The popularity of the conservation easement donation deduction guarantees lots of cases for Tax Court. Here it comes again, in today’s solitary Memorandum, Walter C. Minnick and A.K. Lienhart, 2012 T. C. Memo. 345, filed 12/17/12, Judge Morrison wading through another. But while lacking in legal novelty, the story has its moments.

Here the issue of the 40% substantial overvaluation of Wally’s gift to the Land Trust of Treasure Valley, Inc. (Treasure Valley lies outside Boise, ID) goes away, because Wally’s gift didn’t comply with the regulations. As we saw in BLAK Investments, if the deduction is disallowed on grounds other than the valuation, the valuation is irrelevant. See my blogpost “It’s A Sham”, 9/25/12.

Wally’s deduction comes unglued because the 74-acre parcel of Treasure Valley that Wally donated, 80% of which was subject to the easement, was encumbered by an unsubordinated mortgage, which Wally only got subordinated two years after IRS dropped the SNOD on Wally.

Wally claimed he was misled by the form of grant of easement he got from the Treasure Valley treasurers, in which he warranted that the land was unencumbered when in fact it wasn’t, and that the bank would have gladly subordinated. But a bank officer testified it wouldn’t, and the bank made Wally pay down the principal of the mortgage to get the subordination.

Wally tries to distinguish his case from Ramona Mitchell (see my blogpost “Subordinate or You Lose”, 4/4/12), but fails. He claims the Idaho version of the Uniform Conservation Easement Act would have protected the charitable use. Maybe, says Judge Morrison, but what it would have protected is whatever was left after the bank got its money out. And here there was not even the partial subordination, such as Gordo and Lorna Kaufman got; see my blogposts “A Joy Forever”, 4/4/11, and “‘A Joy Forever’? – Maybe Not”, 7/20/12. But it might behoove Wally to appeal and see if the Ninth Circuit buys the rationale of the First Circuit in Kaufman v. Shulman, 687 F.3d 21 (2012).

Seeking to avoid penalties, Wally claims he “should not be held to the standard of an experienced tax attorney because he worked only for a few months as an attorney and that he spent only a fraction of his time practicing tax law.” 2012 T. C. Memo. 345, at p. 14. He claims he asked his CPA about the conservation easement, and had an expert appraiser do the appraisal. And he used the Treasure Valley model form.

No dice, says Judge Morrison.

All the CPA told Wally was conservation easements give rise to deductions. “However, he did not tell Minnick that the particular conservation easement Minnick granted to the Land Trust was deductible. In the absence of such advice, Minnick could not have reasonably relied on the C.P.A. when he claimed a deduction for the conservation easement contribution. Minnick should have been alerted by the warranty provision in the conservation easement that there might be a problem with the lack of subordination. The easement contained a warranty from Minnick that there was no unsubordinated mortgage on the land. It is true that the form Minnick used to grant the easement was a ‘model’, but that does not matter. This model easement form was not suited to Minnick’s particular parcel of land.” 2012 T. C. Memo. 345, at pp. 15-16. (Footnote omitted.)

The omitted footnote is well worth reading, as it shows a fine example of what sailors call “scuttlin’ up to winnard”. “Note the C.P.A.’s careful response to the following question from Minnick and Lienhart’s counsel:

“Q Did you advise Mr. Minnick as to whether the conservation easement was deductible or not?

“A I advised him that a conservation easement, the donation of a conservation easement is deductible as a charitable contribution, and is specifically provided for in the code.

“We infer that the C.P.A. declined to tell Minnick the grant of the particular easement was deductible and that Minnick should have recognized this.” 2012 T. C. Memo. 345, at p. 16, footnote 3.

And the appraiser was qualified to provide an expert opinion of the easement’s value, not the deductibility or otherwise thereof.

So negligence penalty for Wally.

Footnote- Apparently Wally served one term in the United States House of Representatives. That explains much.

No, not coffee or tea or sodapop, it’s the Central Authorization File system, IRS’ handy-dandy guide to Power of Attorney (Form 2848) and Tax Information Authorization (Form 8821); in short, the master list of who can speak for taxpayers and who can look at what.

The system will be down from one minute after midnight on December 26, 2012 through and including same time on January 3, 2013. Thus, IRS cannot tell who is authorized to do anything.

If you need transcripts or anything else that requires you to prove your authority, do it NLT 11:59 p.m., Eastern Time on 12/25/12, or else hold your peace until January 3, 2013.

If you have a crash emergency that won’t wait during the De-CAF, IRS has suggested the following: “If you need to contact the IRS for help with a client and you have an established power of authority on file, be prepared to provide a faxed copy of that authorization. Our Customer Service Representatives will not have access to the CAF and will have limited research capability during the outage. New authorizations submitted for this purpose will be forwarded to the CAF for processing. You will not need to re-submit it through the Disclosure Authorization function of e-Services.

“Please contact the Practitioner Priority Service at 866-860-4259 if you have questions.”

Happy Holidays.

Or, Scar Tissue

That’s the question for Karl E. Cross, in 2012 T.C. Memo. 344, filed 12/13/12, and Judge Jacobs gives him and his seasoned attorney Mitch an answer they don’t like.

We all know that a Notice of Deficiency is the ticket to Tax Court. Karl E. got Letter 531-T, at the top of which and in capital letters is written “NOTICE OF DEFICIENCY”, for the year in question. The items disallowed giving rise to the deficiency are erroneous, as the computation apparently came from IRS’ RTVUE synopsis of the return as filed, rather than the document itself.

The IRS’ RTVUEr apparently transcribed items incorrectly, ascribed a tax shelter to Karl E. that he wasn’t part of for the year at issue, and thereby caused Mitch to stipulate to bind Karl E. to the outcome of cases having nothing to do with Karl E.’s tax situation for the year at issue, and Mitch alleges IRS knew this all along.

Mitch claims no jurisdiction, as the Notice of Deficiency was so deficient as to be no notice at all. In other words, no ticket.

No, says Judge Jacobs. “It is well settled that no particular form is required for the notice of deficiency to be valid. The Court of Appeals for the Eleventh Circuit, the court to which this case is appealable barring  a stipulation to the contrary, has held that the notice will be treated as valid if the Commissioner demonstrates that ‘the IRS has determined that a deficiency exists for a particular year and specif[ies] the amount of the deficiency’.” 2012 T. C. Memo. 344, at pp. 11-12 (Citations omitted).

Besides, Mitch’s arguments go to the accuracy of the determination, not the fact that there is a determination. The one case to the contrary, Scar v. Com’r., 814 F.2d 1363 (9th Cir. 1987), rev’g 81 T.C. 855 (1983), involves a statement in that notice that the tax return itself was not examined, ascribed to the Scar taxpayer a tax shelter with which Scar had never had a relationship (unlike Karl E., who had been in the tax shelter referred to in the Notice of Deficiency in the past), and assessed tax at the top marginal rate without consulting the Code. Ninth Circuit held that was not a notice.

Here, however, though there may be factual inaccuracies, “(W)e disagree with the position taken by petitioner’s counsel. His arguments in both the motion to dismiss and the supplemental motion are arguments as to the correctness of respondent’s determinations in the notice of deficiency, not the validity of the notice of deficiency. Consequently, these arguments do not support the position he takes because our jurisdiction in this matter does not hinge on the correctness (or incorrectness) of respondent’s determinations in the notice of deficiency.” 2012 T. C. Memo. 344, at p. 15.

Judge Jacobs: “The facts in this matter are readily distinguishable from those in Scar. In this matter, the notice of deficiency specifically addresses petitioner’s income tax return. Unlike the notice in Scar, here the notice of deficiency does not state that the income tax is being determined at the maximum rate simply to protect the Government’s interest. It does not refer to a tax shelter with which petitioner had no relationship. Nor does the notice of deficiency indicate that petitioner’s tax return (or the transcript thereof) was never examined. In sum, we cannot say that the notice of deficiency reveals on its face that respondent failed to determine a deficiency.” 2012 T. C. Memo. 344, at p. 17.

Mitch tries to argue that the Notice of Deficiency should follow the pleading requirements of the Federal Rules of Civil Procedure. No authority for that, says Judge Jacobs; at most, the Notice of Deficiency, like a complaint, sets out the basis of a claim and confers jurisdiction on the Court, but that’s all.

Finally, Mitch’s claim he was hoodwinked into signing onto a determination in cases having nothing to do with the year at issue gets short shrift from Judge Jacobs. Mitch “is a longtime member of the Tax Court bar, is an experienced attorney, and was formerly an attorney in the Commissioner’s Office of Chief Counsel. We are skeptical that he could be induced to consent to such an important agreement by respondent’s counsel without any supporting materials to justify its signing. But we need not make a  determination with respect to [Mitch’s] allegations. Even if true, they would not affect our analysis regarding the validity of the notice of deficiency.” 2012 T. C. Memo. 344, at p. 19, footnote 7, second paragraph).

So Tax Court has jurisdiction, and Mitch can try to get out of the stipulation, and get Karl E. out of the deficiency.

The Judge Who Writes Like a Human Being, a/k/a The Great Dissenter, Judge Mark V. Holmes, has a Designated Order, Docket No. 11884-11, Estate of Bernard Dorman, Deceased, Dennis Dorman, Executor, filed 12/12/12. Incidentally, this is the last time an identical numerical designation of month, day and year will occur for the next 89 years.

Back to Judge Holmes, who in effect paraphrases Mark Twain’s famous statement “Tell me where a man gets his cornpone, and I’ll tell you where he gets his opinions.” Judge Holmes would have it “Tell me where I get my interpretations of the Federal Rules of Evidence, and I’ll tell you where I get my opinions.”

Judge Holmes does the telling: “We are bound by the rules of evidence applicable in a trial without a jury in the United States District Court for the District of Columbia. Rule 143(a); sec. 7453. In light of that mandate, we have applied the law of the D.C. Circuit when it comes to issues concerning application of privilege.” Order, p. 1.

The particular points involve Bernie’s Estate’s appraiser/valuer, the terms of his retention and that of his firm, what the appraiser/valuer was told, and on what assumptions he relied. This IRS wants, but Denny claims work product and material prepared for litigation, so privileged.

Judge Holmes needs a look-see, but gives the IRS some of what they ask for, the rest to follow if the DC Circuit permits. Documents can be multi-purpose. “…the D.C. Circuit opted to follow the Second Circuit…. The test we have to use in judging the extent of work-product protection for a dual-purpose document is whether a document was created ‘because of anticipated litigation, and would not have been prepared in substantially similar form but for the prospect of that litigation.’ The D.C. Circuit held quite plainly that ‘a document can contain protected work-product material even though it serves multiple purposes, so long as the protected material was prepared because of the prospect of litigation.’” Order, p. 2. (Citations omitted).

Judge Holmes gently reproves counsel for both sides (and I’m surprised at IRS’ counsel, though; they should know this). “…since they both seemed unaware of the Code’s somewhat obscure requirement that this Court follow D.C. Circuit evidence law, Petitioner may supplement his response with evidence and argument relating to Respondent’s motion to compel production of document requests 1 and 2; and Respondent may supplement his response with evidence and argument relating to Petitioner’s motion for a protective order relating to document requests 1 and 2.” Order, p. 5.

Mark Twain is vindicated.

This remark, attributed to Voltaire on his deathbed when an abbé approached him and said he came from God, should be remembered by Tax Court litigants seeking to have Tax Court cut them some slack from penalties via Section 6664(c), the “reasonable cause and good faith” out, principally evidenced by reliance on advisors.

So many times taxpayers, usually but not exclusively pro se, claim they relied on a preparer, but introduce no evidence as to the show-and-tell they had with the preparer, or what, if any, credentials the preparer possessed.

Today’s reiteration of this lesson, which I previously expounded in my blogpost “Another Argument”, 6/7/12, among other places, is Carnell Specks and Cheryl Specks, 2012 T. C. Memo. 343, filed 12/11/12.

Nothing novel here in point of law. On the facts, Carnell, a police officer in the fair metropolis of Houston, TX, the residence of the most wonderful child in the world, my granddaughter, moonlights as a security provider, marching about in uniform with personal six-shooter at his side. On the facts, he’s an IC, not an EE, so owes SE, but didn’t pay.

IRS attacks his deduction for rental real estate losses in their answer, so IRS has burden of proof. Carnell establishes material participation, IRS concedes all his rental activity as a single activity, but Carnell can’t show 750 hours, as he’s too busy policing and securitizing. So he’s got the $25K limit under Section 469(i), rather than the $51K he claimed.

Looks like substantial understatement after the Rule 155.

But Carnell says he relied on his preparer, a many-times-told tale. Again, no credentials in evidence, or what Carnell (Cheryl did nothing) told the preparer. So no dice.

One would hope the message finally gets through. IRS has a link on its website which purports to instruct taxpayers how to find a preparer. Maybe the “how to” should include what to tell the preparer, and warn the taxpayer to get the preparer’s resume.

The Kersting tax shelter cases, now approaching their thirtieth birthday, are still winding their way through Tax Court. Henry Kersting, supposedly a U-boat commander for Nazi Germany in World War II, created a package of tax shelters and thereby left a legacy which torpedoed some 1300 airline pilots and their families, and set them adrift in a modern Jarndyce v. Jarndyce, with appellate findings of official misconduct, tampering and general governmental skullduggery.

I’ll skip the details, although a simple Google search will turn these up instantly.

The reason why I turn to this antique is that it continues to befuddle Tax Court to this day. Case in point: Richard J. Buckley and Estate of Jean Buckley, Deceased, Diane Tsubota, Personal Representative, Docket No. 17756-82, filed 12/10/12.

It’s a simple order. IRS has a computation of who owes whom what, and either Richard and Diane sign aboard, or they can submit their own; but if Richard and Diane don’t sign aboard or object, then Chief Judge Thornton will enter IRS’ computation as the decision.

Simple, no?

But that’s not all. Here’s the relevant paragraph, in full: “(2) file the computation and a motion for entry of decision with a proposed decision document; respondent must serve a copy of the motion on petitioners, and petitioners must file their objection, accompanied by an alternative computation, on or before 45 days after the date of service; if petitioners fail to file an objection, then the Court may grant respondent’s motion and enter the decision in accordance with respondent’s proposed computation. It is further”. Order, P. 1.

It is further what?

I told you the Kersting cases continue to befuddle the Tax Court.

Bad law, as the old law school mantra goes, and John Bruce Corcoran and Frances H. Corcoran, 2012 T. C. Sum. Op. 119, filed 12/10/12, proves it true yet again. Judge Gerber feels constrained to follow Ninth Circuit and earlier Tax Court decisions, to render a decision that he admits “is inequitable and does nothing to further the congressional purpose underlying the enactment of section 219.” 2012 T. C. Memo. 119, at pp. 6-7.

Section 219 is the deduction (generally reported on one’s Form 1040 as an adjustment to gross income) for contributions to IRAs, where the taxpayer meets certain age and income limits, and is not “actively enrolled” in any employer sponsored retirement plans. And “actively enrolled” means your name is on the books, whether or not you contribute to, or have the right to get one penny from, the employer retirement plan.

Mr. Cork was a salesman for New York Life, “The Company You Keep”, according to their advertising slogan. But though Mr. Cork wanted to keep New York Life, New York Life did not keep Mr Cork. They canned him for low sales in the year in question.

But before kicking him to the proverbial, New York Life did enroll Mr Cork, concededly without his knowledge, in their defined benefit plan. The hitch, of course, is that Mr. Cork would have to stay with New York Life for five years, and meet certain sales hurdles he knew he’d never surmount, before his rights would vest. Mr. Cork never contributed to the defined benefit plan, and never joined New York Life’s defined contribution plan, because he knew he’d never see back centavo uno from anything he kicked in to any New York Life plan.

So he made a $6K IRA catch-up. But New York Life sent him a W-2 stating he was enrolled in a company plan. So IRS disallows Mr. Cork’s deduction.

Mr. Cork argues he didn’t know he was enrolled, got nothing, and New York Life never contributed a dime anyway, because, in the immortal words of the Kerry Dancers, he was “gone, alas, like our youth, too soon.”

But Judge Gerber is constrained to follow precedent (which I suggest can be distinguished, and unhappily, since this is a 7463 throwaway, will not be examined by an appellate court). So agreeing that the result is entirely inequitable, and does nothing to further Congress’ intendment that individuals who choose to postpone present laughter for retirement jollity should catch a wee break, Judge Gerber finds for IRS.

Takeaway- Employees, don’t let your employer do you any favors. If the proffered retirement plan is more like steel chains than golden handcuffs, just say no. And make sure HR gets the word you don’t want it.

I mean the Isle of Man, the UK’s original tax haven, the right-little, tight-little British Crown dependency in the Irish Sea. It seems the IOM and the UK Revenue have made a deal à la FATCA. In announcing the Manx-UK deal under date of 12/7/12, Chief Minister Alan Bell was quoted thus:  “The Island already shares tax information automatically under the EU Savings Directive and has recently announced that it will do so on a wider basis with the USA.”

Have the dodgers been voted off the island? Stay tuned.

But they do give rise to some interesting, if unanswered, questions. Here’s a reprise of the second iteration of the First Time Home Buyer Tax Credit, known to the initiate as FTHBTC2, the $8000 actual credit, as distinct from FTHBTC1, which was a fifteen-year interest-free loan disguised as a credit.

Case in point is Robert Perez Morales, 2012 T. C. Memo. 341, filed 12/6/12, with its companion case Ronda Kay Morales. Apparently the Moraleses filed separate returns for separate principal residences on the same tax lot (nice move, guys; see my blogpost “Old Tax Credits Never Die”, 11/6/12, showing similar fancy, but more successful, footwork by Bob Packard and wife Marianna). Each claims the $8K credit, of course.

Unfortunately, neither Morales checks the calendar. They sold their last principal residence 4/27/06, according to the 1099-S they got from the settlement company. They bought the new principal residences 3/17/09.

What’s wrong with this picture?

No prize for the correct answer, so I’ll let Judge Kroupa provide it: “A first-time homebuyer is any individual who has had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence in question. Sec. 36(c)(1); Foster v. Commissioner, 138 T.C. 51, 53 (2012). Petitioners purchased the new principal residences on March 17, 2009. Accordingly, petitioners are eligible as first-time homebuyers only if they had no present ownership interest in a principal residence between March 16, 2006, and March 17, 2009. Petitioners sold their prior principal residence on April 27, 2006 and therefore had a present ownership interest in a principal residence during the relevant period. Petitioners are therefore not entitled to the claimed first-time homebuyer credit.” 2012 T. C. Memo. 341, at pp.3-4.

And see my blogpost “This Old House”, 1/30/12, for the story of Francis T. and Maureen P. Foster, the parties alluded to in the case cited in Judge Kroupa’s decision.

So the Moraleses should have looked at the calendar and adjourned the closings. Nothing novel here; the statute is plain, three years means three years, and the Moraleses’ defenses are futile. So what’s interesting?

The question Judge Kroupa decides not to answer. The Moraleses claim the shrink-wrapped guru, in this case TurboTax, led them astray. But they don’t say how. See my blogpost “The Shrink-Wrapped Guru”, 9/14/12.

Judge Kroupa:  “The TurboTax instructions and the specific information petitioners entered into TurboTax is not in the record. Moreover, petitioners failed to introduce other evidence that demonstrates their improperly claiming the first-time homebuyer credit was the result of a TurboTax programming flaw or instructional error. We note we find it unlikely that TurboTax would allow a result inconsistent with the Code if its instructions were properly followed. Petitioners may have acted in good faith but likely made a mistake. We find that petitioners’ use of TurboTax is not a defense to the accuracy-related penalty.” 2012 T. C. Memo. 341, at pp. 6-7. (Citations and footnote omitted.)

But the interesting part is the omitted footnote: “We leave for another day whether reliance on tax preparation software such as TurboTax is sufficient to avoid the accuracy-related penalty where the taxpayer has provided evidence demonstrating a programming flaw or an instructional error.” 2012 T. C. Memo. 341, at p. 7,  footnote 2.

Of course, as I said in my cited blogpost “The Shrink-Wrapped Guru”, “I’m sure the software developers’ counsel have festooned box and contents with disclaimers and exculpatory exhortations worthy of the medieval indulgence mongers.” So perhaps the hypothetical software glitch will not spare the taxpayer.

However,  Special Trial Judge Armen, the Judge with a Heart, who spared poor Kurt E. Olsen in 2011 T. C. Sum. Op. 131, filed 11/23/11, might be willing to do so. See my blogpost “Basis for Dummies”, 11/24/11, a Judge Mark V. Holmes and STJ Armen doubleheader.

Jerry Rawls should join in the last line of the Alma Mater with a loud voice and true thankfulness, after he reads Rawls Trading, L.P., Rawls Management Corporation, Tax Matters Partner, 2012 T. C. Memo. 340, filed 12/5/12, as his trusty accountant, a graduate of the Cornell Law School (just like me), saves him from the Section 6662(a) accuracy penalties in the cited case, a follow-up to Judge Vasquez’s earlier decision; on background, see my blogpost “Finishing the Play”, 3/26/12.

This is a son-of-BOSS, Section 752 unrecognized cover of a short sale, to build phony outside basis to bury a big-time capital gain. Needless to say, it gets shot down on a TEFRA FPAA, notwithstanding a tax opinion from Lewis, Rice & Fingersh, L.C., a St. Louis white-shoe, which says the deal works.

Jerry was a Texas Tech engineering graduate, who quit his job and hocked his house to start a fiber optic company with the unprepossessing name of Finisar before anyone had ever heard of fiber optics. It wound up being worth hundreds of millions, and when it went public, Jerry had a ginormous capital gain.

Solicited by a sheltermonger called Heritage who introduced him to Lewis Rice, Jerry signed with Heritage (who got 2% of the tax savings) after he consulted his brother Walter the CPA, who said it looked okay. “Mr. Rawls believed the Heritage strategies were ‘investments where you had to put up real money but you had the real opportunity to profit.’ Furthermore, Mr. Rawls entered into the Heritage agreement to increase the diversification of his holdings and reduce the economic risk related to the volatility of the market price of his Finisar common stock.” 2012 T. C. Memo. 340, at p. 7.

Lewis Rice prepared all the transactional documents and oversaw the implementation. Jerry claims he relied on Lewis Rice, but Judge Vasquez isn’t buying: “…the Lewis Rice lawyers were not being paid to evaluate a deal or to tweak it; they were being paid to make the transactions happen. They did more than simply evaluate Heritage’s strategies; they implemented them. They created the entities involved and prepared all the paperwork involved. Therefore, Mr. Rawls cannot rely on the advice of Lewis Rice because it was a promoter of the transactions involved.” 2012 T. C. memo. 340, at p. 33. Oh yes, and Lewis Rice got a six-figure flat fee for their trouble.

Promoters, upon whose advice taxpayers cannot rely, are those who “make it happen”. And this is additional support to my argument that the authors of marketed opinions should make it clear that their opinions cannot be relied upon for Section 6664 purposes, so IRS, keep at least part of Circular 230 §10.35.

So does Jerry have to take the Section 6662(a) hit? No, because Larry Poster was his accountant. Jerry’s former accountant had only done his routine tax returns for years, did not understand the heavy complexities of Jerry’s newly-gained wealth, and anyway was getting ready to retire. So Heritage gave Jerry a list of accountants, and Jerry chose Larry.

Larry never paid Heritage for referrals and never charged above his normal low hourly rates for the work he did, which was to look over the paperwork and prepare the returns. So he wasn’t a promoter.

But can Jerry rely on Larry’s advice? Yes, if he’s competent. Judge Vasquez:  “We find that Mr. Poster was a competent professional. Mr. Poster graduated from Cornell Law School, was a certified public accountant, and had almost 30 years of experience in tax when Mr. Rawls hired him, including 13 years as a tax partner at a major accounting firm. Not only was Mr. Poster a competent tax return preparer; he also had knowledge of the relevant aspects of Federal tax law. He had experience evaluating short sales involving section 752 issues.” 2012 T. C. Memo. 340, at p. 35 (emphasis added.)

IRS argued that Larry was incompetent because he gave Jerry the wrong advice. To require the taxpayer to cross examine one with much more expertise than he, and evaluate complicated tax plans, negates the whole purpose of hiring an adviser.

Moreover, Jerry told Larry the whole story. IRS says Larry should have sweated Jerry more, but it’s not the taxpayer’s fault if the expert, who should know what questions to ask, doesn’t ask them. How can the taxpayer know what the expert should ask?

Finally, Jerry was acting in good faith, even though IRS claims he should have known the Heritage deal was too good to be true. “Mr. Rawls is not a sophisticated investor and is not familiar with tax law. Before the success of Finisar, Mr. Rawls’ wealth consisted of the equity in his home, which was subject to two mortgages in order to finance Finisar. Mr. Rawls was not familiar with managing a large fortune and, as of early 2000, he did not have an estate plan or even a will. We find that Mr. Rawls did not have the background or experience necessary to have known that the Heritage plan was too good to be true.” 2012 T. C. Memo. 340, at p. 39.

Larry the Cornell Law alum (from a later class than mine) saves the day for Jerry. Hail, all hail, Cornell!