What if you could live in a world where your bank not only integrates its services to suit your needs, but also allows you to control the experience from your smart device?
For many, banking seems to be driven by a client completing forms and then waiting for someone to tell them which product they qualify for. Living in a digital age, this is no longer good enough. People are expecting their banks to be more engaged, to be more efficient at what they do, and to be more in touch with the latest technologies. And this pressure is not only coming from millennials wanting to see this change. Most people across age groups are demanding it.
Imagine you are searching for a new property on your phone and see something you like. How easy would it not be to click on apply and have your banking app automatically take care of the rest? Using a virtual assistant, the app could manage the entire pre-approval process. It can even let you electronically sign the required (and automatically completed) digital forms based on your 'chat' with the assistant. What is more, the bank could notify you if the price of the property drops to be more in line with your budget.
Given the sophistication of artificial intelligence, data analysis, and other technologies, this example is not wishful thinking but completely possible. Increasingly, service providers are offering solutions designed to facilitate the omni-channel experience. Think things like chat bots, a single view of the customer, and reducing operational costs with real-time statistical analysis. And for customers, the best thing about this is they might never have to visit a branch again.
The reality is that if banks do not become more engaged, customers will move to fintechs. Customers do not care about the mechanics of how this integration (and engagement) occurs. They just want it to work. Already, banking apps are evolving to offer better integrated services and some banks are experimenting with cashless branches.
Imagine you are searching for a new property on your phone and see something you like. How easy would it not be to click on apply and have your banking app automatically take care of the rest?
It is all about providing customers with an experience that is as integrated as possible. If not, then the more agile fintech start-up will likely get the business. Most South African banks have begun the onboarding process with more engagement-friendly solutions. It is all about getting customers up and running as quickly as possible.
A key part of this is to move away from the silo approach of old and integrate the data of different departments like home loans, credit cards, wealth, and so on. By accessing the same customer information, banks can create that elusive single view of a customer and provide solutions specific to the requirements and needs of that individual.
This integration will inevitably lead to different line functions at a bank starting to talk to one another. Banking products should be personalised. Nobody wants a generic offering that caters to a 'market segment'. Instead, people want solutions that take their individual financial portfolio into account.
Understanding the customer becomes paramount. There is nothing stopping a bank from monitoring what happens on social networks and building a clearer view of who their customers are as individuals. It is all about performing real-time data analytics and embracing solutions that enable them to do so.
But the journey for each bank to become fully engaged will be just as unique as the customers being served. There is no one 'right' approach. Instead, a bank should grow in line with its brand. To do any less would be to alienate its customers and lose relevance in the race towards engagement.
Read more on the engaged bank and how to manage the financial health of consumers and businesses.


The Upromise World MasterCard gives cardholders the opportunity to earn cash back in a number of ways and up to a rather significant percentage. In addition, the overall cost to have the card is low compared to the cash that comes back to the cardholder.
The Upromise World MasterCard is a credit card that is designed to save money and make you some money back as you spend it. While all of the details seem rather involved, it is also rather simple.
First, you can use the card anywhere in the world where MasterCard is accepted. By doing this, you earn a certain percentage in cash back for every dollar that you spend. There are opportunities to earn more cash back on purchases, such as making purchases from eligible movie theaters. If you want to earn more, then use your card at an Exxon or Mobil location. If you like to dine out often, then you can use it at a participating Upromise dining restaurant. To get the most cash back, you can shop online through Upromise.com with your card. If you are a Upromise member and you use your card on Upromise.com, then you can double that cash back.
There is no limit to the amount of cash back that you receive. You can even start out with a bonus applied to the card to get you started after you make your first purchase. Every quarter, you can redeem your cash back in checks of at least $10. However, you are offered other redemption options, such as the ability to contribute to a Upromise 529 College Savings plan. You can also make deposits in a Sallie Mae High-Yield Savings Account. If you have a child or you have a loan of your own that is serviced by Sallie Mae, you can use your cash back to make payments toward that loan.
All of these redemption options give you the ability to benefit your future in some way. This is a way in which cardholders are able to put the card to work for them.
The application process is simple and you can apply for a fast decision. All you do is fill in your basic contact information, information regarding your employment and finances, if you would like to add another card to the account, if you would like to receive paperless statements instead of paper statements through the postal mail, and whether or not there are any card balances you would like to transfer. If there are cards with balances that you would like to transfer, you can specify on the application.
After you accept the terms and conditions, you will be delivered a decision. If you are approved, the card should arrive within two weeks.
There is no annual fee to this card and there is an introductory rate that lasts a specific period of time. Depending on the type of introductory offer, the interest is very low or there is no interest at all during the introductory period. This means being able to use the card and earn cash back without paying anything for the card.
Balance transfers operate the same way, as there may be no or very little interest in the balance transfer amount. However, there is a balance transfer fee that is either a minimum dollar amount or a percentage of the transfer amount, whichever is greater.
If you wish to do a cash advance, there is an APR that is associated with the amount of the advance and a cash advance fee. The cash advance fee is a percentage of the transaction or a minimum dollar amount, whichever is greater.
The next fee is the late payment fee. If a payment is made late, there is a fee assessed to the account and this fee can vary by state. When a payment is made late, a penalty APR is also put into effect. This penalty APR is much higher than the standard variable APR that goes into effect after the introductory period. If you are in the midst of your introductory period and the payment is made late, the period will come to an end and the penalty APR goes into effect. It can remain on the account indefinitely and will be applied to any balance that is on the card each billing period.
To avoid paying interest, you can pay off the entire balance within 23 days after the close of your billing period. This will not affect your ability to earn cash back. Instead, no annual fee and no interest means getting cash back for free.
When traveling abroad, there is a foreign transaction fee if you choose to use your card for purchases. The fee is a percentage of the transaction amount and it is charged per transaction.
If you make a payment and it is returned, there is a returned payment fee. If this returned payment causes the payment to be late, then a late payment fee will be charged to the account. If these fees would cause the card's balance to go over the credit limit, there will be no over the limit charge assessed to the card, as this card does not have such a fee. It cannot go over the limit on purchases and Barclaycard will not charge a fee for its own fees making the card go over its limit.
Overall, the fees on the card are rather standard. As for the APR, it is competitive. When combined with the cash back rewards and the ability to travel internationally with the card, it is a convenient card to have.
The Upromise World MasterCard is a card for those that want to get something back for using their card. Most people don't want high fees or strict requirements to get cash back. Instead, they want a card that is easy to manage.


text:
London 2012: Big businesses help small charities in Legacy for London project
Sarah Shaffi
Published: 11:19 AM May 9, 2012 Updated: 8:35 AM October 14, 2020
Some of the UK's best known companies have been helping small charities and social enterprises in the Olympic host boroughs.
Teams from Olympic sponsors adidas, BP, BT, Lloyds TSB Commercial Finance and Deloitte have been taking part in the Legacy for London project over the last two years.
Nine charities in the host boroughs have been mentored by teams of senior executives and received free business coaching, enabling them to develop their services and support more people.
Charities from Tower Hamlets which were mentored were Alcohol Concern Tower Hamlets, Kinetika Art Links International and Step Forward Tower Hamlets.
The project was run by Pilotlight, a charity which brokers free business coaching to small charities, and won the support of the London 2012 Inspire Programme.
Pilotlight's chief executive Fiona Halton was inspired to create the project by the Olympic motto - faster, higher, stronger.
She said: "We all know that charities are facing a tough time at the moment, with many badly affected by the cuts and recession trying to expand their services because of growing need.
"We saw the chance to bring together ambitious charity directors, who understand the problems local people face, with the Olympic partners and their outstanding business talent.
"We wanted the charities in the Olympic boroughs to grow faster, higher, stronger thanks to the Olympics."
Other charities involved in the project were Aanchal Women's Aid in Newham, Access Sport in Hackney, Age UK Waltham Forest, Home-Start Newham, New Choices for Youth in Newham, and StreetGames UK, which is based in Lambeth but works on projects in the East End.
Mike Sharrock, partnership director for BP London 2012, said: "This has been an amazing project and the BP people who volunteered have learned so much, as well as being able to pass on their own business skills in a very different environment to charities like HomeStart, Access Sport and Alcohol Concern, where they're leaving a real legacy.
"What made this project even more special was the response from other London 2012 partners who agreed to join in. It is a wonderful example of the inspirational power of the games."
Seb Coe, chairman of the London Organising Committee of the Olympic and Paralympic Games (LOCOG), said: "Thanks to this Olympic-inspired project, our business sponsors have rallied together to create this lasting legacy; allowing some of their talented directors to mentor these visionary charities to help people at the sharp end of life."

redpajama_set_name: RedPajamaCommonCrawl


text:
package org.socialsignin.spring.data.dynamodb.repository;

public class QueryConstants {

	private QueryConstants() {
	}

	public static final int QUERY_LIMIT_UNLIMITED = Integer.MIN_VALUE;

	public enum ConsistentReadMode {
		/**
		 * Use the default configured in the DynamoDBMapper
		 * @see com.amazonaws.services.dynamodbv2.datamodeling.DynamoDBMapperConfig
		 * @see DynamoDBMapper Configuration
		 *
		 */
		DEFAULT,
		/**
		 * Set consistent read mode to true
		 * @see Consistent Reads
		 * @see com.amazonaws.services.dynamodbv2.datamodeling.DynamoDBQueryExpression#setConsistentRead(boolean)
		 */
		CONSISTENT,
		/**
		 * Set consistent read mode to false
		 * @see Consistent Reads
		 *
		 * @see com.amazonaws.services.dynamodbv2.datamodeling.DynamoDBQueryExpression#setConsistentRead(boolean)
		 */
		EVENTUAL
	}

}

redpajama_set_name: RedPajamaGithub


Summer is in full swing in London. It has been record-breaking heat only this week has we seen some rain to cool things off. The heat has made it hard for me to train when I get home from work. I also find I need an additional water bottle each day to stay cool. How else have I been surviving?
As I mentioned, it is too hot to run when I get home from work. That means I am headed out after dinner. It is a bit of a no-no to exercise so close to bedtime though. Your endorphins will be flowing through your bloodstream, making it harder to relax for bed. I find taking a cool shower and having a cup of Higher Nature Performax Relax bedtime sachet helps relax me. The taste is very subtle and the active ingredient, theanine, will calm you. Magnesium is also a powerful relaxation aid. The ritual of having a hot drink is a big part of British culture and this routine will also let your body unwind.
We have also been making our own popsicles as an after-supper treat by mixing plain yogurt with a splash of orange juice and honey to taste. You could also add in a few small pieces of fruit or freshly chopped mint. Although it isn't quite as satisfying as Ben and Jerry's Phish Food, it is still refreshing and sweet.
Since we have yogurt in the fridge for the popsicles (I gave up a daily yogurt in my lunch after my first round of the #Whole30), i have used the leftovers for protein smoothies as a workout recovery drink instead of a shake. This is something we did a lot in Michigan when we had more counter space to leave out the blender. We have fallen out of practice in London as kitchen counter top is a valuable resource but I am hopeful the blender will be back in action as we organize our new kitchen.
Here is the basic recipe for which you can make more of a treat by adding raw cocoa.
This makes 2 servings. The Higher Nature fiber is textured so you want to be sure to blend well (I tried with plain old milk in a protein shaker). Remember with a smoothie you want to take your time & enjoy it. The blended fruits have released their nutrients all at once so you will not take long to digest it and might feel hungry again soon after. Finally, the protein will assist your muscles as they repair.
The last thing to do remember in this heat is to stay hydrated. Ideally you would be adding High5 Zero Electolyte tablets or nuun tablets with electrolytes to your water but these can be quite expensive. Robinsons's now have a portable squash squeeze bottle (appropriately names SQUASH'D) that can easily fit in your bag or a desk drawer. Squirt some into your glass to add flavor as you re-hydrate without any added sugar. Makes 20 servings so should last you a month.
How are you staying cool this summer without sacrificing your workout regime? Leave a comment below and let me know.
Higher Nature sent me complimentary samples of their products. All opinions are honest and my own.


text:
The Intelligence Men is a 1965 comedy film starring the British comic duo Eric Morecambe and Ernie Wise. In the US, it was retitled Spylarks. It is subtitled "M.I.5 plus 2 equals 0".

The film was successful enough to enable Morecambe and Wise to make two further films, That Riviera Touch and The Magnificent Two.

Plot
Eric (Eric Morecambe), in his London coffee bar, is happily serving black coffee to a sinister-looking man (Tutte Lemkow) when the man tries to persuade him to remember a tune. Unfortunately, Eric is tone-deaf. Ernie Sage (Ernie Wise) enters the coffee bar and Eric tries to get him to identify the tune, without much success. Eventually, Sage realises that this could be something to do with a forthcoming visit by a Russian trade delegation and an assassination attempt by an organisation known as "SCHLECHT" (a parody of SPECTRE from the James Bond films; the word is German for "bad" or "evil", although there is little evidence of German involvement to sabotage this mission).

He reports this to his superiors in Military Intelligence (although he is little more than an office-boy), and they reluctantly agree that only Eric, having heard the tune, will be able to lead them to the centre of the plot. Eric is persuaded to pose as a British agent – the recently deceased Major Cavendish – who had managed to infiltrate SCHLECHT. After a few set-piece comedy interludes, the tune is identified and the plot switches to a performance of Swan Lake at the projected venue for the assassination, where the star Russian ballerina Madame Petrovna (April Olrich) is in grave danger.

This section provides some of the funniest moments of the film: for example, Eric, masquerading as a Russian, adopts a broad Scottish highland accent; and during the ballet performance itself, Eric and Ernie, dressed in Egyptian costumes, get mixed up in the "Dance of the Little Swans". Finally, however, the villain is unmasked and all ends happily.

Cast
Eric Morecambe - Eric
Ernie Wise - Ernie Sage
William Franklyn - Colonel Grant
April Olrich - Madame Petrovna
Gloria Paul - Gina Carlotti
Richard Vernon - Sir Edward Seabrook
David Lodge - Stage Manager
Jacqueline Jones - Karin
Terence Alexander - Reed
Francis Matthews - Thomas
Warren Mitchell - Prozoroff
Peter Bull - Philippe
Tutte Lemkow - Seedy SCHLECHT Agent
Brian Oulton - Laundry Basket Man
Michael Peake - Sinister Stranger

Reception
Critic Leslie Halliwell awarded the film no stars, describing it as an "inept and rather embarrassing big-screen debut for two excellent television comedians".

The film was one of the 12 most popular movies at the British box office in 1965.

Notes

External links

Eric And Ern - Keeping The Magic Alive  **Book, Film, TV Reviews, Interviews**

1965 films
British spy comedy films
Cold War spy films
1960s spy comedy films
Films shot at Pinewood Studios
Films directed by Robert Asher
Morecambe and Wise
Films set in London
1965 comedy films
Parody films based on James Bond films
1960s English-language films

redpajama_set_name: RedPajamaWikipedia


issued from : O. Tanaka in Publs Seto Mar. Biol. Lab., 1964, XII (1). [p.68, Fig.207].
Female: a, habitus (dorsal); b, forehead (left lateral side); c, Md; d, Mx1; e, Mx2; f, Mxp; g, exopod of P1; h, P5.
Nota: The urosome segments and furca are in the proportional lengths as 45:10:24:21 = 100. A1 exceeds the end of furca by distal 3 segments. Furcal rami 1.4 times as long as wide.
Male: i, P5. Nota: The urosome segments and furca are in the proportional lengths as 21:16:13:13:13:24 = 100. Left A1 exceeds the end of the furca by distal 5 segments. The furcal rami about 2 times as long as wide.
issued from : J.M. Bradford-Grieve in The Marine Fauna of New Zealand: Pelagic Calanoid Copepoda. National Institute of Water and Atmospheric Research (NIWA). NIWA Biodiversity Memoir, 111, 1999. [p.49, Fig.21].
Female: A, habitus (dorsal); B, idem (lateral left side); C, Md (mandibular palp); D, Mx1; E, P1; F, P5.
issued from : O. Tanaka & M. Omori in Publs Seto Mar. Biol. Lab., 1974, XXI (3/4). [p.204, Fig.5].
Male: a, forehead (dorsal), rostrum (underneath); b, last thoracic segment and urosome (dorsal); c, geniculated segments of left A1; d, P5. Nota: The urosome segments and furca are in the proportional lengths as 23:18:16:11:11:21 = 100. Prosome and urosome are in the proportional lengths as 75:25.
issued from : O. Tanaka & M. Omori in Publs Seto Mar. Biol. Lab., 1974, XXI (3/4). [p.198, Fig.1,h].
Female (from Izu region): h, mandibular teeth.
issued from : G.D. Grice & K. Hulsemann in J. Zool., 1965, 146. [p.248,, Fig.18, a].
Female (from NE Atlant.): a, P1 (endopod omitted).
Nota: P1 with a row of spinules near the base of each external spine on the exopod (in 3 specimens); their presence may be variable, since the one female found from Madeira Is. did not have these spinules.
Issued from : G.O. Sars in Résult. Camp. Scient. Prince Albert I, 69, pls.1-127 (1924). [Pl.LXXXV, figs.1-16].
Female: 1, habitus (dorsal); 2, idem (lateral left side); 3, forehead (lateral); 4, anterior part head (ventral); 5, rostrum; 6, A2; 7, Md; 8, Mx1; 9, Mx2; 10, portion of distal seta of Mx2 (enlarged); 11, Mxp; 12, P1; 13, P2; 14, P3; 15, P5; 16, urosome (dorsal).
Issued from : W. Giesbrecht in Systematik und Faunistik der Pelagischen Copepoden des Golfes von Neapel und der angrenzenden Meeres-Abschnitte. – Fauna Flora Golf. Neapel, 1892. Atlas von 54 Tafeln. [Taf.39, Fig.46].As Augaptilus bullifer.
issued from : T. Park in Biology of the Antarctic Seas, XXII. Antarct. Res. Ser., Washington, 58. [p.23, Fig.15].
Female: a-b, habitus (dorsal and lateral, respectively); c-d, forehead ventral and lateral, respectively); e, urosome (dorsal); f, genital segment (lateral); g, A2; h, Md; i, Md (biting edge).
Nota: Rostrum consisting of 2 long filaments. Urosome about 38 % length of prosome. Genital segment about 52 % length of urosome. A1, Md, Mx1 and Mx2 are all with reduced number of setae.
issued from : T. Park in Biology of the Antarctic Seas, XXII. Antarct. Res. Ser., Washington, 58. [p.24, Fig.16].
Female: a, Mx2; b, Mxp; c-g, P1 to P5 (anterior views).
Issued from : W. Giesbrecht in Systematik und Faunistik der Pelagischen Copepoden des Golfes von Neapel und der angrenzenden Meeres-Abschnitte. - Fauna Flora Golf. Neapel, 1892. Atlas von 54 Tafeln. [Taf.28 , Fig.6 ]. As Augaptilus bullifer.
Female: 6, A1 (distal segments).
Issued from : W. Giesbrecht in Systematik und Faunistik der Pelagischen Copepoden des Golfes von Neapel und der angrenzenden Meeres-Abschnitte. - Fauna Flora Golf. Neapel, 1892. Atlas von 54 Tafeln. [Taf.28 , Fig.21, 24 ]. As Augaptilus bullifer.
Female: 21, Mx1 (posterior view); 24, Md (mandibular palp).
Le = outer lobe; Li = inner lobe; B = basipodite; Ri = endopod; Re = exopod.
issued from : H. Matsuura, S. Nishida & J. Nishikawa in Deep-Sea Res. II, 2010, 57. [p.2106, Fig.10, e-f].
From Sulu Sea: e, SEM image of button setae on Mx2 and Mxp; f, SEM image of mandible blade.
issued from : H.B. Owre & M. Foyo in Fauna Caribaea, 1, Crustacea, 1: Copepoda. Copepods of the Florida Current. 1967. [p.86, Fig.577].
Female (from 15°00'N, 67°05'W): 577, exopod of P1.
issued from : J.M. Bradford-Grieve, E.L. Markhaseva & C.E.F. Rocha & B. Abiahy in South Atlantic Zooplankton, Edit. D. Boltovskoy. 1999. Vol.2. Copepoda. [p.1036, Fig. 7.245].
Nota: Outer lobe 1 of Mx1 with 4 setae; Exopod with 2 seare; inner lobe 2 absent; inner lobe 4 with 1 seta; Endopd absent.
issued from : H. Matsuura, S. Nishida & J. Nishikawa in Deep-Sea Res. II, 2010, 57. [p.2104, Fig.7].
Vertical distribution of Euaugaptilus bullifer in the Sulu Sea, compared with those in the Celebes Sea.
According to Sewell (1947, p.231) Giesbrecht has noted the presence of rows of small spinules around the articulations of the marginal spines of the exopodal segments of P1. In this character bullfer differs from all other species of the genus.


Make connecting with students personal.
Build and deploy powerful moments of mobile engagement across the entire student journey with the platform built to support personalized messaging and rich interactive content for a mobile-first world.
Our campaign orchestration software allows for point and click creation of mobile-first student experiences combined with cross-channel messaging that's centered around a unified inbox. Start crafting personalized mobile engagement experiences across the student journey.
Convey your institutional strengths to prospective students.
Deliver timely resources to current students.
Build lifelong affinity with your alumni.
Deploy the first higher education focused messaging platform that enables students to choose their preferred mobile messaging channel while allowing team members to manage conversations across all channels from one unified inbox.
Catalog your existing mobile-ready content or quickly create new mobile content experiences using the native authoring tools in the platform.
Integrate directly with your CRM, SIS, LMS to bring over the populations you've already designed, or blend it with the engagement data captured on the platform to craft the most personalized experiences.
Pioneers you've been dreaming of.
Full Measure Education helps institutions solve problems through the entire student journey. Our team of specialists support our partners to develop and deliver strategies that strengthen brand affinity, engagement and enrollment. With Full Measure Education you have the confidence to maneuver the mobile landscape and make a difference.
Taking a test drive is easy.
Schedule today to start preparing for tomorrow.


text:
Sensational Look at World War I
by James Colt Harrison
They Shall Not Grow Old is Peter Jackson's smashing film to start off the new year! Never has a documentary film caused such a stir among film buffs around the world. Jackson's wide-eyed look at World War One gives viewers a reason to weep as well as to rejoice over the sacrifices the young men made in Europe during the early part of the 20th Century.
Jackson has already swept the early awards events at BAFTA and earned many other nominations for Best Documentary, including the London Critics Circle Film Awards nomination as Best Documentary of the Year, and the Golden Reel Award from the Motion Picture Sound Editors, USA. It should clean up at many more awards ceremonies before the year is ended.
"This is not a story of the First World War, it is not a historical story, it may not be entirely accurate but it's the memories of the men who fought---they're just giving their impressions of what it was like to be a soldier," said Jackson at the film's premiere.
The film is an account of the real events during the war, from the viewpoint of the actual soldiers who were in the fight. Jackson and his crew waded through more than 600 hours of interviews from the Imperial War Museum and the BBC in London. Audio interviews of men who had fought in the war that had been recorded in the 1950s while they were still alive were used and cut into pertinent sections of the film. There is no formal "narration" in the film. Only real thoughts and opinions of real soldiers were interspersed into the scenes where appropriate. That gives the film a real, honest look at the conditions and adversities the soldiers endured.
This documentary has an immediate impact on the viewer. These are actual men, some only boys, with real faces, freckles and warm smiles. Some of the boys were only 16 years old, and the average were 17 and 18 at the time they joined the war. You are walloped by the fact that so many of these boys faced their first battle and their instant death. Such a waste!
Jackson and his crew waded through miles of nearly 100-year old film from the archives. Through the magic of very talented technicians, they restored the film to modern day 24 frames per second through the projectors to alleviate the old-time "jerky" silent film look. Using modern day computers, these ingenious and talented people turned the old silent black and white film into 3D (certainly a miracle!) and then colorized it. In an interview, Jackson explained, "The men saw a war in color, they certainly didn't see it in black and white. I wanted to reach through the fog of time and pull these men into the modern world, so they can regain their humanity once more."
It is not easy to sit through many scenes of the carnage caused by the explosives and the gas attacks. It makes one very sad to see these young boys slaughtered on the field. It is shaking to realize that the young, happy faces we saw in earlier scenes were now fodder for the guns of the invading forces.
The film ends up as a magnificent achievement for Peter Jackson and his film associates. It reminds us "war is hell" and that we must never endure such atrocities again. Go see this documentary! It's an astounding look at history close up and in three dimensions, making it all that more realistic.
NOTE: Peter Jackson is known for his Lord of the Rings features. From his first film made in 1987 to 2018, he has been nominated for 43 Oscars® and has won 20 Academy Awards®.
(Released by Warner Bros. and rated "R" for disturbing war images.)


Badi Chura is an instant side dish, with a crispy and tasty feel. It is easy to make provided you have stock of the ready -made badi with you. Now-a-days households prefer to purchase badi from the local market rather than preparing it at home, which is cumbersome. For those who haven't heard about it, badi is sun-dried lentil and tastes great if added to selected traditional dishes. But here we have a standalone dish of Badi. Tastes great, if served with the Pakhal (rice soaked in water).
First of all fry the badi with oil on a pan, till it becomes golden brown. Then put it on a blotting paper or a tissue paper, so that the excess oil is soaked out. Crush the badi using your fingers, so as to turn the badi into very small and coarse pieces. Then put a little oil on a pan. Add the cumin seeds (jeera) and curry leaves till the jeera flutters. Now add the chopped garlic, green chillies and onion and stir for about two minutes. Then add the crushed badi and stir further for about one minute. Your Badi Chura is ready to be served.
Rimpy Yadav - "Very easy to prepare and delicious "
Vikas Kar - "Badichura, saga n pakhal - those yummy days of mom's cooking.....missing a lot. "


Sign up to receive exclusive content updates, fashion & beauty tips!
If you made it to this page, you're probably wondering what the I Travel Too movement is all about, right?
Imagine flicking through a brochure or scrolling through a website and seeing only straight sized people. As someone with body confidence issues, it's hard not to feel as though you're going stick out like a sore thumb throughout your entire holiday. You won't want to go to the pool, you'll feel self-conscious on excursions and a night out would feel like a nightmare. Personally I felt have felt all of these things, and more, when travelling.
This movement is designed to change that.
A couple of months ago I did research into the travel industry to find out just how inclusive their marketing efforts are when it comes to plus size representation. I looked at their websites, brochures, videos and social media channels.
The results, as expected, showed that travel appears to be strictly for slim, white, happy people.
In fact, 95% of materials I researched include NO plus size people at all.
I knew that as just one person I couldn't make the waves I wanted to. and that's where I came up with the I Travel Too movement.
I knew there were people out there just like me, loving life, living to their full potential and travelling the world.
Following the above post, further research showed that 35% of people travelling consider themselves to be plus-size, so I came up with the campaign to show brands that they're alienating a large portion of their target audience by excluding us from their marketing materials. We're just as happy, just as fun and just as amazing as anyone else.
So, how can you get involved Too?
REMEMBER, THE MORE NOISE WE MAKE, THE MORE LIKELY WE ARE TO SEE CHANGE.


text:
District Court in Rewwer Holds Improperly-Signed Timely Forms 843 Can be Informal Refund Claims
February 17, 2022 by Keith Fogg Leave a Comment
The recent decision in Rewwer v. United States, 1:20cv495 (S.D. Ohio 2022) regarding a misfiled refund claim later corrected reaches the opposite conclusion from the Court of Federal Claims' recent decision in Dixon v. United States, (Ct. Fed. Cl. 2022) (Dixon 2) (blogged here) and contradicts the decision in Fulham v. United States, 1:20-cv-05871 (N.D. Ill. 2021), that I blogged about on December 17, 2021, which took a very narrow view of what could pass muster as an informal claim. In each case the taxpayer did not properly file the original claim. Rewwer more or less combines the mistakes made in Fulham and the Dixon cases, yet the taxpayer in Rewwer moves on to the merits while the taxpayers in Fulham and Dixon can't get out of the starting gate. Another recent case, Deeb v. United States, 1:20-cv-01456 (N.D. Ga. 2022), doesn't concern itself with whether the form is correct but dismisses on variance. Credit to Carl Smith for staying on top of these issues and providing much of the language for this post.
In Fulham, the taxpayer filed a Form 843, seeking a refund of income taxes. After not getting a response, he filed a refund suit. While in court, he learned that he should have used a Form 1040X, so he filed a Form 1040X with the court using PACER, not with the IRS. The court dismissed the case for lack of jurisdiction (LOJ) because the Form 843 was the wrong form, and the right form was not filed with the IRS before suit began.
Dixon 1
In Dixon 1 (at 147 Fed. Cl. 469 (2020)), the taxpayer filed Forms 1040X with the IRS, but those forms were signed for the taxpayer by his attorney, John Castro, who held a POA, but not one entitling him to sign tax returns for the taxpayer. The signature on the taxpayer signature line was hard to read, and the IRS did not realize until the first Dixon case was in court that Castro had signed the Forms 1040X. Prior to the suit being brought, the IRS had reviewed the claims and denied them on the merits. The Court of Federal Claims (CFC) held that the lack of signatures from the taxpayer on the Forms 1040X was fatal to jurisdiction because the requirements to sign and to verify under penalties of perjury were statutory and not waivable. The court distinguished the Supreme Court's opinion in Angelus Milling Co. v. Commissioner, 325 U.S. 293 (1945), which held that the IRS could waive the non-statutory claim specificity requirement by rejecting a claim on the merits. The Dixon court said that the signature and verification requirements are statutory and not waivable.
The Dixon 2 case arose after Mr. Dixon went back and properly signed identical Forms 1040X to the ones originally signed by Mr. Castro and filed them with the IRS. They were filed, however, after the statute of limitations for refund claims expired. When the IRS did not allow the corrected refund claims, Mr. Dixon then brought a new CFC refund suit on the new Forms 1040X, where he argued that the original Forms 1040X were informal claims that were perfected by the corrected Forms 1040X, so the corrected Forms 1040X were deemed to relate back to the originals for purposes of the timely filing requirement. In the Dixon 2 opinion, the CFC again dismisses for LOJ, holding that the improperly-signed Forms 1040X cannot constitute informal claims because of the lack of the taxpayer's signature and compliance with the verification requirement.
Rewwer
Rewwer presents a combination of facts from both the Fulham and Dixon cases. In Rewwer, the taxpayers timely filed Forms 843 with the IRS for a few years, which the IRS considered on the merits, granting one and denying two. The Forms 843 were signed on the taxpayer signature lines by a holder of a POA, as "[taxpayer] POA". During consideration of the claims, the IRS told the taxpayers that Forms 843 were not the right forms, so the taxpayers then submitted Forms 1040X in replacement. The Forms 1040X were not properly signed and verified by the taxpayers, either. The Forms 1040X were filed after the 3-year SOL under 6511 had expired. After two Form 1040X claims were disallowed, the taxpayers brought suit in district court. Only then did the taxpayers learn that the Forms 1040X were not properly signed, so the taxpayers prepared new, identical Forms 1040X and filed them with the IRS during the refund suit. The court rejected an IRS motion to dismiss, finding the Forms 843 to be informal claims for refund that had been timely filed, even though on the wrong form and with the wrong person signing and verifying. Here's a quote from the Rewwer opinion:
An informal claim must have 'a written component . . . and should adequately apprise the Internal Revenue Service that a refund is sought and for certain years.'" Estate of Hale v. United States, 876 F.2d 1258, 1262 (6th Cir. 1989) (quoting American Radiator & Standard Sanitary Corp. v. United States, 318 F.2d 915, 920 (Ct. Cl. 1963)). "[T]he writing should not be given a crabbed or literal reading, ignoring all the surrounding circumstances which give it body and content. The focus is on the claim as a whole, not merely the written component." Id. Accord Wilshire v. United States, No. 1:07-CV-00377, 2008 WL 4858256, at *1 (S.D. Ohio Nov. 10, 2008) (two years of oral and written communications from the executor of the taxpayer's estate, along with a copy of the will and original tax return were sufficient to constitute a valid informal claim for a refund).
The Rewwer court also discussed a Sixth Circuit decision, Thomas v. United States, 166 F.3d 825, 831 (6th Cir. 1999), in which that court addressed the specific issue of Form 843 as an informal claim, holding:
the "Forms 843" dated November 1, 1995 are sufficient administrative claims. Although filed on the wrong form, the "Forms 843" dated November 1, 1995 put the IRS on notice. This fact is evidenced by the corresponding IRS rejection letters dated June 27, 1996, which refer Thomas to the IRS' initial examination of his tax returns. Therefore, the IRS was aware of the nature of Thomas' claims.
In Rewwer, the court based its decision on the totality of the facts. It found that:
the IRS understood that Plaintiffs were seeking a refund, even though the proper form was not used. The Form 843s which were submitted made it clear which years were being claimed
The court described the information in the Form 843 and explained that in the correspondence back and forth between the IRS and the taxpayer that followed the filing of the Form 843,
there is no indication that the IRS did not understand Plaintiffs' request. Rather, the IRS asked for more time to conduct research, sent the claims to the Cincinnati Service Center for processing, and at one point, actually appeared to allow the requested adjustment for tax year 2007. Moreover, the IRS allowed the full amount of Plaintiffs' claim for tax year 2008, which was also filed on Form 843.
The Rewwer court then quoted from Angelus Milling, where the Supreme Court stated:
If the Commissioner chooses not to stand on his own formal or detailed requirements, it would be making an empty abstraction, and not a practical safeguard, of a regulation to allow the Commissioner to invoke technical objections after he has investigated the merits of a claim and taken action upon it.
The Rewwer court also found that any deficiencies in the informal claim were cured by the filing of the formal claims. The Court concludes that the IRS should be estopped from asserting this formal requirement since it waived strict compliance until Plaintiffs filed their claim here.
Note the use of estoppel. Only non-jurisdictional claim processing rules are subject to waiver, forfeiture, and, in some cases, estoppel and equitable tolling. Implicit in the court's holding is that the signature and verification requirements are not jurisdictional and are subject to waiver, forfeiture, and estoppel.
Deeb
One more case presenting this issue has recently come out, Deeb v. United States, 1:20-cv-01456 (N.D. Ga. 2022). He sought refunds of income tax deficiencies and accuracy-related penalties which he had paid for 2010 and 2011. For the 2010 year, the court cites Dalm for the proposition that a late-filed refund claim is a jurisdictional defect to a refund suit, but then inconsistently grants an IRS merits motion for summary judgment for 2010 because the refund claim was filed late. Of course, if Dalm is the law, the 2010 year should have been dismissed for LOJ. For the 2011 year, the court finds a variance between the refund claim and the refund suit and so doesn't allow the taxpayer to contest certain non-travel disallowed business expenses. The court (citing precedent) calls the variance doctrine jurisdictional, though this is not necessarily the case. No court I know of has discussed whether variance is still jurisdictional.
The court then goes on to rule on the deductibility of certain travel expenses and finds them not deductible for reasons of the taxpayers not being away from home (a tax home issue) and substantiation. The court grants summary judgment to the IRS on these travel expenses. The court finds the accuracy-related penalties to apply because the taxpayers made no separate contest of the penalties beyond arguing that the travel expenses were deductible.
The claim was filed on a single Form 843 covering both years and covering both penalties and income taxes. There is no discussion in the opinion that the Form 843 would not be the right form (other than possibly for the accuracy-related penalties). Deeb shows that, at least for some courts, Form 843 can at least constitute an informal claim that can be perfected prior to suit when a Form 1040X is filed after the SOL has passed. In Deeb, the Form 843 was never perfected by the filing of Forms 1040X. The IRS did not argue that he had filed the wrong claim form and did not move for dismissal based on lack of jurisdiction. What seem like odd rulings from the court based on the other cases litigated probably flowed from the arguments the court received (and did not receive).
Filed Under: collateral estoppel, Federal Courts - Jurisdiction, refund claim, Variance
Perkins Case Raises Variance and Issue Preclusion In Context of Taxation of Native Americans
June 23, 2020 by Leslie Book Leave a Comment
The case of Perkins v United States raises interesting procedural issues, including collateral estoppel (also known as issue preclusion) and variance. Earlier this month a federal district court judge adopted the magistrate judge's recommendation to deny the government's motion for summary judgment in a refund suit involving a Native American tribe member who along with her husband ran a trucking and gravel extraction business.
The magistrate's recommendation situates the dispute:
The federal income taxation of American Indians is not a sexy topic." John Lentz, When Canons Go to War in Indian Country, Guess Who Wins? Barrett v. United States: Tax Canons and Canons of Construction in the Federal Taxation of American Indians, 35 Am. Indian [pg. 2018-5250] L. Rev. 211, 211 (2011). Neither is gravel. Yet the two topics have come together in this case to present a question that no prior case has had to answer directly. When Indians extract gravel from Indian land through an Indian-owned sole proprietorship, is the resulting income exempt from federal income tax based on treaties that promise the "free use and enjoyment" of land or protection from "all taxes"? And even if the Court answers in the affirmative, have plaintiffs Fredrick Perkins ("Fredrick") and Alice J. Perkins ("Alice") made enough of a showing of business income and expenses that treaty protection would make a practical difference on their 2010 federal income tax return?
The substantive issues relate to the Canandaigua Treaty and the Treaty of 1842. Native Americans, like other citizens, are subject to tax on income unless a treaty provides otherwise. The Perkins and the IRS have been fighting about whether the treaties exempt income they earned in their gravel business in 2008, 2009 and 2010. The 2008 and 2009 years were the subject of a deficiency case in Tax Court. In 2018 the Tax Court, in a reviewed opinion that generated a dissent by Judge Foley, held that the treaties did not exempt their income from the gravel business from US income tax. The Perkins have appealed that decision to the Second Circuit.
The 2010 year is the subject of a refund suit in federal court in New York. The magistrate's recommendation, adopted by the district court judge last month, explicitly disagrees with the Tax Court's analysis and finds that the treaties do provide an exemption for the income though the taxpayers' entitlement to a refund awaits a jury trial that would establish the amount of tax exempt gravel income and allocable expenses.
This creates the somewhat odd situation where two different courts have reached differing views on the same substantive issue with respect to the same taxpayer.
Rather than dig into the substantive treaty issue in this post I will discuss the procedural issues that last month's federal district court opinion raises.
Issue Preclusion (Collateral Estoppel)
In federal district court, the government pointed to the Tax Court decision in its favor. In doing so, the government argued that the taxpayers should be prevented from relitigating the same issue, basing its argument on collateral estoppel. That doctrine prevents parties from relitigating an issue that has been previously litigated and subject to a final determination. The district court disagreed, noting that there has yet to be a final decision, given that the Perkins appealed the Tax Court decision and that the decision "does not become final until a petition for certiorari is denied, the time to file such a petition expires, or the Supreme Court issues a mandate."
In addition, the district court noted that the magistrate's recommendation preceded the Tax Court opinion, and collateral estoppel prevents litigation in a subsequent case.
One other procedural issue in the case warrants highlighting. In objecting to the magistrate's report, the government raised variance. The variance issue arose because during discovery the government established that the Perkins' failed to report fully gross receipts from the part of the business that the parties agreed was not covered by the treaties' exemption. The Perkins responded by acknowledging the underreporting but also establishing that they underclaimed expenses relating to the taxable portion of the business.
As a refresher, the variance doctrine means that the argument raised in a refund suit must have been made in the claim. As the district court noted, the "variance doctrine does not require exact precision; if the issue raised in court is derived from or is integral to the ground timely raised in the refund claim, it `may be considered as part of the initial ground." (internal cites omitted).
The refund claim the Perkins submitted focused on the application of the treaties and whether the treaties exempted a portion of their income from the gravel business:
As enrolled members of the Seneca Nation of Indians (the "Nation"), the taxpayers have been given permission by the Nation to sell gravel from [the] property on the Nation's territory, in exchange for royalty payments made to the Nation. Under the Supremacy Clause, the [IRS] may not tax income derived directly from the land protected by federal treaties. The taxpayers correctly reported these sales as exempt from federal taxation. The IRS, however, determined the income to be taxable. Taxpayers have paid the taxes and now seek a refund.
In rejecting the government's variance argument, the district court emphasized that the Perkins' were not basing their claim to a refund on their entitlement to deduct expenses, and they had properly teed up the treaty issue in their claim:
Cutting through all the back and forth, the crux of the plaintiffs' claim is that their gravel income was improperly taxed. That issue was fully presented in their refund claim to the IRS. The IRS had a full opportunity to investigate all aspects of their claim for a refund; as the plaintiffs observe, however, the IRS chose not to "examine the 2010 income or business expenses, and did not request or review any receipts, statements, workpapers, or other records."
Because the plaintiffs' theory as to why they are entitled to a refund has not changed, their claim is not barred by the variance doctrine. And the fact that the IRS has now come up with a new reason why the plaintiffs were taxed in the correct amount (or even less than they should have been) does not change that.
While the Perkins' claim did not identify their entitlement to deduct expenses, the expenses themselves were not the reason why the Perkins' claimed to have made an overpayment:
Stated another way, the plaintiffs are not now alleging a new reason why they are entitled to a refund; rather, they are responding to the defendant's argument why they are not. The plaintiffs claimed that they were due a refund for reason A. The defendant responded that even if the plaintiffs were correct about A, they had no claim because of B. The plaintiffs then said that the defendant was wrong about B because of C. That does not mean that the plaintiffs are raising A and C in support of their claim; rather, they are raising A and using C as a response to defense argument B. That is not a variance by any definition.
The longstanding dispute for the 2010 year now moves to trial. For the 2008 and 2009 years, the Second Circuit heard oral argument earlier this spring. The earlier years involved deficiencies of hundreds of thousands of dollars. The 2010 year involves just under $7,000. The disparity in amounts at issue likely explains why the Perkins decided to bifurcate the cases, as the Flora full payment rule likely left Tax Court as the only forum for 2008 and 2009. As a practical matter, the outcome of the live Second Circuit case will control whether the treaties promise of the "free use and enjoyment" of land insulates the Perkins from income tax on the earnings from their gravel extraction business.
Filed Under: collateral estoppel, Variance
False Return Conviction Provides Basis for Collateral Estoppel to Prevent Discharge
April 21, 2017 by Keith Fogg 1 Comment
For a brief period the Tax Court treated a conviction for filing a false return, IRC 7206(1) as the basis for sustaining the civil fraud penalty using collateral estoppel. The period ran from the decision in Considine v. Commissioner, 68 T.C. 52 (1977) to its reversal in Wright v. Commissioner, 84 T.C. 636 (1985) (reviewed). In the recent unpublished bankruptcy appellate panel (BAP) case of Terrell v. IRS, BAP No. WO-16-007 (Bankr. 10th Feb 17,2017), the 10th Circuit BAP sustained the decision of the bankruptcy court and held that a guilty plea for filing a false return provides the basis for collaterally estopping the debtor from challenging the discharge of his taxes for the year of the plea. Though unpublished, the opinion, without much analysis, pushes the scope of collateral estoppel on the issue of criminal conviction and civil fraud toward a more favorable position for the IRS. Reasons exist for drawing a distinction between collateral estoppel in the bankruptcy discharge context and civil fraud penalty. Had the court articulated those reasons, I would have come away from the opinion with a more comfortable feeling.
The Tax Court opinions, cited above, determining first that collateral estoppel applies to civil fraud and then subsequently determining it does not provide lengthy analysis concerning the scope of a false return plea. From the perspective of punishment both tax evasion, IRC 7201, and filing a false return will get the taxpayer to the same prison sentence almost every time. Because the elements of the two crimes differ slightly and because proving the filing of a false return is slightly easier, prosecutors lean towards a false return conviction at times. Chief Counsel attorneys used to complain bitterly when Assistant United States Attorneys would accept a plea to a false return count rather than evasion because it meant a lot more work in the subsequent civil case; however, the change to 6201(a)(4) to allow assessment of the restitution amount may have taken some of the sting off of the situation.
The difference in the elements of the two crimes plays a role in deciding whether collateral estoppel applies. The Tax Court examined this difference closely in its opinions applying the elements of the crimes to the civil fraud penalty while the BAP does not do spend as much time applying the elements of the crime to the elements of the applicable discharge statute.
In Considine the Tax Court reasoned:
(a) that it had previously held that a conviction for willfully attempting to avoid tax (I.R.C. § 7201) established fraudulent intent justifying a civil fraud penalty, see Amos v. Commissioner, 43 T.C. 50, aff'd, 360 F.2d 358 (4th Cir. 1965); (b) that the Supreme Court had held that "willfully" has the same meaning in section 7206(1) (false return) as in section 7201 (attempt to evade tax), see United States v. Bishop, 412 U.S. 346, 93 S.Ct. 2008, 36 L.Ed.2d 941 (1973); and (c) therefore that a conviction for filing a false return, without more, establishes fraud justifying the civil penalty.
Considine v. United States, 683 F.2d 1285, 1286 (9th Cir. 1982)(the 9th Circuit criticizes the Tax Court's decision in citing to Considine v. Commissioner, 68 T.C. at 59-61)
In reconsidering and reversing Considine, the Tax Court in Wright stated:
"In a criminal action under section 7206(1), the issue actually litigated and necessarily determined is whether the taxpayer voluntarily and intentionally violated his or her known legal duty not to make a false statement as to any material matter on a return. The purpose of section 7206(1) is to facilitate the carrying out of respondent's proper functions by punishing those who intentionally falsify their Federal income tax, and the penalty for such perjury is imposed irrespective of the tax consequences of the falsification. As noted above, the intent to evade taxes is not an element of the crime charged under section 7206(1). Thus, the crime is complete with the knowing, material falsification, and a conviction under section 7206(1) does not establish as a matter of law that the taxpayer violated the legal duty with an intent, or in an attempt, to evade taxes." (internal citations omitted)
The IRS Chief Counsel's office at page 63 of its Tax Crimes Handbook states that "there is no collateral estoppel as to civil fraud penalties under this section. The section 7206 (1) charge is keyed into a false item, not a tax deficiency. Collateral estoppel arises only with a conviction or guilty plea to tax evasion." Similarly, IRM 25.1.6.4.3 provides that "A conviction under IRC 7206(1), filing a false return, does not collaterally estop the taxpayer from asserting a defense to the civil fraud penalty since conviction under IRC 7206(1) does not require proof of fraudulent intent to evade federal income taxes. In these cases, additional development is required to establish the taxpayer's intent to evade assessment of a tax to be due and owing."
At issue in Terrell is whether the his guilty plea for a false return places him squarely within the elements of 523(a)(1)(C). Section 523 of the bankruptcy code sets out the actions with respect to individual debtors that prevent, or except, the discharge of a debt. Congress has added to the list over the years since the adoption of the bankruptcy code in 1978. The list of excepted debts in 523 numbers 19 and several of those 19 subparagraphs of section 523(a) have more than one basis for excepting the debt from discharge.
The provision relating to tax debts, 523(a)(1), has three separate bases for excepting a debt from discharge. Subparagraph (A) excepts debts that achieve priority status under section 507(a)(8). This subparagraph, in general terms, prevents debtors from discharging relatively new tax debts. Subparagraph (B), which has been the subject of many posts, prevents debtors from discharging tax debts for which the debtor has never filed a return or filed a late return within two years of the filing of the bankruptcy petition. Subparagraph (C) at issue in this case prevents debtors from discharging tax debts "with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax."
The question before the BAP concerns the language of the discharge exception for making a fraudulent return and the language of IRC 7206(1) for filing a false return. Section 7206(1) holds a taxpayer liable for a felony tax offense if he "willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter." Does this statute, which does not require any understatement of tax but merely a false statement, match the elements of bankruptcy code section 523(a)(1)(C) such that the conviction under IRC 7206(1) requires a finding of collateral estoppel regarding the discharge of the underlying taxes.
The BAP, after acknowledging that Mr. Terrell presented "no arguments as to why the bankruptcy court's application of collateral estoppel was in error" says yes because (1) "the issue in the Criminal Case is identical to the issue presented in the Adversary Proceeding" because the same factual issues existed in both statutes; (2) his "guilty plea in the Criminal Case constitutes a full adjudication on the merits"; (3) both the debtor and the IRS were parties to the criminal case; and (4) the debtor "had a full and fair opportunity to litigate the Criminal Case."
The language in 523(a)(1)(C) "made a fraudulent return" may sufficiently line up with the language of IRC 7206(1) to allow collateral estoppel to work here but I would like the court to work a little harder to make that connection for me. The Tax Court eased into a similar conclusion with respect to the fraud penalty and an IRC 7206(1) conviction and then had to walk it back after the 9th Circuit brought its attention to the elements of that crime. The standard of proof for the IRS in a 523(a)(1)(C) case is preponderance of evidence unlike the clear and convincing standard needed for sustaining the civil fraud penalty. There are certainly differences between the Considine situation and the Terrell case but enough similarities to deserve more analysis. I am not yet convinced.
Filed Under: Bankruptcy, collateral estoppel, Fraud
Former Tax Court Judge Kroupa Pleads Guilty to Conspiracy
October 24, 2016 by Keith Fogg 1 Comment
We have written before about the indictment of former Tax Court Judge Kroupa and the collateral impact of her indictment. Her husband pled guilty last month and on Friday, October 21, she also pled guilty. If you have never gone to a guilty plea hearing, you should take the time to read the transcript of this hearing. You will see how detailed the court is when accepting a plea seeking to foreclose all opportunity for the defendant to later argue that they were not really guilty of the count(s) to which they made a guilty plea. Between the judge and the Assistant U.S. Attorney, it takes over 40 pages of transcript to get in all of the questions. As you will see, the answers are short and sweet.
Occasionally, I have clients or prospective clients in the clinic who have pled guilty to a tax crime. Some tell me they were not really guilty but just pled to end the process. I remind them of their conversation with the judge at the taking of the plea. Although most profess little memory of the event, I know they had to answer the essentially the same questions posed to former Judge Kroupa. While many motivations to plea exist, after going through the plea process the defendant really has little room to wriggle. In a recent HBO series, The Night Of, involving the taking of a state rather than a federal plea, the defendant cannot make the necessary statements of guilt and ends up going to trial. Former Judge Kroupa gave all the right answers. The Court accepted her guilty plea. Now a sentence report must be written and a sentencing hearing held.
What does Former Judge Kroupa get by pleading guilty? She gets a reduction in the sentencing guidelines, she gets only one felony conviction, and she gets to avoid the stress and cost of trial. Let's look at each of the things she gets but not forget that in all likelihood she also gets to go to prison. The guilty plea is not something she will go home and celebrate about.
Sentencing Guidelines
The Supreme Court decided several years ago that the federal sentencing guidelines provide guidance to federal judges in imposing criminal sentences; however, the guidelines do not impose mandatory time periods that the judges must follow. Despite the non-binding nature of the guidelines, most judges pay careful attention to them and for that reason so do most defendants.
For tax crimes the guidelines usually start with the amount of tax the defendant has underpaid due to their criminal action. That amount usually provides a baseline number in the guidelines which translates into a recommended sentence. That, however, is just the start. In the case of someone like former Judge Kroupa, the guidelines provide for enhancements because of her special knowledge of the tax laws and her special position in the system. Because of these factors she received a higher number under the guidelines which translates into a higher sentence. By pleading guilty, she receives a reduction because of acceptance of responsibility. If you read the plea transcript you will see a discussion of the enhancements and the reduction.
Building on the base amount and the adjustments, the guideline in her case result in a recommended sentence of 30-37 months. The judge carefully explained in the plea hearing that she will not necessarily follow the guideline and the ultimate sentence could end up higher or lower. The defendant receives no guarantees. The sentencing report will influence the judge as could anything that happens between now and the time of sentencing; however, making the guilty plea does have the effect of reducing the guideline amount from what a guilty verdict would produce. That provides motivation for pleading guilty in weighing the pros and cons.
In pleading guilty former Judge Kroupa received the opportunity to plea to one count and have the remaining counts dismissed. This allows her to control the count to which she pleads guilty and the collateral impact of the plea. She did not plead guilty to the felony of evasion of tax under IRC 7201 which carries with it the consequence of collateral estoppel on the fraud penalty. I wrote recently about a very unusual case in which a guilty plea did not result in collateral estoppel. By negotiating a plea agreement, she had several counts drop away. This may prove beneficial to her although the Department of Justice need not be criticized for entering into the plea since the number of counts may have had little or no impact on the sentence and on the payment of the fraudulently unreported tax.
The IRS may not need collateral estoppel here in order to collect the proper amount of tax. She has already made some tax payments. The 2010 change in the law regarding restitution allows the IRS to assess without having to issue a notice of deficiency the amount order for restitution. When the IRS pursues a criminal tax case, it sets the civil case to the side until the criminal matter ends. The end of her criminal case will mark the renewal of the civil tax audit. Of course, she can agree to the taxes and penalties proposed by the IRS at the end of that audit and terminate the civil case without a fight.
If it does come to a fight about the imposition of the fraud penalty or additional amounts of tax not included in the restitution order, the IRS will issue a notice of deficiency and former Judge Kroupa will have the opportunity to litigate the correctness of the notice before the Tax Court. In such a case the Chief Counsel attorney will wish the plea included the IRC 7201 counts and former Judge Kroupa will undoubtedly wish that she did not have to go to Tax Court to get an opinion on the issue. Of course, she can always pay and go to district court via the refund procedure.
Stress and Cost
The plea agreement transcript contains a detailed list of the medications former Judge Kroupa now takes. I do not know if she took any of these drugs before the criminal investigation but getting investigated for a criminal tax violation is extremely stressful. I would not be surprised to learn that all or most of the drugs assist in dealing with the stress of the investigation. With the plea agreement life will not turn into a bed of roses but the bleakest period may have passed.
Trying a criminal tax case not only creates additional stress but often depletes the bank account of the accused. Already, she will have paid handsomely for the representation she has received. Many former criminal cases produce little tax revenue for the IRS because the defendant spends all of their money on the defense and has very limited job prospects after the conviction. Ending the case with a plea saves some of the costs and may preserve assets to deal with the unpaid taxes and other necessary expenses.
The guilty plea brings the criminal phase of former Judge Kroupa's case near to conclusion. The IRS has obtained the thing it wants most in a criminal case – publicity. A case like this draws far more attention than the ordinary criminal tax prosecution. Perhaps the silver lining for the tax system in this case is that is may provide more deterrence and this painful event will influence others to file their taxes correctly.
Filed Under: collateral estoppel, Sentencing Guidelines, Tax Court
Ex Tyco CFO Swartz on the Hook for Tax For Millions "Borrowed"
October 19, 2016 by Leslie Book 1 Comment
An earlier version of this post originally appeared on the Forbes Procedurally Taxing site on October 18, 2016
When Tyco was synonymous with greed, Mark Swartz and his boss Dennis Kozlowski were vilified as all that was wrong with corporate America. Swartz and Kozlowski were both released on parole in the last couple of years. Swartz, Tyco's former CFO and Kozlowski's right-hand man, has had a long-simmering dispute with the IRS over the tax consequences of $12.5 million he helped himself to back when he and Kozlowski were raiding the corporate coffers. This past week the Tax Court in Swartz v Commissioner resolved in favor of the IRS a partial summary judgment motion relating to the $12.5 million, and I will briefly describe it below.
Back when Tyco was flying high, Swartz was participating in Tyco's key executive loan program. The receipt of loan proceeds, however, is not gross income. The problem for Swartz was that he took steps that suggested he had no intent of repaying some of those proceeds:
In August 1999, a handwritten journal entry in Tyco's accounting records mysteriously reduced Mr. Swartz's outstanding loan balance by $12.5 million. Swartz did not make any payments on this loan to Tyco during the year at issue. He also did not include the $12.5 million on his Form 1040 (for example, as cancellation-of-debt income), and Tyco did not include the amount on Mr. Swartz's W-2.
Tax Court Judge Mark Holmes, in his direct style, describes the hot water that Swartz found himself in:
In 2001, Mr. Swartz became a member of Tyco's board of directors. Not too long afterward, the directors learned that Kozlowski was the target of a criminal investigation for possible state sales-tax violations by the district attorney in Manhattan. Kozlowski was indicted only a few days after this information surfaced and promptly resigned from the board. His replacement — John Fort — immediately retained a law firm to undertake a full and complete investigation of Tyco's business including compensation and transactions between Tyco and its officers and directors. This led to a conversation (the details of which are unknown on this motion) between the law firm and Swartz about the mysterious 1999 journal entry. And the conversation led to the reversal of the journal entry. Mr. Swartz then repaid the money with interest.
Kozlowski and Swartz were the subject of a multi-count indictment, including one that alleged that Mr. Swartz stole the $12.5 million from Tyco and another that alleged the conduct amounted to grand larceny under New York law.
At trial, Swartz argued that he thought the $12.5 million loan reduction was part of his bonus; after a hung jury in the first trial a second jury found Swartz guilty of those counts (and others) and sentenced him to 8 to 25 years.
What of the tax consequences of the $12.5 million? It is black-letter law that ill-gotten gains are gross income. In the tax dispute, Swartz took a different approach than what he argued in the criminal trial. In Tax Court he argued that his eventual repayment of the proceeds and Tyco's actions in 2002 showing after the fact that a repayment obligation existed meant that his actions back in 1999 were null and void and thus there was no gross income in the first instance.
He did not raise this argument in the criminal trial, and IRS sought to use the doctrine of collateral estoppel to prevent him from arguing it in Tax Court.
The order lays out the general conditions for collateral estoppel:
an issue of law or fact in the second case is the same as one in the first case;
there has been a final judgment in the first case;
the party to be precluded is the same or in privity with a party in the first case;
the issue that is precluded was actually litigated in the first case; and
the controlling facts and legal principles are unchanged.
Swartz argued that there was no identity of issue or actual litigation because he did not make the argument he wanted to make in Tax Court in the criminal case. There was no dispute about elements 2 and 4. The focus was on whether the issue was the same in both matters. Finding in favor of the IRS, the order notes that "a party's failure to make an argument about an issue in the first case doesn't mean that he gets a do-over in the second."
As the Restatement (Second) of Judgments, §27cmt.c (Am.LawInst.1982), concisely summarizes "if the party against whom preclusion is sought did in fact litigate an issue of ultimate fact and suffered an adverse determination, new evidentiary facts may not be brought forward to obtain a different determination of that ultimate fact. . . . And similarly if the issue was one of law, new arguments may not be presented to obtain a different determination of that issue."
Parting Thoughts
The order notes that there are some cases which suggest that a thief's agreement to return stolen property in the same year as the original taking can serve as an exception to the general rule that ill-gotten gains are gross income. It was possible that the argument Swartz sought to make may not have mattered for state law purposes but in fact may have mattered for tax purposes. Yet, the order notes that as a matter of law Swartz's position did not address that narrow exception, as there was no agreement to return the funds to Tyco until 2002, "after he was caught." If there were allegations that the facts may have led to a material difference under federal tax law, I suspect the order would have concluded differently.
Often the government argues that a conviction should serve to collaterally estop a taxpayer from arguing that the ill-gotten gains were not gross income. Keith discussed the somewhat unusual case of Senyszen v Commissioner where the Tax Court looked at the impact of a tax evasion conviction on the amount of the civil liability owed by the taxpayers and held that the IRS cannot use collateral estoppel to impose a liability where it otherwise does not exist. As that case makes clear, courts have discretion to not apply it even when the basic conditions are satisfied. Moreover, sometimes embezzlement type convictions do not have the specificity in terms of the amount at issue, which could generate a separate dispute. Here as Judge Holmes notes, the amount itself was specific in the indictment, and Swartz is left to face the tax consequences of that conviction, though his later repayment of the $12.5 million may generate a deduction that perhaps will soften the blow somewhat.
Filed Under: collateral estoppel
Hiramanek Case Raises Issue of Collateral Estoppel When Spouse Intervenes as well as the Refusal of Tax Court to Accept Attempted Concession by IRS on Issue of Duress
May 17, 2016 by Patrick Thomas Leave a Comment
Today, we welcome back guest blogger Patrick Thomas. Patrick has just finished his Christine Brunswick Fellowship through which the ABA Tax Section sponsored his work for two years at the Low Income Taxpayer Clinic (LITC) located within the Neighborhood Christian Legal Clinic in Indianapolis, Indiana. He will open the new LITC at Notre Dame Law School this fall as its first director. He writes on an recent decision by Judge Halpern involving an interesting innocent spouse case with a couple of unusual procedural issues. Keith
On May 10, Judge Halpern issued a memorandum opinion in Hiramanek v. Commissioner, T.C. Memo. 2016-92, denying innocent spouse relief in a standalone petition under section 6015(e). This case presents an interesting application of the collateral estoppel doctrine, along with a good example of circumstances under which a purported joint tax return is signed under duress. Mr. Hiramanek, the Petitioner (and a certified public accountant), was denied the opportunity to argue that a joint return was filed because of his prior intervention in his ex-wife's case before the Tax Court, where the Court found that because the purported joint return was signed by Mr. Hiramanek's wife under duress, she could not be held liable for the deficiency on that return. Because Mr. Hiramanek had effectively litigated this issue previously before the Court, he could not raise it again in his own proceeding under section 6015(e).
For tax year 2006, the IRS received what purported to be a joint tax return from the Hiramaneks. In March 2010 the IRS sent them a Notice of Deficiency, which determined a $27,222 deficiency, along with a $5,444 section 6662(a) penalty. Mrs. Hiramanek ("Ms. Kapadia" in the Court's opinion) timely filed a petition, which both requested innocent spouse relief and disputed the deficiency in full. Mr. Hiramanek formally intervened in that case under Rule 325(b).
Prior to trial, Ms. Kapadia and the Service stipulated that she signed the purported joint return under duress and that therefore no deficiency existed with respect to her. The Court, however, did not accept the stipulation and proceeded to hold a trial on the duress issue. In his testimony at trial, Mr. Hiramanek disputed the allegations of duress, but otherwise did not introduce other relevant evidence. Ms. Kapadia testified and introduced other evidence of a long history of abuse, along with the specific abuse that forced her signature on the tax return.
The Court found that Ms. Kapadia signed the return under duress and, accordingly, she was not liable for the deficiency. Specifically, the Court held Mr. Hiramanek's contrary testimony not credible, while finding credible Ms. Kapadia's testimony and evidence showing a history of abuse. (The Court also found that she qualified for relief under IRC § 66(c), which provides an exception from community property rules where spouses separately file). The Court's ultimate findings as to the circumstances of duress are quite harrowing. According to the Court:
Throughout their marriage [Mr. Hiramanek] physical and verbally abused petitioner. During 2007 the abuse included threats against petitioner's life, physical assaults, and verbal abuse. Petitioner documented several instances of abuse in a handwritten diary from December 13, 2005, to April 4, 2007.
In 2007 [Mr. Hiramanek] prepared a 2006 joint Federal income tax return . . . for himself and petitioner. On the evening of April 3, 2007, [Mr. Hiramanek] presented petitioner with a copy of the joint return for her signature. Petitioner refused to sign the return without first reviewing it. [Mr. Hiramanek] initially refused but, upon petitioner's instance [sic], allowed her a quick glance at the return. Petitioner noticed that [Mr. Hiramanek] had claimed a casualty loss deduction of $35,000 for a break-in to their rental car while they were vacationing in Hawaii. [Mr. Hiramanek] had overstated the amount of the casualty loss deduction, and as a result, petitioner refused to sign the return.
Petitioner's refusal to sign the return angered [Mr. Hiramanek]. He grabbed petitioner's left arm and twisted it several times, resulting in bruising. He then struck petitioner on the back of the head with an open hand and pulled her hair with both hands. Finally, [Mr. Hiramanek] pushed petitioner on the jaw. Petitioner still refused to sign the return. Later that night, [Mr. Hiramanek] cornered petitioner in the bathroom and shoved her against the wall. He ordered her to the kitchen table and threatened her with physical harm and threatened that she would never see her children again if she did not sign the return. Petitioner, fearing for her safety, placed a scribble in the signature line of the return.
The next day . . . [Mr. Hiramanek] presented petitioner with a new version of the return in which he had removed the $35,000 casualty loss. Fearing for her safety, petitioner signed the return without review.
Hiramanek v. Commissioner, T.C. Memo. 2011-280, at 3-4 (Hiramanek I). Ms. Kapadia also filed a police report about this sequence of events, which she introduced at trial.
While the first Tax Court litigation was pending, Mr. Hiramanek filed his own request for innocent spouse relief with the Service, which was denied. He then petitioned the Tax Court for redetermination of his innocent spouse request, which eventually evolved into Hiramanek II. (Mr. Hiramanek appealed the first case all the way to the Supreme Court, which denied certiorari in late 2015. This resulted in a multi-year stay of the Hiramanek II proceedings. The Service filed a motion to lift the stay and for judgment on the pleadings on November 2, 2015.)
The Service argued that not only was no joint return filed, but Mr. Hiramanek was prohibited from arguing the existence of a joint return (a necessary predicate to innocent spouse relief) because of his involvement in the final determination in Hiramanek I. The Service specifically argued that the doctrines of res judicata and collateral estoppel gave Mr. Hiramanek only one bite at the apple on this issue—a bite he had already taken.
The Court largely agreed with the Service. It grounded its decision in the collateral estoppel doctrine, rather than res judicata; the Court recognized that IRC § 6015(g)(2) provides an exception to the res judicata doctrine, at least for innocent spouse petitions that are filed subsequent to the final determination of a tax deficiency. As such, res judicata could not bar Mr. Hiramanek's argument.
Mr. Hiramanek's primary argument against the application of collateral estoppel was that the Court in Hiramanek I did not have jurisdiction to determine anything outside of the innocent spouse context once Ms. Kapadia formally withdrew her request for innocent spouse relief with the Service. However, because Ms. Kapadia filed her petition within the 90 day period after issuance of the Notice of Deficiency and included a "catch-all" request to invalidate the deficiency, the Court determined that they did have jurisdiction over any matter affecting the deficiency. Whether Ms. Kapadia signed the return under duress was centrally relevant to the existence of a deficiency; thus, the Court reasoned, they had jurisdiction to address that question.
Because Mr. Hiramanek actively participated in the resolution of the duress issue; that issue was identical to the dispositive issue in Hiramanek II; the Court had jurisdiction and rendered a final judgment; Mr. Hiramanek was a party to the prior litigation; and no operative facts had changed in the interim, Mr. Hiramanek was estopped from arguing that a joint return was filed. Therefore, because Mr. Hiramanek's standalone petition necessitated a joint return and deficiency from which to seek relief—a requirement that could necessarily not be proven, given the collateral estoppel—the Court granted the Service's motion for judgment on the pleadings.
This seems a fairly straightforward application of the collateral estoppel doctrine. However, there is a lesson to be learned for practitioners. Mr. Hiramanek was only prevented from relitigating the duress issue because he actively participated, as an intervenor, in the Hiramanek I litigation. Had he not formally intervened, collateral estoppel would provide no bar. Of course, the factual determinations would be highly probative evidence against his claim, so representatives of nonmoving spouses still would be well-advised to intervene in appropriate cases.
A more interesting situation could arise if the Court had accepted a settlement between Ms. Kapadia and the Service. In Dinger v. Commissioner, T.C. Memo. 2015-145, the Court concluded that a settlement, without a factual stipulation supporting the settlement, did not raise a collateral estoppel bar to subsequent litigation of the substantive facts actually underlying the settlement. Here, it appears the Service and Ms. Kapadia did have a factual stipulation that would have supported the settlement. But again, because Mr. Hiramanek would not have participated in that settlement, collateral estoppel would not apply. And, a stipulation alone would have less probative value than evidence introduced at trial, and would provide less finality to the petitioner seeking relief, as well as the Service.
Thus, in particularly compelling cases with substantial available evidence of abuse, like Ms. Kapadia's, it may be prudent for an individual seeking innocent spouse relief, or the relief sought by Ms. Kapadia, to take this issue to trial and to accede to intervention by the nonmoving spouse. Even if the IRS Chief Counsel desires to grant innocent spouse relief, it may be in their interests to try the issue as well, given that it will save them from additional litigation down the line. Of course, this does not prevent tactics like Mr. Hiramanek's that could extend the litigation, but given Hiramanek II, it appears that the Service could easily succeed with a motion for judgment on the pleadings in subsequent litigation brought by the nonmoving spouse.
Filed Under: collateral estoppel, Innocent Spouse Tagged With: Patrick Thomas
Collateral Estoppel in Civil Tax Case Following Conviction of Tax Evasion
April 21, 2016 by Keith Fogg 4 Comments
In Senyszyn v. Commissioner, the Tax Court looks at the impact of a tax evasion conviction on the amount of the civil liability owed by the taxpayers and finds that the IRS cannot use collateral estoppel to impose a liability where it otherwise does not exist. The opinion in the preceding sentence follows an earlier decision of the Court in which the IRS sought summary judgment. The facts here create a bizarre result in that tax evasion convictions do not occur in situations in which the IRS cannot prove the taxpayers has evaded a tax liability and, yet, here the IRS cannot prove any tax liability in the civil case that followed the criminal conviction. Usually, Chief Counsel attorneys love to litigate Tax Court cases in which the taxpayer pled guilty to tax evasion because the conviction makes proving the civil case so much easier. When the conviction involves a lesser offense than the flagship conviction of tax evasion, the proof gets more difficult. To make matters more embarrassing for the IRS in this case, the taxpayer is a former revenue agent.
The criminal case seems pretty normal except that it involves an IRS employee. Mr. Senyszyn misappropriated funds from a business he appears to have taken over while working as a revenue agent. He stipulated in the criminal case that he failed to report $252,726 in income on the joint tax return filed for 2003 because he did not report the money that he misappropriated. The IRS always pursues criminal liability before it seeks to establish civil liability. When the IRS obtains a conviction for tax evasion under IRC 7201, case law provides that the conviction under 7201 necessarily dictates a civil liability for fraud under the principle of collateral estoppel. Here the IRS seeks to use the taxpayer's stipulation of the amount of the unreported income as a further basis for collateral estoppel and the Tax Court draws the line at turning this stipulation into a tax amount for which it must determine liability. The Court found the decision novel enough to publish it as a case with precedent. What makes it precedential and how did the IRS lose a civil case against unrepresented taxpayers for which it obtained a criminal conviction?
Mr. Senyszyn got increasingly involved in the real estate business of David Hook during the late 1990s and early 2000s. The relationship soured, however, and Mr. Hook brought suit again Mr. Senyszyn on May 28, 2004. The complaint alleges that Mr. Senyszyn embezzled and converted a minimum of $400,000 which amount increased to $1,000,000 by the time of trial. In 2006 Mr. Senyszyn deeded his interest in all but one parcel of some property the parties had jointly purchased in partial settlement of the suit. The suit must have come to the attention of someone at the IRS who passed it along to the criminal folks who opened an investigation. A revenue agent was assigned to assist the criminal investigators and the RA tracked the transfers into and out of the business account in determining that Mr. Senyszyn netted $252,726 in 2003. The US Attorney in New Jersey charged Mr. Senyszyn with a four count indictment to which he pled guilty to tax evasion for 2003. Mr. Senyszyn later attempted to withdraw his guilty plea but his attempts to do so failed.
On June 30, 2008, Mr. and Mrs. Senyszyn filed an amended return for 2003. The amended return reports the $252,726 additional gross income but it also shows expenses in excess of that amount resulting in a net profit of -$223,279. The IRS received but did not process this amended return. The IRS argued that the reporting of the $252,726 on the amended return was an admission that petitioners received that amount of additional income in 2003. Just as it rejected the application of collateral estoppel to the amount based on the plea agreement, the Court rejected the reporting of this amount on the amended return as full agreement with the calculation of the IRS because they also claim a large deduction not calculated by the IRS. The Court states that the issue is whether the RA correctly computed the relevant amounts.
It finds that he did not. The Court found that Mr. Senyszyn returned to Mr. Hook more than $481,947 of benefits received in 2003. This meant that he returned more than he received based on the calculations provided to the Court. Because he returned more than he received, he did not have any income from his dealings with Mr. Hook. Having reached this factual conclusion, the Court next looks at the impact of collateral estoppel. The Court states that even though it concludes no deficiency exists based on the facts presented to it "we could apply the doctrine of collateral estoppel to uphold a deficiency in whatever minimum amount would justify Mr. Senyszyn's conviction under section 7201." The reason the Tax Court could determine some deficiency is that the conviction required at least some minimum amount of tax liability and since some minimum amount of liability had to exist for purposes of convicting him, the Tax Court could consider itself bound by the existence of that minimum amount whatever it might be.
While a 7201 conviction requires the existence of a minimum amount of tax, it does not require the existence of any specific minimum amount. So, the Court grapples with the effect of collateral estoppel in a situation in which it has found no deficiency in its own proceeding and notes that it has not previously faced this question. The Court states that "we conclude that the purposes of the doctrine would not be served by upholding a deficiency unsupported by the evidence presented. Upholding a minimum deficiency would not promote judicial economy." A main purpose of collateral estoppel is judicial economy so that once a court determination occurs subsequent courts will not need to relitigate the same issue. Since the Tax Court needs to look at the deficiency amount even when a 7201 conviction exists, to take that look and determine no tax exists does not really require any additional resources. So, the Tax Court refuses here to make up some minimum amount of deficiency just to support that element of the criminal conviction. Because it does not find a deficiency, it also does not impose the fraud penalty.
These facts will not often occur but they do give hope to petitioners convicted of tax evasion that on the amount of the liability, they will get an opportunity to present evidence to the Tax Court in support of a different number than existed in the criminal plea agreement. Because this case involved a plea and not a trial, it is possible the outcome would differ following a conviction by trial.
The Tax Court also noted that it thought it unlikely Mr. Senyszyn had returned all of the money he took from Mr. Hook during the years 2002-2004 and stated that it only had 2003 before it. It also rejected petitioners' claim for a refund. In rejecting the claim for refund, it cited to the fact that the filing of the petition in this case well after the time frame for filing a refund claim. It did not mention the timing of the filing of the amended return by petitioners but that also appeared to come after the period for a timely refund claim.
Another Reason Tax Professors Don't Need to Invent Hypotheticals
January 27, 2016 by Guest Blogger 3 Comments
Today's guest post is from Professor James Edward Maule, a colleague of mine and Keith's at Villanova's Charles Widger School of Law, who many moons ago taught Stephen in Villanova's Graduate Tax Program. This post originally appeared earlier this month in Mauled Again, Jim's eclectic blog that in his words offers "more than occasional commentary on tax law, legal education, the First Amendment, religion, and law generally, with sporadic attempts to connect all of this to genealogy, theology, music, model trains, and chocolate chip cookies." Jim's blog was an inspiration to us, and his creative mind and far-reaching interests have touched on many topics (in the last few weeks alone he has discussed a proposal to include driver license numbers to reduce identity theft, taxation of powerball winnings, and genealogy). He also years ago when I transitioned from the tax clinic to teaching doctrinal courses offered up a generous series of posts that contained his views on how and what to teach in a Basic Income Tax Course, leading a tax prof colleague to refer to Jim as the "Yoda of tax teachers."
In this post, Jim offers some thoughts on a recent Tax Court case that has the ingredients of a bad movie, but also sweeps in some interesting procedural issues relating to collateral estoppel and rescission. Les
A recent Tax Court decision, Blagaich v. Comr., T. C. Memo 2016-2 should provide some interesting classroom questions for those teaching the basic federal income tax course. It also is providing some interesting insights for myself, and hopefully for readers of MauledAgain (and now Procedurally Taxing).
The taxpayer was involved in a romantic relationship with Lewis E. Burns from late 2009 until early 2011. During 2010, when the taxpayer was 54 and Burns was 72, he transferred to her property worth at least $743, 819, including cash and a Corvette. At the end of November in that year, the taxpayer and Burns entered into a written agreement intended to confirm their commitment to each other and to provide financial accommodation for her. They had no intention to marry and the agreement was, at least in some respects, intended to formalize their "respect, appreciation and affection for each other" in the way a marriage otherwise would do. The agreement provided that the parties "shall respect each other and shall continue to spend time with each other consistent with their past practice", and that both "shall be faithful to each other and shall refrain from engaging in intimate or other romantic relations with any other individual". The agreement also required Burns to make an immediate payment of $400,000 to the taxpayer, which he did. Soon thereafter, the relationship soured, an on March 10, 2011, the taxpayer moved out of Burns' house, and on the next day he sent her a notice of termination of the agreement. Shortly thereafter, he concluded that she had been involved in a romantic relationship with another man throughout the relationship between himself and the taxpayer.
In late March of 2011, Burns sued the taxpayer in the Circuit Court for the Eighteenth Judicial District, DuPage County, Illinois, seeking nullification of the agreement, return of the Corvette and a diamond ring, and an order directing the taxpayer to return cash "and other accommodations" that Burns had provided to her, totaling more than $700,000. On April 8, 2011, Burns caused there to be filed with the IRS a Form 1099-MISC, reporting a transfer to the taxpayer of $743,819 in 2010. Based on the Form 1099, the IRS asserted a deficiency against the taxpayer, who filed a petition in the Tax Court on March 8, 2013. The IRS learned of the state court action and in May of 2103 requested the taxpayer's attorney to provide copies of depositions taken in the case, any filings and motions relating to the Form 1099-MISC, and the fraudulent inducement claim asserted by Burns. In October 2013, the taxpayer moved for a continuance, reporting that the IRS did not object, and the Tax Court granted the motion. At some point during this time, Burns died.
In November 2013, after trial, the state court found that the taxpayer had fraudulently induced Burns to enter into the agreement, and entered a judgment ordering her to pay $400,000 to Burns' Estate. The court held that the Corvette, the ring, and $273,819 in checks were "clearly gifts" to the taxpayer that she was entitled to keep. Subsequently, the executors of the estate caused an amended Form 1099-MISC to be issued, reporting $400,000 of income, and noting that the taxpayer had paid the $400,000 pursuant to the state court order.
The taxpayer then moved in the Tax Court for summary adjudication. The taxpayer relied on two arguments.
First, the taxpayer argued that $343,819 of the amount transferred to her by Burns was excluded from gross income as "clearly gifts." She also argued that the IRS was estopped by the state court decision from denying that this amount represented gifts. The IRS argued that it was not so estopped because it was not a party nor in privity with any party in the state court action. The Tax Court agreed with the IRS and rejected the taxpayer's collateral estoppel claim. The court rejected the idea that the IRS was estopped because it took steps to keep itself informed about the state court action. It also rejected the argument that the IRS bound itself to the outcome of the state court case by agreeing to a continuance in the Tax Court proceedings.
Second, the taxpayer also argued that the $400,000 portion of the transfers was not gross income under the doctrine of rescission. In other words, because she returned the money she ought to be treated as having not received it in the first place. The IRS argued that the doctrine of rescission was not applicable because the taxpayer did not return the $400,000 to Burns in 2010. The Tax Court agreed with the IRS, explaining that the doctrine of rescission is a narrow exception to the claim of right doctrine, which requires cash method taxpayers to include gross income in the year received if acquired without consensual recognition, express or implied, of an obligation to repay and without restriction as to disposition. The doctrine of rescission applies if the amount that is received is returned within the same taxable year. The Tax Court rejected the taxpayer's reliance on cases in which the obligation to return the amounts that had been received had been acknowledged in the year of receipt even though actual repayment was made following that year, because in this instance the taxpayer did not acknowledge, in 2010, any obligation to return the $400,000.
Accordingly, the Tax Court issued an order denying the taxpayer's motion for summary adjudication. Whether any portion of the $743,819 constitutes gross income to the taxpayer, or can be excluded as a gift, remains to be decided. Though it has been reported that the $400,000 payment for being monogamous was gross income, the taxpayer still has the opportunity to argue that the amounts received were gifts, particularly the amounts received before she and Burns entered into the agreement. Whether she succeeds remains to be seen.
For students in the basic federal income tax class, the question is simple. "Suppose your romantic partner pays you to remain monogamous. Do you have gross income?" When a student objects that "no one does that," there now is proof that people do. Perhaps not very many people, but sometimes the most interesting tax cases arise from activities in which very few people participate.
Filed Under: collateral estoppel Tagged With: James Maule
0 Flares
Filament.io


Penny's Hill `The Specialized` Shiraz Cab Merlot 2016 (6 x 750mL), SA.
Skillogalee `The Cabernets` 2014 (12 x 750mL), Clare Valley, SA.
McWilliam's `Inheritance Fruitwood` Red NV (12 x 750mL), NSW.
Red Claw Pinot Gris 2016 (6 x 750mL), Mornington Peninsula, VIC.
Tempus Two `Copper` Cabernet Merlot 2016 (6 x 750mL), Barossa/Coonawarra.
Campbells Rutherglen Muscat NV (12 x 375mL, half bottle), VIC.