Thursday, December 28, 2017

Procedurally Taxing Blog Discussion of Two Designated Orders (12/28/17)

I write today on two Tax Court designated orders regarding cases of interest to enthusiasts of tax crimes.  In addition to writing opinions as T.C.'s or T.C.M.'s, the Tax Court issues orders in cases that are published on its web site.  The Tax Court's explanation, here,
The Tax Court provides two tools to assist the public in locating orders of interest: Today’s Designated Orders and Orders Search. Users of both of these tools are reminded that Tax Court Orders shall not be treated as precedent. Rule 50(f). 
Orders appearing on Today’s Designated Orders are designated by the individual Judges, Senior Judges, and Special Trial Judges who issued the orders. Designated orders may exclude routine, nonsubstantive orders such as scheduling orders or rulings on motions for extension of time. Designated orders are not a complete inventory of all orders of the Court nor are these versions official documents of record. Designation practices of Judges vary; some select more of their orders for posting here than others. 
In contrast, the Orders Search function contains all orders issued after June 17, 2011 by all Judges, Senior Judges, and Special Trial Judges of the Court, except it does not include computer-generated mailings of form orders, such as standing pretrial orders, standing pretrial notices, orders for amended petition & filing fee, orders for filing fee or waiver, and orders for ownership disclosure statement.
The Procedurally Taxing Blog, here, regularly writes on designated orders of general interest to tax procedure enthusiasts.  The PT Blog is an important resource for tax practitioners generally, but its discussion of designated orders is particularly helpful to identify items of interest in the designated orders.

Today, the PT Blog discusses, here, two designated orders of interest for criminal tax enthusiasts.  I won't write on these two orders because the author of the Blog entry does that well.  I will add, where I think appropriate, some information for context./

In Dicker v. Commissioner (Dkt 12007-16L Order dated 12/12/17), here, the Court denied the IRS summary judgment in a CDP proceeding involving restitution based assessment ("RBA") under the procedures whereby the IRS may assess criminal restitution "as if such amount were such tax" without further ado after the restitution award becomes final.  § 6201(a)(4)(A),here.  In this case, Dicker had been convicted for promoting a bull shit shelter for his work with BDO and Daugerdas.  See BDO Seidman Personnel Sentenced for Bullshit Tax Shelter Promotion (Federal Tax Crimes Blog 6/11/14), here.  Presumably the RBA was for the taxes of the tax shelter investors.  The issue addressed in the order is the adequacy of the CDP proceeding.  Specifically, there was some breakdown in the communications between the Appeals Settlement Officer ("SO") and the taxpayer's representative, who had represented the taxpayer in the criminal case.

The PT Blog discussion of Dicker ends with this conclusion
My advice to criminal tax counsel would be to appropriately limit a Form 2848 to that criminal representation—if that’s even necessary, as one could simply enter an appearance in the criminal tax case. I think a Form 8821 may have been more useful here, as that allows for information flow between the Service and another individual, without suggesting to the Service that the individual represents the taxpayer. If Ms. Gavioli’s role was limited to providing useful information, this would have been a safer option. If it wasn’t, then Mr. Dicker is in trouble.
In Soleimani v. Commissioner (Dkt. 8884-13 Order dated 12/12/17), here, which the PT author describes as a "page turner," the taxpayer sought to prove a foreign seizure loss (Iran) with forged Iranian documents.  After this skullduggery turned up in the course of the Tax Court case, "At the end of trial, respondent orally moved under Rule 41(b)(1) to conform the pleadings to the evidence, such that a fraud penalty under section 6663(b) could be asserted."  The Court denied the IRS's attempt to assert the civil fraud penalty.  I refer for the rest to the PT blog and the opinion.

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