Judge Holmes examines whether Appeals did what the old English folk song directed: “Consider, good cow, consider.”

And The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Implacable, Imperturbable, Indomitable, Indefatigable, Illustrious, Incontrovertible, Ineluctable, Indispensable and Ineffable Foe of the Partitive Genitive, and Old China Hand, finds Appeals did so. Even a glance seems to be sufficient.

And it sinks poor Rudolfo B. Zapata, Docket No. 28931-09L, filed 8/5/16.

Rudy had health problems. His return for the year at issue showed tax due, that he didn’t pay, and Rudy admitted he owed. So no SNOD necessary. IRS hits Rudy with a NITL, he asks for a CDP, gets bounced, and petitions.

Judge Holmes was concerned that Rudy’s health problems might have rendered him financially disabled. See my blogpost “Elected, Depressed and Disabled,” 11/12/14, for the backstory on financial disability.

Anyway, Rudy claimed an overpayment for a subsequent year wiped out the shortfall for the year at issue. But the SOL on lookbacks would bar this.

Unless.

Unless Rudy’s financial disability tolled the SOL. Judge Holmes, you’ll remember, is a great fan of remands to Appeals. So he bucks Rudy back, and asks Appeals to check out Rudy’s disability. Appeals bounces Rudy yet again.

“Our standard of review depends on whether Mr. Zapata’s [year at issue] tax liability is at issue. And, although Mr.Zapata conceded his [year at issue] tax liability, there’s a question lurking here of whether Mr. Zapata’s request that his [later but barred] overpayment affects his [year at issue] tax liability in such a way that the [year at issue] liability is thereby ‘at issue.’ This has turned out to be a difficult question that remains unsettled in our Court, Estate of Adell v. Commissioner, 107 T.C.M. (CCH) 1463, 1466 (2014) (delicately noting ‘lack of uniformity’ in cases). If the proper crediting of one year’s overpayment is an issue of the ‘underlying liability,’ the standard would be de novo. If it isn’t, the standard would be abuse of discretion. See, e.g., Kovacevich v. Commissioner, 98 T.C.M. (CCH) 1, 4-5 (2009). This would mean that we look to see if the Commissioner’s decision was based on an error of law, rested on a clearly erroneous finding of fact, whether he ruled irrationally, or otherwise acted arbitrarily or capriciously. Antioco v. Commissioner, 105 T.C.M. (CCH) 1234, 1237 (2013); Woodral v. Commissioner, 112 T.C. 19, 23 (1999).” Order, at p. 2.

Judge Holmes is a grandmaster of the judicial duck. He ducks here, deciding he doesn’t need to decide, because whatever is the standard, IRS wins. “The Appeals officer conducting the hearing must verify that the requirements of applicable law and administrative procedures were met, consider issues properly raised by the taxpayer, and determine if the collection action fairly balances the need for efficient tax collection with the taxpayer’s legitimate concerns. See IRC§6330(c)(3).” Order, at p. 2 (Emphasis by the Court).

“The key question is whether the Appeals officer considered the issues properly raised by Mr. Zapata. There was only one on remand: Did Mr. Zapata qualify for a tolling of the statute of limitations that would otherwise bar a claim for refund or using his right to a refund to offset his tax liability for another year? The Code section that’s relevant here is section 6511(h), which tolls the statute for ‘financially disabled’ taxpayers. Congress told the Commissioner to issue a procedure to implement this section and there is a revenue procedure that does so. See Rev. Proc. 99-21, 1999-17 C.B. 960 (listing requirements to toll the statute). The administrative record here shows that Mr. Zapata submitted a note from his doctor, but we have to agree with IRS Appeals that — under either standard of review–it did not meet the requirements of the revenue procedure. It did not, for example describe Mr. Zapata’s impairment, link it to an inability to manage his financial affairs, or provide any specific time period when he could not manage his affairs. We are somewhat concerned that the Appeals officer appears to have barely acknowledged the subject during her communication with Mr. Zapata’s power of attorney [sic], and even told the power of attorney [sic] that the ‘only concern’ for the hearing was the [year at issue] tax debt and that the…refund should be addressed with another department. The CDP hearing might have been a helpful time to discuss the medical condition and the highly specific requirements for a doctor’s note, but we acknowledge that the Appeals officer is obligated only to consider the issue. She made no error on the record before her that Mr. Zapata’s proof of financial disability did not meet the requirements of the revenue procedure. Her determination upholding the levy on Mr. Zapata’s property was therefore not an abuse of discretion.” Order, at p. 3.

So we have an AO who has a docket to clear, a doctor who is by no means an expert on Rev. Proc. 99-21, 1999-17 C. B. 960, and a taxpayer (who was certainly disabled at one point) who puts in no answering papers on IRS’ summary J motion.

Great result.

BTW, Judge, a power of attorney is a piece of paper, sometimes also known as Form 2848; the person who acts for another by virtue of the power conferred by said piece of paper is denominated therein as the “agent.”

That’s the Elizabeth (Akers) Allen classic tune IRS is singing in Curtis W. Royall, Sr. & Vanessa Royall, Docket No. 3921-16S, filed 8/4/16, as STJ Diana L. Leyden finds fault with IRS’ chronology in her maiden appearance on this blog.

As I said when STJ Di first was appointed to Tax Court back in June, “I have no doubt STJ Leyden will give the taxpayers a fair shake in Tax Court.”

Well, it seems that Curt and Van are all paid up for the year for which the SNOD at issue was issued.

But STJ Di wants to know when they were so paid up. If before the SNOD issued, then case dismissed for invalidity of SNOD; ya can’t have a deficiency if ya don’t owe anything. If after, SNOD was valid because deficiency was unpaid at issuance, but case must be dismissed as moot because now nothing is due.

IRS got the dates wrong. “…respondent [IRS] filed a Motion To Dismiss for Lack of Jurisdiction on the ground that the notice of deficiency for petitioners’ taxable year…is invalid because petitioners paid the tax liability that is the subject of the notice of deficiency on which this case is based prior to the issuance of that notice. Respondent notes that the notice of deficiency was issued on November 30, 2015, and petitioners paid the amount…on April 23, 2016, which date is not prior to issuance of the notice.” Order, at p. 1.

So IRS, produce the transcript showing when Curt and Van paid up.

I look for more good blogfodder from sharp-eyed STJ Di.

Footnote to the foregoing (9/6/16):

IRS “…filed First Supplement to Motion to Dismiss for Lack of Jurisdiction and attached a transcript of account…that stated the correct date for the payment of the tax liability. The transcript of account…showed that a payment was made before the notice of deficiency was issued.” Order (same Docket No.), filed 9/6/16, at p. 1. So STJ Di kicks the case for invalid SNOD.

They were signed by the right person in the wrong capacity. Did the agreements extend the SOL?

Let’s ask The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Implacable, Indefatigable, Illustrious, Incontrovertible, Irrefragable, Ineluctable, Ineffable Foe of the Partitive Genitive, and Old China Hand, Judge Mark V. Holmes.

His answer is found in a designated hitter, Continuing Life Communities Thousand Oaks LLC, Spieker CLC, LLC, Tax Matters Partner, Docket No. 4805-15, filed 8/3/16.

The FPAA would be time-barred, save for the extensions signed by Warren Speiker. But the Continuing Lifers claim Warren signed as TMP of Speiker CLC, LLC. Except he wasn’t. The TMP of Speiker CLC, LLC was The Speiker Living Trust. Now Warren was a co-trustee who could bind the trust. Except he never signed as co-trustee.

In other words, “When Mr. Spieker signed each extension he did so with this signature line: ‘Warren E. Spieker, Jr., Tax Matters Partner of Spieker CLC, LLC, Tax Matters Partner of Continuing Life Communities Thousand Oaks, LLC.’ Continuing Life correctly notes–and there’s no dispute about this fact either — that the Trust, not Warren Spieker, is the TMP of Spieker LLC. Continuing Life therefore believes the correct signature line should’ve been: ‘Warren E. Spieker, Jr., Trustee of the Spieker Living Trust as Manager of Spieker CLC, LLC, Tax Matters Partner of Continuing Life Communities Thousand Oaks, LLC.’ It argues the wrong party signed the extensions and they are invalid.” Order, at pp. 2-3.

“We now need to decide that age-old question: What’s in a name?” Order, at p. 3.

Partnerships and limited liability companies can be complex structures, and there may be entities within entities. But ultimately there must be a human being to sign something.

So the issue is “who,” not “how.”

“Here, it was ‘Warren Spieker’ who signed the forms, and ‘Warren Spieker’ who had the actual authority to sign those forms. Continuing Life has failed to identify a single fact in dispute, material or otherwise, regarding Mr. Spieker’s authority to bind the Trust as its trustee, the Trust’s authority to bind SCLC as its manager, or SCLC’s authority as Continuing Life’s TMP to execute Forms 872-P to extend the statute of limitations. That the signature line misstated the source of that authority is, under our precedents, no reason to hold them ineffective.” Order, at p. 5.

Takeaway: It is more important to be a “personage,” than to be “of noble rank and title, a dignified and potent officer, whose functions are particularly vital!”

His Honor Big Julie, Judge Julian I Jacobs (hereinafter HHBJJJIJ) is playing the old UK party game, and the big winner is Whistleblower 21276-13W, 147 T. C. 4, filed 8/3/16.

You remember Whistleblower 21276-13W, right? If not, read my blogpost “Sunset in Ogden,” 6/2/15.

Well, blower and Mrs. blower are back. And IRS, in a burst of magnanimity, concedes that blower and Mrs. blower are entitled to 24% of collected proceeds.

But the dude and friends went down criminally as well as civilly, and coughed up “$74,131,694 in tax restitution, a criminal fine, and civil forfeitures to the Government under 18 U.S.C. sec 3571.” 147 T. C. 4, at p. 4.

IRS will only go for 24% of the $20 million piece of the $74 million-plus that was tax restitution. Blower and Mrs. Blower want 24% of the whole enchilada.

It’s all about Section 7623(b). Both IRS and the blowers claim the language is clear, and the post-2014 regulations don’t apply, as the blowers put in their claim before.

Some versions of clear language is clearer than others.

“The language of section 7623(b)(1) is plain. And ‘[w]here * * * the statute’s language is plain, “the sole function of the courts is to enforce it according to its terms.”’ We therefore must ‘give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, ‘that language must ordinarily be regarded as conclusive.’” 147 T.C. 4, at pp. 10-11. (Citations omitted).

Section 7623 is expansive, so whatever IRS does to grab money from dodgers and evaders is up for grabs. But the statute doesn’t define what “collected proceeds” might be. So HHBJJJIJ goes for plain meaning.

Well, although HHBJJJIJ is careful that interpreting legislation does not become creating legislation, he decides that “proceeds” means more than just cash, and “collected” means whatever you got.

“We are leery of arbitrarily limiting the meaning of an expansive and general term such as ‘collected proceeds’. In drafting section 7623(b)(1), Congress could have provided that the whistleblower’s award is to be based on taxes and other amounts assessed and collected by the IRS under title 26. But it did not. Instead, Congress chose to use a sweeping term ‘collected proceeds’ as the basis of the award. The context of the statute in which the term ‘collected proceeds’ is used reinforces our conclusion. Congress revealed its intent that the mandatory whistleblower program be an expansive rewards program by including in section 7623(b)(1) other broad and sweeping terms such as ‘any administrative or judicial action’, ‘any related actions’, and ‘any settlement in response to such action.’” 147 T. C. 4, at p. 14.

“Respondent [IRS] claims the phrase ‘detecting and bringing to trial and punishment persons guilty of violating the internal revenue laws’, as used in section 7623(a)(2), is essentially synonymous with the phrase ‘detecting underpayments of tax’, as used in section 7623(a)(1), and that both phrases refer to taxes assessed and collected under a provision of title 26. Consequently, according to respondent, only amounts assessed and collected under a provision of title 26 may be used in funding the award to a whistleblower.” 147 T. C. 4, at pp. 14-15.

That doesn’t fly. Criminal offenses under Title 18 are mentioned in Title 26.

“We find the reference in section 6531(8) to 18 U.S.C. sec. 371 to be especially illuminating inasmuch as the targeted taxpayer pleaded guilty to conspiracy to defraud the IRS, file false Federal income tax returns, and evade Federal income tax, in violation of 18 U.S.C. sec. 371.  Finally, the phrase ‘internal revenue laws’ dates from the earliest version of the whistleblower statute enacted in 1867. At that time, the modern title 26 did not exist; internal revenue laws meant all revenue laws. We think it erroneous to impose a post facto restriction on the meaning of the phrase not intended by Congress when it enacted the legislation. In sum, the phrase ‘internal revenue laws’ is not limited to those laws codified in title 26.” 147 T. C. 4, at pp. 17-18. (Footnote omitted).

IRS’ last argument is that “including” doesn’t mean “including.”

This gets the Tax Court equivalent of a Taishoff “Oh please.”

There’s no conflict with the case I blogged in the abovecited blogpost. FBAR penalties only exist in Title 31.

“In sum, we herein hold that the phrase ‘collected proceeds’ is sweeping in scope and is not limited to amounts assessed and collected under title 26. To paraphrase the Court of Appeals: Congress’ not supplementing the comprehensive phrase ‘collected proceeds’ with an exclamatory ‘and we mean all proceeds collected’ does not lessen the force of the statute’s plain language.” 147 T. C. 4, at pp. 23-24.

Section 7623(a) is discretionary; Section 7623(b) is mandatory. IRS tries to conflate these; HHBJJJIJ deflates IRS’ arguments.

Blower and Mrs. blower hit the jackpot.

Footnote- I want to give a Taishoff “Good Job, First Class” to blower’s and Mrs. blower’s counsel, but it must be an anonymous award, because HHBJJJIJ has sealed counsel’s identity to protect the innocent.

The section 162 ordinary-and-necessaries for those seeking education unreimbursed employee business expenses require the seeker to be presently engaged in a trade or business while seeking education to be more and better presently engaged.

But what happens when the seeker loses the job, while still being educated?

Judge Nega has an answer for that, and gives us a useful look at how to evaluate the facts, in Alex Kopaigora and Elizabeth S. Kopaigora, 2016 T. C. Sum. Op. 35, filed 8/2/16.

Alex was a manager for Marriott, running the show at their hostellerie at LAX. While so running, he was taking an executive MBA at BYU. Alex documented all his expenses, and IRS has no problem with the documentation. IRS claims that Alex lost his job with Marriott (which Judge Nega says was unjustified, but Alex nonetheless was out of a job). And IRS also claims that the executive MBA fitted him for a different job, even though Alex got a new job doing what he was doing at his old job.

Judge Nega: “A taxpayer may be engaged in a trade or business, although unemployed, if the taxpayer was previously involved in and actively sought to continue in that trade or business while pursuing a defined degree program related to his or her line of work. Furner v. Commissioner, 393 F.2d 292, 294 (7th Cir. 1968) (teacher continued to carry on her trade or business while simultaneously pursuing a graduate degree program and actively seeking employment in her line of work); rev’g 47 T.C. 165 (1966); see also Picknally v. Commissioner, T.C. Memo. 1977-321; Sherman v. Commissioner, T.C. Memo. 1977-301.” 2016 T. C. Sum. Op. 35, at p. 6.

As for the executive MBA fitting Alex for a new line of work, Judge Nega rejects that.

“When evaluating whether education expenses qualify the taxpayer for a new trade or business, the Court uses a ‘commonsense approach’ comparing ‘the types of tasks and activities which the taxpayer was qualified to perform before the acquisition of a particular title or degree, and those which he is qualified to perform afterwards.’” 2016 T. C. Sum. Op. 35, at p. 6. (Citations omitted, but get them for your next memo of law).

The aim is to maintain or improve skills, and you can deduct travel, meals and lodging expenses if you go on the road to education.

Judge Nega went over Alex’s courseload. “The courses petitioner chose to fulfill his degree requirements did not qualify him for a new trade or business because he was not qualified to perform new tasks or activities with the conferral of his degree. Instead, petitioner chose courses in a line of study that he was familiar with–management and finance. Even though petitioner took a few courses that were outside this scope, we do not believe that these courses by themselves could have prepared him to enter a new trade or business.” 2016 T. C. Sum. Op. 35, at p. 9.

And while unemployed, Alex kept on studying and looking for work. His new job was in the same line as the old, and IRS didn’t show that the executive MBA was required for the new job.

IRS waits until it’s brief time before claiming that Alex deducted some expenses in the wrong year, and while that might ordinarily be off the table as an ambush, Alex admitted he got it wrong, after Judge Nega reopened the record to let him show he hadn’t.

The Answer is None

 Charles A. Sisson and Maralee M. Sisson, 2016 T.C. Memo. 143, filed 8/1/16, prove that the difference between 11 and 13, when you’re talking about chapters in the Bankruptcy Act, is none.

Charles is fighting a SNOD, but everything is dropped or stipped out, except for the SE on Charles’ earnings during the lifetime of his Ch 11.

We had this discussion in my blogpost “I Call ‘Foul!’ 7/1/16, when Judge Holmes (I’ll skip the honorifics and epithets, because I just got back from dinner here in the Berkshires) burned up 18 (count ‘em, 18) pages on Ch 13 and SE in the Chang Bullock story.

Charles claims his bankruptcy estate should have picked up the SE, but Judge Morrison says no.

Charles worked for the IMF, and got paid, but international organizations don’t withhold FICA or FUTA.

There’s still a deficiency, even though the only tax is SE and not income. “A deficiency is generally defined as the tax owed minus the tax reported. Sec. 6211(a). For this purpose, the tax includes both the tax under section 1 and the self-employment tax under section 1401. Sec. 6211(a) (providing that tax includes tax imposed by subtitle A, sections 1 to 1563, and subtitle B, sections 2001 to 2801).” 2016 T. C. Memo. 143, at p. 7.

Payment for services performed for international organizations is exempt from FICA withholding by statute. Thus, such payments are subject either to SE or nothing. OK, says Charles, but the bankruptcy estate should pay, not me.

No, says Judge Morrison. “To sort out this contention, we consult sections 1398 and 1399. These provisions were added by the Bankruptcy Tax Act of 1980, Pub. L. No. 96-589, sec. 3(a)(1), 94 Stat. at 3397.” 2016 T. C. Memo. 143, at pp. 10-11.

What Charles earned is in fact the property of the estate. It belonged to the estate and had to be administered in accordance with the Plan. Charles shouldn’t have included his earnings on his 1040. The estate had to pick up the income tax.

But SE is another story.

“Self-employment income is defined as the net earnings from self-employment derived by an individual. Sec. 1402(b). The net earnings from self-employment are defined as the gross income derived by an individual from a trade or business, less deductions. Sec. 1402(a). Thus, the self-employment tax is not a tax on taxable income. It is therefore not the tax imposed on the bankruptcy estate by section 1398(c)(1). Section 1398 includes no other provision, apart from section 1398(c)(1), imposing tax liability on a bankruptcy estate. Because section 1398(c)(1) imposes the section 1 tax on the bankruptcy estate, but not the self-employment tax, we infer that Congress did not intend a bankruptcy estate to be subject to the self-employment tax. We conclude that a bankruptcy estate is not liable for the self-employment tax.” 2016 T. C. 143, at pp. 13-14. (Footnote omitted).

Here’s the omitted footnote. “Our conclusion is consistent with the IRS’s published guidance in Notice 2006-83, sec. 4.02, 2006-2 C.B. 596, 598. However, we do not rely on the notice or give it the deference that would be due a regulation.” 2016 T.C. 143, at p. 14, footnote 8. (Citation omitted).

So Charles, pay up. And Charles, meet Chang.

It’s an old baseball trick that was, or should have been, pensioned off long ago. The pick-off throw is late. The runner holds the base. The infielder pretends to throw the ball back to the pitcher, but holds it for a second as the runner steps off the base. Whereupon the sneaky infielder tags the runner and yells for the umpire to declare the runner out. Of course, the correct counter is for the runner to watch the pitcher actually receive the ball before making any move off the base.

Well, IRS is wise to the hidden spouse trick, wherein one spouse pays the whole mortgage interest for the year at issue, files MFS and tries for more than the $500K that Section 163(h)(3)(B)(ii) allows.

Tony Tao-Fu Hsu, Docket No. 30921-15S, filed 7/29/16, tries it on. And is tagged out in a designated hitter from The Judge With the Wonderful Name, STJ Lewis Carluzzo.

Tony Tao-Fu evidently didn’t read my blogpost “Faina, Meet Sophy,” 5/17/12, or he would have known this was a loser.

STJ Lew: “As noted, according to petitioner, the ‘obvious purpose’ and ‘spirit of the law’ is to prevent married taxpayers who file separately from each using an indebtedness limitation of $1,100,000. We see the purpose of the statutory limitations quite differently.” Order, at p. 4.

Going back to ol’ Faina Bronstein, 138 T.C. 21, cited in my blogpost aforesaid, “We believe section 163(h)(3)(B)(ii) clearly states that a married individual filing a separate return is limited to a deduction for interest paid on $500,000 of home acquisition indebtedness.” Order, at p. 4.

It doesn’t matter than Mrs. Tony Tao-Fu (name omitted in order) was never in title; never signed note, deed of trust or anything else; and had no legal obligation to lender, Tony Tao-Fu or anybody else. Or that Tony Tao-Fu paid every centavo of the mortgage interest for the year at issue. Or that the mortgage well exceeded $1 million.

“Obvious purpose” and “spirit of the law” don’t get it when Congress hasn’t spoken unequivocally.

It’s called “Lemme outta here!”

And His Honor Big Julie Judge Julian I Jacobs (hereinafter “HHBJJJIJ”) responds in a flash.

In a designated hitter, no less, Z & N Group, Inc., Docket No. 30013-15L, filed 7/28/16.

“On July 26, 2016, at 2:13 p.m., counsel for petitioner filed a Motion to Withdraw as Counsel. On July 26, 2016, at 2:23 p.m., counsel for petitioner filed a duplicate Motion to Withdraw as Counsel. For cause, it is

“ORDERED that the Motion to Withdraw as Counsel, filed July 26, 2016, at 2:13 p.m., is granted in that RS and QD, are deemed withdrawn as petitioner’s counsel of record in this case.” Order, at p. 1. (Names omitted).

The duplicative motion is stricken, but I can speak from decades of experience that I have been in the situation when I just wanted to bail out, many a time and oft.

Judge James S. (“Big Jim”) Halpern is on a discovery tear, with a full-dress TC (Whistleblower 11099-13W, 147 T. C. 3, filed 7/28/16) and three (count ‘em, three) designated hitters concerning the discovery disputes Whistleblower 11099-13W (hereinafter “Whiskey13”) has stirred up.

And Judge Big Jim gives Whiskey13 the whole enchilada: IRS must hand over IDRs (Information Document Requests), address and phone number of ex-IRS employee and when and how IRS found it out, and allow eleven (count ‘em, eleven) depositions of ex-IRS staffers, with teleconferencing by IRS Chief Counsel attorney.

You “win your case at discovery” CLE providers and addicts can go to the Tax Court website for today’s designated hitters.

I’m more interested in where Judge Big Jim isn’t going. And that’s in the full-dress T.C.

Whiskey13 blew the doors on a LIFO inventory shuffle whereby target (small T, not the circle-and-dot retailer) deferred tax. IRS examined and picked up some money, whereupon target, feeling the heat, dropped the dodge and paid a lot more tax going forward.

Whiskey13 claims IRS got the big money later because Whiskey13 showed them where to look. But do Section 7623(b)(1), and Reg. Section 301.7623-2(b) stretch that far?

“To petitioner, it does not matter that respondent did not act to shut down the [scam] on the basis of his information.  To petitioner, it is a sufficient justification for an award that the investigation respondent undertook on the basis of his information put target on notice that the [scam] was under scrutiny by the IRS.  That, he believes, caused target (1) to abandon elements of the [scam], which almost immediately resulted in its paying more tax and (2) eventually, to abandon LIFO, which resulted in billions of dollars in increased tax collections.  Moreover, petitioner believes that respondent derived leads from the investigation that he undertook on the basis of petitioner’s information and that those leads led to respondent’s making adjustments for years 1 and 2 to target’s reported income that are attributable to his information.” 147 T. C. 3, at pp. 12-13.

IRS counters with Example (2) in Reg. Section 301.7623-2(b)(1), where, once tipped off by Whistleblower, IRS gets additional info from IDRs and summonses that Whistleblower didn’t furnish to begin with, and therefore Whistleblower gets nothing.

“In part, the example concludes that the portions of the IRS’ investigation relating to the additional facts obtained through the issuance of IDRs and summonses are not actions with which the IRS proceeds on the basis of information provided by the whistleblower because the information provided did not substantially contribute to the IRS’ administrative action based on the information provided by the whistleblower.  Sec. 301.7623-2(b), Example (2), Proced. & Admin. Regs.” 147 T. C. 3, at pp. 14-15.

I said it a long time ago in my blogpost “Qui Tam?” 9/12/12.

“Now the problem is obvious: it needs the whistleblower to connect the dots. Some dots may be public, some private, some hidden, some in plain sight. But in the immortal words of the late great Bill Klem, ‘Some is balls and some is strikes, but they ain’t nuthin’ till I calls ‘em.’ Somebody has to call ‘em, or at least put it all together, so the party charged with ‘callin’ ‘em’ can in fact call ‘em.

“Does no one remember Edgar Allen Poe’s classic short story ‘The Purloined Letter’? The essential document was in plain sight all along, but disguised. It took an expert’s eye to find it, and an expert’s hand to recover it for the true owner.” Qui Tam?, 9/12/12.

If the Whistleblowers don’t show IRS where to look, how will IRS ever know where to look? And without looking, what will IRS collect?

But Judge Big Jim has had enough for one day.

“We need not at this point in the case address the merits of respondent’s lack of-authority argument, which respondent has not fully developed.  Petitioner’s case, grounded on the legal theory that the IRS collected proceeds from target on the basis of petitioner’s information about the [scam], is well pleaded.  It is not obviously contradicted by section 7623(b)(1).  The validity of section 301.7623-1, Proced. & Admin. Regs., has not been tested, nor does respondent argue that it applies.  The proper interpretation of section 7623(b)(1) is something that the Court may decide in due course during these proceedings upon argument or briefing by the parties.  If respondent is interested in a pretrial ruling from the Court on matters of law, then his proper course of action under our Rules would be to file a motion for summary judgment under Rule 121.” 147 T. C. 3, at p. 15.

And he’s had enough of IRS’ stonewalling.

“Respondent’s principal objection to the motion is, as we have discussed, relevance.  He also objects to producing four of the requested IDRs on the ground that petitioner cannot move to compel discovery for documents that he has not sought through discovery.  Petitioner, by his… letter made known his request for those four IDRs, and we see no benefit to making petitioner ask again for something respondent has made clear he will not produce except upon order of the Court.  With respect to the 17 IDRs petitioner did not identify in that letter, we likewise see no benefit in making petitioner take any further steps to make his request for those IDRs clear to respondent.” 147 T. C. 3, at p. 17.

But it’s all subject to a Section 6103 confidentiality order.

A Taishoff “good job” to Henry S. Lovejoy, Esq., and the team from Kostelanetz Fink.

I don’t want to embarrass IRS’s attorney, so I will mention no particulars about that person. But that person’s response to a petition that arrived in the mail with a USPS meter mark within the 90-day limit for reconsideration of a SNOD is embarrassing.

See Marion I. Tanner Trust Dated 03/28/2002, Rita A. Wilson, Trustee, Docket No. 13446-16S, filed 7/28/16.

Here’s that person’s motion. I’m leaving in the dates because they are material.

“2. The 90-day period for timely filing a petition with this Court from the notice of deficiency expired on June 5, 2016. June 5, 2016, was a Sunday, so the [90-day period for filing a timely Tax Court petition as to that] notice of deficiency expired on June 6, 2016.

“3. The petition was filed with the Tax Court on June 8, 2016, which date is 93 days after the mailing of the notice of deficiency and 2 days after the expiration of the notice of deficiency.

“4. The copy of the petition served upon Respondent bears no U.S. Postmark on the cover in which the petition was mailed to the Tax Court. There is a U.S. Postmeter stamped on the cover which reads “JUN 01 2016.”

“5. The irradiation process for mail sent to the United States Tax Court is approximately 7 days.

“6. The petition was not filed with the Court within the time prescribed by I.R.C. § 6213(a) or § 7502.” Order, at p. 1.

Ch J L. Paige (“Iron Fist”) Marvel is positively douce.

She sends that person off to check on Reg. 301.7502(c)(1)(iii)(B), about delivery when a mailing would ordinarily be delivered if timely mailed.

And exactly what the irradiation process has to do with this is unclear; if it ordinarily takes seven (count ‘em, seven) days for the radioactors to do their thing, so what? When did the petition arrive in their (literally) hot little hands?

But that person isn’t done yet. That person claims the petitioner hasn’t shown that Rita A. is truly the trustee.

Except the SNOD says she is.

So let that person file a supplement to that person’s motion to dismiss. “In that Supplement respondent shall set forth and discuss fully respondent’s position as to both (1) whether the petition in this case was filed timely in light of section 301.7502(c)(1)(iii)(B) of the regulations, and (2) based upon a diligent and good-faith search conducted by respondent, whether Rita A. Wilson is the duly appointed trustee of the trust.” Order, at p. 2.