Welcome To Tax Court, Now Go Home (Unless a Lawyer Volunteers)

We welcome back commenter in chief and occasional blogger Bob Kamman for another post with insights on matters otherwise missed.  Today, Bob’s post discusses interesting case outcomes but also the people who made it possible – the amazing volunteers at the calendar calls in New York City.  Frank Agostino has organized the local tax bar at calendar calls in NYC for many years and helped many taxpayers who had no expectation of such assistance when they showed up in court.  For his efforts at the NYC calendar calls and other pro bono work he does, the ABA recognized Frank with the Janet Spragens award in 2012.  Keith

If you’re looking for trouble, consider showing up at Tax Court trial sessions in Manhattan once they resume.  Just ask New Jersey tax attorney Frank Agostino, who keeps going back for more – and that’s a good thing.  His recent examples are cases decided the week of May 18, 2020: Peacock and Pope.  In Peacock, Judge Vasquez notes:

When this case was called from the calendar, Mr. Agostino and Mr. Colasanto were present in the courtroom as volunteer lawyers. They entered appearances on behalf of petitioner husband for purposes of arguing the motion before us, and we are thankful for their pro bono service.

(Phillip Colasanto is an associate in Mr. Agostino’s firm.  Brooklyn lawyer Alec B. Schwartz also appeared, later.)

What is most remarkable about these two cases, aside from the question of what would have happened without last-minute volunteer legal help, is that both involve an IRS notice of deficiency followed by a delayed IRS defense that the Tax Court lacks jurisdiction to review it.  If the notice is the ticket to Tax Court, Chief Counsel is the bouncer who shows up much later to deny petitioner’s entry.

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Peacock Case: Timeline and Result

March 11, 2016:  IRS revenue agent issues a 30-day letter proposing full disallowance of $52,376 in expenses.

April 7, 2016: Taxpayer meets with revenue agent, who issues a “corrected report” disallowing all expenses but removing the accuracy-related penalty. Bottom line is $6,761 tax and $431 interest.

April 8, 2016: Taxpayer hands revenue agent a check for $7,192 with a four-page cover letter.  The last page states,

Because our meeting yesterday was cut short due to time constraints, I request a follow-up meeting to discuss how I may amend my 2013 US Tax Return to better and more accurately reflect the . . . expenses that I claimed on Schedule C.  In the meantime, please find enclosed check no. 5324 dated today, April 8, 2016, in the amount reflected in your revised Form 4549-A. . . .I do, however, respectfully disagree completely with your determination.   I am working on completing IRS Form 12203 – Request for Appeals Review, and will submit it to you under separate cover.

April 8, 2016:  An IRS transcript shows that this payment is recorded with a transaction code 640 as an “advance payment of tax owed.”  With no corresponding assessment, the account will continue to show a credit balance in the same amount. 

October 16, 2016:  Taxpayer, having submitted the form six months earlier, writes to the Appeals office:

I have yet to hear from the IRS regarding my request for Appeals Review.  On April 8, 2016, I hand delivered . . .check number 5324 in the amount of $7,192 along with my letter dated April 8, 2016.  In that letter, I made it crystal clear that this payment was made in protest, and that I completely disagreed with the IRS determination.

March 27, 2017:  Appeals issues a notice of deficiency for $6,544, slightly less than the $6,761 proposed in the revenue agent report.

May 24, 2017:  Petition is filed with Tax Court. IRS answers June 23, 2017.

November 16, 2017:  Trial is set for April 9, 2018.

March 15, 2018: Less than four weeks before trial, IRS files a motion to dismiss for lack of jurisdiction.  It contends that the April 2016 payment extinguished the deficiency before the notice was issued.

March 28, 2018:  Taxpayer responds that the remittance was not a payment but a deposit, preserving his right to petition.

April 9, 2018, continued to April 13, 2018:  At Tax Court hearing, Frank Agostino enters his appearance for taxpayer.  Simultaneous opening briefs ordered for June 27, 2018.  These are filed, and simultaneous answering briefs are filed August 13, 2018.

Twenty-one months later, the 17-page Tax Court opinion by Judge Vasquez walks the parties through:

  • Code Section 6211 and cases decided under it, holding that if a deficiency is paid before a notice of deficiency is issued, then there is no deficiency and the Tax Court has no jurisdiction.
  • Code Section 6603, which nevertheless allows a taxpayer to make a cash deposit to pay any tax not yet assessed.  IRS guidance on how to do this is provided in Rev. Proc. 2005-18. Such a payment stops interest from accruing but preserves the right to petition Tax Court.

According to a footnote, IRS does not contend that the taxpayer’s letter with his April 2016 check fails to satisfy the Rev. Proc. 2005-18 requirements.

The Court then cites in detail various provisions of the Internal Revenue Manual regarding such deposits.  The opinion reminds us (citations omitted),

To be sure, the IRM does not have the force of law . . . Nevertheless, the IRM can be persuasive authority . . . and a review of relevant IRM provisions is instructive in ascertaining the procedures the IRS expects its employees to follow . . .

The April 2016 check, on its memo line, contained the taxpayer’s SSN and the words “payment 2013 Federal Income Tax.” IRS contends that the word “payment” was enough to remove it from the category of “deposit.”  Also, it claims he loses because he used the word “payment” in his October 2016 letter to Appeals.

Five pages later, after further references to the Internal Revenue Manual, the Regulations under Section 6213, and Rev. Proc. 2005-18, the Court finds “Petitioner husband properly designated the remittance as a deposit, respondent treated it as such, and the deficiency was never extinguished by a payment.”

The taxpayer may eventually lose his case, but he has won the right to keep it in Tax Court.  Inoculated against attempts by IRS to deny him a trial less than a month before its first scheduled date, he may have a decision by 2021, regarding how much tax he owes for 2013.

 Pope Case:  Timeline and Result

2018:  Petitioner files a timely Form 1040 return reporting $42,163 in wages and $8,929 in federal income tax withheld. After child tax credit and child care credit, his tax is zero.

October 10, 2018:  IRS sends petitioner a “Letter 4800C, Questionable Credit 30 Day Contact Letter,” informing him that $7,856 of his withholding had been disallowed.  IRS has records of only $2,448 in wages received, and $1,073 in tax withheld. 

November 20, 2018:  After no response, IRS sends a notice of deficiency, which the Court describes:

 …explaining that it had been unable to verify his reported wages and withholding.  The first page of the notice stated that his deficiency for 2017 was “$.00,” . . .The “tax deficiency computation” at the end of the letter shows the “change in tax shown on return” as zero, the “decrease to refundable credits” as zero, and the “tax deficiency” as zero.  The only adjustments appearing in this computation are a $26,407 downward adjustment to petitioner’s AGI and a $7,856 reduction in withholding credits.

February 13, 2019:  Tax Court petition filed.  IRS answers on April 29 (more than 60 days, but the government had been closed for 35 days, ending January 25). 

March 15, 2019:  IRS issues a refund for $1,273: Tax withholding of $1,073; $142 refundable child tax credit; and $58 interest.

August 27, 2019:  Trial set for January 13, 2020.

January 3, 2020:  IRS files a motion to dismiss for failure to properly prosecute.

January 13, 2020:  Petitioner appears for trial.  IRS withdraws its motion to dismiss for failure to prosecute, then moves to dismiss for lack of jurisdiction.  Frank Agostino and Phillip Colasanto enter appearances.  Petitioner is ordered to respond to IRS motion by February 12, 2020.

February 12, 2020:  Petitioner’s response is filed.  A footnote to the decision tells us he attached “a pay stub and a pair of Forms W-2, Wage and Tax Statement, that purport to show tax withholding in excess of the amounts that the IRS verified through third-party reporting.”

Unfortunately, those exhibits don’t matter.  Judge Lauber explains why Sections 6201 and 6211 do not grant Tax Court jurisdiction in cases where the only dispute concerns the credit for income tax withheld.  “Because we lack jurisdiction to redetermine the adjustments to petitioners’ 2017 liability, we do not consider these documents or his assertion that he did not actually overstate his withholding credits.”

What may have happened here is that the taxpayer’s withholding seemed to IRS algorithms far higher than needed for a single parent.  The withholding he claimed was 21% of wages.  Nevertheless, what IRS verified as withholding was 44% of wages.  Employers can make mistakes, and it may take years for them to file corrected W-2 forms.  IRS assumes the employer is correct, and expects the employee to promptly prove otherwise.  The taxpayer may have been using tax withholding as a savings account.  Or, he might have expected his annual income to be four times as great, but then was not employed for nine months. 

The Tax Court might at least have suggested that IRS allow an audit reconsideration.  That could avoid a District Court refund suit.  Pro bono can do only so much.  If Congress intended to remove withholding disputes from Tax Court jurisdiction, it could at least allow them when the issue is not raised by IRS until the day of trial. 

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While cases that result in Tax Court opinions contribute to a practitioner’s highlight reel, those that are settled with no fanfare deserve some attention also.  So we should note the case of Marie Lucien, whose trial in a small-tax case before Judge Guy was set for December 9, 2019.  Mr. Agostino entered a limited appearance and made an oral motion for continuance.  IRS Counsel agreed. Less than three months later and just weeks before the Court closed its doors, a stipulated decision was entered for petitioner, agreeing that she owed no tax for 2016.  Two other lawyers were also there to help out: Jonathan A. Zandi of New York, and Bimal K. Gupta of Parsipanny, N.J. 

Nina Olson and the Congressman’s Late Mother

Regular guest blogger and sleuth Bob Kamman brings us a window into the administration of the 2008 Economic Stimulus Payments, newly relevant for the forthcoming 2020 Economic Impact Payments. Christine

In a recent comment here, I asked whether the Economic Impact Payments would be paid to deceased taxpayers and nonfilers.  If the former National Taxpayer Advocate saw the question, it must have brought back memories of her testimony at a hearing on June 19, 2008, before the Subcommittee on Oversight of the House Committee on Ways and Means. The subject was the Economic Stimulus program that had been enacted several months earlier. It included rebate checks of $300 to $600 for millions of Americans. 

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She was questioned by Rep. Lloyd Doggett, Democrat of Texas.  He still represents part of Austin, where at the University of Texas he earned his B.A. and J.D. degrees.  He was, and is, a member of the Ways and Means Committee.  He was not a member of the Oversight Subcommittee, chaired by Rep. John Lewis, but he was allowed to ask some questions because, obviously, something was on his mind.

He didn’t let on right away, what was bothering him:

Mr. DOGGETT. While I clearly am very concerned that all those who are entitled to this stimulus payment get it, I note,  as Mr. Johnson pointed out, that we have spent $300 million to ensure that it gets done right.

    I am also concerned about whether any of these payments are sent out to people that are not entitled to receive them. Are either of you involved on that end of it, to be sure that the stimulus payments only go to those who are entitled to receive them?

            Ms. OLSON. Well, I think that the–actually, the way that the legislation has been written is pretty tight, as—-

            Mr. DOGGETT. Well, let me tell you where it apparently wasn’t tight enough.

            Ms. OLSON. Yes, Sir.

            Mr. DOGGETT. Yesterday I received a notice dated June 16th  that my mother would receive her payment next week. My mother  died last September. Within a week of her death, because her  payments are direct-deposited into her account, I notified  Social Security, to be sure that we wouldn’t have any payment to which we were not entitled.

            Do you have any estimates? I extend this question–I may  not be able to stay for all their testimony–to the next panel,  as well. Do you have any estimate of how many dead people are  receiving stimulus payments?

            Ms. OLSON. Sir, I don’t. There is a question on the website that I will go back and look at that talks about decedents, and who is entitled to that payment in the course of the decedent, because it would be–the payment is based on their 2007 filing.  So she filed, or her–you know, her estate filed—-

            Mr. DOGGETT. Her estate filed—-

            Ms. OLSON [continuing]. A return for her. Perhaps under the  law, she is entitled to it, and I would have to check—-

            Mr. DOGGETT. Well, I would like to know about that, too.

            Ms. OLSON. Yes.

            Mr. DOGGETT. If, as a part of the stimulus–in her case, she does not have a surviving spouse–whether this payment goes  to estates of people this year or not, and what efforts–it surprises me that there has not been any update, if there has not, of the database to reflect that. Do you know—-

            Ms. OLSON. I will check on that.

Rep. Doggett then directed some questions to James R. White, from the Government Accountability Office:

Mr. DOGGETT. Do you know, Mr. White, if under this payments  can be made to the estate if there is no surviving spouse of someone who died last year?

            Mr. WHITE. I am not sure, off the top of my head. I–given the short period of time that IRS has had to implement the program, I don’t think yet there are good estimates of non-compliance problems. We are monitoring this as part of our filing season work for the Subcommittee on Oversight, and we will be reporting later this year.

            Mr. DOGGETT. Well, it’s been right at 9 months since I notified Social Security of this. You would certainly expect that they would have updated the database to show the correct information.

            Fortunately, they have not been sending, to my knowledge, any direct deposit of her Social Security check. You would expect that they would have it all–all the database–corrected in 9 months, wouldn’t you?

            Mr. WHITE. We are–this is something we are monitoring, and we will pursue as part of our ongoing work for the Subcommittee.

            Mr. DOGGETT. Thank you very much.

            Chairman LEWIS. Thank you. Now Mr. Brady is recognized for his questions.

That would be Rep. Kevin Brady (R-Tex.) from Houston, who was a Committee member but not on the Subcommittee. Rep. Brady wanted to make a point about the price of gas.

    “The question today deals with the technical aspects of delivery,” he said.  “But I think the bigger question on the stimulus checks is, is it working. Are these checks stimulating our economy across this country, as was hoped? I think the answer  is no, or certainly not as much as it could. There is reason for that.   In the past year, rising fuel prices have, I believe, neutralized the impact of the stimulus checks. Just in the past year, the average family in America is now paying $536.50 more for fuel than they were a year ago. It is hard to have–with $300 to $600 stimulus checks, it’s clear that these checks are being drained down our gas tanks.” 

After a brief soliloquy about dependence on foreign oil, he ended with, “Ms. Olson, I won’t ask you that question, the impact.”

Ms. OLSON. Thank you.

            Mr. BRADY. I will say, though, you have raised a separate issue from that, which I feel we ought to be exploring. That’s the issue of debit cards. Seems to me we need a–as much as we can–more of a 21st century response to challenges, short-term  challenges, like this.

            Can you comment on how those would occur, and who would be eligible to get them?

            Ms. OLSON. Well, I do think I have to say the IRS is  exploring the idea of delivering regular refunds on debit cards  as Social Security has started to use debit cards for those  individuals who don’t have bank accounts. There are savings to  the government in that regard, so that you don’t have to issue  paper checks.

            A debit card has an account number and a routing number,  just the same way as a bank account does. I think my  understanding is, with Social Security, that Treasury has  entered into a contract with one entity to deliver these cards.  It’s no fee to the individual receiving the card. It can be  done in any number of ways: people going into banks and picking  up a card, or being assigned a card themselves.

            So, I think that, you know, the–that would just–for those  individuals who are unbanked, or even in the area where we’re sending out paper checks, the delivery of dollars is so much faster if we’re delivering it electronically.

            Mr. BRADY. Yes.

            Ms. OLSON. The debit cards are just really, to me, as you said, a 21st century solution.

            Mr. BRADY. Those debit cards, since people are struggling  so much with high fuel prices, you know, if they weren’t able to afford something they needed, but instead had to buy higher gas, would they be eligible to use it at the gas pump?

            Ms. OLSON. Absolutely. The Social Security cards are used  anywhere that essentially a credit card is taken. So, at food stores, at gas tanks, at ATMs, et cetera.            

Mr. BRADY. All right. Thank you, Chairman. Yield back

While Rep. Brady was lamenting the rising price of gas and the national dependence on imported energy, Nina Olson located some information about payments for deceased taxpayers.  She asked,

Ms. OLSON. Mr. Chairman, may I answer Congressman Doggett’s question? I found—-

            Chairman LEWIS. Yes, you may, Ms. Olson.

            Ms. OLSON. Thank you. There is a FAQ on the IRS website that says, “If an individual dies, what happens to his or her direct deposit, or stimulus check?” The answer is, “Stimulus payments will be issued in the name of the individual eligible for a payment on a filed 2007 income tax return, or to the account designated by the individual on that return. Thisincludes situations where a person dies after filing a return, or where the final 2007 income tax return was filed by a personal representative or surviving spouse.”

            “Any issues or concerns involving a decedent’s filed return, or the related stimulus payment, should be addressed by the legal representative of the decedent’s estate.” So—-

            Chairman LEWIS. Now I turn to Mr. Pascrell for his questions.

So there you have it.  In 2008 the law was written as a credit on 2008 returns, but with an advance payment before the end of the year, based on information from the 2007 return.  The recipient did not have to survive until 2008.  I found an archived version of the 2008 FAQ to which she referred.  It was issued on March 17, 2008, only 32 days after the law was enacted. 

The 2020 law follows the structure of the 2008 law, except that it allows a look back to 2018 if no 2019 return was filed. It remains to be seen, whether IRS will apply it to decedents as was done twelve years ago, and how long it will take to decide. 

Breaking Rule 36: When IRS Fails To Answer a Petition

Bob Kamman returns with a tale of woe that will hopefully be short-lived. I trust the matter will be resolved promptly once Bob is able to communicate with the Chief Counsel attorney assigned to the case. The situation shows the importance of the Answer telling the petitioner or representative who they can call to resolve their case. Too frequently it seems that IRS correspondence exam jumps the gun and issues an unnecessary notice of deficiency. Like Bob, my practice is to file a petition in these cases without waiting the full 90 days. I have not had any luck asking the IRS to rescind a notice of deficiency under section 6212(d) on the basis that exams reviewed and accepted my client’s substantiation after issuing the SNOD, so I may as well get the petition done early. A streamlined rescission process for cases like these would avoid unnecessary petitions filed by us cautious and pessimistic lawyers. Christine

I’m the Rodney Dangerfield of tax practitioners.  I get no respect.  At least from IRS, in Tax Court.

Other lawyers who blog or comment here: They file a Tax Court petition, IRS files an answer.  When I file a petition? It’s ignored. 

See Docket No. 19789-19.  Filed November 1, served on IRS November 6. Tax Court Rule 36 grants IRS a generous 60 days to file an answer.  That time expired January 6 (because January 5 was a Sunday). 

Compare that to  Docket No. 19787-19P , filed a few days after my case  and served the same day as mine.  The petitioner there is represented by Keith Fogg, who gets respect.  IRS filed an answer in that case on December 20, even though they had to send it to Kentucky for a lawyer who handles passport cases. 

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You might notice that I requested Washington, D.C., as the place of trial.   I thought that would expedite settlement.  Maybe IRS has less respect for practitioners who seem to be forum shopping.   I knew there was no way this case would go to trial, because it would be easy to settle once I could talk to a real person.  The disputed tax with interest  involves about $2,000, enough that a 3% filing fee was not out of line. 

It’s not like an IRS answer reflects more than a cursory look at the petition.  Most answers consist of a couple pages denying everything for lack of sufficient knowledge or information, up to but usually not including that the sun sets in the west.  But at least they provide the name of the attorney assigned to the case.

The lack of respect, however,  did not begin with IRS ignoring my Tax Court petition.  Its notice of deficiency was issued because my response to an IRS notice was ignored.   I had explained the mistake  on Schedule D was due to some missing Form 1099-B stock sales.

IRS sent its infamous CP-2000 on July 22, 2019, proposing a tax increase of $4,761.  (Being less than $5,000,  it was not quite enough to slap on the computer-generated Section 6662 penalty of another 20%.)

My letter to IRS on August 6 provided correct information.  It included copies of the relevant Forms 1099-B; and a 1040 (marked “Information Only, Do Not File”) showing the tax computation and a balance due of $2,847.  

On September 20, IRS mailed my clients a notice acknowledging they received my letter on August 12 and informing them that it would need another 60 days to respond.  But perhaps not coincidentally, the federal government fiscal year was ending soon.  Did Ogden Service Center managers exert  pressure to close cases so  year-end statistics would shine?  Not that they would admit.

Whatever the reason, a notice of deficiency dated October 15 was issued, showing the same adjustments as those on the original CP-2000.  It completely ignored the explanation I gave two months earlier.  Obviously, I get no respect. 

Hoping to move this case closer to settlement before the busiest days of the 2020 tax season, I filed the Tax Court petition a couple weeks later.  At some other time, in some other case, I would just wait and see how long it would take for IRS or the Tax Court to discover I had fallen through the cracks.  But my clients want to be done with the matter, and have already made an advance payment (Code Section 6603, Rev. Proc. 2005-18) of what they actually owe. 

(No, they are not paying me a fee, other than what I have received from them and their family in the last three decades as clients.   I could try to pursue IRS for fees, but life is too short for such bureaucratic ordeals.)

And filing the petition did get us some attention from IRS.  On November 18 – two weeks after Chief Counsel received the petition – IRS in Ogden mailed a revised CP-2000 proposing tax of only $3,057.  The $210 difference from our figures was due to keeping the tuition tax credit instead of changing it to a deduction, which saved money at the higher AGI.

The November 18 notice tells us, toward the bottom of Page 6, that “to recalculate your tax, we used . . .the new information you provided.”

Respectfully, may I ask anyone in charge at IRS (if that label is not an oxymoron): Why do you issue a notice of deficiency first, then look at the information provided?  Would it not be more efficient to do it the other way around?

The word “respect” does not appear in the part of the Taxpayer Bill of Rights (as explained in Publication 1) under “The Right To Quality Service.” It does promise, “Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS.”

Oddly enough, “respect” appears later, in this context:

Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections, and will provide, where applicable, a collection due process hearing.

The heading for that paragraph is “Right To Privacy.”  Tax Court proceedings offer little privacy.  Well, there is that thing about redacting SSN’s. 

I did some research on Tax Court procedures when IRS files a late answer.  The issue does not appear often, if at all.  I think it is safe to say: File a petition late, and the Court will dismiss the case for  jurisdictional reasons.  File an answer late, and the Court will excuse IRS on equitable grounds. 

2019 Tax Court Shutdown: A Year Later, Still Catching Up

We welcome back guest blogger Bob Kamman. In this post, Bob investigates what happened to one batch of cases whose trials were postponed due to the last federal government shutdown. This is a timely reminder that disruptions to the system can have significant lingering impacts on some individuals, even if the system as a whole appears to have recovered and moved on. Christine

A federal government shutdown is often just around the corner. So let’s
take a look at how the last one worked out for some Tax Court cases.

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I searched Tax Court orders from January, 2019, during the five weeks that many government offices were closed for lack of funding. I found 31 cases that had been set for trial at the New York City session starting February 11, 2019. The Tax Court pulled the plug on these January 22, 2019. As it turned out, the shutdown ended January 25, 2019, but it would have been difficult for IRS attorneys to get back up to speed, even in two weeks.

Of course, other dockets in other cities were also canceled. This was just one of them.

A year later, how did these cases turn out?

If you guessed that many of them were settled by stipulation when the court reopened, without a trial, you have a good working knowledge of tax litigation.

If you wondered how many have not shown any progress in nearly a year, you share my concerns. More on those, later. But first, here are some details on when the stipulated decisions were entered, and whether petitioners agreed they owed tax and penalties. I have listed them in chronological order, with the name of the first petitioner listed.

  • February 15, Nji Ban, $223 tax owed, no penalties.
  • February 26, Vanessa Smith (innocent spouse), $966 tax owed, no penalties.
  • March 20, Malaika Martin, tax, no penalty.
  • April 5, Michael Fiore, tax and penalty (successful innocent spouse).
  • April 10, Guy Jacono, tax and penalty.
  • April 18, Michael Patriarca, tax and penalty.

On June 5, the Court set October 28 as the new trial date for these cases, which then apparently inspired more stipulated decisions:

  • July 1 and July 2, James Sherlock, two cases, tax and penalty.
  • July 15, Marie Miele, no tax, no penalty.
  • October 18, Jeffrey Farrell, tax and penalty.
  • October 23, Donna Schlenker, tax and Section 6651 penalty (2 cases).
  • October 24, Nirvelyn Jean-Simon, tax, no penalty.
  • December 2, David Nnadika, tax, no penalty after October 28 hearing.
  • December 2, Morris Kromah, tax, no penalty, innocent spouse not assessed.

There were three other rescheduled cases on the October 28 New York City calendar, with these outcomes:

  • Hamid Maksoud: IRS filed a motion for summary judgment. Taxpayer did not appear, and IRS won a decision for tax and fraud penalty.
  • Brian Reis, dismissed November 4 after an October 28 hearing on IRS motion for failure to properly prosecute. Taxpayer did not appear. Tax and Section 6651 penalty assessed.
  • David Stein: Frank Agostino entered an appearance on July 16. On September 16, his motion to continue and consolidate with another case was granted. No new trial date has yet been set.

This list accounts for 18 of the 31 cases I found for the February 11, 2019 New York City calendar. What happened in the other 13?

The wheels of justice turn slowly, and for these petitioners they may not be grinding at all. The last docket entry for these cases, as of December 10, 2019, is the January 22, 2019 order that canceled their February 11 trial.

  • Munr Kazmir and Ansar Batool (three cases total; one in each name, and one joint. They are also represented by Frank Agostino or another lawyer in his firm). Two of these cases were filed in December 2014; the other in November 2016.
  • Junior Burke (the order canceling trial is returned mail, the docket reports). Case filed February 2016.
  • Barbara Reagor, February 2016.
  • Michael Crosby, April 2016.
  • Pressure Controls Inc. (petitioner substituted counsel April 23), August 2016.
  • Jason Voicheck. January 2017.
  • Karen Jones, February 2017.
  • Lawrence Ebert (who won an earlier Tax Court case), April 2017. He had written a letter on March 8, 2019, to the Court that caused another case to be opened by mistake; it was closed.
  • Marvin Boyd, April 2017.
  • Erica Harris-Young, May 2017.
  • Yousef Zaben, June 2017.

All of these cases had been filed at least 20 months before the canceled trial date, and now it has been at least two and a half years. The earliest ones have now been waiting five years for a day in court. Is this any way to run a tax system?

What the Tax Court Might Learn from the Chinese

Given the shortage of free and low-cost legal help, many courts and researchers are working to improve access to justice by making court systems more accessible to self-represented parties. Efforts have included developing software to generate pleadings through guided interviews, among many other approaches. Today Bob Kamman alerts us to similar efforts in China, and suggests harnessing technology to improve self-represented petitioners’ ability to navigate a Collection Due Process appeal. Christine

The Beijing Internet Court has launched an online litigation service center featuring an artificially intelligent female judge, with a body, facial expressions, voice, and actions all modeled off a living, breathing human (one of the court’s actual female judges, to be exact). As one report points out, though, the robot judge is used only for the completion of “repetitive basic work” only, like litigation reception and online guidance.

If “repetitive, basic work” reminds you of Collection Due Process cases in Tax Court, then let’s consider whether some form of automation can help expedite and resolve them. Has the Independent Office of Appeals turned down your request for help with a lien or levy? We don’t have an app for that, yet. But we could.

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The start of computer-assisted pleading, I propose, would be “check the box” petitions that might eliminate some hopeless cases and refine the procedures for others. At IRS, tax compliance is forms-driven. It seems to work for most people. Tax Court should also consider it, at least as an option.

Here is what I mean. A CDP petition would look something like this:

– – –

1) My CDP hearing was based on
O  Doubt as to liability;
O  Request for collection alternative;
O  Both.

2) If based on doubt as to liability,
O  The tax was shown on my original return, but I later amended it.
O  The tax was assessed after an IRS examination, but I did not receive a Statutory Notice of Deficiency (“90-Day Letter).
O  Other (explain).

3) If based on a request for a collection alternative, I proposed:
O   An offer in compromise.
O   An installment agreement.
O   A “currently not collectible” determination.
O   Something else (explain).

4) The Appeals Settlement Officer did / did not request a current financial statement showing my income, expenses, assets and liabilities. If requested,
O   I provided this information.
O   I did not provide complete information.

5) The Appeals Settlement Officer did / did not request that I file all tax returns currently due. If requested,
O   I have filed all required returns.
O   I have not filed all required returns.

6) The Appeals Settlement Officer did / did not determine a “Reasonable Collection Potential” based on my financial information. If a determination was made:
O   I agreed with it.
O   I did not agree with it because of these circumstances which I asked to be considered:

7) I do / do not request help with Alternative Dispute Resolution under Rule 124(c) of the Tax Court, (“Nothing contained in this Rule shall be construed to exclude use by the parties of other forms of voluntary disposition of cases.”) For example, if IRS agrees I would allow this case to be decided by a mediator from a recognized tax clinic affiliated with a university or professional organization.

– – –

Does this look like a way to discourage taxpayers with no reasonable prospect for success, from wasting everyone’s time?  If so, that would be useful, provided it does not close the courthouse door to those who might prevail. It would not discourage those who are filing a petition simply to delay the inevitable. That problem can be alleviated by identifying losers early and putting them on a fast track to closure. For example, Congress could help (but won’t) by increasing the Tax Court filing fee to $250, with a refundable credit for the prevailing party.

“Check the box” pleading can help taxpayers and the Court. Another improvement would be to require, as many federal and local courts have, a “cover sheet” that must accompany a petition. The cover sheet could, for example, require a statement that either the filing fee, or a waiver request is attached.

I recently noticed that the Tax Court is issuing dozens of notices each month, setting the Place of Trial for petitioners who have not done so. They may not think it’s urgent, since the Tax Court website states that the Form 5 can be electronically filed later. A cover sheet could also identify the type of case (tax, CDP, innocent spouse, whisteblower, passport, etc.), not just for real-time statistical purposes but for work-flow scheduling.

I hope some of these suggestions are criticized, by people who can come up with better ones. Meanwhile, maybe we don’t have to look to China for inspiration. Maybe Utah is close enough, for finding judges willing to let a hundred flowers bloom. Utah’s Supreme Court has created a “sandbox”, for testing new ideas about the administration of justice.

The idea is to encourage legal providers and even nonlawyers to suggest and test products that they think can help improve access to legal services. “With oversight from the courts, applicants can test their product without worrying about the strict rules that attorneys have been forced to follow for years.”

Some Facts About the Walquist Case, Along with Some Nuance

Frequent guest blogger Bob Kamman put his formidable investigative skills to work to bring us an in-depth look behind the Walquist opinion. Christine

“Everyone is entitled to his own opinion, but not to his own facts.”
–Daniel Patrick Moynihan

“Facts, sir, are nothing without their nuance.”
–Norman Mailer

The Tax Court is certainly entitled to its opinion in Walquist v. Commissioner, 152 T.C. No. 3, which Keith Fogg blogged here. But a review of the record and other public documents yields facts that may contradict those cited in the opinion, or at least provide some meaningful nuances. Serious questions are therefore raised about its precedential value.

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 Here are what the Tax Court found to be some of the facts:

R through his Automated Correspondence Exam system determined, for Ps’ 2014 tax year, a deficiency in tax and a penalty for an underpayment attributable to a substantial understatement of income tax. R’s computer program generated a 30-day letter inviting Ps to reply and submit relevant information. When Ps declined to respond, the program generated and issued to them a notice of deficiency in the form of a Letter 3219. This letter again invited Ps to contact R, but they did not do so.

Here is what actually happened:

Petitioners filed their 2014 Form 1040 with a paper return that was received by the Fresno Service Center on April 2, 2015. It must have been placed in the “Funny Box” (see Internal Revenue Manual 3.10.73.3.4) because it was stamped “Frivolous Return Program – Internal Revenue Service – Fresno CA” on that day. The next stop in its processing was April 13, 2015, when it was stamped “Received – FRP 306.”

The taxpayers had added to the jurat (declaration under penalty of perjury, just above their signatures), “This return is in accordance with 12 USC 411, 12 USC 95(a)(2), [illegible].” Those sections are used by tax protesters who claim income is not taxable unless paid or measured by Federal Reserve notes, or something like that.

They also wrote “Demand for Lawful Money Reduction” on Line 21, with a bracketed amount of $87,647.96 to indicate a loss. The pretrial memorandum correctly transcribes the first word as “Demand” but a later pleading erroneously changed it to “Remand.”

The next we see of the return is an internal IRS Form 8278, “Assessment and Abatement of Miscellaneous Civil Penalties,” dated July 27, 2015 and signed by “Ms. Bluemel” as originator and Krista Decaria as manager and reviewer. (They work not in Fresno, but at the IRS Ogden Service Center.) It assesses a $5,000 penalty for a frivolous tax return. Assessment of this penalty is not subject to deficiency procedures. In its “Remarks” section, the Form 8278 states “Argument 29.” IRM 25.25.10.2 explains this as “Any other position deemed frivolous.”

The Walquists filed a joint return. Both spouses had W-2 income. Craig Walquist earned $20,113 from two employers, with $624 federal income tax withheld. Maria Walquist earned $59,840 from one employer, with $5,105 withheld. The total withholding from W-2 forms was $5,729 but their return claimed $5,730.69. In August 2015, IRS grabbed the $5,000 penalty from this amount. That left $730.69, which was applied to taxes they owed for 2008. Then IRS allowed $54.12 interest from April 15 on the “overpayment.” That amount went to 2008, also.

All of these facts come from IRS pleadings in the Tax Court case. To find out what happened between August 2015 and August 2017, when the Notice of Deficiency was issued, we must look elsewhere. Did IRS just throw the fishy 1040 back in the sea of returns, only to have the audit commence again because of some unreported income? Fortunately, the taxpayer attached some IRS correspondence to the lawsuit he filed in the District Court for Minnesota. But first, let’s look at some more facts from the Tax Court opinion.

Alerted to petitioners’ underreporting by computer document matching, the IRS processed the examination of their return through its Automated Correspondence Exam (ACE) system, employing its Correspondence Examination Automated Support (CEAS) software program. This software is designed to process cases ‘with minimal to no tax examiner involvement until a taxpayer reply is received.’ Internal Revenue Manual (IRM) pt. 4.19.20.1.1 (Dec. 18, 2017).

On July 26, 2017, the CEAS program generated and issued to petitioners a Letter 525, General 30-Day Letter. In cases such as this–where the understatement of income tax calculated by the program exceeds the greater of $5,000 or 10% of the tax required to be shown on the return–the program systematically includes in the letter a substantial understatement penalty. See sec. 6662(b)(2), (d)(1)(A). The program accordingly calculated a penalty of $2,766.40, or 20% of the proposed deficiency of $13,832. See sec. 6662(a).

What Walquist attached to his District Court complaint, though, is a Letter 525 dated June 30, 2017. It says, “We’re auditing your 2014 Form 1040, and need a response from you.” Attached to the letter is a computation showing a balance due of $18,003. This included $13,832 tax; $2,766 Section 6662 penalty; and $1,405 interest. In a box on the Letter 525 for “Examiner’s Signature,” there is printed “Tax Examiner”; and in the box for “Employee ID,” the number 1000099771.

The Letter 525 adds, “let us know by July 30, 2017 if you agree or disagree with our proposed changes.” The Walquists both signed a two-page, single-spaced letter dated July 26, 2017, asserting tax-protester arguments based on Federal Reserve notes. (There is no proof it was mailed, but no reason to believe it was not. It would not have accomplished anything, anyway). IRS responded with the August 30, 2017 Notice of Deficiency.

In addition to his $20,113 of W-2 income, Walquist received $14,159 in “non-employee compensation” reported on Forms 1099-MISC, which IRS determined was subject to $2,001 self-employment tax. He also received $1,215 in unemployment compensation.

As IRS stated in a November 26, 2018 filing, “respondent’s determinations are chiefly based on a misclassification of income rather than underreporting of income by petitioners.” In other words, the $14,159 of self-employment income should not have been reported as wages, but instead shown on Schedules C and SE.

The Notice of Deficiency shows the same employee identification number as the Letter 525. It is attributed to Christine L. Davis, from Ogden’s “Return Integrity and Compliance Services, Integrity and Verification Operation.” That IRS office “detects, evaluates and prevents improper refunds.”

As it turned out, the software that IRS relied on to figure the tax did not produce an accurate result. It was only after the Tax Court petition was filed that IRS Counsel reduced the $13,832 amount to $12,220, and the $2,766 Section 6662 penalty to $2,444. A $60 filing fee saved the taxpayers $1,934 plus interest. They should have quit while they were ahead. The Tax Court also corrected its error in ordering them to pay the filing fee, before it found that it had already been received. Perhaps it was paid in Federal Reserve notes which caused some accounting problems.

Some more facts from the Tax Court:

Whether an accuracy-related penalty determined by an IRS computer program is a ‘penalty automatically calculated through electronic means’ does not appear to have been decided in any published Opinion of this Court. . . .The penalty at issue was calculated and instantiated in letter form by a computer software program. Because the computer did this without human intervention, no ‘individual making such determination’ appears to exist.

Yes, “instantiated” is a word. But that part about human intervention?

In its pretrial motion dated October 5, 2018, the IRS attorney informed the Court:

Respondent determined that petitioners were liable for an I.R.C. §6662 accuracy-related penalty for their 2014 tax year. I.R.C. § 6662 (a). Respondent is able to satisfy its burden of production with respect to this penalty. I.R.C. § 6751 requires respondent to furnish evidence of managerial approval of the accuracy-related penalty prior to the issuance of the notice. As an exhibit to respondent’s September 5, 2018 motion to dismiss, respondent submitted a signed Declaration and Case History demonstrating managerial approval of the accuracy-related penalty in this case prior to issuance of the notice. As such, respondent is able to meet its burden of production.

In other words, in a case where the Tax Court saw no human intervention in a tax-protester audit, the IRS itself saw the need for managerial approval of a Section 6662 penalty, and confirmed it was done.

But maybe that is not the precedent the Court intended to establish with this case. Maybe the message is the $12,500 penalty it assessed under Section 6673, for taking a position in Tax Court that was frivolous or groundless.

The maximum penalty that could have been assessed is $25,000. It might not be coincidence that $12,500 nearly matches the amount of tax, $12,220, that should have been shown on the Walquists’ frivolous return. That does not include the $5,000 penalty they had already paid to IRS.

The Tax Court penalty can now be collected from either spouse. In 2014, Mrs. Walquist was the primary breadwinner, responsible for 63% of the income. Filing separately, she still would have owed more than $3,000 tax. But there is little evidence that she is the primary tax protester. She was not a plaintiff in the District Court case. An IRS notice attached to that complaint indicates that for 2016 her husband filed separately, and was again penalized $5,000. It is the husband who has self-published a book that asks such questions as, “Have American Christians erred in assuming our country is Biblically on the side of good?”

I searched Tax Court opinions from 2017 to date for cases involving joint returns where the Section 6673 penalty was considered. Most such cases during this period involved taxpayers who are unmarried or filing separately.

I found two cases involving joint returns. In one of them, Henry and Kathy Jagos, TCM 2017-202, the taxpayers had income of $544,167 in 2012. They denied owing tax because they “are private-sector citizens (non-federal employee) employed by a private-sector company (non-federal entity) as defined in 3401(c)(d).”

From the Court’s opinion:

At trial the Court encouraged the Jagoses to abandon their frivolous arguments and cited specific authorities for them to consider. The arguments raised in their 70-page brief were a rehash of the very same arguments that were dispatched in those cases. And the Jagoses have raised frivolous arguments at every stage of this process from their 2012 income tax return to their closing brief. For disregarding the cases cited to them and wasting the Court’s resources with their frivolous arguments, we impose a sanction under section 6673 . . .

The Court found that they owed $155,149 in tax – but assessed only a $1,000 penalty under Section 6673.

In the other case, Michael Wells and Lynn Kirchner-Wells, TCM 2018-188, the Court noted:

Petitioners also attached Forms 4852, Substitute for Form W-2, Wage and Tax Statement, to each of the returns indicating zero wages and the same amounts of tax withheld as was shown on each Form W-2. The Forms 4852 included the following tax protester statements: I am a private-sector worker, not an ‘employee’ as defined in IRC 3401(c) and IRC 3121. I worked with a private-sector company, not a federal employer as defined in IRC 3401(d). I did not engage in a ‘trade or business’ as defined in USC Section 7701(a)(26).

The tax deficiency was $52,051, but no Section 6673 penalty was assessed. “The Court may on its own determine whether to impose a penalty not to exceed $25,000 when it appears to the Court that a taxpayer’s position is frivolous or groundless. Sec. 6673,” Judge Gerber wrote. “We did not find in the record that petitioners have made these or similar frivolous claims in the Court before or that they have been previously forewarned. Thus we will not impose one here, nor does respondent seek a section 6673 penalty in this case.”

Has the Tax Court now announced an end to leniency for tax protesters? At least the Walquist case suggests that those with frivolous arguments (and their spouses) should stick to the facts, and keep their opinions to themselves.

Five Things to Know About FedEx and the Tax Court

Today Bob Kamman explores FedEx issues in Tax Court and brings us several interesting findings. The bottom line for practitioners (as always) is to be aware of the jurisdictional perils that await those who cut it close without carefully checking the list of designated private delivery services. Christine

Inspired by Keith Fogg’s post about the Tax Court petition that could not be delivered by FedEx during the January 2019 government shutdown, I searched recent Tax Court orders for similar cases. Here are five things I learned.

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1) You can’t always trust word searches on the Tax Court website.

I searched for orders with the word “FedEx” from October 1, 2018 through May 28, 2019.  The search returned three hits.  Then I searched for “FedEx” from April 30, 2019 through May 28, 2019.  That search returned ten hits.  So I searched for “FedEx” from only November 1 through December 31, 2018.  That search returned five hits, none of which were in my first search.

My conclusion, or at least hypothesis, is that the search “times out” after a certain number of orders are searched.  Results will be more accurate if done by month, rather than for longer periods. 

2) The case described in Keith’s post is not unique.

In the Awad case, in response to an earlier order the Court writes

The petition, filed January 30, 2019, arrived at the Court in an envelope with a FedEx ship date of January 29, 2019. . . . petitioners indicated that the petition was originally mailed to the Tax Court on January 16, 2019, (2) petitioners provided respondent a copy of the envelope in which the petition was originally sent to the Tax Court on January 16, 2019, a copy of which was attached to the Response, and (3) petitioners also provided respondent a copy of the envelope in which the petition was returned to them, a copy of which was attached to the Response.

It is not clear whether the first attempt was through the U.S. Postal Service, or through FedEx.

And then there is the unfortunate petitioner in Chicas, whose deadline for filing was December 31, 2018 – a date the government was closed.  He used UPS Ground to send his petition on January 3, 2019.  It was returned by UPS, and he sent it again by UPS Ground on February 22, 2019.  He was late the first time, and UPS Ground is not an acceptable service anyway. 

3) IRS does not always question jurisdiction.  Sometimes it needs help from the Tax Court.

That is what happened in Powerhouse Mortgage Corporation.  In dismissing the case on November 29, 2018,  Judge Foley explained,

Attached to the petition was a notice of determination concerning collection action dated July 17, 2018 . . .The petition had been received by the Court in an envelope sent by FedEx Express Standard Overnight and bearing a ship date of August 17, 2018. An answer to the petition followed on October 9, 2018, but did not address jurisdictional matters. Nonetheless, because review of the record suggested a fundamental jurisdictional defect, the Court by Order dated October 12, 2018, directed the parties, on or before November 2, 2018, to show cause in writing why this case should not be dismissed for lack of jurisdiction, . . .Shortly thereafter and in lieu of a response, respondent on October 17, 2018, filed a Motion To Dismiss for Lack of Jurisdiction on the identical ground of an untimely petition.. . .petitioner was afforded additional time, until November 9, 2018, to object to respondent’s motion as well. 

The petitioner did not respond, and the motion to dismiss was granted.

See also Jones, dismissed by Judge Foley on December 3, 2018.  IRS didn’t notice that the petitioners not only were late, but used the wrong FedEx service.  However, the Court did:

The petition in the above-docketed proceeding was filed on September 4, 2018. Therein, petitioners alleged dispute with a notice of deficiency dated June 1, 2018, issued with respect to the 2015 and 2016 taxable years. The petition had been received by the Court in an envelope sent by FedEx Express Saver and bearing a ship date of September 1, 2018. Unexpectedly, respondent thereafter on September 21, 2018, filed an answer to the petition, not addressing the matter of timeliness.

Nonetheless, because review of the record continued to suggest a fundamental jurisdictional defect, the Court at that juncture issued an Order To Show Cause dated October 24, 2018, directing the parties to show cause in writing why this case should not be dismissed for lack of jurisdiction, on the ground that the petition was not filed within the time prescribed by section 6213(a) or 7502. . . . In particular, the Order To Show Cause noted, first, that the date of the notice of deficiency underlying this proceeding indicated a statutory deadline for filing a petition pursuant to section 6213(a) . . .that expired on August 30, 2018, and, second, that FedEx Express Saver is not a designated private delivery service for purposes of the section 7502 . . . timely mailing provisions.

Substantially the same facts have also led Judge Foley to request both parties in Rodriguez to explain by June 11 why the case should not be dismissed when FedEx Express Saver was used and the petition was not received by the required date.  This May 22, 2019 order is somewhat confusing because it states the FedEx envelope “reflects a ship date of August 25, 2019.

I am sure that will be cleared up in later proceedings.  Maybe it was just another FedEx mistake, as happened in Muramota.  In that case, the petition was “in an envelope indicating that the petition was received and processed by FedEx on May 15, 2018, for delivery by FedEx 2-day mail.”  But when Judge Thornton questioned jurisdiction, because the last date to petition was May 14, 2018, “the parties are in agreement that the petition was delivered to FedEx on May 14, 2018, as evidenced by a receipt provided by petitioners’ counsel, and the petition was therefore timely mailed.”  A stipulated decision was entered the same day.

4) Petitioners continue to use FedEx services that do not qualify for “timely mailed” recognition.

Judge Foley’s four-page order of February 25, 2019,  dismissing the Thompson case explains why FedEx Express Saver service is not a qualified “private delivery service.”  The petitioners had noted that they followed the instructions on the second page of their Notice of Deficiency, which apparently did not explain “private delivery service” limitations.  I looked at a couple Notices of Deficiency from 2018 and did not find a reference to private delivery services on them. 

Similar language was used by Judge Foley in his four-page order of February 4, 2019, dismissing Griffiths.

5) The Tax Court uses FedEx also.

When it absolutely positively has to get there faster than the Postal Service can deliver, or when there may be other benefits, the Tax Court uses FedEx to contact Petitioners.  (It probably gets a discounted government rate.)  

For example, in McPhee,  “On May 7, 2019, the Court was informed of an unsuccessful delivery attempt by FedEx of the Notice of Change of Beginning Date of Session, served on petitioners on May 1, 2019. Petitioners subsequently advised the Court that their address has changed. . . .”

Undesignated Orders: All in a Day’s Work for a Tax Court Judge

Today frequent guest blogger Bob Kamman takes us through a day in the life of a Tax Court judge, as viewed through the non-designated orders that occupy much of the Court’s day-to-day time. Christine

Much can be learned from the Designated Orders selected by Tax Court judges as noteworthy among the hundreds of orders issued each day. But sometimes we may learn just as much from those that are not designated. For examples, let’s shadow Judge David Gustafson for one day, as he works through his in-box to move cases along.

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These are all lessons from May 2, 2019. They include:

  1. A taxpayer (Augustine) hopes to get help from a Low-Income Taxpayer Clinic.
  2. A taxpayer (Pendse) wants a trial later this month because she will be out of the country for more than a year.
  3. Taxpayers (Emanouil) whose co-counsel wants to withdraw, but forgets to sign the motion.
  4. A taxpayer (Miruru) whose case was dismissed with tax deficiency upheld after failure to appear at trial and to respond to an IRS motion.
  5. A taxpayer (Baba) gets a second chance from IRS Appeals but has not confirmed he wants it.
  6. Taxpayers (Reuter and Stovall) have not returned proposed decision documents to IRS after a settlement seems to have been reached.
  7. A partnership (Cross Refined Coal) in whose case IRS has filed a motion to compel.
  8. A taxpayer (Insinga) in a 2013 whistleblower case, whose latest filing needs to be sealed without redactions.
  9. Taxpayers (Houchin) whose 2013 case will be continued again, as they and IRS requested, but not on Judge Gustafson’s calendar. (The docket shows a bankruptcy filing.)
  10. Taxpayers in two cases (Lugo, and Abdu-Shahid) in which IRS Counsel misfiled documents.

Darline Augustine, Docket 12248-18

Pro Se, New York

The Commissioner filed a motion for summary judgment (Doc. 7) in this “collection due process” (“CDP”) case. We ordered petitioner Darline Augustine to file a response by March 1, 2019, and we did our best to explain the nature of the IRS’s motion and what she should state in a response. (See Doc. 9.)

Ms. Augustine requested more time to submit her response (see Doc. 13), so we gave her until April 15, 2019 (see Doc. 14). On that date she filed a one sentence letter (Doc. 15) that did not respond substantively to the motion. By order of April 22, 2019 (Doc. 17), we allowed her to file a supplemental response by no later than May 6, 2019. On April 29, 2019, we received from Ms. Augustine another letter (Doc. 18), which informed us that she is getting the help of a Low Income Tax Clinic, and which states: “With regard to the reply to the summary judgment, I will have to get assistance from a low income legal service. I am not an attorney and legal language is quite opaque to me.” No attorney from an LITC has filed an entry of appearance in this case.

Ms. Augustine’s letters have asserted that she wants to appear before the Tax Court. Trials are conducted, however, to resolve disputes of fact. If there are no material facts that are disputed, then there is no need for a trial. The Commissioner’s motion purports to show that no trial is needed in this case because (the motion says) the undisputed facts show that the IRS is entitled to prevail. To preserve her opportunity for a trial, Ms. Augustine must show why we should not grant the Commissioner’s motion. We will give her one more opportunity to do so. It is

ORDERED that, no later than June 3, 2019, Ms. Augustine shall file any supplemental response to the Commissioner’s motion that she wishes to file. If she intends to obtain the assistance of an LITC, then she will need to obtain it in time to meet that deadline. In the absence of the entry of an appearance by an attorney representing Ms. Augustine, we would not expect to grant her any further extension of this deadline. It is further

ORDERED that, no later than June 24, 2019, the Commissioner shall file a reply to Ms. Augustine’s supplemental response, if she files one; or, if she does not file a supplemental response, then the Commissioner shall file a status report so stating.

Shona Pendse, Docket 25665-17

(Pro Se, Boston before taxpayer relocated)

Now before the Court is petitioner’s motion to calendar this case for trial this month. We will deny the motion.

This case was scheduled to be tried at a Boston session of this Court on April 1, 2019, but at the joint request of the parties, it was continued. The place of trial was changed to Washington, D.C., and the case was thereafter scheduled to be tried at a trial session beginning September 16, 2019. Petitioner wants a more prompt trial, and she says that she must be out of the country from June 2019 through August 2020. She therefore requested that the case be set for trial at a special trial session in Washington beginning May 21, 2019, at which the undersigned judge will coincidentally be presiding. Respondent objects. Counsel states that he received information from petitioner in April that prompted an inquiry by which he learned of a related refund case that is pending in U.S. district court, that involves a different taxpayer, and that is being handled by the U.S. Department of Justice. Counsel states that it is necessary to coordinate the two cases and that he cannot be ready for trial in this case in May 2019. Petitioner does not dispute the relatedness of the cases but maintains that respondent should have known about the related case already and should now be ready to proceed.

Even if we were otherwise inclined to grant petitioner’s motion, it might not be practical to try to fit this case into the special trial session beginning May 21, 2019. A special trial session is set based upon the anticipated situation and needs of the case being scheduled, and in this instance the other case set for that session is likely to use all of the available time in that session. Moreover, respondent’s counsel’s expressed need to coordinate this case with the refund case is plausible, and while perfect coordination of information between Chief Counsel and the various units of the IRS–and between Chief Counsel and the Department of Justice–might bring efficiencies, it would do so at a sometimes great cost, so we do not fault Chief Counsel nor his client agency for counsel’s unawareness of the related case before petitioner disclosed it to him.

Because we will deny the motion to calendar, this case remains on the calendar for the regular trial session in Washington, D.C., beginning September 16, 2019. However, we do not overlook petitioner’s scheduling difficulty with that trial session, and this order is without prejudice to any motion petitioner might make to continue this case from that trial session. We would consider any such motion on its merits. It is

ORDERED that petitioner’s motion to calendar is denied.

Peter C. & Pascale Emanouil, Docket 5089-17

(2-Day Trial in Boston, October 2018)

On April 25, 2019, an unopposed motion to withdraw as counsel of record was filed on behalf of Nicholas F. Casolaro. The motion states that co-counsel Richard M. Stone and Peter D. Anderson will continue as counsel for petitioners in this case. That motion, however, was not signed by Mr. Casolaro in compliance with Tax Court Rule 24(c), which requires that counsel seeking to withdraw his appearance must file a motion with the Court requesting leave to do so. It is therefore

ORDERED that, no later than May 7, 2019, counsel for petitioners shall file an amendment to the unopposed motion to withdraw bearing the signature of Mr. Casolaro in compliance with Rule 24(c).

Mbugua J. Miruru, Docket 25168-17

(New Hampshire, Pro Se)

When this case was called from the calendar for the Court’s March 11, 2019, Boston, Massachusetts, trial session, there was no appearance by or on behalf of petitioner Mbugua J. Miruru. Counsel for the Commissioner appeared and filed a motion to dismiss for lack of prosecution. In that motion, the Commissioner moves the Court to enter a decision with respect to Mr. Miruru in the amount for the tax year 2015 set forth therein. By order dated March 11, 2019 (served March 18, 2019), the Court directed Mr. Miruru to file a response to the Commissioner’s motion to dismiss on or before April 10, 2019. As of this date, the Court has received no response from Mr. Miruru. It is therefore

ORDERED that in addition to regular service, the Clerk of the Court shall serve a copy of this Order of Dismissal and Decision on Mr. Miruru at the additional address (in Bristol, New Hampshire) that appears on the certificate of service attached to the Commissioner’s motion. It is further

ORDERED that the Commissioner’s motion to dismiss for lack of prosecution is granted, and this case is dismissed for lack of prosecution. It is further

ORDERED AND DECIDED that there is a deficiency in income tax due from petitioner Mbugua J. Miruru for the tax year 2015 in the amount of $4,538.

Abu Baba, Docket 13186-18

(Virginia, Pro Se)

On April 26, 2019, the Commissioner filed two motions: (1) a motion for continuance [i.e., for a postponement] of the trial of this case, and (2) a motion for remand, in which it asks the Court to remand the case to the IRS’s Office of Appeals for further consideration. A continuance and remand would be welcome to many petitioners in a case such as this one, but the motions state that the Commissioner does not know whether petitioner Abu Baba objects to the motions. It is therefore

ORDERED that, no later than May 14, 2019, Mr. Baba shall file with the Court and serve on the Commissioner a response to the Commissioner’s two motions filed April 26, 2019.

Janet Ann Reuter & David Stovall, Docket 15641-17

(New York, Pro Se)

On May 1, 2019, the Commissioner filed a motion for entry of decision. The motion alleges that the parties have reached a basis of settlement and that counsel for the Commissioner sent to petitioners a proposed decision document effectuating that settlement, but indicates that petitioners have failed to return the decision document to counsel for the Commissioner. It is therefore

ORDERED that, if petitioners objects to the Commissioner’s motion for entry of decision, then on or before May 15, 2019, petitioners shall file with the Court and serve on the Commissioner a response to the motion, explaining why that motion should not be granted and a decision entered in this case.

Cross Refined Coal, LLC, Docket 19502-17

(Counsel for Both Parties in Chicago; Boston Trial Request)

On April 26, 2019, respondent filed a motion to compel (Doc. 50). It is

ORDERED that petitioner shall file a response by May 10, 2019, and that respondent shall file a reply by May 23, 2019.

Robert J. & Linda C. Houchin, Docket 27654-13

(Nevada; Counsel for Both Parties and Trial in Los Angeles)

In accordance with the parties’ joint recommendation in their status report filed April 29, 2019, it is

ORDERED that the undersigned judge no longer retains jurisdiction over this case and that this case is continued generally.

Joseph A. Insinga, Docket. 9011-13W

(New Jersey; Washington DC Trial)

(Petitioner Counsel in Memphis; IRS Counsel in Detroit)

 On April 26, 2019, petitioner filed a first amended reference list of redacted information (Doc. # 258). It is therefore

ORDERED petitioner’s first amended reference list of redacted information (Doc. 258), is sealed. It is further

ORDERED that the Clerk of the Court shall remove from the Court’s public record the first amended reference list of redacted information (Doc. 258), and that these documents shall be retained by the Court in a sealed file which shall not be inspected by any person or entity except by an Order of the Court.

Wanda M. Lugo, Docket 15028-18

(New York; Pro Se)

On May 1, 2019, the Commissioner mis-filed in this case a motion for extension of time (Doc. 10) that was obviously intended to be filed in another case. It is therefore

ORDERED that the Commissioner’s motion filed May 1, 2019 (Doc. 10), is stricken from the Court’s record in this case and shall not be viewable as part of this case.

Abdu-Shahid May, Docket 11654-18

(New York; Pro Se)

On May 1, 2019, the Commissioner mis-filed in this case a motion for extension of time (Doc. 12) that was obviously intended to be filed in another case. It is therefore

ORDERED that the Commissioner’s motion filed May 1, 2019 (Doc. 12), is stricken from the Court’s record in this case and shall not be viewable as part of this case.

What sort of day was it? “A day like all days, filled with those events that alter and illuminate our times… all things are as they were then, and you were there.” (If you were not a television viewer before 1972, you may not recognize that quotation from Walter Cronkite.) As this review demonstrates, a Tax Court judge in just one day may make a wide range of decisions –- for individuals and businesses disputing large amounts of tax and small ones; in collection due process matters; and even in whistleblower cases. Most of this work will not be found in published opinions and designated orders. What all of the cases have in common, though, is that each is the most important one before the Court, for the petitioner (and counsel, if any) involved.