No, not the IRC nor the CFR. These are the “event codes” on the docket sheets, both printable and unprintable, to be found on the Tax Court website. While these are most of them self-explanatory (e.g., “P” for Petition, “A” for Answer, “NOTR” for Notice of Receipt of Petition), today I found one that was puzzling.

I couldn’t get an explanation by telephone, as docket section thought petitions were the ones that employed it, but neither they nor petitioner’s counsel was available by telephone. The event code is MIND, and the case is Cylie G. Fields, Docket No. 5819-23S, filed 12/3/24.

Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan’s order is brief: “the caption of this case is amended by adding the letter ‘S’ to the docket number.” Order, at p. 1. Unusual, as there’s no motion to restore the case to small-claimer treatment, nor any statement that the preceding regular case treatment was inadvertent.

A docket check shows that in April a year ago, when the petition was filed as a small-claimer, the initial docket number was amended the next day to omit the letter “S” suffix, with no explanation save the event code “MIND.” “My bad”?

Edited to add, 12/5/24: I heard today from Sarah Silfies Finken, Esq., Administrative and Case Services Counsel at Tax Court, that “MIN” signifies minute entry, that is, docket clerk’s entry to correct or supplement a docket entry, which may or may not be directed by an order of the Court; the letter “D” means Docket. While in this case there may have been an error, Ms. Finken notes that, with the huge volume of cases, there are very few errors. And indeed, in my experience, this is so.

And When and How

The above-set-forth is not a question, but an essential guideline for establishing client-attorney privilege, as STJ Zachary S. (“Highrise”) Fried judge-‘splains in Amgen Inc. & Subsidiaries, et al., Docket No. 16017-21, filed 12/1/24.

Y’all will recollect that back on 11/14/24 STJ Fried tossed Amgen’s claim that a PowerPoint slideshow from some attorney to a bunch unnamed Amgens (hi, Judge Holmes) was privileged. What, no? See my blogpost “A Note of Sympathy,” 11/14/24*.

Amgen tries a Rule 161 reconsideration motion, with declaration attached from Jacqueline (a/k/a Jackie) Samuels, wherein is asserted “‘the audience for such documents was limited to individuals within Amgen,’ and references the Declaration of Jacqueline Samuels which ‘provides additional context for these documents[,] . . . including an explanation of how these documents . . . were kept confidential within Amgen.’” Order, at p. 3.

OK, but what is missing from this picture? STJ Highrise Fried will tell us.

“…we conclude that the PowerPoint presentations and spreadsheets do not specify their audience or the individuals who had access to the documents. Neither the documents themselves nor petitioner’s privilege logs sufficiently identify the recipients of the legal advice or demonstrate that the communications were made in confidence between an attorney and a client. This omission is critical, as the attorney-client privilege is only applicable to communications made for the purpose of providing legal advice to specific, identifiable clients or their representatives.

“We note that petitioner’s motion for reconsideration, along with the Declaration of Jacqueline Samuels, provides additional information regarding certain withheld documents. This new information offers further details about the subject matter of the documents, explains the legal purpose they serve, and addresses their confidential nature. Had the additional information been included in petitioner’s privilege logs we expect that the scope of respondent’s motion might have been narrowed. The failure to identify the audience in the privilege logs or within the documents themselves waives the claim of attorney-client privilege as to the documents.” (Emphases added).

Not only is the importance of who, but also the importance of when and how, front-and-center when client-attorney is on the cards. Who sought advice, who provided the advice, when and how was the privilege asserted.

I suggest that Section 7525 FATPs (and maybe so USTCPs) should assure these particulars be explicitly set forth in the document itself, stating authorized recipients, with warnings to inadvertent readers or recipients to return or destroy on every page or slide. Moreover, the privilege log should reiterate the identities of the authorized addressees-recipients and recite warnings given as to each document.

* https://taishofflaw.com/2024/11/14/a-note-of-sympathy/

“Unless otherwise permitted by the Court, motions shall be separately stated and not joined together….” Rule 54(b), in pertinent part. OK, so the motion beloved by both IRS and yours truly gives rise to the partial summary J barrage in Desoto Holdings LLC, Desoto Investors LLC, Tax Matters Partner, Docket No. 13013-20, filed 12/1/24.

For backstory, see my blogpost “Stir Silt Till You Wilt,” 6/24/24*.

IRS has four (count ’em, four) motions seeking partial summary relief, but two are conjoined, so Judge Elizabeth Crewson Paris only allows three separate summary J types, but lets IRS file the conjoined motion in limine later on per the Pretrial Scheduling Order.

Not to be left out, the Desotos have their own partial summary J motion.

I’ve expressed doubts about Rule 54(b)’s exclusion of omnibus motions before now, but here even Judge Paris got confused. She had to set aside an earlier order where she or a Court clerk mistook one of the Desotos’ motions for partial summary J as a declaration in support. Order, at p. 1.

No wonder waitstaff hate separate checks.

* https://taishofflaw.com/2024/06/24/stir-silt-till-you-wilt/

“We May Not Look Behind”

As the Man From Mumbai put it. The doors of The Glasshouse being shut today, I cannot look behind.

Today being the “Day of Publick Thanksgivin” proclaimed in 1789 by George Washington, and incidentally now a public holiday in the City of the Grateful UnSuffs, US Tax Court has shut its doors.

Hence I shut mine.

Best holiday wishes to all.

Judge Christian N. (“Speedy”) Weiler finds the Section 6663 fraud chops do not subject Albert S. N. Hee to double jeopardy, notwithstanding Albert already went down for seven (count ’em, seven) counts of tax fraud in USDCDHI.

It seems Albert used his wholly-owned C Corp to write off “the college tuition of his eldest child, the purchase of a home for approximately $1.3 million that was primarily used by his children while attending college, and $92,000 of personal massage payments.” Order, at p. 3, footnote 2. Must’ve been quite a massage.

Btw, the case is Albert S.N. Hee & Wendy R. Hee, et al, Docket No. 24068-22, filed 11/27/28.

Judge Speedy Weiler, true to his cognomen, disposes of the double jeopardy argument quickly. “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). The clause does not prevent the imposition of both a criminal punishment and a civil sanction for the same act or omission. Helvering v. Mitchell, 303 U.S. 391, 398–99 (1938). Section 6663 is a civil sanction for tax fraud and is therefore not barred by the double jeopardy clause even when a prior criminal conviction for the same act or omission has occurred and restitution has been paid. Morse v. Commissioner, T.C. Memo. 2003-332, 86 T.C.M. (CCH) 673, 677, aff’d, 419 F.3d 829 (8th Cir. 2005). Accordingly, we conclude petitioners cannot rely on the double jeopardy clause to shield them from the section 6663 fraud penalties in these cases.” Order, at p. 7.

Criminal tax defense counsel should note the impact of Marinello v. United States, 584 U.S. 1 (2018). Albert went down for a Section 7212(a) obstruct-and-impede count for a series of phony returns between 2002 and 2015. IRS wants to bootstrap this into a noncooperation-with-IRS badge of fraud. But Marinello put paid to this catch-all, by requiring that defendant knew of a specific audit or investigation which s/he obstructed or impeded. Hence change-in-law knocks out issue preclusion on this point. As for whether obstructing or impeding is the same as not cooperating even in post-Marinello cases, Judge Speedy Weiler leaves that for another day. No summary J on that issue to IRS.

A docket search shows Albert was pro se. He gets a Taishoff “Good Job, Third Class.”

Judge Rose E. (“Cracklin'”) Jenkins leads off with a full-dress T. C. in Students And Academics For Free Expression, Speech, And Political Action In Campus Education, Inc., 163 T. C. 9, filed 11/26/24. For collectors of cutesy acronyms, this mouthful boils down to SAFE SPACE.

Howbeit, the SAFESPACERs petitioned when, after 270 days since their Section 501(c)(3) was filed, IRS had done nothing. After a brief confab during which IRS claimed their paperwork needs more stuff, the SAFESPACERs move to dismiss without prejudice, and IRS joins in.

Everyone agrees that the petition was timely filed, and Tax Court has Section 7428(a)(1) DJ jurisdiction. But can a Section 7428(a)(1) petition be dismissed without prejudice?

Yes, says Judge Jenkins. Leave aside Sections 6213 and 7459(d), where dismissal otherwise than for jurisdictional defects is not available, because in such cases decision must be entered for IRS in the full amount of the SND.

“However, the Court considers other types of cases to which sections 6213 and 7459(d) do not apply, including under provisions of the Code providing for declaratory judgment by the Court. See, e.g., I.R.C. §§ 7428, 7476, 7477, 7478, 7479. See generally Rule 210. In such cases, the Court has previously granted motions to voluntarily dismiss or withdraw petitions. See Pugh v. Commissioner, 161 T.C. 4, 8–9 (2023) (collecting cases in which voluntary dismissal was permitted and concluding that voluntary dismissal was appropriate for a petition under section 7345); Joseph E. Abe, DDS, Inc. v. Commissioner, 161 T.C. 1, 4 (2023) (concluding that voluntary dismissal was appropriate for a petition for declaratory judgment under section 7476).” 163 T. C. 9, at p. 3.

For the story on Zola Jane Pugh, 160 T. C. 2, filed 8/14/23, see my blogpost “Abroad at Home – Part Deux,” 8/14/23*; for the story on Joseph E. Abe, DDS, see my blogpost “A Hotly Burning Question What Has Swept the Continent – Redux,” 8/3/23**.

And FRCP 41(a) gets a good workout. The key here is prejudice to the nonmovant, but IRS has gone along with this motion, so clearly no prejudice. Anyway, the prospect of further litigation is not considered prejudice. There’s no SOL issue here, as the 270-day threshold in Section 7428 is a minimum, not a maximum. While Judge Jenkins thinks that an incomplete application might mean a failure to exhaust administrative remedies, the SAFESPACERs claim they did and IRS doesn’t claim they didn’t. And IRS has neither answered the petition nor moved for summary J, so FRCP 41(a)(1)(A)(i) is OK.

Petition dismissed without prejudice.

* https://taishofflaw.com/2023/08/14/abroad-at-home-part-deux/

** https://taishofflaw.com/2023/08/03/a-hotly-burning-question-what-has-swept-the-continent-redux/

“It is well established that no particular form is required for a notice of deficiency; rather, to be valid a notice must state that the Commissioner has determined the amount of deficiency for a particular year and specify the amount or provide information necessary to compute it.” Nitschke, T. C. Memo. 2016-78, 4/26/16, at p. 6. Cary Douglas Pugh, J.

OK, so when Shona Pendse, Docket No. 7601-24, filed 11/25/24, proffers “… a February 12, 2024, email from the office of the United States Attorney for the District of Massachusetts, and specifically, an attachment thereto which provided a ‘Summary of Tax Due and Owing’ for Shona Pendse for tax years 2011, 2012, 2019, 2020, and 2021,” (Order, at p. 2), and argues same was the equivalent of a notice of deficiency, why does Ch J Kathleen (“TBS = The Big Shillelagh”) Kerrigan kick the e-mail, attachment, and Shona to the curb?

Ch J TBS says “the petition here was not based upon or instigated by a specific IRS notice expressly providing petitioner with the right to contest a particular IRS determination in this Court.” Order, at p. 3. But there is no “specific notice,” unless Nitschke, its predecessors, and descendants have been overruled. For Nitschke, see my blogpost “Long-Term Rounder,” 4/26/16.*

No doubt one of my ultra-sophisticated readers will invoke Section 6212(a), which mandates the SND “shall include a notice to the taxpayer of the taxpayer’s right to contact a local office of the taxpayer advocate and the location and phone number of the appropriate office.” Does want of the TAS notice invalidate the SND, or is it a mere procedural irregularity? No caselaw on that one, and anyway, IRS didn’t argue it or Judge Pugh didn’t pick up on it. I would point out that any court holding that any IRS communication that didn’t include the TAS notice was not a valid SND would paid to all this argy-bargy about miscellaneous billets doux.

And that the e-mailed attachment (the text of which we never see) was not mailed to Shona’s last known address means nothing, if she was able timely to petition it. All Section 6212(a) says is the Commissioner is authorized to mail it. Per Section 6213(a), mailing starts the 90-day (or offshore 150-day) clock running and stops collection; in any case, apparently Shona beat the clock.

But absent such a holding as hereinabove set forth, or a Loper-Bright-proof regulation mandating a form SND, how is Shona or anybody else supposed to know what is a SND?

* https://taishofflaw.com/2016/04/26/long-term-rounder/

While the Glasshouse Gang is off to the sales, DAWSON will soldier on. So if you’ve got a delivery due for November 29, 2024 (Friday), log on and send it in.

Or, more officially, “In addition to observing the Thanksgiving holiday on Thursday, November 28, 2024, the Court will be closed on Friday, November 29, 2024. DAWSON will remain available for electronic access and electronic filing.”

Those fortunate enough to be at liberty yesterday noontime heard from six (count ’em, six) Chief Judges, past and present, of United States Tax Court. They spoke of early trailblazing (race, gender), of seemingly wild predictions of future technology that came true, of fleeing from the collapse of the Twin Towers and later piloting the Court through the COVID lockdown, and the launch of DAWSON…a remarkable anabasis to match any account, ancient or modern, of an expedition into a new country.

I am sure that the now-complete 19-member bench, not to mention the extraordinary lineup of Senior Judges and STJs, could tell of events of like tenor.

But that was yesterday. Today, Judge Adam B. (“Sport”) Landy, the only STJ in modern times to advance from thence to the Big Bench in the “Small Court”, returns to utterly mundane duties, of the sort usually encountered by kindergarten teachers.

It ought not to require one who has earned a Bachelor of Science in Chemistry and a Master of Science in Sport and Entertainment Management from the University of South Carolina, a Juris Doctor from the University of South Carolina School of Law, and a Master of Laws in Taxation from the Northwestern University Pritzker School of Law, to instruct IRS’ counsel thus.

“(T)he Commissioner filed a Notice of Filing of the Administrative Record, Certificate as to the Genuineness of the Administrative Record, and the Administrative Record. The Administrative Record fails to provide page numbers or be identified by Bates numbering for each exhibit. Therefore, we will order the Commissioner to refile the Administrative Record specifically marking each exhibit with the proper exhibit designation (i.e., 1-J, 2-J, etc.) and page number (i.e., Page 1 of the total number of pages, Page 2, etc.) or by Bates number.” Order, at p. 1.

The case is William H. Wooten and Shannon J. Wooten, Docket No. 1719-24L, filed 112/22/24. I note that a quick docket peek shows four (count ’em, four) attorneys appearing for IRS. One would think that perhaps one of them…but enough.