Source: http://procedurallytaxing.com/happy-holidays-thanks-to-graev-iii/
Timestamp: 2019-02-23 15:38:42
Document Index: 727469161

Matched Legal Cases: ['§ 6751', '§ 7491', '§ 7701', '§ 6751', '§ 7491', '§ 6662', '§7491', '§ 7491']

Today (Dec. 22), Judges Halpern and Ashford issued a similar order to those issued yesterday by Judges Buch and Paris. The Judge Halpern order (which is actually dated Dec. 21 and is a designated order) is in Pourmirzaie v. Commissioner, Docket No. 25558-14. The Pourmirzaie case was tried on April 25, 2016, but has not yet been decided. The Judge Ashford order (which is dated today and is, by contrast, not a designated order) is in Gonzalez v. Commissioner, Docket No. 27298-14. The Gonzalez case was tried on May 16, 2016, but has not yet been decided.
Both orders recite the same timeline regarding Graev and other 6751(b) opinions and use some of the same text as in the Judges Buch and Paris orders from yesterday — suggesting that the Tax Court already has developed a template order for its judges to use in such pending, but post-trial, cases. Like the order quoted in the text of Keith’s post, the orders in the Judges Halpern and Ashford cases put coal in some IRS attorneys’ stockings, concluding:
ORDERED that respondent shall file a response to this Order by January 5,
2018, addressing the effect of section 6751(b) on this case and directing the Court
to any evidence of section 6751(b) supervisory approval that is in the record of this
case. It is further
ORDERED that petitioner may file a response to this Order by January 12,
2018, addressing the effect of section 6751(b) on this case. It is further
ORDERED that any motion addressing the application of section 6751(b) on
this case shall be filed by January 19, 2018. The parties are reminded that any
such “motion shall show that prior notice thereof has been given to each other
party or counsel for each other party and shall state whether there is any objection
to the motion.” Rule 50(a), Tax Court Rules of Practice & Procedure.
Judge Guy, in an order dated and posted December 22 in the DeValeria case (Docket No. 18396-16S) dealt with a case that had already been tried. A Small Tax Case, no less:
This case was tried in San Francisco, California, on September 26, 2017, and remains under consideration by the Court. On December 20, 2017, the Court issued its opinion in Graev v. Commissioner, 149 T.C. __ (Dec. 20, 2017), and issues addressed in that opinion may affect the resolution of the accuracy-related penalty determined by respondent in this case under IRC section 6662(a).
Under the circumstances, the Court will reopen the record in this case and set the case for a further trial. In lieu of a further trial, the parties may submit to the Court a comprehensive stipulation of facts related to the section 6662(a) penalty or a stipulation that sets forth the parties’ basis for settlement of that issue.
ORDERED that the record in this case is reopened. It is further
ORDERED that this case is set for further trial at a time and date certain of 11:00 a.m. on Tuesday, January 30, 2018, at the Federal Building and U.S. Courthouse, Room 2-1408, 450 Golden Gate Avenue, San Francisco, California 94102.
https://www.ustaxcourt.gov/InternetOrders/DocumentViewer.aspx?IndexSearchableOrdersID=247734
Judge Buch recognized today that it’s the holiday season that brings two short work weeks and at the end of the year, many IRS attorneys with “use or lose” annual leave are away from the office and will have many deadlines to meet when they return. So he issued this order in the Triumph Mixed Use Investments case (Docket No. 20412-14):
On December 20, 2017, the Court issued its opinion in Graev v. Commissioner, 149 T.C. No. 23 (2017) (Graev III). The following day, we issued an order asking the parties to address the effect of Graev III on this case. To allow more thorough consideration, it is
ORDERED that the deadlines set forth in the Court’s order of December 21, 2017 are extended by 14 days as follows:
Respondent shall file his response to the December 21, 2017 order by January 19, 2018;
Petitioner may file a response to the December 21, 2017 order by January 26, 2018; and
Any motion addressing the application of section 6751(b) on this case shall be filed by February 2, 2018.
( Similar orders were issued by Judge Buch in the Dynamo Holdings and Hendrickson cases.)
Meanwhile, Judge Ashford is churning out orders today with response dates of January 9 for IRS, and January 16 for petitioners. At least one of them (Totten, Docket No. 10691-14S) is a Small Tax Case with a pro se petitioner. The trial of that case was in May 2016.
Today, Dec. 28, two more nondesignated orders that were patterned on the other 6751(b) orders were issued in two different cases involving, in all, 12 dockets. Both cases were tried and awaiting decision. One order was in Rogers, et al., Docket Nos. 30586-09, et al. (5 consolidated dockets). The other was in Full-Circle Staffing LLC, et al., Docket Nos. 12883-15, et al. (7 consolidated dockets).
Yesterday, a similar nondesignated order was issued in Rademacher, Docket No. 30820-15.
There was also a Memorandum Opinion filed December 28 by Judge Wherry, who found that IRS followed the required procedures not once, not twice, but three times:
“The examiner who proposed the 40% gross valuation misstatement penalty the first time (and the 20% accuracy-related penalty in the alternative) received personal, written approval from her group manager. Likewise, the Appeals officer received personal, written approval from his team manager for the 40% gross valuation misstatement penalty (and for the 20% penalty that was shown on the notice of deficiency). And the senior counsel who pleaded affirmatively in respondent’s answer to the petition that petitioners are liable for the 40% gross valuation misstatement penalty received her associate area counsel’s personal, written approval, as evidenced by the latter’s signature on the answer filed in this Court. In sum, no matter which of these three instances was the initial determination of the 40% penalty, section 6751(b) was satisfied because each instance was approved in writing by an immediate supervisor.”
https://www.ustaxcourt.gov/USTCInOP/OpinionViewer.aspx?ID=11544
On Friday, December 29, the Tax Court website posted (let’s call these) a Graev III order by Judge Marvel regarding a case she tried in Houston more than two years ago. Her response deadline for both IRS and the petitioners is January 19; motions, if any, are due the following week, January 26. (Roth, Docket No. 30216-13.)
Judge Ashford on January 3 issued an order in Docket No. 27298-14 stating:
“On December 22, 2017, the Court issued an Order directing, inter alia, respondent to file a response, on or before January 5, 2018, addressing the effect of section 6751(b) on this case and directing the Court to any evidence of section 6751(b) supervisory approval that is in the record ofthis case.
“On December 29, 2017, respondent filed a Motion for Extension of Time requesting that the Court extend the time in which to file the response. According to the motion, respondent’s counsel is coordinating the response with respondent’s counsel’s National Office and in order to fully respond to the Court’s December 22, 2017, Order concerning the impact of Graev III on this case, requests to file the response on or before January 19, 2018. Respondent’s motion indicates that petitioner does not object to the granting of this motion.”
So Judge Ashford extended the date for the IRS response to January 19. Petitioner has until January 26 to respond, and any motion must be filed by February 2.
Just when you thought you had heard everything you need to know about Graev, Judge Holmes came up with this today, in an order in the Michael Jackson Estate case. Where the order uses italics for emphasis, I have capitalized:
The Court’s resolution of both of these issues may well be reviewed on appeal in this or other cases. The Court has learned of an additional consequence of Graev III that might be lurking in this case. Consider the language of the following sections:
§ 6751(b)(1) – “NO PENALTY UNDER THIS TITLE shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor ofthe individual making such determination or such higher level official as the Secretary may designate”;
§ 7491(c) – “[T]he Secretary shall have the burden of production in any court proceeding with respect to the liability of any INDIVIDUAL for any penalty, addition to tax, or additional amount imposed by this title”; and
§ 7701(a)(1) – “The term ‘person’ shall be construed to mean and include an INDIVIDUAL , a trust, ESTATE, partnership, association, company or corporation.”
The parties may wish to brief the issue ofwhether the Court’s ruling in Graev III that § 6751(b) compliance is part ofthe Commissioner’s burden of production extends to cases where the petitioner is a taxpayer but is NOT an individual. They should note that the Court traditionally applies § 7491(c) in estate tax cases, see, e.g., Estate of Richmond v. Commissioner, 107 T.C.M. 1135, 1145-46 (2014) (Commissioner bears burden of production on § 6662 penalty); Estate of Giovacchini v. Commissioner, 105 T.C.M. 1179, 1186 (2013) (Commissioner has burden of production on penalties), though we’ve never said why, see, e.g., Estate of Rector v. Commissioner, 94 T.C.M. 567, 574 n.11 (2007) (not deciding if §7491(c) applies to estate because record sufficient to meet any burden of production); Estate of Hartsell v. Commissioner, 88 T.C.M. 267, 269 n.6 (2004) (only assuming § 7491(c) applies because Commissioner met any burden of production).
ORDERED that in their briefs due later this year, the parties state whether they wish to address this issue and, if they do, what their positions are .