Judge Rose E. (“Cracklin’) Jenkins has limited use for Mo’s & Mal’s expert (whom I’ll call J-Les) in Mohammad Fawad Aryanpure & Malika Aryanpure, Docket No. 17120-23, filed 6/25/25, but she won’t toss him entirely, despite IRS’ avowals that his report is all about legal conclusions that are strictly the preserve of the Court.

“As petitioners argue, [J-Les]’s analysis related to petitioners’ tax return preparer’s performance may well be useful to this Court. However, this Court agrees with respondent that [J-Les]’s opinion related to reasonable reliance on that preparer inappropriately addresses one of the key legal issues in this case.” Order, at p. 3.

So Judge Rose E. (“Cracklin'”) Jenkins will cherrypick J-Les’ report and testimony.

“To the extent that the Report is admitted at trial, the Court will not consider any stricken portions. However, this Court will not, at this point, exclude the remainder of the Report nor his testimony under Fed. R. Evid. 702. Because [J-Les]’s statements with regard to fraud do not purport to address the standards for fraud applicable for purposes of section 6663, as petitioners acknowledge, they may be of limited value to this Court, but they do not intrude on its province. More broadly, although the limitations of [J-Les]’s analysis may affect its utility, this Court is not convinced that the non-legal opinions contained in the Report constitute pure advocacy and will not assist this Court, as contemplated by Fed. R. Evid. 702. Therefore, the remaining relief sought in Respondent’s Motion will be denied.” Order, at p. 3.

But as fraudulent underreporting is on the menu, Mo & Mal want to bar IRS from introducing evidence of any income other than that deposited into their personal accounts, claiming Section 6501(c)(1) limits IRS only to items where fraudulent intent is shown. SOL applies to the rest.

No, says Judge Rose E. (“Cracklin'”) Jenkins.

“…petitioners’ argument rests on a faulty premise concerning section 6501(c)(1). If respondent succeeds in proving that a petitioner filed a false or fraudulent return with the intent to evade tax for one of the years at issue for purposes of section 6663, the same conclusion will apply for purposes of section 6501(c)(1). And if section 6501(c)(1) applies to allow an unlimited period to assess tax for a particular year at issue, such period applies for the entire amount of tax for that year.” Order, at p. 3. (Citation omitted).

If any is in, it’s all in.

Judge Morrison has issued a corrected opinion text for T. C. Memo. 2025-45, originally filed 5/15/25, under date 6/24/25. I had blogged the uncorrected back on 5/15/25.

In the absence of an explanatory order, I can only recommend my readers scan the corrected version to find any corrections.

I found only the addition of one attorney to IRS’ roster.

Edited to add, 6/24/25: And of course the typo at T. C. Memo. 2025-45, at Page 23.

No, this is not an essay on tariffs and trade. Rather, ex-Ch J L. Paige (“Iron Fist”) Marvel Judge-‘splains the broad discretion for releasing (or not) NFTLs.

Bobby G. Glaser and Cathleen A. Glaser, T. C. Memo. 2025-66, filed 6/23/25, want IRS to lift the NFTL imposed when they renegotiated their existing IA to pick up two (count ’em, two) new years.

The Letter 2603C that granted their requested revision stated “Although you made arrangements with us to pay your tax monthly, if you don’t pay the entire amount you owe by May 08, 2023, we may file a Notice of Federal Tax Lien to protect the government’s interest.” T. C. Memo. 2025-66, at p. 3. The Glasers didn’t pay, IRS filed the lien, and the Glasers petitioned Appeals’ sustentation thereof.

But the Glasers don’t show that IRS didn’t follow procedures, and the Letter 2603C properly reserved IRS’ right to file the NFTL. Nor did the Glasers show that the NFTL impeded their ability to pay pursuant to their revised IA.

That their pre-amendment IA didn’t result in a NFTL is nothing to the point. To get it lifted, proof is needed that the NFTL does more harm than good.

NFTLs protect the government’s position until payoff.

Now that the ice hockey season is over, the title or caption first above written at the head hereof (as my expensive colleagues would say) is no long applicable. It was never applicable in United States Tax Court, as Judge Adam B. (“Sport”) Landy makes clear in Ringer Road Rock & Timber, LLC, Ringer Road Manager, LLC, Partnership Representative, Docket No. 7123-24, filed 6/23/25.

The Ringer Road Rockers have nothing to do with this. Rather. IRS is trying a flying line change, on which Judge Sport Landy blows the play dead.

“Jordan S. Musen filed a Notice of Withdrawal for Catherine J. Caballero. That ‘Notice’ states that it was filed on behalf of Catherine J. Caballero. But that ‘Notice’ did not seek to withdraw the appearance of a counsel for respondent who has properly entered an appearance in this case. This Notice seeks to remove Ms. Caballero from among the counsel of record.” Order, at p. 1.

According to a quick docket search, apparently Jordan S. Musen was withdrawn as counsel for IRS back on 4/1/25, but maybe that was an April Fool’s joke. Howbeit, in or out, s/he is going about it the wrong way. Judge Sport Landy puts CatCab back.

“Rule 24(c) allows an attorney to withdraw by notice in limited circumstances, but that rule is clear, ‘Counsel desiring to withdraw as counsel may file a notice.’ It does not permit one attorney to file a notice and thereby remove another attorney. As a consequence of their filing of a Notice of Withdrawal of Counsel, Ms. Caballero was improperly removed as counsel in this case. Rule 24(c) provides three options for an attorney to be withdrawn from a case. As relevant here, Rule 24(c)(1) sets forth the limited circumstances in which an attorney can withdraw himself or herself as counsel. If those limited circumstances are not met, such as if one attorney is attempting to remove another attorney, then a Motion must be filed under Rule 24(c) v(2) or (3). Rule 24(c)(3) is captioned Motion to Withdraw Counsel by Party. In this instance, the attorney who filed the improper notice represents a party (respondent), and as counsel of record for a party, he may file a motion on that party’s behalf to have another attorney removed.” Order, at p. 1.

Taishoff says I suppose any attorney seeking to remove another attorney must at least represent a party for whom the attorney sought to be removed had filed EoA. And at the time seeking to remove the other, must him/herself currently have on record an EoA to represent that party. Remember, withdrawal by notice is not the same as withdrawal on motion. I covered this in my blogpost “Firm EoA – Again,” 5/5/25.

There’s a multifaceted discovery joust in Mohammad Fawad Aryanpure & Malika Aryanpure, Docket No. 17120-23, filed 6/20/25, with Judge Ronald L. (“Ingenuity”) Buch taxing his ingenuity to sort out what Mo & Mal have to tell IRS, and vice versa.

Since most of this is intensely fact-bound, I’ll leave it to the discovery geeks among you to delve deeply. I’m looking for the broader issue, namely, viz., and to wit, IRS’ exam and interview notes. IRS’ notes, memoranda, and casual jottings may not be privileged; as always, it depends.

“Petitioners seek access to a number of documents in the administrative file that respondent contends are covered by attorney-client, deliberative process, and work product privileges. However, their arguments against privilege generally do not withstand scrutiny. Furthermore, petitioners have not identified any authority to support their contention that the Commissioner must personally assert the deliberative process privilege. Cf. Marriott Int’l Resorts, L.P. v. United States, 437 F.3d 1302, 1307–08 (Fed. Cir. 2006) (recognizing that the authority to assert deliberative process privilege may be delegated). Accordingly, this Court will not consider the government to have waived privilege with respect to any such documents that may be relevant.

“However, this Court agrees with petitioners that notes or memoranda of interviews conducted during the IRS examination may potentially not be subject to privilege. Respondent’s privilege logs provide insufficient information to assess the claimed privileges. Furthermore, this Court is not in a position to assess the potential relevance of the materials. This Court will order respondent to supplement the privilege logs with respect to the notes and memoranda of interviews identified by petitioners…  to provide additional information for those documents being withheld. Petitioners remain free to challenge respondent’s privilege log, as supplemented, and the Court will consider in camera review with respect to any particular items identified by petitioners as potentially relevant and still sought at such juncture.” Order, at p. 5.

Practitioners, maybe so might could be there’s gold in them back-of-envelope scrawls an RA threw in the bottom of the file folder.

Instead of waiting fifty (count ’em, fifty) years, our National legislative process has given over a day in mid-June annually for the Leviticus 25:10 treatment.

US Tax Court is therefore shut up, and so am I.

No, not the enlisted crew hangout on the Starship Enterprise, rather this is the agent of downfall of IRS’ deficiency case against Luis Carlos Ibarra Cano, T. C. Memo. 2025-65, filed 6/18/25.

LCIC is 400 days late with his petition, and IRS wants summary J tossing the petition for want of jurisdiction. IRS gets that, but not for the reason they wanted (late petition); it’s not sent to last known address, hence defective.

Judge Albert G. (“Scholar Al”) Lauber tells the story.

“Petitioner’s last known address when the Notice of Deficiency was mailed was 220 6th Street, Hempstead, Texas 77445. The Notice was erroneously addressed to him at 2206 TH St. Hempstead, TX 77445-4761. A U.S. Postal Service (USPS) Form 3877, Firm Mailing Book for Accountable Mail, shows that the Notice was sent by certified mail to 2206 TH St. Hempstead, TX 77445.” T. C. Memo. 2025-65, at p. 2.

Usually typos in addresses don’t invalidate SNDs. But this one is over the limit.

“The Notice and the Form 3877 both show an incorrect address for petitioner. The error evidently arose from the transposition of the digit ‘6.’ But this is not a harmless typographical error, as might exist (for example) if the word ‘Street’ had been misspelled. Both documents showed what was almost certainly a nonexistent address. On the record before us, we have no way of knowing how the USPS would have handled delivery of this Notice of Deficiency.” T. C. Memo.  2025-65, at p. 3.

Given a $4K deficiency, is it worth IRS’ while to subpoena an IRS official to testify, especially when LCIC doesn’t even bother to show up for the trial? Of course, LCIC may have known the SND was defectively served, so didn’t waste his time.

IRS argues that the fact LCIC petitioned shows he got the SND timely. Scholar Al doesn’t issue “oh, please”s, but this time he should.

“The fact that petitioner attached to his Petition a copy of the mis-addressed Notice, respondent says, ‘establishes that petitioner received the [N]otice without delay, which proves that the [N]otice is valid for purposes of conferring jurisdiction on the Tax Court.’ We do not reach the same conclusion. Petitioner petitioned this Court… 400 days after the Notice was mailed. This hardly proves that he actually received the Notice ‘without delay.’” T. C. Memo. 2025-65, at p. 4.

Someone somewhere failed to hit the space bar on the keyboard, so “200 6th St” became “2006 TH St.” Looks like they need a proofreader.

Judge Christian N. (“Speedy”) Weiler belies his cognomen as he puts the brakes on Brank Cove Capital, LLC, Gene Larson, Tax Matters Partner, Docket No. 12074-20, filed 6/17/25. After the trial, which is virtually a petitioner’s laydown, just as IRS was lining up the 40% substantial overvaluation chop, petitioner’s trusty attorneys trotted out the Seventh and Eighth Amendment jury trial and excessive fines argument.

“Petitioner also cites to a case pending before then United States Court of Appeals for the Eleventh Circuit dealing with this issue. As previously noted, the Court also has a case pending in which the same or similar issue has been raised. At the suggestion of petitioner, we are inclined to await entering a decision in this case and allow the parties to submit post-trial briefing on this legal issue—should they choose to do so. Accordingly, we will not enter a Decision at this time.” Order, at p. 1.

So let the parties file some status reports.

AbbVie Inc. and Subsidiaries, 164 T. C. 10, filed 6/17/25, undertook to merge with an offshore in a stock-for-stock swap with a new subsidiary. The offshore, Shire, undertook to effect the merger. Problem was, both sides had shareholders, unrelated to themselves and to each other, who had to agree.  So all they could agree to in a Co-operation Agreement was to convince the shareholders to agree.

Problem was, Treasury issued Notice 2014-52, 2014-42 I.R.B. 7, casting serious shade on the tax impact of the proposed deal. Whereupon, AbbVie’s Board chickened out, pulled its recommendation to its shareholders, and agreed that the Co-operation Agreement required AbbVie to pay $1.635 billion-with-a-b to Shire as a Break Fee. 164 T. C. 10, at p. 7. See 164 T. C. 10 at p. 8 for the Termination Agreement that followed.

AbbVie took an ordinary loss, claiming contract abandonment. IRS said Section 1234A made the loss capital, in that it was the abandonment “with respect to property which is (or on acquisition would be) a capital asset in the hands of the taxpayer.”

Judge Emin (“Eminent”) Toro says this isn’t a capital asset, because property isn’t involved. The deal involves stock that neither AbbVie nor Shire owns or controls. There’s a bunch rights and obligations (hi, Judge Holmes) that AbbVie abandoned, but none of them involves property, because neither AbbVie nor Shire owns the stock.

There’s a major dictionary chaw, as is obligatory. But the story is simple: it’s not property.

And the Ice Thin

When Billy Long’s myrmidons are radar-locked and the dragnets deployed, the practitioner, dragged in at the last red-hot minute, is thrust on her/his mettle. The faint-hearted need not apply. So enter no less than The Great Chieftain of the Jersey Boys, to whom the above set forth conditions provide opportunity, not dread.

Back in April, IRS issued a trial subpoena duce tecum to nonparty whom I’ll call GC. Two (count ’em, two) days before return date, a principal of GC, whom I’ll call Richie, files through trusty attorney a motion to quash.

The sun is bright and staring; the transparent ice shows beads of moisture. Judge Albert G. (“Scholar Al”) Lauber is in no mood for last-minute derailments.

“In his Motion [Richie] erroneously states that trial starts June 16 and represents that his condition makes travel and ‘prolonged oral responses’ difficult. In fact, the trial of this case does not start until October 20, 2025, as noted in the subpoena. The upcoming hearing on June 18 will not require substantive testimony from [Richie]. Rather, it will be a brief zoom.gov proceeding focusing on the documents specified in the subpoena, and [Richie] or his counsel may attend remotely.” Order, at p. 1.

As the midnight telehucksters say, “But wait! There’s more!”

“[Richie] also argues that the subpoena is ‘overly broad’ and ‘imposes an undue burden.’ But the subpoena was issued on April 23, and he had almost two months to move to narrow or quash the subpoena on that ground. It is unreasonable to move to quash on this ground two days before the hearing. We will accordingly deny the Motion.” Order, at p. 1.

The Order is Ivey Branch Holdings, LLC, Ivey Branch Investors, Tax Matters Partner, Docket No. 19189-19, filed 6/17/25, docket item 196.

Wet feet included at no extra charge.