No, I didn’t misspell the international radiotelephone declaration of a non-life-threatening emergency. But it is a declaration that will have consequences for Panagiota Pam Sotiropoulos, Docket No. 19884-12, filed 2/12/18.

Judge Lauber finally gets around to tossing Pam’s petition for want of jurisdiction, because Section 905(c) backs up IRS’ contention that they “don’t need no stinkin’ SNOD” to hit Pam for the tax refund she got from HMRC (that’s Queen Elizabeth II’s revenooers), even if it later turns out Pam was not entitled to same and she paid the UK income tax for which she took credit long ago.

See my blogpost “Give It Back, Take It Back,” 5/1/17, and my blogpost therein cited, for Pam’s joust with UK and US.

So Pam’s petition is dismissed for want of jurisdiction.

But I’ll repeat my comment from last May: did she have a chance to contest? All Tax Court decided was (a) they could see if they had jurisdiction, and (b) they didn’t. Maybe I’ll get a blogpost out of a CDP, if Pam seeks one.

And Go to the End of the Line?

It’s in my nature to look for litigation tactics and stratagems, even where, perhaps, the principals and their attorneys themselves were unaware of, and did not intend to employ, the tactic or stratagem.

So I do not impute to Mary B. Doggett, Docket No. 11434-17S, filed 2/12/18, nor to Jock H. Doggett & Jane M. Doggett, Docket No. 11412-17S, filed 2/12/18, nor yet to their attorney, whom I’ll designate hereinafter as “Mike,” any crafty motive.

It may be that the stricter regular rules of procedure give more scope to the petitioners. It may be that the right of appeal, unavailable in a small-claimer, has strategic value. It may be that there is some advantage that Mike has found, and I have missed. Omniscience is definitely not in my line.

But with trial date approaching, and continuance sought, buying time by way of dropping your “S” gets you away from the STJs, at least for the moment (and perhaps permanently). And sends you back to the general docket. And you didn’t use up a continuance.

Thanks, Mike. Even if I got it totally wrong.

A precept from my long-ago apprenticeship days popped into my mind; don’t make the judge guess, or speculate. Tell your client’s story as plainly as you can. That wisdom seemed apposite as I read Judge Morrison’s advice to Carolyn D. Young, Docket No. 9613-17, filed 2/9/18.

Carolyn D. got a SNOD challenging her HOH filing and the personal exemption she claimed for one Jim Smith, for whom no other information is furnished. Carolyn D. petitioned the SNOD timely, but leaves out some important stuff.

Judge Morrison: “…according to respondent [IRS], the petition challenges the federal government’s use of the petitioner’s 2015 tax refund to offset an education loan owed by her to the Department of Education. This last issue, respondent contends, is outside the jurisdiction of the Tax Court.” Order, at p. 1.

So IRS moves per Rule 34 to dismiss for failure to state a claim.

But Carolyn D. will get a shot at a course correction.

“Petitioner should be given the opportunity to file an amended petition to clarify whether she challenges the notice of deficiency’s determinations regarding head-of-household filing status and the personal exemption for Jim Smith. Petitioner should also have the opportunity to explain why the Tax Court has jurisdiction to resolve the educational-loan offset issue.” Order, at p. 1.

I’d be glad to know why Section 6402(g) doesn’t knock out all education loan offset challenges. The only work-around I know of is the Chapter 13 gambit in United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010).

But I’m always glad to learn.

In the unlikely event anybody is interested, I took a pass on today’s designated hitters. One was a Graev-reopener (enough already), one was an unsubstantiated everything, and one was a hardscrabble farmer’s third attempt to overturn a decision five years after it became final, and after 9 Cir. had tossed his appeals (twice). Sisyphean endeavors rarely end well…at least, in Tax Court.

Peter Edward Schaller & Catherine Joanne Schaller, Docket No. 7318-17, filed 2/8/17, looks like a simple unreported income story, but something jogged my memory. So while The Judge With a Heart, STJ Rob’t. N. Armen, hits P.E. for $1K in tax, maybe P. E. had something going for him that never turns up in the record.

P.E. claims he worked for the City of Sioux City, IA. The Sioux City crew didn’t withhold FICA/FUTA/ITW, nor did the Unemployment Insurance types, although P. E. claims he berated them, visited their offices, and otherwise demanded that “…Sioux City Finance Office and lowa Workforce Development Civil Service Employees shall bear full responsibility, both fiduciary and pecuniary accountiability [sic] and responsibility for their failure to do the jobs that they are getting paid to do!” Order, at p. 2.

P.E. did get a total of $10K from the City and UI, which he didn’t report.

OK, we know that if an employer withholds but doesn’t remit, the employee is off the hook, per Section 31(a). But if an employer doesn’t withhold, the employee is stuck.

But stuck for what? STJ Armen doesn’t tell us how IRS got wind of the Sioux City and UI cash, but I’ll bet it was because both of those dudes filed 1099s.

Now here’s the kicker. See my blogpost “Catch Me If You Can,” 1/4/12. The employee in that case got a check from an outfit he never worked for, in payment of wages owed him from his real employer, and got a 1099-MISC Non-Employee Compensation therefor.

Judge Cohen gave that employee the benefit of the 92.35% reduction for the SE, and the 50% of SE exclusion from AGI.

I know the Sum. Op. I blogged was a small-claimer and not precedent for anything. And it is possible that Sioux City filed a W-2 showing no withholding, whether because P. E. claimed he’d owed no tax the year before or for the year at issue, or otherwise. So without more facts, I’m just speculating.

But maybe so P. E. has a claim for SE treatment as to Sioux City.

I chronicle the latest efforts by The Great Dissenter/Concurrer, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a Master Silt Stirrer and Old China Hand, Judge Mark V. Holmes, to propound an exit strategy from the long-running debate about the virginity (or otherwise) of certain islanders.

Or as a much more exalted personage has put it, “Be still, ye inhabitants of the isle.”

First up, Gail Vento, et al., Docket No. 23527-08, filed 2/8/18. Y’all will doubtless remember the wanderings of la famille Vento from Vegas to the Virgin Islands, from Tax Court to 3 Cir and back. If not, just Google them and me, and I doubt not the whole saga will pop.

Now la famille Vento, or such of them as missed the 3 Cir cut for unguided Congressional largesse, are still scuffling with IRS. Latest gambit is invocation of an authority not quite so exalted as that hereinabove referred to. This is the competent authority.

“…petitioners filed a request for an answer to the question of their Virgin Island residency with the so-called ‘competent authority’ — an office within the IRS whose agents can meet with their counterparts in the VI BIR to try to settle this issue. That has not worked out, but the Court’s recent opinion in Coffey v. Commissioner may provide a different escape hatch.” Order, at p. 1.

Judge Holmes wants out.

So Judge Holmes held a phoneathon.  IRS and la famille should report. Judge Holmes suggests that la famille drop the competent authorities, go to trial, or better yet, see if the cover-over papers VIBIR sent to IRS sets up the same SOL out as bailed out Coffey.  For those who missed the scoop on Coffey, see my blogpost “Another Non-Virgin,” 1/30/18.

But wait, there’s more, as the midnight telepitchers say.

Thomas Pfeil, 18251-13, filed 2/8/18, and Brad Camrud, 22732-13, filed 2/8/18, have the same idea, and IRS, no doubt with a sense of fatigue, is down with this.

Let’s have a Coffey break.

“…the Court spoke with the parties in this case to discuss how to move it forward. They reasonably proposed taking two months to confer to see whether the cover-over documents central to at least one opinion in Coffey exist in this case in some form, and to see if there will be any post-decision motions in Coffey that might affect all the cases that are similar to it.” Camrud order, at p. 1.

So take a couple months, guys. Just make it all go away.

I promised y’all Judge David Gustafson’s checklist for those litigants facing a Graev reopener. If you’ve been following this my blog at all, you know that IRS has been dredging up Section 6751(b) Boss Hoss signoffs on chops in cases long since tried, ever since 2 Cir agreed with Judge Gustafson that the Boss Hoss must precede the chop-laden SNOD.

There’s a daily stream of orders reopening records and giving petitioners a chance to call foul, and I suspect we’ll see even more, as the “sleepers wake.”

Well, today it’s the turn of Abdul M. Muhammad, Docket No. 23891-15, filed 2/7/18, to bukh about the pain and strain that will descend upon him if a late-proffered “Penalty Approval Form” gets wild-carded in.

Judge Gustafson, obliging as ever, hands Ab, by way of a designated hitter,  a handy-dandy guide to repelling boarders.

“Mr. Muhammad shall file a response to the Commissioner’s motion to reopen the record, stating whether he disputes the authenticity of the ‘Penalty Approval Form’ or otherwise objects to the Commissioner’s motion. If he does object, then he shall explain why. He shall also explain, in the event the Court were to overrule his objection and reopen the record to receive evidence on the subject of supervisory approval of the penalty, (1) whether and how the granting of the Commissioner’s motion would prejudice him, (2) what remedy would be required to cure or mitigate that prejudice, and (3) whether there is any evidence that Mr. Muhammad would wish to offer into evidence (or would wish to attempt to obtain) or whether there is any witness whom he would wish to examine (and, if so, what testimony he would hope to evoke from that witness).” Order, at pp. 1-2.

Take a close look at that form, Ab; sometimes the forms the IRS wants to wildcard in are trifle ex post facto. By way of analogy, see my blogpost “Going to the Mat,” 1/24/18.

Old men are loquacious. I plead guilty. I tell war stories with the best of them; wear my sober pinstripes, white button-down oxfords and striped repp neckties like Old Grayback from Wayback; and at Bar Association functions glaze over the eyes of those hard-working attorneys young enough to be my grandchildren with my “when I was your age” natterings.

Well today The Great Dissenter/Concurrer, a/k/a The Judge Who Writes Like a Human Being, Master Silt Stirrer and Old China Hand, Judge Mark V. Holmes, does what in my young day half-a-century ago was called “resettling an order.”

Check out my blogpost “Settle Order on Notice,” 6/23/17.

Now when the State court judge had finally churned out the “order, judgment and decree,” at more or less rare intervals some party would claim the judge got it wrong. Rather than serving notice of entry and filing an immediate appeal, a motion to resettle the order would follow, replete with “sober reasoning and copious citation of precedent” (but sometimes including rich helpings of what the other side called “Bravo Sierra”).

Judge Holmes has his chance to resettle today.

Here’s Judith S. Coffey, Petitioner & The Government Of The United States Virgin Islands, Intervenor, Docket No. 4720-10, filed 2/7/18.

Last week Judge Holmes ended this long-running saga by calling IRS out-of-time. See my blogpost “Another Non-Virgin,” 1/30/18. He did it by finding no jurisdiction, as the SOL had run.

“The parties spoke with the Court on January 31, 2018 and it was suggested that the order be amended to state the effect of this dismissal which, by operation of IRC § 7459(e), is that no deficiency is due. This is technically a request to revise a decision….” Order, at p. 1.

Motion to resettle order granted.

It’s a slow day at the Glasshouse. That Obliging Jurist, Judge David Gustafson, has a designated hitter checklist for those litigants responding to a Graev reopening, and various judges are swallowing Judge Holmes’ Coffey decision (which he has revised in light of commentary from the litigants therein; “Settle Order on Notice,” anyone?) dealing with the wise Virgins (Islanders).

But Ch J L Paige (“Iron Fist”) Marvel is following precedent and allowing the parties to stip jurisdiction (despite Judge David Gustafson dissent in Pearson, as to which see my blogpost “Does Not the Wild Boar Break Cover Just as You’re Lighting a Weed?” 11/30/17) .

Here’s Frieda G. Oliner Irrevocable Trust, Marian Cohen, Trustee, Docket No. 12766-15, filed 2/7/18.

Marian and IRS agree that the envelope that reached the Glasshouse on the fourth day after the 90-day cutoff contained the petition, and showed a private postage meter mark of the last day of the 90 days. The four days apparently satisfied IRS that the envelope reached the Glasshouse, and the flailing date stampers and hard-laboring intake clerks who toil therein, in the usual time.

So Pearson? Yes, but.

“…because that petition arrived within the ordinary mailing time for an envelope properly addressed and sent by first class mail and bearing a timely U.S. Postal Service postmark date, the timely mailing/timely filing provisions of section 7502 apply.” Order, at p. 1.

So we are back to “as good as.” If the private frank, be it generated by private postage meter, stamps.com or whatever, gets the petition to the Glasshouse in the same time as it would have gotten there had the USPS clerk hand-cancelled their own self, it’s good enough.

Judges Gustafson and Holmes will get their own posts seriatim, as my already-on-their-second-18-yr-old-Macallan colleagues would say.

No, this is not a reprise of the old wheeze concerning what a certain privileged young lady makes for dinner. Unlike today’s one small-claimer (a reprise of the obsolescent unreimbursed employee business expense deduction) and Judge David Gustafson’s patient deconstruction of a virtually-uncontested NOD from a CDP, today we have an undesignated order containing a useful practice pointer.

Here’s Judge Goeke on making reservations dealing with disputed documents.

Parties may agree that certain documents exist, but dispute relevance and admissibility. The proponent of the documents will wish the adverse party to admit the documents as evidence, by way of a Rule 91(f) motion. The opponent will, of course, oppose.

Judge Goeke: “Pending before the Court is respondent’s Motion for Order to Show Cause Why Proposed Facts and Evidence Should Not be Accepted as Established Pursuant to Rule 91(f)…. … petitioners’ [sic] filed a Response to Motion for Order to Show Cause Why Proposed Facts and Evidence Should Not be Accepted as Established Pursuant to Rule 91(f). The documents that underlie respondent’s motion and petitioners’ response should be stipulated exhibits with objections reserved and the admission and characterization of those documents will be determined at trial.” Order, at p. 1.

IRS’ motion is denied.

Deciding admissibility of documents is as much the daily grist that comes to the judicial mill as the credibility of witnesses’ testimony.

Oh, the order is one of many in Estate of Rhoda-May A. Dallas, Deceased, Jane D. Miller, Executor, et al., Docket No. 4853-16, filed 2/6/18.

There is one more thing, a whistleblower case brought by a former client. When I saw the name on today’s linked Orders list, memories came flooding back from twenty-five years ago. The order was only a routine sealing, but I look forward to seeing how the case develops, and blogging any good stuff. I see the client does have new counsel, though, and I wish them both well.

No one can question that the universe is running down, and inevitably will approach some form of absolute zero, when all molecular activity will end. As a much more exalted authority put it, “Work, for the night is coming when no one can work.”

Well, personally, the last four weeks, with health and economic issues, have certainly pointed the way to that last gasp. And today the Glasshouse website has made its contribution to general collapse.

While the connectivity interruptus featured on its homepage seems to be abated, today we have 140 orders on the Orders Search, and only one (count it, one) order opens directly with a link. And both designated orders are similarly inaccessible.

Of course I e-mailed the Tax Court webmeister. I thought, however, that a phonecall might help the process. I reached an IT person who spent some time trying to get my attorney registration number (the relevance of which I could not ascertain, but I thought it might be subject to connection). At the end of his search (Tax Court’s software does not permit a name search), I explained the problem. The IT person promised to contact the webmeister. At this writing, however, no joy.

If you need to read an order, you’ll need to do a docket search.

The opinions do open directly.  Connie L. Minton a.k.a. Connie L. Keeney, 2018 T. C. Memo. 15, filed 2/5/18, ekes out innocent spousery per Section 6015(f), even after she works hard and comes up with the $6K deficiency she wants to lay at the door of her deadbeat ex, who can’t be found.

Connie can’t show she was defrauded, or that deadbeat ex stole the money to pay the tax, nor was she so abused that she couldn’t challenge what the return showed. While deadbeat ex lied about his business prospects, the tax was generated when Connie drew down her 401(k) to fund deadbeat ex’s get-rich-quickery, thus triggering tax.

Judge Pugh: “We reach a different answer with respect to the liability attributable to Mr. Keeney’s business. Unlike respondent, we conclude that liability is not attributable to petitioner because petitioner’s involvement in the business was nominal only. Therefore, we conclude that petitioner satisfies the threshold conditions for relief with respect to the liability (including self-employment tax) associated with the income from Mr. Keeney’s business. Our remaining analysis is limited to that liability.” 2018 T. C. Memo. 15, at p. 10.

Deadbeat ex’s tall tales about his great business saves Connie.

“We are convinced by petitioner’s testimony that she believed the Federal tax liability would be paid out of the proceeds from the ‘big contract’ that Mr. Keeney promised was coming. Given petitioner’s lack of sophistication and her position in the marriage, and taking into account Mr. Keeney’s duplicity and abuse, we also conclude that her belief was reasonable. Therefore, this factor weighs in favor of relief. Because respondent did not dispute whether the other factors favored relief or are neutral, we will not consider them further here. And because we find that this factor also favors relief, we conclude that relief is appropriate.” 2015 T. C. Memo. 15, at pp.  14-15.

Because Connie is plausible and sympathetic, even though she coughed up the whole deficiency, she can get a refund of whatever part thereof is attributable to deadbeat ex.

Homero F. Meruelo, 2018 T. C. Memo. 16, filed 2/5/18, is trying the “incorporated pocketbook” gambit to try to build basis in his melted-down Sub S. Judge Lauber isn’t buying.

Homero has a bunch of Sub Ss in his real estate empire, along with partnerships and LLCs, some of which were owned with others. The Black 08 (real estate pros need no explanation) put paid to the lot, and Homero wants a thundering NOL, but IRS says no.

“Here, petitioner seeks to treat as his incorporated pocketbook 11 distinct [Sub S] affiliates. Many of these companies had co-owners besides petitioner. And because the inter-company payments allegedly creating his basis involved netting hundreds of accounts payable against hundreds of accounts receivable, petitioner is necessarily contending that his ‘incorporated pocketbook’ not only disbursed funds but regularly received them. We have never found an incorporated pocketbook on such facts.” 2018 T. C. Memo. 16, at pp. 18-19.

There’s more, like a back-to-back loan argument, but defective paperwork torpedoes all that.

Finally, what’s a day at the Glasshouse without The Great Dissenter/Concurrer, a/k/a The Judge Who Writes Like a Human Being, Master Silt Stirrer and Old China Hand, Judge Mark V. Holmes, playing another variation on the Section 6751(b) Boss Hoss double concerto for taxpayer, IRS and orchestra?

Today it’s a designated hitter, Great Lakes Concrete Products LLC, Section 15602-15L, filed 2/5/18. The Great Lakers are on for trial in June, but they want a penalty abated. And it’s not one of the usual ones.

“The penalty involved is one for failure to deposit under I.R.C. § 6656. This prompted the parties to realize that this case raises yet another problem in the aftermath of Chai v. Commissioner, 851 F.3d 190 (2d Cir. 2017), aff’g in part, rev ‘g in part 109 T.C.M. 1206 (2015): Is the penalty under that section one that is ‘automatically calculated through electronic means’? I.R.C. § 6751(b)(2)(B). If it is not, then did the immediate supervisor of whoever made the initial determination to impose that penalty approve it in writing? And there are likely to be collateral problems as well, such as whether proof of the IRS’s compliance with § 6751 is part of the verification ‘that the requirements of any applicable law or administrative procedure have been met,’ I.R.C. § 6330(c)(1), or is part of a challenge to the underlying liability, I.R.C. § 6330(c)(2)(B).” Order, at p. 1.

Well, there is the statutory formula, and it doesn’t take N. deGrasse Tyson to do the numbers. But that’s maybe for someone else to decide.

Phoneathon time. And Judge Holmes gets both sides to agree to a remand. Really, when it comes to punting, Judge Holmes should try out for the Eagles.

But Judge Holmes doesn’t trust the vagaries of Appeals, or IRS’ focus.

“Any supplemental notice of determination should explain the IRS’s position on whether penalty abatement is a precluded issue for each liability at issue, a full explanation of whether Great Lakes met the reasonable-cause exception to penalties for each period at issue, and a statement and explanation of the effect of § 6751 and Chai on this case.” Order, at p. 2.