I’m glad Tax Court judges are back from the barbecue, and the hard-laboring clerks and flailing date-stampers are back on the job after the Memorial Day weekend.

I and my fellow members of American Legion New York Post 2001 9/11 Memorial had a great Sunday at the USS Intrepid Air/Space Museum, raising money and consciousness.

But now it’s back to work.

There is no Office for the Self-Represented at Tax Court, of the sort we see in New York State Courts. Such offices cannot, of course, give legal advice, but they can provide pointers to those hopelessly adrift in the legal Scylla and Charybdis that surrounds the courts.

And for some reason the only pro bono assistance is at calendar call, unless His Honor Big Julie Judge Julian I Jacobs, s/a/k/a HHBJJJIJ, goes to his private bullpen for Olena Ruth, Esq. But none of his colleagues seem prone to do likewise. See my blogpost “Assigned Counsel? – Two Votes ’No’,” 2/5/16 for the backstory.

I submit that having pro bono attorneys and USTCPs at calendar call, while laudatory, is like having the emergency room team at rehabilitative medicine: it presupposes the patient survives long enough to get there.

So here’s another case where Ch J L Paige (“Iron Fist”) Marvel tells IRS counsel to violate Rule 4.3 of the Model ABA Rules of Professional Conduct. Y’all will recollect that Rule 201(a) requires attorneys and USTCPs to adhere to said Rules of Professional Conduct.

We come now to the sad story of Keith D. Poleon, Docket No. 5936-17, filed 5/30/17. Keith has had a stroke and is unable to work steadily; Momma Donna is helping out, but hasn’t a clue what to do with the SNOD sent to her son in February, so she sent a letter to Tax Court.

Ch J Iron Fist treats the letter as a petition, and that’s good. But Momma Donna signed it and not Keith.

Maybe Momma Donna could qualify as next friend, a sort of curbstone guardian ad litem, but for that she needs to make a motion that complies with Rule 60(d).

I am prepared to wager my birthday presents to myself that Momma Donna has no idea of what Rule 60(d) requires.

But have no fear. Ch J Iron Fist orders IRS counsel to jeopardize his or her license (Tax Court website shows IRS counsel still unassigned) in the cause of justice.

“Respondent shall further undertake to discuss with and explain fully to Donna Poleon whether or not she possibly may qualify to be recognized by this Court as next friend for petitioner pursuant to Tax Court Rule 60(d).” Order, at p. 2.

How that doesn’t involve giving legal advice to an unrepresented person in an adversarial situation confounds me. And the argument that Donna isn’t yet a party would go over a treat with any disciplinary committee, Bar Association or judicially-appointed referee—Not!

So why not solve the problem? Put some good stuff on the website, and have a clerk or two standing by the phone ready to help out people like Momma Donna.

This phrase is more often heard among those who “breathe short-winded accents of new broils, to be commenced in strands afar remote” than those who frequent the halls of the Glasshouse at 400 Second Street, NW.

But it’s being heard more often lately.

Elizabeth M. Jacobson voluntarily exited from her whistleblower case; see my blogpost “A Hotly Burning Question What Has Swept This Continent – Part Deux,” 2/8/17.

We all know you can’t voluntarily bail from a deficiency (SNOD) without having decision taken against you for the whole boat; see Section 7459(d). You can, of course, bail from a NOD (levy or lien), per Wagner. But what happens next in such event may be less than felicitous.

Well, how about bailing as an intervenor in a Section 6015 innocent spousery?

The question arises in a designated hitter from CSTJ-in-waiting Lewis (“A True Chief’s Name”) Carluzzo, and CSTJIW Lew will enlighten us.

Here’s Caitlin Dennis, Petitioner, and John Wilcox, Intervenor, Docket No. 17166-16, filed 5/26/17, with John as the lead actor.

IRS wants a Rule 37(c) undenied-deemed-admitted, but CSTJIW Lew puts that on hold, while he deals with John’s bailment request. Caitlin petitioned a NOD denying her innocent spousery, IRS answered and John intervened.

Now John wants out.

“In his motion Mr. Wilcox claims that respondent has already granted him section 6015 relief…. He goes on to note that he resides in New York State, while Richmond, Virginia, is the designated place of trial, and he lacks the resources to continue to be a party to this litigation. He now takes the position that he has nothing to gain by remaining a party.” Order, at p. 2.

OK, but how does CSTJIW Lew justify letting John bail?

“Presently, our Rules do not address the withdrawal of an intervenor in a proceeding such as this one. Rule 1(b) provides that in any instance where there is no applicable rule of procedure, the Court or the judge before whom the matter is pending may prescribe the procedure, giving particular weight to the Federal Rules of Civil Procedure (FRCP) to the extent that they are suitably adaptable to govern the matter at hand.” Order, at p. 2.

Well, FRCP 21 lets a USDC Judge drop anyone dispensable, except when the drop would kill diversity. And Tax Court don’t need no stinkin’ diversity.

But is John dispensable? If John and Caitlin filed MFJ for the year at issue, and there’s any deficiency or other misdoing therein, then either someone is innocent and someone is guilty, or they’re both guilty, whether in whole or in part.

“Considering the disputed issues between petitioner and respondent, and although intervenor might very well be called as a witness for one or the other of the parties, we are satisfied that he is not an indispensable party to this proceeding. The Court has no jurisdiction over intervenor’s [year at issue] Federal income tax liability, if any, in this proceeding, and petitioner’s entitlement to section 6015 relief in no way is dependent upon intervenor’s status as a party. Accordingly, we will grant his motion to withdraw.” Order, at pp. 2-3.

While I’m a fan of my fellow Lew, I’m not so sure about this. Is there a possibility of an inconsistent result here, a double-reverse whipsaw where John walks and Caitlin wins, notwithstanding that tax, chops and interest are definitely owing?

If John cannot join with the late Gen. George Brinton McClellan and yell “On to Richmond!” for want of cash, he can always put in Rule 91 stipulated facts. If IRS granted John innocent spousery, IRS’ counsel should be down with that.

But this should be a case for one-and-done.

And I’m betting this non-precedential order is not the last we’ll hear about this.

Whistleblower 4496-15W, 148 T. C. 19, filed 5/25/17, is unappealing. No, that’s not a personal comment; I do not know him. But having been nicked for 7.3% of his award because of the famous sequester in the Budget Control Act of 2011, 4496 wants Tax Court to make the Ogden Sunseteers hand him the whole enchilada.

But 4496 has another problem. And Judge Lauber will tell us all about it.

“The IRS Whistleblower Office (Office) offered petitioner an award that had been reduced by 7.3% on account of the ‘sequester’ imposed by the Budget Control Act of 2011.  Petitioner accepted this award.  In his acceptance letter he agreed to ‘waive all of * * *[his] administrative and judicial appeal rights,’ including his ‘right to petition the United States Tax Court.’  The Office subsequently issued petitioner a check in the agreed-upon amount.  After cashing that check he filed a petition challenging the 7.3% reduction of his award on account of the ‘sequester.’” 148 T. C. 19, at pp. 2-3.

BTW, 4496 is fighting about $232,697. When the Ogden Sunseteers gave his attorney the bad news, the attorney twice tried to get OS to agree to let him duke it out about the 7.3%, and if he won, give him the $232K. OS said  ”negatory, good buddy,” twice.

So 4496 signed the acceptance letter, got the check for $2,954,933 and cashed it, and banged in a petition.

But does Tax Court have jurisdiction here? OS first claimed that either 4496’s acceptance letter or OS’s receipt thereof was a “determination” that triggered the 30-day petition period, and 4496 was too late. 4496 said ”Until I got the money nothing was determined.”

OS folds and says, “OK the date you got the check is the date, and you’re in within thirty days.”

Not so fast, says Judge Lauber.

“Although we are not bound by the parties’ views with respect to our jurisdiction, Ringo v. Commissioner, 143 T.C. 297 (2014), we agree that, on the facts involved here, the 30-day window must be calculated by reference to the issuance of the award check.  In the case of a favorable award decision, the Office’s ‘determination’ denotes a decision that the whistleblower will receive an award in a specific amount.  As respondent acknowledges, the award that the Office proposed in its… letter remained uncertain even after petitioner accepted it, because it was subject to conditions subsequent that could cause the award amount to be reduced.  Petitioner received no intervening communication from the Office (such as a determination letter) confirming the final amount of his award.  That being so, on the basis of the regulations that existed at that time he could not know that he would actually receive an award in the agreed-upon amount until the check was in fact issued to him.” 148 T. C. 19, at pp. 10-11 (footnote omitted).

You remember Mica Ringo, whose case is still pending. No? Then see my blogpost “Let’s You and Him Fight,” 10/9/14.

So once again, the check’s the thing. Before the check issued, taxpayer could have litigated, appealed, won, settled or whatever. It ain’t over till it’s over.

But now that 4496 got in the door of the Glasshouse at 400 Second Street, NW, he gets a rapid right-about-face and quick-march right back out. With no more money.

The deal OS offered 4496 wasn’t ambiguous; he was given a five-line arithmetically-correct analysis of what he was getting. If unhappy, he could have rejected the deal, got a determination letter and petitioned that (there is no mandatory form for a whistleblower determination). If there was any mistake, it was unilateral and not mutual.

Courts like settlements. And whatever the merits of 4496’s argument about sequester, parties often give up arguable or even winnable positions to settle a case. Been there, done that.

I’m guessing that 4496 and his attorney wanted some cash after waiting who knows how long since they handed IRS enough goods to whack the taxpayer for $14 million and get 22% out of a possible 30% thereof. So maybe so they figured that putting up another $60 bucks plus summary J papers wasn’t worse than a lottery ticket with a $232,697 payout.

As the hockey players say, “Shoot the puck, it might go in.”

Keith Howard Johnson, Esq., and associates strove mightily for Christina M. Fitzpatrick, 2017 T. C. Memo. 88, filed 5/24/17. Their labors and lucubrations paid off, as they rescued Christine from the TFRPs unloaded on her by an overzealous revenue officer and corporate officers of dubious credibility.

For the backstory on Christina and her troubles, see my blogpost “Grape of Wrath,” 11/2/16.

But Judge Vasquez, protector of the fisc, slices and dices Keith Howard’s well-earned fee.

First of all, IRS only had the benefit of the record, replete with “misinformation,” to put it charitably. So IRS was substantially justified when it issued the TFRPs and at the CDP.

But Keith Howard dropped a qualified offer; see Section 7430(c)(4)(E)(i). And the qualified offer was more than IRS got after trial.

So IRS (that means us, fellow taxpayers) is on the hook for what happened after IRS did nothing with the qualified offer. For Keith Howard, the past is prologue, and he can eat those hours.

Keith Howard argues his special expertise and thirty years of combat time to beat the hourly cap, but that’s a nonstarter. This case was strictly facts; blow up the corporate officers and the RO, and you’re a winner.

Then too, there were a couple other qualified lawyers (hi, Judge Holmes) who could have represented Christine adequately, so no special uniqueness bonus there.

Keith Howard claims this was an “undesirable” case, but the Supremes have held that is not a special factor. As a much higher Authority put it, “In the sweat of thy face shalt thou eat bread.”

Finally, Keith Howard argues that IRS took an unusually litigious position. And there’s an 11th Cir case that remanded a USDC decision awarding enhanced fees to consider the unusually litigious issue.

Yes, but, says Judge Vasquez.

A lot of courts have dealt with the unusually litigious position argument, and it hasn’t flown. “Most of the courts have concluded that an unusually litigious position cannot be considered a special factor because it would amount to ‘an impermissible award of punitive damages, contrary to the statute and to principles of sovereign immunity.’” 2017 T. C. Memo. 88, at p. 13 (citations omitted).

So what might get a private litigant (or their counsel) a Section 6673 chop, only gets Keith Howard and crew some more hours.

Judge Vasquez of course chops copying costs and the 6.5 hours Keith Howard spent on a FOIA request.

Keith does get $179,049.70.

I leave it to my colleagues to decide whether such compensation for self and two associates, after intake interviews and information gathering, a letter 12153 to Appeals, a CDP, a petition from a NOD, Branerton and formal discovery, motions, trial prep, and a seven-day Tax Court trial, all over several years with overhead to pay, evokes more than a grim smile.

You’d think IRS would stop with this one, as they got a Taishoff “Oh, Please” back in 2014. See my blogpost “Another Taishoff ‘Oh Please’,” 9/24/14. But no; there they go again.

This time it’s Doctors Hospital 1997 LP, et al., Docket No.9479-14L, filed 5/24/17. Actually there are two docket numbers, so there are two petitions, one I’ll call 79 and the other 80. And thereby hangs the cliché. Note that this is a petition from a NOD, so the thirty-day rule is in play here.

So, as Judge Holmes used to say, “now pay attention.” I’m going over the dates most particularly.

NOD dated March 28. 80 arrives at the Glasshouse May 2, but USPS track-and-confirm shows it entered the certified mail stream on April 27.

79, however, though postage was affixed at a USPS self-service kiosk on April 27, got to the Glasshouse on May 1, but doesn’t enter USPS stream until April 28.

Remember March has 31 days, thus cutoff date is April 27 for Section 7502 mailed-is-filed.

Now 80 is more complete, and has a proper Ownership Disclosure Statement (Form 6 if you’re keeping score).

Well, sounds like duplication to me. So close 79 and keep 80 as timely filed, right?

Wrong. IRS tries it again. Being slimy (whether also crafty or deft I leave to you), IRS pulls the old maneuver.

Here’s Ch J L Paige (“Iron Fist”) Marvel. “On May 19, 2017, respondent then filed a Motion To Close on Grounds of Duplication at Docket No. 9580-17L.” Order, at p. 1.

If that’s granted, then the Docs are left with 79, and are a day late and more than a dollar short, as 79 was mailed on April 28 per USPS, notwithstanding the self-service kiosk postage mark.

I warned about this back on 11/18/15 in my blogpost “No Deus, Much Machina.” I said “Just because the USPS owns and operates the postage meter, it’s still a postage meter, and you can’t control it. So the date that’s shown on the postage issued by USPS is the date you’re stuck with. And the date may change after the last minute that a piece of mail posted in the dropbox in the post office would be postmarked with the date you’re trying to establish. So remember, if the magic moment is 5 p.m., using the self-service kiosk at 5:01 p.m. may not help you. You’ll get the next day’s date on the machine-made postage.”

Ch J Iron Fist closes 79 on grounds of duplication, and dismisses IRS’ motion to close 80, not bothering to rebuke IRS for this shabby trick.

C’mon, Com’r Kosinski, even a banged-up, beaten-down and beaten-up single-shingle like me, “only a general practitioner with very limited experience and mediocre qualifications,” can see through this stuff.

This somewhat cryptic remark is a puzzlement to Paul Niski, 2017 T. C. Sum. Op. 33, filed 5/23/17, and it leads to an unfair result, but such are the anfractuosities of the IRC. And even the taxpayer’s friend, STJ Leyden, can’t help.

The chronology is somewhat muddled, but Paul overpaid some years and underpaid (or didn’t pay) a couple others (hi, Judge Holmes). But he did file and pay late. The arithmetic seems to show Paul would owe little or nothing, except for late filing.

He’s been hit with nonpayment and nonfiling chops, with interest to boot.

Paul says “you had my money.”

IRS says “Overpayments from one year don’t apply to the next, or any other year, unless you seek application or refund within the Section 6511 lookback periods.” In other words, Paul wants refunds, but the SOL on refunds has run.

That Treasury has “the use of monies” is a good argument if the tax had been paid when due, and Treasury held the overpayments. But Paul hadn’t paid when the taxes were due.

“Whether or not the barred claimed overpayments from 2002 and 2006 are characterized as moneys generally in respondent’s hands, they are not considered payments for purposes of calculating the additions to tax.  The Court is bound by the strict terms of the statutory provisions that limit credits or refunds for overpayments to those properly claimed within three years of the date they are paid.  Landry v. Commissioner, 116 T.C. 60, 62-63 (2001); see sec. 6511(b)(2)(A).  As a matter of law amounts paid or deemed paid more than three years before a tax return claiming them is filed cannot reduce or eliminate the additions to tax.  See Mason v. Commissioner, 2001 Tax Ct. Memo LEXIS 75, at *18; Stephenson v. Commissioner, 1995 Tax Ct. Memo LEXIS 35, at *7.” 2017 T. C. Sum. Op. 33, at p. 22.

And see my blogposts “Lookback in Anger,” 11/12/12, and “Lookback in Anger – Part Deux,” 4/15/15.

So even though Paul gets a chance to challenge tax due de novo in this CDP case, he loses.

Pre-answer motions are a favorite tactic of defendants. I like them too. And the appropriate templates should be kept handy in IRS’s shot locker as well.

Ch J L Paige (“Iron Fist”) Marvel thus reminds IRS’s counsel in Craig D. Kahn, Docket No. 8733-17, filed 5/22/17, a real dull day at The Glasshouse.

Craig is petitioning a SNOD for tax year 2017, which he doesn’t attach to his petition. This isn’t surprising, because unless Craig somehow has a tax year that ended after January 1 but before April of this year, a SNOD for tax year 2017 is an unlikely occurrence.

IRS answers Craig’s petition, claiming no SNOD or NOD. And not a word about a jurisdictional motion to follow.

“The answer was similarly silent regarding any other potential taxable years that might support this proceeding, simply noting that petitioner’s 2017 tax year had not yet closed.” Order, at p. 1.

OK, but where does that leave this case?

Ch J Iron Fist will tell us.

Since the record shows neither a SNOD nor NOD for 2017, and is silent as to any other year, IRS can either make a jurisdictional motion, or show some basis for jurisdiction, with documents annexed.

A pre-answer motion would have saved a lot of trouble.

This lesson was brought home to me so many years ago that I forget what the facts were in that case. But the lesson remains.

I was discussing Muncy, Ertelt and Banister yesterday. See my blogpost “Play It Now, Play It Now, Play It Now,” 5/19/17. I thought Ninth Cir gave Banister a real quick brush-off.

I hadn’t read or blogged Judge Cohen’s opinion, Joseph R. Banister, 2015 T. C. Memo. 10, filed 1/12/15, the opinion Ninth Cir affirmed so tersely. Her discussion about reforming extensions of SOL of even date therewith (as my expensive colleagues would say) was more interesting than Joe’s multiplex misdeeds. See my blogpost “Reformation Symphony,” 1/12/15.

Turns out Joe was an all-round bad dude and top-class rounder. I won’t repeat what Judge Cohen had to say. If I had been on Ninth Cir at the time, Joe would not have fared as well as he did.

Now Leroy Muncy wasn’t in Joe’s league, so maybe he caught a break. Or maybe litigants are somewhat more douce out on the Great Plains than in LaLa Land.

But I suggest we all, bloggers, litigants, attorneys, USTCPs, and even Judges, must “with a joyful mind, bear through life like a torch in flame” the simple rule: The facts are everything.

I take my text for today’s sermonette (a Friday when nothing much happens at Tax Court) from Neil Diamond’s 1970 serenade to a vinous by-product that has never appeared upon my table (and hopefully never shall).

Here’s the story of Steven L. Ertelt, Docket No. 10739-14L, filed 5/19/17.

Steve wants to play the Leroy Muncy gambit, but ex-Ch J Michael B (“Iron Mike”) Thornton upbraids Steve for waiting too long.

And ex-Ch J Iron Mike throws in a $1K Section 6673 chop for lagniappe.

It seems like only yesterday I mentioned the Leroy Muncy gambit. But it wasn’t; it was the day before yesterday. See my blogpost “Delegati Non Potest Delegare, – Part Deux” 5/17/17.

Steve waited until he had run out the clock on his “I never got the SNOD so I can contest liability de novo” opener. He went the Rule 122 route, but that got bounced. Then there was a remand to Appeals to see if the SNOD was mailed to last known address.

The supplemental NOD said it was. Trial was set, IRS moved for summary J, but that was denied because of issues with the PS3877.

Trial was finally held. Steve wanted another remand, but didn’t get it.

Tax Court sustained IRS.

Steve now wants a vacation, to put in the Muncy Eighth Circuit remand discussed in my above-referenced blogpost.

Too late, Steve. Vacations (Rule 161 or Rule 162 variations) aren’t for coming up with could’a would’a should’a theories. As the title of this blogpost says, play it now, play it now, play it now.

That is, if you can.

“Unlike the taxpayer in Muncy, petitioner did not raise in his pleadings, at trial, or on brief the issue he has raised in these motions. Petitioner’s case was before the Court on a notice of determination concerning collection action and in his amended petition petitioner alleged he never received of [sic] a notice of deficiency for the years in issue and ‘therefore has never had a chance to challenge the liability of the proposed tax.’ At trial and in his brief, petitioner’s only argument was that respondent could not prove that he received the notice of deficiency, not that the notice of deficiency was improperly issued. See Rule 331(b)(4) (‘Any issue not raised in the assignments of error shall be deemed to be conceded.’).

“Moreover, petitioner had multiple opportunities to raise the delegation of authority issue presented in Muncy and he failed to do so. The Eighth Circuit decided Muncy on March 2, 2016, and through and until the date of the decision in this case on March 1, 2017, petitioner filed several documents including an objection to respondent’s motion for summary judgment, a motion to remand, a post-trail [sic] brief, and a motion to reopen the record, in addition to a trial that was held on June 20, 2016.” Order, at p. 5.

Anyway, says ex-Ch J Iron Mike, these delegation arguments are frivolous.

Well, if they’re so frivolous, how come Eighth Cir reversed and remanded in Muncy?

Steve’s problem is that, even if he had timely raised the delegation issue, he’s a Californian, and Ninth Cir blew off that argument in Banister v. Commissioner, T.C. Memo. 2015-10, at *9, aff’d, 664 F. App’x 673 (9th Cir. 2016).

“In Banister, T.C. Memo. 2015-10, at *7, the taxpayer argued, among other things, that the notice of deficiency was invalid because it was not signed by an authorized person; the Court dismissed the taxpayer’s arguments as frivolous and imposed a penalty under section 6673. On November 16, 2016, the Ninth Circuit, Banister, 664 F. App’x 673, affirmed the Court’s decision and imposed an additional penalty under section 6673.” Order, at p. 6.

And of course Steve the Californian is Golsenized to Ninth Cir. Ex-Ch J Iron Mike blows off Eighth Cir’s learning in a footnote. True, Ninth Cir themselves gave Banister the brush-off in a memorandum opinion, of which the Court said “This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.” Banister, at p. 1, footnote 2.

Now ex-Ch J Iron Mike might argue that the Ninth Cir Rule 36-3(c)(ii) “sanctionable conduct” exception lets Banister in. But it’s a really thin twig upon which to hang, compared to what Eighth Cir did in Muncy.

Granted, Steve may be every bit as great an obstructionist as ex-Ch J Iron Mike says he is. And maybe Ninth Cir is right and Eighth Cir is wrong, although why this point should depend on arbitrary lines on a map eludes me. We’re dealing with a national tax code, that affects all American taxpayers, and a lot of people and entities who aren’t Americans or aren’t taxpayers. Is it so much to ask for a forum to interpret one uniform rule, right or wrong, for all the aforementioned? And isn’t Federal tax law sufficiently complex to require disputes thereunder to be appealed to a national bench with the requisite expertise, rather than the multiplex-cinema approach that has served us so ill up to now?

All that said, IRS’ counsel certainly didn’t cover themselves with glory, either.

The right paper in the hands of ex’r Jeff would have saved the day for Estate of Nancy H. Powell, Deceased, Jeffrey J. Powell, Executor, 148 T. C. 18, filed 5/18/17.

But once again, the power of attorney is useless if it fails to empower the agent to do what is needful.

The late Nancy put $10 million in cash and stock into a limited partnership, in which she had a 99% limited partner’s interest. Judge Halpern is down with ex’r Jeff’s position, that the three-year clawback into the late Nancy’s estate is only the difference between the worth of the cash and stock over the worth of what the late Nancy got for the same, namely the 99% limited partner’s interest.

And the clawback does cover that value, because all the partners, limited and general, could elect to terminate the LP and divvy up the goodies, thus qualifying for Section 2036(a)(2) “possess or enjoy” treatment.

But ex’r Jeff hands the late Nancy’s 99% limited partner’s interest to a charitable lead annuity trust a week before the late Nancy departs this vale of tears. For no consideration.

No one says there wasn’t a power of attorney (springing variety, which springs to life when principal is incompetent), or that the late Nancy wasn’t incompetent a week before she died. Two doctors certified the late Nancy was incompetent.

Problem: CA law requires a grant of explicit authority in the POA to permit the making of gifts by the agent.

Ex’r Jeff claims general authority to deal with principal’s property, but that’s a nonstarter.

See my blogpost “Good Job, Judge Lauber,” 10/14/16.

Takeaway- Draft that POA with utmost care. Especially when you’re under time pressure.