Sleepless night

O sleep, O gentle sleep, nature's soft nurse, how have I frightened thee, that thou no more will weigh my eyelids down, and steep my senses in forgetfulness?

-- Shakespeare, Henry IV, Part 2, Act 3, Scene 1


O polish’d perturbation! golden care! That keep’st the ports of slumber open wide to many a watchful night!

-- Id, Part 2, Act 4, Scene 5


Unable to sleep, I went to my desk and did some research for a prospective law review article on taxation. It is now at the tedious stage where I keyword search the Internal Revenue Code and then make notes on the respective relevant sections.

This is by no means my first law review article. My last one is now under editorial review, and the target date for inking up the press is February or March 2007. At least two of my law review articles have been cited in published judicial opinions.

So now, having heard my son's alarm clock in the next room, I am looking out the window and realizing that it is 6:00 AM and the sun has risen (hiding behind the cloud cover, to be sure).

At this point it really doesn't pay me to get back to sleep. My schedule for today will not require me to be robust and alert, and maybe I can get in a nap this afternoon.

Tomorrow, however, is a different story. Tomorrow is my first day of class for the Fall semester, and I will need to be in top form. In teaching a class, there is a window of approximately 90 to 120 seconds during which the professor (or, for that matter, a grade school teacher) must (A) establish his/her authority; (B) inform the class of the overall lesson plan for the semester; and (C) make the students interested in learning the material. It isn't too difficult to do all of these things, but the semester will be a total washout if all three are not done.

Yesterday's Tax Court opinions are still in the "Today's Opinions" files instead of "Historic Opinions" files. The case of Flank v. Commissioner, Tax Court Summary Opinion 2006-134, will eventually be filed in the archive instead of the current, maybe in the next few hours.

After ruling on the various issues regarding a married couple's IRA distributions and the taxability thereof, the Tax Court then addressed the taxpayers' well-founded contention that the IRS " has rounded up or rounded down the amounts for the proposed adjustments to the return to prejudicially favor the IRS" in a manner contrary to the IRS's own regulations. The Court's decision sidestepped the issue, finding " even if petitioner is correct, the difference in each calculation is less than $1, and the impact on petitioners’ total tax is negligible."

On one hand, the Judge Dean appropriately applied the maxim "De minimis non curat lex" to this penny-ass matter. On the other hand, there is something wrong with the IRS getting away with contravening its own regulations to the detriment of the taxpayer.

It is noted that in Thommen v. Commissioner, T.C. Memo 1995-152, the Tax Court included $21interest in the taxpayer's gross income (though the taxpayer was using the so-called tax protester arguments and was sanctioned for doing so). And in Danner v. Commissioner, T.C. Memo 1992‑385, there was $36 unreported income as an item at issue.

Is the Tax Court too cozy with the IRS? Probably not! The Tax Court does tend to look at things objectively, and the fact that the IRS enjoys the presumption of correctness, while the taxpayer must prove each element of a claimed deduction or exclusion certainly skews the IRS's batting average in that tribunal. But the IRS, like any other administrative agency, needs to be kicked in the toochas once in a while or else it will get out of hand.

I think that Hizzoner passed up an opportunity to crack the whip against the IRS. The principle, and the damage to the public perceptions regarding the Tax Court's objectivity, are worth somewhat more than the Flanks' pocket change at issue here.

Okay, now to go get dressed. I have some appointments today.