3/25/19, lets long-suffering Ch J Maurice B (“Mighty Mo”) Foley tell us again that even being good accountants doesn’t avail when confronted with disclosing your ownership.

“…petitioner filed in the above-docketed matter an Ownership Disclosure Statement. However, such statement is incomplete in that it contains no disclosures; rather, it bears only petitioner’s signature but is otherwise blank. As relevant here, the form directs petitioner to list all parent corporations and entities owning 10 percent or more of petitioner’s stock OR to state that there is no such parent corporation or entity.” Order, at p. 1.

I’ll say it again: Ch J, modify the form. Put in the language YOU CANNOT LEAVE THIS FORM BLANK. IF “NONE”, WRITE “NONE.”