Practitioners routinely rely on Kovel* engagements to provide Section 7525 privilege cover for communications with CPAs and preparers in advising clients. But not all communications are thus protected, as Judge Ronald L. (“Ingenuity”) Buch shows us in Desmond McGuire & Cory Lynne Brame, et al., Docket No. 25461-16, filed 3/20/25.

Third-party disclosure is a waiver.

Tax prep advice, as distinct from tax law advice, is not legal advice, therefore not privileged, so the Kovel blanket doesn’t cover. “Exhibit 140-J is an email chain containing attorney-client privileged legal advice that was forwarded to an accountant by petitioners for the purposes of tax return preparation. Attorney-client privilege is waived if privileged communications are disclosed to a third party. Petitioners received communications from their attorney that was privileged legal advice. However, the disclosure of the advice to a third party, their accountant, for purpose of return preparation, which is not subject to privilege, is a waiver of the attorney-client privilege that previously attached to the communication. Petitioners argue that the disclosure of the legal advice to their accountant does not constitute a waiver of attorney-client privilege because it was pursuant to a Kovel arrangement. See Kovel, 296 F.2d at 922. The disclosure to the accountant was not in furtherance of the legal advice, rather it was disclosed to assist in tax return preparation. Kovel does not apply in this circumstance, and petitioners waived attorney-client privilege with their disclosure of Exhibit 140-J.” Order, at p. 4.

Taishoff says this is an ambush. Clients routinely tell their preparers what their lawyers told them. In my experience over 58 years, no client asks and pays for legal advice to satisfy an unslaked thirst for abstract legal knowledge or to make a gift to my retirement fund, but to solve the client’s real and present problem. This ruling eviscerates any possible use the client can make of their trusty attorney’s advice for which presumably they paid serious money.

Likewise, State tax advice isn’t covered by Section 7525. Id., as my expensive colleagues would say (but what use their clients are to make of said expensive advice I cannot tell.).

Here be dragons.

* https://law.justia.com/cases/federal/appellate-courts/F2/296/918/131265/

Nothing really new, but a T C. Memo from Judge Cary Douglas Pugh shows that hardship isn’t hard enough when it comes to early draws from an IRA, and an order from Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan sends another late petitioner to join Antawn Jamal Sanders, for whose story see my blogpost “In the Midnight Hour,” 6/20/23.*

First, Charlie Campana, T. C. Memo. 2025-23, filed 3/19/25. Charlie claims IRS erroneously nixed his refund for an out year, and he thought the IRA trustee withheld all the tax, so he didn’t report his pre-59-1/2 COVID-induced hardship draw. Out years are out if not before the Court via SND or NOD, and economic hardship is not basis for avoiding the 10% add-on. Charlie’s belief in his IRA’s trustee isn’t enough reasonable cause to avoid the Section 6662(a) and (b)(2) five-and-ten chop.

“Petitioner did not testify, nor do we see anything in the record to suggest, that he relied on a tax professional or even considered an information return (e.g., a Form 1099–R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., issued by [trustee]) to determine his tax liability. We acknowledge petitioner’s misunderstanding of the applicable law, and we are sympathetic to his frustration regarding the IRS’s denial of his [out year] claim for refund. But neither is a ground for concluding that there was reasonable cause for his failure. We therefore sustain the penalty.” T. C. Memo. 2025-23, at p. 4.

Next, Gregory B. Klock, Docket No. 495-25, filed 3/19/25, petitioned a SND from Laguna Beach, CA, where it was 9:06 p.m. on Day 90. Unhappily, it was already the next day in The City of the Governmentally Efficient, which is situated in the Eastern timezone.

“Although the Court may sit at any place within the United States, its principal office, its mailing address, and its Clerk’s office are in the District of Columbia. I.R.C. § 7445; Rule 10. A document that is electronically filed with the Court is filed when it is received by the Court as determined in reference to where the Court is located.” Order, at p. 2. (Citation omitted).

* https://taishofflaw.com/2023/06/20/in-the-midnight-hour/

This may work for an IA or to get small-claimer treatment, but not for a passport grab, as Ch J-elect Patrick J. (“Scholar Pat”) Urda reminds Drew J. Pfirrman, T. C. Memo. 2025-22, filed 3/18/25.

Drew had run up $143K when IRS certified the debt to State, T. C. Memo. 2025-22, at p. 5. Drew claimed he’d paid the debt down below the then-current $59K cutoff for seriously delinquent.

“In addition to questioning his underlying tax liability, Mr. Pfirrman also suggests that he has made payments that have dropped the liability ‘below the threshold of this Court review.’ Mr. Pfirrman misunderstands the statutory structure. Once a certification of a seriously delinquent tax debt has been made, it may be reversed “if the debt with respect to such certification is fully satisfied.” I.R.C. § 7345(c)(1) (emphasis added). Unless a taxpayer satisfies the section 7345(b)(2)(A) exception, a partial payment does not justify reversal of a certification or otherwise end the matter, even if the partial payment drops the amount of the unpaid, assessed, and legally enforceable liability below the… threshold for certification of a seriously delinquent tax debt.” T. C. Memo. 2025-22, at p. 6.

Of course underlying liability is a nonstarter in a passport grab.

Btw, the Section 7345(b)(2)(A) exception covers timely-paid installment agreements, inapplicable here.

Whether or not Marc Worrall and Sue J. Worrall, Docket Nos. 14793-22, 14734-23, filed 3/18/25, get the Genesis 2:24 treatment outside US Tax Court I leave to a much higher Authority even than Judge Kashi Way.

Even in Tax Court Judge Way is loath to opine whether each of Marc and Sue are entitled to 25 interrogatories inclusive of parts and subparts per Rule 71(a).

“…we address respondent’s objection that Interrogatories 26–33 exceed the allowable limit under Rule 71(a), under which a party may serve upon any other party no more than 25 written interrogatories, including subparts. Rule 71(a). A party may seek leave of the court to serve additional interrogatories. Id. and Rule 70(c)(1).

“Petitioners sought no such leave. Petitioners argue instead that because they comprise two parties, Marc and Sue Worrall, each are permitted 25 interrogatories under our Rules and thus their combined 34 interrogatories are within their limit. Because respondent abandons his objection to the number of interrogatories in his Response and we are denying petitioners’ motion, we need not decide whether the petitioners Marc and Sue Worrall are considered one party for purposes of the limit on interrogatories under Rule 71.” Order, at p. 5.

I don’t know which of Marc’s and Sue’s eight (count ’em, eight) trusty attorneys came up with this move, but she or he is surely entitled to a Taishoff “Good Try, First Class.”

The latest IRS tactic in Malibu Valley Land, LLC, Spectrum Development, Inc., Tax Matters Partner, Docket No. 20442-19, filed 3/17/25 draws a rebuke and a lesson from Judge Travis A. (“Tag”) Greaves. Judge Tag Greaves brushed aside a bunch exclusionary-preclusionary motions on a couple days ago (hi, Judge Holmes); see my blogpost “Doowop,” 3/11/25.*

Now IRS’ attempt to quash a Malibu subpoena ad testificandum as an attempt to get around the discovery scheduling order fails. Judge Tag Graves rebuffed the Malibus when they tried a subpoena duces tecum on the same nonparty, who had furnished documents upon which IRS’ expert relied. But as said nonparty isn’t bringing anything, that’s no barrier.

IRS is trying to quash a subpoena on a nonparty. Moreover, the nonparty doesn’t object to testifying. Tax Court Rules don’t cover whether a party or third-person can move to quash a nonparty subpoena. So Judge Tag Greaves goes to the FRCP, and FRCP 45(d)(3) sets out only two (count ’em, two) bases for such motion, and IRS flunks both.

“Respondent does not represent Mr. C nor is Mr. C a party to this case. Thus, respondent only has standing to quash the subpoena if he can reasonably assert privilege over the information sought by the subpoena or he has a personal right in such information. Respondent did not claim a privilege nor a personal right to the information sought by the subpoena in his motion. Therefore, it appears that respondent lacks standing to quash the subpoena issued to Mr. C.” Order, at p. 2. (Name omitted).

Even if IRS had standing, IRS didn’t raise burden to Mr. C., or relevance of his testimony.

* https://taishofflaw.com/2025/03/11/doowop/

Judge Courtney D. (“CD”) Jones plays a variant on our old pal the percipient witness in Asia Zaheen, Petitioner and Kamran Ehsan, Intervenor, Docket No. 13863-22, filed 3/14/25 (Happy Pi Day!).

Intervenor Kam’s trusty attorney, whom I’ll call Louie, moved yesterday “to Compel Expert Testimony.” Motion involved psychological evaluation report and testimony concerning same. Taishoff says this is a wee bit rich, as trial is scheduled for Tuesday, and no Rule 143(g) moves had taken place.

Judge CD Jones had advised Louie in a conference call yesterday she wasn’t inclined to admit said report on Rule 143(g) grounds, or recognize the evaluator as an expert.

“Nevertheless, the Court acknowledges that Mr. S could testify (and be cross-examined) as a fact witness regarding his purported evaluation of intervenor and preparation of the report. Intervenor could then offer the report as a medical record. Accordingly, the Court will set the Motion to Compel for hearing at the commencement of the trial. If intervenor intends for Mr. S to testify at the hearing or at trial (or both), Mr. S must be present, in person.” Order, at p. 1. (Name omitted).

Note the witness is “Mr.,” not “Dr.,” although witness has a Ph.D. And if not qualified as an expert, isn’t his report weightless?

Oh, the backstory on percipient witnesses can be found in my blogpost “Percipient and Admissible,” 11/7/22.*

* https://taishofflaw.com/2022/11/07/percipient-and-admissible/

I wouldn’t be so presumptuous as to claim succession to the role of the late and much-lamented A. G. Linkletter, a hero of my childhood so long ago. But reviewing the activities of the self-representeds as they navigate the straits of The Glasshouse in the City of the Ongoing Purges is a strong temptation.

Gary L. Macintosh & Joanne Macintosh, et al., Docket Nos. 10864-23, 3218-25, and 3219-25, filed 3/13/25 (and I cite all three docket numbers because they play roles here) seem to be enmeshed in the toils of DAWSON, causing Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan to beg the Macintoshes to cease their electronic bombardment.

The Macintoshes started on paper, and their petition is on for trial on St. Patrick’s Day under the first hereinabove set forth docket number, as my high-priced colleagues would say. But the Macintoshes have exhibits and status.

“… without first having properly requested and received eAccess to their case at Docket No. 10864-23, petitioners apparently twice attempted to electronically file documents pertaining to their upcoming trial. As a result, petitioners inadvertently commenced two additional cases at Docket Nos. 3218-25 and 3219-25.” Order, at p. 1.

So Ch J TBS tells Ch Clk Charles (“Champagne Charlie”) Jeane to have his hardlaboring crew transplant the two errant cases as trial exhibits and a status report in the single surviving docket, and close the two outliers.

A docket search shows that the Macintoshes may have paid sixty Georges for each of their miscues. Do they get a refund?

Once again, I suggest that we really need another Tax Court Judicial Conference, just to sit around and swap war stories. Perhaps Ch J-elect Patrick J. (“Scholar Pat”) Urda might wish to consider complying with the Congressional mandate in Section 7470A by convoking one when he takes office.

I’ll preregister right now.

The webinar Best Practices when Appearing Before the U.S. Tax Court was an important guide, but unfortunately I could only view half of it. I am sure many other interested persons were not even able to do that.

Why these webinars are not recorded and archived for viewing after the original airing I cannot fathom. The “Trailblazers” series sponsored by then-Ch J Maurice B (“Mighty Mo”) Foley was thus preserved, so it cannot be that the technology is unavailable.

I found most interesting the statement of Judge Christian N. (“Speedy”) Weiler that he had looked at the list of registered attendees and had found none who transgressed the objectionable or careless conduct standards. Preaching to the choir, Judge?

I most respectfully suggest that webinars like this one be recorded, and mandatory viewing thereof be imposed upon wits, wags, wiseacres, and wannabes if they wish to continue to be heard in the Nationwide Play Before You Pay forum.

Judge Goeke has three (count ’em, three) off-the-benchers today, but as Karl Ludwig Johannes Baedeker used to say, there is little here to detain the tourist.

Organic Cannabis Foundation, LLC, et al., Docket Nos. 381-22L, 5442-22L, filed 3/12/25, admits it’s late with its CDP requests for the only year at issue in both cases, and has only the Michael Corleone gambit, classical variation, for Boechler equitable tolling. Hence, when remanded to Appeals and admits its failure of proof, Appeals gives the Organics a Decision letter off an Equivalent Hearing per Reg. Section 301.6320-1(i)(1).

“The law is clear that a Decision letter which is not subsequently deemed to be a Notice of Determination does not yield judicial review.” Transcript, at p. 7. (Citation omitted). No judicial review available because no NOD because no CDP because too late requested and equitable tolling folded.

Cacey Taylor, Docket No. 2699-24, filed 3/12/25, shows Judge Goeke going above and beyond, trying to extract from petitioner any basis to allow him more Uber-DoorDash miles deduction than what IRS allowed. Section 274 strict substantiation doesn’t apply to cabbies.

“Regarding the Uber transportation income and the DoorDash related income, the Court, at trial, spent significant time trying to elicit from the Petitioner a way in which the Court could estimate Petitioner’s mileage associated with these business activities. Petitioner consistently stated that he, at the time he filed the return, had an app on his phone which showed a total amount of miles which would have wiped out all of his income, but he chose not to use those miles and therefore he did not think he owed any tax. He also admitted that he no longer had that information and he never clarified whether the income associated with his Uber and DoorDash activities was the only basis for the miles that was captured on this alleged app.

“Given the lack of clarity and specific information underlying these assertions, the Court then attempted repeatedly to elicit from the Petitioner specific information that could be used to estimate additional miles other than those allowed by Respondent at trial associated with his driving activities. Petitioner just declined to do that, repeatedly.” Transcript, at pp. 4-5.

The allowed mileage stands. I’m not sure what petitioner thought to accomplish by refusing to provide anything.

Amanda Renee Stewart, Petitioner, and Ahmed Zeid, Intervenor, T. C. Sum. Op. 2025-3, filed 3/11/25, carried the “separate checks” principle to the max and beyond.

STJ Jennifer E. (“Publius”) Siegel tells all: “Petitioner and intervenor kept their finances largely separate throughout their marriage. For example, they would split joint household expenses by individually putting money for the specific item(s) into a shared account maintained for that purpose. If they gave a gift as a couple, they would each pay for half. The two tracked their expenses through a smartphone application and would periodically reconcile them, settling up when they did so. Petitioner frequently fronted the money for joint expenses and was later reimbursed by intervenor. The two did not own any property or investments together.” T. C. Sum. Op. 2025-3, at p. 2. And they each separately entered their information on the tax prep software for their 1040 MFJ for year at issue.

So when the parties divorce and IRS hits them with a SND, Ahmed claims it’s unfair to let Amanda Renee off the hook, and she should help him amend their return to let him pick up the unreported income and add some deductions from his business, in which she took no part.

STJ Publius isn’t interested.

“As an initial matter, the Court has no authority to require parties to amend their income tax returns. Further, we agree with the IRS’s concession that petitioner should be relieved from joint and several liability under section 6015(c) for the portion of the deficiency and penalty caused by intervenor’s unreported income from his business.” T. C. 2025-3, at p. 4.

Ahmed wants to relitigate the deficiency, but he never petitioned the SND. And innocent spouse cases are restricted to eligibility for relief. Amanda Renee checks all the boxes for Section 6015(c) apportioned. All Ahmed has is the Michael Corleone gambit, “don’t ask me about my business” variation.