This will remain a nonpolitical blog. I make my views abundantly clear elsewhere and advocate for them strongly. I must however strongly urge here that none of us can do as Aldous Huxley titled his novel, and remain eyeless in Gaza.

I must give hearty, though belated, thanks to Judge Mark V. (“Vittorio Emanuele”) Holmes for an analogy that has worn well: “(T)he silt we stir today will cloud the cases we plunge into tomorrow.” 137 T. C. 17, at p. 61.” See my blogpost “The Great Dissenter,” 12/28/11.

I wish my high-priced refrigerator (kaput for the second time in less than two (count ’em, two) years) had worn half as well.

Judge Ronald L. (“Ingenuity”) Buch took a 500 hp Mercury outboard to the silt in Veribest Vesta, for which see my blogpost “Judge Buch Says It All,” 7/15/25. And the muddied waters are swirling about Judge Albert G. (“Scholar Al”) Lauber, as he tries to quieten the allegedly spooked trusty attorneys for Ivey Branch Holdings, LLC, Ivey Branch Investors, LLC, Tax Matters Partner, Docket No. 19189-19, filed 8/14/25.

Among said trusty (but allegedly spooked) attorneys is the redoutable Vivian D. (“Golden”) Hoard, Esq., who with her crew gets a Taishoff “Good Try, Third Class.”

“… petitioner filed a Motion to Stay Proceedings, requesting that the Court stay proceedings in this case pending resolution of appeals from this Court’s decisions in Ranch Springs, LLC v. Commissioner, 164 T.C. No. 6 (2025), and Beaverdam Creek Holdings, LLC v. Commissioner, T.C. Memo. 2025-53. Petitioner’s counsel urge that they face a dilemma: Zealous advocacy dictates that they continue to embrace the discounted cash flow valuation method rejected in Ranch Springs and Beaverdam Creek, but doing so could risk sanctions in light of views expressed in a recent bench opinion delivered by another Judge of this Court. See Veribest Vesta, LLC v. Commissioner, Docket No. 9158-23, Entry No. 194, Transcript of July 11, 2025 (Bench Op.).” Order, at p. 1.

Judge Scholar Al, perhaps with a muted sigh and uplifted eyes, rejects.

“Petitioner’s request for a stay ignores the bifurcated nature of this trial. The first phase of trial is limited to taking the testimony of fact witnesses and experts whose testimony does not implicate valuation or geological evidence…. We will not hear expert testimony implicating valuation until the second phase of trial…. Petitioner will thus have no occasion to engage in ‘zealous advocacy’ regarding the appropriate valuation method during the initial phase of trial. In any event, the undersigned will not entertain any Motion to Impose Sanctions prior to a definitive appellate court ruling on the subject.” Order, at p. 1.

It’s not only Judge Ingenuity Buch who brings ingenuity to Tax Court practice.

Making his seventh (count ’em, seventh) appearance in this my blog, Clair R. Couturier, Jr., Docket No. 19714-16, filed 8/13/25, or rather his trusty attorneys, whom I’ll call “Alvah’s Guys,” fling a spanner in the IRS’ chopworks.

I’ll let Judge Albert G. (“Scholar Al”) Lauber judge-‘splain.

“In the Notices of Deficiency issued to petitioner respondent determined additions to tax under section 6651(a)(1) for failure to file Forms 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. In determining these additions to tax, respondent relied on this Court’s Opinion in Paschall v. Commissioner, 137 T.C. 8, 21 (2011), which held (among other things) that the “Form 5329 is a tax return within the meaning of section 6011, and failure to file Form 5329 can result in section 6651 additions to tax.” Order, at p. 1. For the Paschall mystery, see my blogposts “Dies Ira,” 7/15/11, and “Retro,” 2/29/24.

Alvah’s Guys go for broke.

“After the trial record in this case was closed, petitioner filed his Simultaneous Opening Brief in which he contended that the Court should overrule Paschall. If the Court were to do that, petitioner says, Form 5329 would be a return required only under the authority of section 6058—which requires the filing of returns respecting tax-deferred plans—and not under the authority of section 6011. In that event, petitioner contends, failure to file Form 5329 could not result in additions to tax under section 6651.” Order, at p. 1.

Taishoff says, wotta move! May not win, but worth a Taishoff “Good Try, Hail Mary Division.”

Howbeit, Alvah’s Guys have rattled IRS counsel.

Wherefore, IRS seeks to amend the answer to assert “an alternative position, that petitioner’s failure to file Forms 5329 generates additions to tax under section 6652(e). That section imposes additions to tax for failure to file a return required by section 6058.” Order, at p. 1.

Except.

IRS never alleged Boss Hossery, because no need to get Boss Hoss sign-off for any addition to tax under section 6651, 6654, 6655, or 6662.” See § 6751(b)(2)(A).

Except.

Section 6652(e) is not among the “blessed communion, fellowship divine” un-Boss Hossed by Section 6751(b)(2)(A).

So IRS moves to reopen the record to wild-card in the declarations of the super and the suped, affirming Boss Hossery, a mere nine (count ’em, nine) years after the petition was filed. Apparently both super and suped are, like the hero of the Platters’ 1959 immortal hit, “still around.”

I’m surprised IRS didn’t just have them sign off now, as assessment hasn’t yet occurred and Clair is Golsenized to the Korner-cutting 9 Cir.

Don’tcha just love this stuff?

Section 7491 BoP shifts are rare, and Harness Rock, LLC, Ornstein-Schuler, LLC, Tax Matters Partner, Docket No. 29331-21, filed 8/12/25, really hasn’t asked Judge Goeke for a shift. The Harness Rockers want Judge Goeke to rule that IRS’ Section 170(e)(1)(A) argument is new matter, which would trigger the shift.

Judge Goeke does, shifting aside Oconee Landing, Rock Cliff, and Jackson Corners, in all of which Tax Court held it wasn’t, despite the wild-card boilerplate language of the FPAA. But Judge Goeke prefers 46 Henry Locust Rd.

Here’s the relevant FPAA language.

“To the extent you are able to establish that a noncash charitable contribution has been made, you failed to establish that it satisfied all the requirements of I.R.C. § 170 and the corresponding Treasury Regulations for deducting a noncash charitable contribution. If it is determined that you have satisfied all the requirements of IRC. § 170 and the corresponding Treasury Regulations for deducting a noncash charitable contribution, you have not established the value of the noncash charitable contribution.” Order, at p. 2.

The Harness Rockers’ trusty attorneys sent a Section 170(e)(1)(A) Branerton to IRS in April, which IRS ghosted. Then IRS raised the issue last month.

IRS claims the broad language of the FPAA takes in all of Section 170. But that broad language speaks of allowing the deduction; Section 170(e)(1)(A) speaks of valuing the deduction.

“Respondent did not explicitly raise the section 170(e)(1)(A) issue until July 2025, approximately two months before the trial. While Harness Rock’s organizers/managers may have been aware of the possibility that respondent might pursue such an argument based on letters they received from law firms regarding similar transactions undertaken by other entities they organized/managed, we do not believe petitioner should have been forced to speculate as to respondent’s position so close to the trial date. This is especially true considering that addressing the section 170(e)(1)(A) argument will require the production of additional, different evidence.” Order, at p. 5.

Besides, Section 170(e)(1)(A) provides an alternative valuation method, which the FPAA would take away.

“…the Henry Order shows that respondent’s language could not have pertained to the amount of the deduction in that case because sustaining it would have resulted in an allowable deduction smaller than respondent’s alterative [sic] valuation position. Although there has been no argument that respondent’s section 170(e)(1)(A) argument would produce such a result in this case, we believe the Henry Order demonstrates the somewhat unthinking nature and mechanical use of respondent’s broad FPAA language. There is no indication that such language is sufficient to raise section 170(e)(1)(A) as an issue in petitioner’s case, when similar language did not raise section 170(e)(1)(A) as an issue in Henry. We note that the Henry Order is more recent than the Oconee, Rock Cliff, and Jackson Orders; in those earlier cases we had not yet been confronted with such an issue with respect to section 170(e)(1)(A).” Order, at p. 5.

And clearing this up now, with trial a month away, lets the parties know what evidence to produce.

But before the Harness Rockers’ trusty attorneys pop the corks on the Krug, they should check this out.

“We note that both parties are represented by knowledgeable counsel and appear to have engaged in extensive discovery and other preparation for trial. We consider it unlikely that there will be an evidentiary tie on the section 170(e) issue that would cause the burden of proof to be the deciding factor. See Knudsen v. Commissioner, 131 T.C. 185, 188 (2008). At trial, both parties should be prepared to introduce all admissible evidence relevant to this issue.” Order, at p. 1, footnote 3.

While I oughtn’t to single out any of the Harness Rockers’ thirteen (count ’em, thirteen) trusty attorneys, all of whom get a Taishoff “Good Job,” I do want to give a shout-out to my colleague Lyle (“Full-Court”) Press, Esq.

Lest I be misunderstood, I am all in favor of whistleblowers. I said it long ago: the information may be publicly available, but so what? “(I)t 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.” See my blogpost “Qui Tam?” 9/12/12.

That said, I am no fan of the stripminer who conjoins his EDGAR and Wall Street Journal subscriptions with his on-the-job training at an accounting firm that does Section 482 work to try to extract cash from the public fisc with hand-me-down info and unsubstantiated theories.

Hence when Judge Albert G. (“Scholar Al’) Lauber curb-kicks Whistleblower 20442-18W, T. C. Memo. 2025-86, filed 8/11/25, I’ve no sympathy for said blower.

“Respondent contends that petitioner’s information did not ‘substantially contribute’ to the adjustments made by the examination teams, and we agree. In analyzing this question, it is helpful to focus first on the character of the information petitioner supplied. He had no inside knowledge about Target or its tax planning. He had no involvement in the preparation of Target’s financial statements or tax returns and no access to its internal documents. Virtually all the information he supplied was derived from publicly available sources, such as newspaper articles, business journals, and SEC filings.

“Petitioner was employed by a firm that did SEC filings for large multinational corporations. Given his experience, he was able to scrutinize Target’s SEC filings and make an educated guess about transfer pricing issues that might arise during an IRS audit. Petitioner presumably could have reviewed SEC filings by dozens or hundreds of other large multinational corporations, made educated guesses about transfer pricing issues they might have, and filed whistleblower claims targeting them.

“By its nature, high-level information of this sort is unlikely to be of great use to experienced IRS examiners who are auditing large multinational companies. And that was what the exam teams found here.” T. C. Memo. 2025-85, at p. 14.

Mike Lissack’s up-and-down safari with Reg. Section 301.7623-2(b)(1) and its “substantially contributes” language gets an airing. This blower fails on that score. Again, for full disclosure, Mr. Lissack was a client of mine many years ago in an entirely unrelated matter.

In short, bravo to the blowers who risk all for truth, justice, and the American way. But no praises for the stripminer and bounty hunter who “habitually overhauls the register of deeds in search of defects in titles, whereon to stir up strife, and put money in his pocket.”

One thing predictable in every Dixieland Boondockery is IRS’ partial summary J motion seeking a finding of Section 6751(b) compliance. Barring names, numbers, and dates, each such Order is as alike as cans of Coca Cola from a coin-operated vending machine. Especially is this true as the greatest number of these cases are Golsenized to 11 Cir, where Kroner reigns supreme. So long as supe supervises RA at the time of sign-off, that’s just fine.

Riddle Aggregates, LLC, Ornstein-Schuler, LLC, Tax Matters Partner, Docket No. 31104-21, filed 8/11/25, is such another. The trusty Riddle attorneys spare ex-Ch J Kathleen (“TBS = The Big Shilleagh”) Kerrigan the usual desperate hunt for disputed facts or pleas for extended discovery, and agree with IRS’ names and dates and electrons.

But they note for the record “For purposes of preserving this issue for appeal, petitioner notes its disagreement with our interpretation of section 6751(b) and that of the Eleventh Circuit.” Order, at p. 4.

Taishoff says I hope the trusty Riddle attorneys get to the Supreme Court, and the Supremes put paid to this nonsense.

My readers, I am sure, are as tired as I of the upside-down-and-backwards reading of Section 6751(b). The testimony of the ABA Tax Section back in 1997 was clear; the aim was to get a second look before penalties were threatened to bludgeon taxpayers into disadvantageous settlements.

But the drafting of the implementing statute is atrocious; Charles Dickens’ Circumlocution Office could not have done better to figure out How Not To Do It. The word “assessment” was used by inept drafters, unaware of the technical meaning given in Section 6203, that is, entry of the amount of tax due in the Office of the Secretary. But Section 6213(a) provides that no assessment of tax or penalty (entry on the records) may be made once a petition has been timely filed in a deficiency case. Once a case has been thus commenced, assessment is barred until decision is final per Section 7481.

Wherefore, a SND may be issued without Section 6751(b) signoff, timely petitioned, litigated, decision entered, notice of appeal and appeal bond posted, appeal decided, remanded, new trial, appeal, bonded, appeal decided, certiorari petitioned and granted, Supreme Court decision rendered, remand to Tax Court, and decision entered. Assessment made twenty (count ’em, twenty) years after penalties first mentioned. Supe and RA have grown old together and are at their retirement party when a clerk runs in with a CPAF, which they both sign. 11 Cir is satisfied with that result.

Yes, I know Judge David Gustafson foresaw that; see my blogpost “Money-Back Guarantee Meets the Boss Hoss,” 11/30/16. And Judge Holmes really unloaded on this farcical schemozzle; see my blogpost “Stir, Baby, Stir – That Silt,” 12/20/17.

Nonetheless the vending machine grinds on.

Michael Joseph & Kathleen C. Joseph, Docket No. 6027-24, filed 8/8/25, want to unsettle with IRS. They claim when they signed the stip of settlement “they were completely ‘unaware of monetary figures’ and under duress to make a decision regarding going to trial or settlement. Additionally, petitioners allege that they had no confirmation of the exact amount that was owed, and that their understanding of the computations with respect to interest and deductions were not presented by respondent in a clear and concise manner.” Order, at p. 2.

Except Judge Christian N. (“Speedy”) Weiler finds the numbers IRS proposes are “entirely consistent with the terms of the settlement reached between the parties.” Order, at pp. 2-3.

Once again, those who need it won’t read it, and those who read it don’t need it.

The numbers are what it’s all about. You never settle until you agree on the numbers.

The old wheeze says “When the law is against you, pound the facts; when the facts are against you, pound the law. When both facts and law are against you, pound the table.”

Taishoff says, when the numbers are against you, smile your sweetest, go into the hallway and sob.

Christopher B. Epps, T. C. Memo. 2025-85, filed 8/7/25, neither makes an offer for an IA or PPIA, nor for CNC. So Ch J Patrick J. (“Scholar Pat”) grants IRS summary J sustaining the NITL gave him.

See T. C. Memo. 2025-85, at p.5, final paragraph, for the real story.

Chris’ trusty attorney deserved better.

That’s what Judge Kashi (“My or the High”) Way tells Tisha S. Hillman, T. C. Memo. 2025-84, filed 8/6/25. She wants to fight over the amounts she self-reported, and didn’t file amended returns when she was offered the chance by the AO at her CDP.

Tisha wants a hearing before IRS filed a NFTL. That’s a nonstarter.

“… it is important to note that the Code does not even afford a taxpayer a right to a CDP hearing to contest an NFTL until after the government has in fact filed the NFTL. See § 6320(a) (describing the manner in which a taxpayer is notified of an NFTL filing under section 6323 and the period during which that taxpayer may request a CDP hearing). This is in contrast to requesting a CDP hearing to contest a levy under section 6330, which explicitly forbids the IRS from levying on a taxpayer’s property before notifying the taxpayer in writing of the right to a CDP hearing and permitting the hearing to occur. § 6330(a)(1). Thus, petitioner’s argument that her CDP rights were violated because an NFTL was filed before she had a hearing is without merit.” T. C. Memo. 2025-84, at p. 8.

But wait, there’s more!

Judge Way blows off “… petitioner’s argument concerning the application of the Thirteenth Amendment and her demand for the Court to order $48 million in sanctions against respondent. Petitioner, who the record indicates has a legal education, is warned that the Court is authorized under section 6673(a)(1) to impose a penalty not exceeding $25,000 whenever a taxpayer’s position in a proceeding is frivolous or groundless. Petitioner is therefore cautioned that a penalty may be imposed in any future case before this Court should she continue to pursue frivolous positions. The Court declines to impose sanctions against respondent.” T. C. Memo. 2025-84, at pp. 9-10, footnote 4.

Note that Ms. Hillman is a SuperLawyer.

Judge Dawson said it fifty-one (count ’em, fifty-one) years ago: “The discovery procedures should be used only after the parties have made reasonable informal efforts to obtain needed information voluntarily. For many years the bedrock of Tax Court practice has been the stipulation process, now embodied in Rule 91. Essential to that process is the voluntary exchange of necessary facts, documents, and other data between the parties as an aid to the more expeditious trial of cases as well as for settlement purposes. The recently adopted discovery procedures were not intended in any way to weaken the stipulation process. See Rule 91(a) (2).” (Citation superfluous).

So now the Tax Court bench need to sort out what was informally answered and what not, in laborious detail, in such six-page novellas as Carters Lake Land, LLC, f.k.a. Sassafras Point II, LLC, Piedmont Private Equity Manager, LLC, Tax Matters Partner, et al., Docket No. 1034-21, filed 8/5/25. It’s IRS’ motion to compel responses to interrogatories. And Judge Travis A. (“Tag”) Greaves has to sort out each and every one.

Nothing has changed in fifty-one years. Judge Dawson might have written these words.

“Before analyzing each interrogatory individually, the Court addresses the expectation regarding a satisfactory informal discovery process. In many of petitioner’s responses to Respondent’s First Formal Interrogatories to Petitioner, petitioner objects that respondent did not first seek specific requests informally. Respondent asserts that he has satisfied informal discovery requirements because the parties have been informally exchanging documents and information since at least June 2022. Petitioner, however, maintains that the Rules require greater specificity in informal discovery, beyond general discussions or broad exchanges. Petitioner argues that respondent is not free to raise entirely new questions in formal discovery without first seeking the answers informally because he ‘engaged in informal consultation and exchange of information’ generally.

“A principal purpose of the requirement for informal discovery is to save the Court’s and parties’ time and resources in the development of relevant and undisputed facts. See Schneider Interests, L.P. v. Commissioner, 119 TC 151, 154 (2002). In International Air Conditioning Corp. v. Commissioner, 67 T.C. 89 (1976), the Court held that Rule 70(a)(1) contemplates ‘consultation or communication,’ words that connote discussion, deliberation, and an interchange of ideas, thoughts, and opinions between the parties, and a mere letter from one party to the other does not constitute a good faith effort to comply with Rule 70(a)(1).” Order, at pp. 2-3.

But the game continues.