At least it would seem so for Leroy Muncy, 2014 T. C. Memo. 251, filed 12/15/14.

Leroy’s troubles start when he plays protester dodges, with fake contractor status while in truth and in fact an employee. The forces of righteousness catch up, and Leroy cops to one count of Section 7201 knowingly and willfully et cetera. As part of his criminal plea in aid of avoiding the slammer, Leroy agrees to heavy-duty restitution, which the record does not show he paid.

The plea agreement says it binds only Leroy and the US Attorney for the Eastern District of AR, and Leroy’s a free fire zone for everyone else. The plea agreement calls the restitution “criminal monetary penalties”, but later an order calls it restitution.

IRS hits Leroy with a SNOD, deducting the restitution amounts from the deficiency, but changes its mind and amends its answer to Leroy’s petition to add back in the restitution numbers.

Amidst a flurry of protester stalling, Leroy calls “foul”, raising the plea agreement as a bar to increasing the deficiency set forth in the SNOD.

“Although the District Court ordered specific restitution amounts for each of the tax years … petitioner’s tax liabilities for each of these years were not an essential element of the Government’s case and were not actually litigated.” 2014 T. C. Memo. 251, at p.9 (Citations omitted).

So while an essential element of Section 7201 criminality is an underpayment, a finding of the exact amount is not.

Judge Nega goes into parallel statutes and the legislative history of Section 6201(a)(4) to show that restitution can be collected without using the deficiency procedure. So the restitution order neither determined Leroy’s tax liability nor offset the deficiency shown.

Leroy’s double jeopardy argument also fails. “Petitioner also contends in his petition that the Double Jeopardy Clause of the Fifth Amendment of the U.S. Constitution bars the Commissioner from imposing civil fraud penalties and additions to tax in the notice of deficiency. We note that the double jeopardy clause ‘protects only against the imposition of multiple criminal punishments for the same offense.’ Hudson v. United States, 522 U.S. 93, 99 (1997) (emphasis added). Furthermore, the civil tax penalty for fraud is not a punishment for purposes of the Double Jeopardy Clause of the Fifth Amendment. Helvering v. Mitchell, 303 U.S. at 398; Morse v. Commissioner, T.C. Memo. 2003-332, aff’d, 419 F.3d 829 (8th Cir. 2005); Roberts v. Commissioner, T.C. Memo. 1997-216.” 2014 T. C. Memo. 251, at p. 18, footnote 9.

IRS wants nonpayment of estimated tax (Leroy filed nothing, of course), but Year One of the sequence is rejected because IRS didn’t show Leroy owed any money for the year preceding Year One, so the 90%-100% tests don’t work for Year One, but they do for every succeeding year.

And pleading guilty to Section 7201 delictions is a pretty big badge of fraud.

Leroy does catch one break: the Section 6673 penalty does not fall upon him.

But watch it: “In this case the Court will not grant sanctions. This is not because the facts and law do not support the sanctions. Rather, the Court chooses to give petitioner a warning before imposing sanctions. While the record supports such sanctions, the Court is circumspect about imposing them without a proper warning to parties. Now that such a warning has been issued, the Court expects that petitioner will not continue to make frivolous arguments in this or other Tax Court proceedings or relitigate a settled case.” 2014 T. C. Memo. 251, at p. 25.

Stand by for the petition when IRS liens and levies.

Two Federal holidays mean four days off for the flailing datestampers and hard-laboring purveyors of “somber reasoning and copious citation of precedent” who toil at and from 400 Second Street, NW, in the City on the Potomac.

Here’s the gen.

“The United States Tax Court will be closed on Friday, December 26, 2014, and Friday, January 2, 2015.

“For purposes of computation of time under Rule 25, Tax Court Rules of Practice and Procedure, December 26, 2014, and January 2, 2015, shall each be treated in the same manner as a legal holiday. See Rule 25(a)(2) and (b), Tax Court Rules of Practice and Procedure.”

Today Judge Lauber instructs us how to call a penalty in Gale Gargiulo, Petitioner and Louis Gargiulo, Intervenor, Docket No. 2893-14, filed 12/12/14.

Judge Lauber denies both Gale’s motion for partial summary J and her Rule 91(f) fact establishment motion. Judge Lauber raises one forearm vertically held in front of the body with an open fist facing away from the referee’s chest (closed fist for a HS referee); the other hand grasping the first arm’s wrist. Illegal use of the hands and arms, Gale.

Gale claims Section 6015 innocence. She divorced Louis while Louis was stuck at Fort Dix.

Now I was once stuck at Fort Dix, but that was just overnight, the night being October 14, 1969. I won’t forget it, having come into McGuire AFB on an evening flight from Southeast Asia via Yakota and Seatac. But I could leave the next day, and did I ever!

Louis is not so lucky. Louis was staying at FCI Fort Dix Camp, a Federal prison, when Gale dumped him, and only got out to home release last month. Louis is not free to wander until some time next February, assuming he plays nice.

Judge Lauber is not thrilled with Gale’s tactics. “As a consequence of the divorce, petitioner was awarded an office building in which many of intervenor’s personal and business records were stored. Despite several requests, petitioner has not permitted intervenor or his brother (acting on his behalf) to obtain access to any of the documents or records (including electronic records) stored in this office building. Intervenor has filed with the Superior Court of New Jersey a motion to recover these records, but his hearing on that motion will not occur until January 2015.” Order, at pp. 1-2.

Apparently the lanes on the George Washington Bridge are not the only thing that runs slow in New Jersey.

But Gale is nowise slow. She doesn’t let Louis or Bro see any paper, but moves ahead to bail on whatever taxes are owing from their nuptial days.

Remember Branerton. Voluntary discovery is “the bedrock of Tax Court practice.” Play nice; motions don’t get granted until someone stops playing nice.

“Without copies of his personal and business records, intervenor cannot honestly and fully respond to any proposed stipulations or motions for summary judgment. He was released from prison a month ago and is currently serving a period of home confinement. It is unreasonable for petitioner to expect him to stipulate to facts and respond to motions for summary judgment, while simultaneously denying him access to the records he needs in order to respond intelligently. The Court expects petitioner to cooperate with respondent and intervenor by engaging in informal discovery, which requires that petitioner allow intervenor access to his personal and business records that are under her control. Only upon a showing that informal discovery efforts have failed will we entertain motions by petitioner to compel stipulation, deem facts established, or otherwise impose sanctions.” Order, at p. 2.

Anyway, as to summary J, burden is on Gale to show no material fact issue exists, non-movant (Louis) gets benefit of doubt, and without discovery there’s no way of knowing whether such an issue exists or not.

Louis moves for continuance of trial, which Judge Lauber grants.

Now Gale and Louis can send in status reports every 60 days, and Judge Lauber will see when he can try this case.

I note that Gale is represented by a firm of attorneys with long-time Tax Court experience. This was not their finest hour.

Personally, it was only bad because a signal fire really fouled up the subway system, making the trip to the office, the Bloomberg BNA Tax Advisory Committee meeting and a client’s holiday party a sardine-packed series of jolts and jars and halts, followed by quarterback sneaks through mobs of furious riders.

But it was substantially worse for Larry J. Austin, 2014 T. C. Memo. 249, filed 12/11/14.

Larry wanted legal fees and admins after IRS admitted that all the cash in his various Korean bank accounts, though titled in Larry’s own name, wasn’t unreported income (only some of it was).

Judge Nega briefly chronicles Larry’s career. “Petitioner received his law degree from Harvard Law School in 1980. From the late 1990s through mid-2005 petitioner participated in and/or facilitated various listed transactions subject to disclosure under section 1.6011-4(b)(2), Income Tax Regs., including intermediary transaction tax shelters, tax avoidance using artificially high basis transactions, partnership straddle tax shelters, and distressed asset debt transactions.” 2014 T. C. Memo. 249, at p. 2.

As we used to say, “Harvard–because not everybody can go to Cornell.” NB- I was accepted for admission to Harvard Law School, but they didn’t give me a scholarship, unlike the Gang on The Hill Far Above. Thanks yet again, guys.

Larry joined the Dark Side, as managing director of Chenery Associates, Inc., peddler of dubious (to put it charitably) tax strategies. Larry was a distressed asset/distressed debt specialist. For more about Chenery, see my blogpost “House of CARDS”, 3/8/11.

Larry and IRS settle, with Larry giving up on most of what IRS claims were his delictions. But IRS gives Larry a lot of his Korean stash because IRS gets information from the crew in The Land of the Morning Quiet that they wouldn’t let Larry open up trust or escrow accounts. And Larry did use the money therein to buy Korean junk for his buddies at Chenery.

Larry claims his affidavit showed IRS they were wrong.

No, says Judge Nega, Larry’s word isn’t good enough. For admins, the question is how reasonable IRS was at the time the SNOD went out. For litigation (legals), was IRS reasonable when they answered Larry’s petition.

“Bank deposits are prima facie evidence of income, and the Commissioner does not need to prove a likely source of such income. The use of the bank deposits method has long been sanctioned by the courts. The bank deposits method assumes that all money deposited into a taxpayer’s account during a given period constitutes taxable income. When the bank deposits method is used, ‘the Government must take into account any non-taxable source or deductible expense of which it has knowledge.’ The taxpayer bears the burden of proving that bank deposits come from nontaxable sources.” 2014 T. C. Memo. 249, at p. 10. (Citations omitted).

Much cash went in and out of Larry’s Korean accounts. He reported the interest as income.

That Larry said “trust me and my partner”, and provided no Korean corroboration, doesn’t make IRS’ position unreasonable.

Larry loses.

And it doesn’t get any better for Spencer Hosie and Diane Rice Hosie, 2014 T. C. Memo. 246, filed 12/11/14, and Judge Lauber isn’t especially sympathetic to Spence’s and Di’s claim that IRS should have allowed their installment agreement.

“The SO rejected petitioners’ proposed installment agreement after determining that their tax liabilities could be fully or partially satisfied by liquidating or borrowing against their assets ($9.3 million of equity in their residence and vacation home). See Internal Revenue Manual (IRM) pt. 5.14.1.4 (5) and (6) (June 1, 2010) (‘Taxpayers do not qualify for installment agreements if balance due accounts can be fully or partially satisfied by liquidating assets[.]’); Boulware v. Commissioner, T.C. Memo. 2014-80 (finding that settlement officer’s reliance on this IRM provision was not an abuse of discretion). Petitioners made no showing of ill health, economic hardship, or other circumstance warranting an exception from this general rule. See Eichler v. Commissioner, 143 T.C. __, __ (slip op. at 16-17) (July 23, 2014); IRM pt. 5.19.1.6.3(2) (Apr. 1, 2011); id. pt. 5.14.1.4(5) and (6). Between 2009 and 2013 petitioners had defaulted on four previous installment agreements, one of which involved lower monthly payments than the $15,000 they now promised to make. The SO did not abuse his discretion in rejecting this offer.” 2014 T. C. Memo. 246, at p. 9.

There’s some jousting about a SNOD sent post-petition, and how Tax Court deals with that, but this blogpost is long enough.

Spence and Di are both lawyers, with a long history of noncompliance with tax laws.

For more about the Eichler case abovecited, see my blogpost “It’s Only A Notice”, 7/23/14.

Finally, and in these cases it really isn’t the lawyer’s fault, there’s the sad tale of Jeanne D. Bonney, who stopped practicing when she was disabled back in 2010. Her employer told her that they’d get another attorney in the firm to take over her cases, except they didn’t.

What they did do is go bankrupt back in March 2014.

And they left some eighty-six (count ‘em, 86) cases hanging fire, with trial dates coming up.

Nice book of business, if you can service it.

Jeanne fires off letters to Tax Court, asking to be let off. And various Judges issue orders to show cause to IRS and the taxpayers, asking them to show cause why Jeanne should not be turned loose, and suggesting the taxpayers find new counsel or try the cases themselves.

This is scandalous. I don’t know how disabled Jeanne was, so I can’t say she should have contacted the clients. And maybe she was unaware that her firm filed bankruptcy in March. I can well understand that she relied on what her firm told her. I would have done. Certainly, the clients can’t be faulted; they may not have been named as creditors in the bankruptcy. And I don’t know what the firm told them, if anything.

But what the clients should do now (some of these cases have 2008 docket numbers) needs something more than a “sort it out yourselves” from Tax Court.

Some heads should roll.

Flames Out

Back on October 21, when Judge Lauber imposed a gag-and-seal order on testimony in Amazon.com, Inc., & Subsidiaries, Docket No. 31197-12, I was moved to comment as follows: “I can just see Jeff Bezos standing, with flaming sword in hand, at the door of Centre Court, 400 Second Street, NW, driving away eavesdroppers and the idly curious from the sacred precincts.” See my blogpost “The Man Of Mystery – Revealed”, 10/21/14.

Well, today I am disappointed that The Great Jeff will be neither sitting nor standing at 400 Second Street, NW, nor anywhere else within the purlieus of Tax Court, much less with a flaming sword. Today, Judge Lauber favors us with 2014 T. C. Memo. 245, filed 12/10/14.

Therein, it is explained why corporate bigwigs need not testify if (a) to testify would impose an “undue burden” (which means the same thing as “burdensome and oppressive”, according to Advisory Committee Note to the 1991 Amendment to Rule 45, 134 F.R.D. at 668, but why you need different words to say the same thing eludes me) on the Boss Hoss, and (b) when various lord lieutenants, who hover round Hisself and are intimately familiar with the decision-making process, have already testified, or will testify, to the same stuff.

IRS gives The Great Jeff a trial subpoena ad testificandum (as opposed to a subpoena duces tecum, for which we had a ribald nickname in my days On The Hill Far Above). And of course The Great Jeff’s legal bomber wing moves to quash.

IRS seems at a loss to explain why they need The Great Jeff on the stand. “Respondent informed the Court that, if Mr. Bezos is called, his testimony ‘is likely to be less than a day.’ Counsel for respondent stated that, because Mr. Bezos had not been deposed, respondent might not call him as a witness even if the motion to quash is denied.” 2014 T. C. Memo. 245, at p. 6.

Besides, it’s the Christmas Rush, don’tcha know? The Great Jeff takes time from his busy day to sign an affidavit in support of the motion to quash in which he states that “…appearing at trial would require a significant commitment of time by Mr. Bezos and would cause a substantial disruption of his management responsibilities during Amazon’s peak holiday season.” 2104 T. C. Memo. 245, at pp. 4-5.

Too right! Jeff, get Herself’s presents here prontito! And don’t forget my children’s and grandchildren’s presents either.

Judge Lauber gets all judicial, however.

“The Court indicated that it would postpone ruling on the motion to quash until after petitioner had completed presentation of its case in chief, which would enable the Court better to assess respondent’s need for Mr. Bezos’ testimony. To date, the Court has heard 17 days of trial testimony, including the testimony of 21 Amazon fact witnesses. Of these 21 fact witnesses, six are or were members of Amazon’s senior leadership team, known at Amazon as the ‘S-Team.’ Members of the S-Team reported directly to Mr. Bezos, regularly attended meetings with him (including certain board of directors meetings), and were thoroughly familiar with his decisionmaking process and his customer-centric philosophy for running the company.” 2014 T. C. Memo. 245, at p. 5.

Moreover, “The Court has heard testimony from all relevant departments at Amazon, including technology, operations, finance, and tax. This testimony has spanned all periods of Amazon’s life as a public company, from 1997 to the present. The vast majority of the subjects listed by respondent have been covered by testimony of three or more Amazon fact witnesses, including senior level managers, middle managers, and junior staffers (who actually prepared the documents that are the subject of respondent’s interest).” 2014 T. C. Memo. 245, at p. 6.

Note that while the wigs may shuck and jive (and IRS’s wigs are good at it; see my blogpost “Walk Right In, Set Right Down”, 10/15/14), the PBI (that’s Poor Bloody Infantry, mate) will generally roll and tell all.

Worst of all, “Respondent [IRS] has not identified any relevant topic not covered by prior testimony or any subject about which Mr. Bezos is alleged to possess unique knowledge. Respondent did not seek to depose Mr. Bezos and indicated that Mr. Bezos might not be called even if the motion to quash were denied. Collectively, these facts demonstrate that respondent’s need for Mr. Bezos’ testimony is minimal and weigh heavily in favor of granting the motion to quash.” 2014 T. C. Memo. 245, at pp. 10-11. (Footnote omitted).

I wonder what would happen if a petitioner’s counsel did something like this. Sanctions, maybe?

WordPress.com tells me this is the fourth anniversary of my registration of this site. I congratulate myself.

No, not the Lloyd Bridges 1958 TV series; rather, this is the story of Adams Offshore Services, Ltd., Docket No. 5541-14, filed 12/9/14.

Adams was a drilling-baby in the Gulf of Mexico, sufficiently shelved on the North American Continent to fall foul of Industry Director’s Directive #1 – United States Outer Continental Shelf Activity, LMSB-4-0909-037 (October 28, 2009). And no, I didn’t know about it, either, but Section 638(1) places that part of the GOM, where Adams was drill-babying, within IRS’s grasp.

Apparently IRS searched some on-line nautical databases, and found Adams’ whereabouts. When IRS sent letters to Adams’ UK HQ, they were told that the person with the information wanted was dead. Further epistolary dealings revealed Adams had fled the fogs of Aberdeen, and finally revealed Adams fetched up in the warmth of Bahrain (and who would blame them, except that Aberdeen has 15-yr old Talisker whilst Bahrain is dry).

IRS’ crack Revenue Agent Tan Vuong had sussed out Adams’ whereabouts in the Emirate aforesaid and posted off a thirty-day letter to all three of the addresses found, and placed these addresses in the file. None of the letters came back.

But when crack Revenue Agent Tan Vuong forwarded his file to IRS Technical Services Office in Houston, TX (where one can both be warm and obtain whiskey), all the Texan Techies did was mail a SNOD to Aberdeen.

You can guess the rest, but I’ll tell you anyway.

Judge Dawson gets this one, and spends eleven (undesignated) pages on IRS’ losing motion to dismiss for want of jurisdiction.

First, Adams’ high-priced counsel argues IRS’ counsel violated international law. No, not torture, although some who deal with IRS might claim that. In this case, it’s the Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, November 15, 1965, 20 U.S.T. 361 (The Hague Service Convention).

That doesn’t cut it, says Judge Dawson. ”In short, the Hague Service Convention is limited to the transmission of judicial and extrajudicial documents for service of process abroad. It does not apply to a notice of deficiency, which is only a determination of a deficiency before an administrative assessment is made by the Internal Revenue Service. Section 6213(c). A notice of deficiency is not a judicial or extrajudicial document contemplated by the Hague Service Convention.” Order, at p. 7, footnote 5.

Those of us who sat through Pennoyer v. Neff and Mullane v. Hanover Bank in a previous millennium vaguely remember that notice must be given with some reasonable chance of reaching the party entitled to same.

I guess Judge Dawson remembered that too.

“When, as here, the IRS is faced with choosing more than one possible last known address and is in doubt as to the correct one, the exercise of due care and diligence is necessary so that the notice of deficiency will be received by the taxpayer in time to file a petition in this Court for a redetermination of the deficiency. Confronted with three different addresses for petitioner and in doubt as to which one was correct, we think respondent did not use due care and diligence in sending the notice of deficiency only to petitioner’s Aberdeen Address. Although we recognize that the Internal Revenue Manual (IRM) does not have the force of law and is not binding on the IRS, respondent should have followed its own directive that ‘[i]f there is any doubt as to what the last known address is, additional duplicate original notices should be sent to each known address.’ IRM pt. 4.8.9.8.2.l(2) (July 9, 2013).” Order, at pp. 9-10 (citations omitted)

I understand IRS is short of money, but hopefully they can afford postage stamps.

From the Idiots’ Guide to Sports website: “One of the most common offensive penalties, holding is also one of the most costly: 10 yards. The official holds one arm with a closed fist against his body with the arm grasping the wrist. They say offensive blockers are guilty of holding on every play, but what the game officials are looking for is to see if the defender is unable to break free from the blocker’s grasp.”

Well, Judge Kerrigan won’t call offensive holding against IRS, because the players doing the holding are wearing the uniform of the United States Marshal Service (and it is undisputed the defender cannot break free, as he was sentenced to 45 years in the slammer).

That’s the story of Marvel Thompson, Docket No. 6536-13L, filed 12/8/14, a designated hitter from Judge Kerrigan.

Marv never bothered filing a return for the year at issue, but ever-obliging, IRS gave him a Section 6020(b) SFR, and threw in a SNOD, both at no extra charge. Marv petitioned the SNOD, and he and IRS settled, with the settlement agreement specifically providing “…interest will be assessed as provided by law on the deficiency and additions to tax due from petitioner.” Order, at p. 1.

Well, when Marv signed the agreement, the US Marshal’s guys had had his records, his funds, and of course Marv his own self, tucked well away for about eight years.

And the Marshal’s guys weren’t about to turn any of Marv’s funds loose, to the IRS or anybody else.

IRS sends a Notice of Jeopardy Levy (what the urgency is I can’t tell, as the US Marshal is not, so far as it known, about to flee the jurisdiction or secrete any funds) to Marv, and he sends off a Form 12153, claiming IRS delay attributable to the US Marshal, holding his money and not letting him pay.

Judge Kerrigan: “Petitioner does not point to any specific IRS employee or any specific ministerial or managerial act that would meet the criteria for abatement of interest pursuant to section 6404(e). He simply states that IRS employees helped with the criminal investigation that led to, and were present at, his arrest. And respondent agrees that ‘[t]he Government, including IRS agents, was involved in investigating and arresting [petitioner] on criminal charges that lead to a 45 year conviction.” However, the record reflects that it was the U.S. Marshals Service that held his funds, not the IRS. Even if the IRS did assist with the criminal investigation, such assistance does not qualify as a ‘ministerial or managerial act which caused an unreasonable delay’ such that an abatement of interest would be warranted.” Order, at p. 3.

Excuse me, Judge, but remember my blogpost “Getting Shifty”, 9/20/13? No? Well, take a peek.

If the US Attorney and IRS are on the same team, and the acts of one are attributable to the other, why is it that the US Marshal and IRS aren’t on the same team?

And besides, Judge, now that you’ve allowed IRS to levy, upon what will IRS levy? Marv’s funds in the hands of the US Marshal’s office?

Maybe I’m slow, but this don’t make a lot of sense to me.

Accord and Satisfaction

 Jeffrey A. Prussin and Judith M. Prussin echo the immortal words of Mick Jagger’s and Keith Richards’ 1965 hit in a small-claimer from Judge Kerrigan, 2014 T. C. Sum. Op. 107, filed 12/8/14.

J&J had a push-and-shove with IRS over excise tax for a couple years (as Judge Holmes would put it, but I wouldn’t) on a pension plan, which they and their attorney settled.

They signed off on the Forms 5330 and 4549-E for those years.

Jeff also had a problem on his personal return for another year, but paid up.

IRS came after J&J for interest. J&J claim IRS implicitly renounced interest when they settled.

No, says Judge Kerrigan: “The settlement of disputed tax liabilities is governed by sections 7121 and 7122, which authorize the Secretary or an authorized delegate to settle any tax disputes and compromise any civil or criminal case arising under the internal revenue laws. The procedures under these provisions and the applicable regulations are the exclusive means by which a compromise or settlement will be binding on both the taxpayer and the Government. Accordingly, ‘no theory founded upon general concepts of accord and satisfaction can be used to impute a compromise settlement’.” 2014 T. C. Sum. Op. 107, at pp 8-9. (Citations omitted).

And the Section 7122 regs require an OIC, with the tender of properly-completed Form 656, the payment and the fee and the supporting documents and all that jazz.

J&J didn’t.

Judge Kerrigan repeats herself: “However, petitioner husband testified that petitioners did not actually sign any agreement with the IRS. The record also does not contain any evidence of a signed Form 656. Since the regulations dictate the exclusive means by which a binding agreement can be reached, and those regulations require the signing of a Form 656, the fact that neither form was signed is fatal to petitioners’ claim. Petitioners and respondent did not enter into a binding agreement as required by the statute.” 2014 T. C. Sum. Op. 107, at p. 10.

Takeaway–when you settle, send in a Form 656 with all the necessary doodads, or get an explicit stipulation signed by someone at IRS with authority, stating you don’t owe anything else, whether interest, penalties or additions.

No, this one doesn’t run on Amtrak; this is the celebrated “streamlined” Section 6015 innocency streamlined procedure first enunciated back on January 5, 2012, in IRS Notice 2012-8, and later enshrined in Rev Proc 2013-34, 2013-43 RB 397.

Of course, the Sriram jumpball followed; see my blogpost “Diehl or No Diehl”, 6/21/12. But now that the Rev Proc is final, and Tax Court can no longer shuck and jive around it with the “blended approach” (which means whatever Tax Court says it means at any given moment), where are all the streamlined cases?

Well, since Christmas has apparently come early at 400 Second Street, NW, where there was neither opinion nor designated order yesterday or today, The Great Dissenter, a/k/a The Judge Who Writes Like a Human Being, s/a/k/a The Inveterate, Implacable, Illustrious and Indefatigable Enemy of the Partitive Genitive, Judge Mark V. Holmes, leaps into the breach and shows us how a streamliner works.

It’s an off-the-bencher, which means it’s not precedent, can’t be cited, can’t be relied on and is first cousin to Lord Voldemort (“He Who Must Not Be Named”), but anyway, take a dekko at Catherine R. McDougall, Petitioner, and Thomas McDougall, Intervenor, Docket No. 2986-13, filed 12/4/14.

They’re community propertarians in sunny AZ, but the problem arises when Tom’s partnership, which was pre-marital, unloads some IA real estate in a condemnation, elects the three-year Section 1033 rollover, but blows the deadline because Catherine’s suing him for divorce.

IRS liens both Tom and Catherine, and when they unload the marital domicile pursuant to the divorce decree, the escrow agent (this is the Far West, where they don’t sit down at closings) hands IRS two checks, His and Hers.

Judge Holmes parses Rev Proc 2013-34, and finds Catherine innocent and streamlined, just like IRS did. Tom is apparently a shady character, although Judge Holmes doesn’t tell us how he reaches this conclusion.

Since it’s fact-driven and community-propertarian, I’ll leave off the analysis, but read Judge Holmes’ marked-up transcript (even though he missed an inappropriate apostrophe, he got most of them).

We now have some idea of how Tax Court might deal with a streamliner.