Petition for Writ of Certiorari — Joe Alfred Izen, Jr., Petitioner v. Commissioner of Internal Revenue

Supreme Court briefFeb 23, 2023

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No. _________

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In The

Supreme Court of the United States

---------------------------------♦--------------------------------JOE ALFRED IZEN, JR.,

Petitioner,

vs.

COMMISSIONER OF INTERNAL REVENUE,

Respondent.

---------------------------------♦--------------------------------On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

---------------------------------♦--------------------------------PETITION FOR WRIT OF CERTIORARI

---------------------------------♦--------------------------------JOE ALFRED IZEN, JR.

Counsel of Record

5526 McKnight Street

Houston, TX 77035

(713) 668-8815

jizen@comcast.net

Counsel for Petitioner

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QUESTIONS PRESENTED

Whether equitable tolling may extend substantiation evidence gathering deadlines under I.R.C.

§ 170(f )(12).

Whether Congress lacks the power to delegate unbridled discretion to the Commissioner to refuse to

promulgate regulations which provide equitable

relief from filing deadlines in appropriate cases.

Whether in a statutory scheme conflicting provisions must be construed and applied, if possible, so

that both competing purposes can be realized.

Whether Petitioner was entitled to a hardship

exemption under I.R.C. § 170(f )(11).

Whether the Petitioner Izen was entitled to summary judgment because the Commissioner failed

to present controverting evidence supporting his

claim that a charitable deduction was never made

and that the charitable deduction had no value.

PARTIES TO THE PROCEEDINGS

The following list provides the names of all parties

to the proceedings below:

Petitioner, Joe Alfred Izen, Jr., was a Petitioner in

the United States Tax Court and an Appellant in the

Court of Appeals.

Respondent, Commissioner of the Internal Revenue Service, was the Respondent in the United States

Tax Court and was the Appellee in the Court of Appeals.

iii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ................................

PARTIES TO THE PROCEEDINGS ...................

TABLE OF AUTHORITIES .................................

OPINIONS BELOW.............................................

JURISDICTION ...................................................

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED ..............................................

STATEMENT OF THE CASE..............................

REASONS FOR GRANTING THE PETITION ..... 11

EQUITABLE TOLLING MAY EXTEND

SUBSTANTIATION EVIDENCE GATHERING DEADLINES UNDER I.R.C.

§ 170(F)(12) ................................................ 11

CONGRESS LACKS THE POWER TO

DELEGATE UNBRIDLED DISCRETION

TO THE COMMISSIONER TO REFUSE

PROMULGATE

REGULATIONS

WHICH PROVIDE EQUITABLE RELIEF

FROM FILING DEADLINES IN APPROPRIATE CASES ......................................... 18

IN A STATUTORY SCHEME CONFLICTING PROVISIONS MUST BE CONSTRUED AND APPLIED, IF POSSIBLE,

SO THAT BOTH COMPETING PURPOSES CAN BE REALIZED ..................... 22

TABLE OF CONTENTS – Continued

Page

PETITIONER WAS ENTITLED TO A

HARDSHIP EXEMPTION UNDER I.R.C.

§ 170(F)(11) ................................................ 37

PETITIONER IZEN WAS ENTITLED TO

SUMMARY JUDGMENT BECAUSE THE

COMMISSIONER FAILED TO PRESENT

CONTROVERTING EVIDENCE SUPPORTING HIS CLAIM THAT A CHARITABLE DEDUCTION WAS NEVER

MADE AND THAT THE CHARITABLE

DEDUCTION HAD NO VALUE ................ 40

CONCLUSION..................................................... 42

APPENDIX

Fifth Circuit Opinion entered June 29,

2022 ............................................................... App. 1

Tax Court Stipulated Decision entered

May 25, 2021 ................................................ App. 7

Tax Court Order on Government and Izen’s

Motion for Summary Judgment entered

April 13, 2017 ............................................... App. 9

Tax Court Opinion entered March 1,

2017 ............................................................ App. 11

Tax Court Order Denying Summary Judgment entered March 9, 2016 ...................... App. 29

Order denying Rehearing entered September 30, 2022................................................. App. 32

TABLE OF CONTENTS – Continued

Page

Statutory Addendum 26 U.S.C. (I.R.C.)

170............................................................... App. 33

Ninth Amendment to the U.S. Constitution .............................................................. App. 43

TABLE OF AUTHORITIES

Page

CASES

15 W. 17th St. LLC v. Comm’r., 147 T.C. No. 19

(2016, en banc) ............................................ 16, 17, 19

Abramski v. United States, 573 U.S. 169, 134

S. Ct. 2259, 189 L. Ed. 2d 262 (2014) .....................15

Atlantic & Gulf Stevedores, Inc. v. M/V Grand

Loyalty, 608 F.2d 197 (5th Cir. 1979) ......................33

Boechler, P.C. v. Commissioner of Internal Revenue, 142 S. Ct. 1493 (2022) .................... 11-15, 18-21

Combes v. Getz, 285 U.S. 434, 52 S. Ct. 435, 76

L. Ed. 866 (1932) .....................................................32

Dixon v. C.I.R., 316 F.3d 1041 (9th Cir. 2003) ...... 12, 13

Esquivel-Quintana v. Lynch, 810 F.3d 1019

(C.A.6 2016) .............................................................16

Gilbert Imported Hardwoods, Inc. v. 245 Packages of Guatambu Squares, More or Less, 508

F.2d 1116 (5th Cir. 1975) .........................................33

Griffin v. Oceanic Contractors, Inc., 458 U.S. 564,

102 S. Ct. 3245, 73 L. Ed. 2d 973 (1982) ................34

Griffith v. Commissioner, 56 T.C.M. (CCH) 220,

1988 T. C. Memo 445, 1988 WL 95665 (U.S.T.C.

1988) ........................................................................17

Guedes v. Bureau of Alcohol, Tobacco, Firearms

& Explosives, 140 S. Ct. 789, 206 L. Ed. 2d 266

(Mem).......................................................................15

vii

TABLE OF AUTHORITIES – Continued

Page

Hongsermeier v. Comm’r, 621 F.3d 890 (9th Cir.

2010) (cert. denied Dkt. No. 10-749 March 7,

2011) ........................................................................13

Houston v. U.S. Gypsum Co., 580 F.2d 815 (5th

Cir. 1978) .................................................................37

King v. Burwell, 135 S. Ct. 2480, 192 L. Ed. 2d

483, 576 U.S. 473 (2015) ..........................................36

Leathers v. Leathers, No. 08-CV-1213 (D. Kan.

2015, 9-25-15) ..........................................................17

Leonhart v. Commissioner, 27 T.C.M. (CCH) 443,

1968 T.C., 98 (USTC, 1968) .....................................17

Lewis v. Barnhart, 285 F.3d 1329 (11th Cir.

2002) ........................................................................35

Markle v. Commissioner, 28 B.T.A. 201 (B.T.A.

1933) ........................................................................23

Mobile Co. v. State of Tennessee, 153 U.S. 486,

490, 14 S. Ct. 968, 38 L. Ed. 793 (1894) ............ 32, 36

Nacirema Operating Co., Inc. v. S. S. Al Kulsum,

407 F. Supp. 1222 (S.D.N.Y. 1975) ..........................33

Norfolk Southern Corp. v. Comm’r of Internal

Revenue, 104 T.C. 13, 104 T.C. 2 (T.C. 1995) ...........22

R & J Partners v. Comm’r of Internal Revenue,

No. 10-606 (5th Cir. 2011) (cert. den’d No. 11581 (April 30, 2012)) ...............................................41

Rickey v. US, 592 F.2d 1251 (5th Cir. 1979) ...............29

Scheidelman v. Comm’r, 682 F.3d 189, 109

A.F.T.R.2d 2012 (2nd Cir. 2012) ..............................27

viii

TABLE OF AUTHORITIES – Continued

Page

School District of Abington Township. Pennsylvania v. Schempp Murray III v. Curlett, 374

U.S. 203, 83 S. Ct. 1560, 10 L. Ed. 2d 844

(1963) .......................................................................21

Speiser v. Randall, 357 U.S. 513, 78 S. Ct. 1332,

2 L. Ed. 2d 1460 ......................................................21

Stern v. Marshall, 131 S. Ct. 2594 (2011) ..................20

Sturges v. Crowninshield, 4 Wheat. 122, 17 U.S.

122, 4 L. Ed. 529 (1819) ..........................................36

Transbrasil S.A. Linhas Aereas v. Department of

Transport, 791 F.2d 202 (D.C. Cir. 1986) ................34

United States v. Davis, 25 L. Ed. 2d 323, 90

S. Ct. 1041, 397 U.S. 301 (1970) ..............................32

Word v. US Commodity Futures Trading

Comm’n, 924 F.3d 1363 (11th Cir. 2019) ................35

CONSTITUTIONAL PROVISIONS

U.S. Const. amend. IX ........................... 1, 13, 19, 20, 21

STATUTES

7 U.S.C. 18(e) ...............................................................35

28 U.S.C. 1254(1)...........................................................1

I.R.C. Sec. 124(f ) .........................................................34

I.R.C. Sec. 170(B)(12) .............................................. 1, 22

I.R.C. Sec. 170(f )(8)(D) ...............................................19

I.R.C. Sec. 170(f )(10)(D) .............................................27

TABLE OF AUTHORITIES – Continued

Page

I.R.C. Sec. 170(f )(11)................................... 1, 26, 37, 38

I.R.C. Sec. 170(f )(11)(H) .............................................27

I.R.C. Sec. 170(f )(12) ... 1, 2, 9, 17, 18, 22, 24, 25, 28, 35, 38

I.R.C. Sec. 170(f )(12)(F) ..............................................27

Internal Revenue Code of 1913........................................ 23

Internal Revenue Code of 1926........................................ 23

RULES

Federal Rules of Civil Procedure Rule 56 ..................41

Federal Rules of Civil Procedure Rule 60(b) .............12

Tax Court Rules of Practice and Procedure Rule

121(a) .......................................................................41

Tax Court Rules of Practice and Procedure Rule

142 ..................................................................... 17, 38

PETITION FOR WRIT OF CERTIORARI

Petitioner, Joe Alfred Izen, Jr., respectfully petitions for a Writ of Certiorari to review the Judgment of

the United States Court of Appeals for the Fifth Circuit.

---------------------------------♦---------------------------------

OPINIONS BELOW

The Tax Court’s Memorandum Opinion, was reported at 148 T.C. No. 5, (App. D). The Court of Appeals

Opinion was unpublished (App. A).

---------------------------------♦---------------------------------

JURISDICTION

The Judgment of the Court of Appeals was entered

on June 29, 2022. This Court has jurisdiction pursuant

to 28 U.S.C. 1254(1).

The notification required by Rule 29.4(b) has been

made to the Solicitor General of the United States by

providing a copy of this Petition.

---------------------------------♦---------------------------------

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

Bill of Rights, Ninth Amendment, U.S. Constitution.

I.R.C.

170(f )(12).

170(B)(12).

I.R.C.

170(f )(11).

---------------------------------♦---------------------------------

I.R.C.

STATEMENT OF THE CASE

Petitioner purchased a 50% ownership interest in

a Hawker-Siddley DH125-400A jet aircraft at a bankruptcy sale, donated his interest in the aircraft to the

1940 Air Terminal Museum at Hobby Airport in Houston,

Texas in December, 2010, but did not claim the charitable gift deduction allowed by IRC 170(B)(12) until he

filed an Amended Petition in the Tax Court raising the

deduction in a subsequent 1040X amended tax return

for tax year 2010 while the Tax Court case was pending. The Commissioner denied the deduction claiming

that Petitioner’s substantiation evidence was not

“contemporaneous” and did not meet the various time

deadlines set out in IRC § 170(f )(12).

FACTUAL SUMMARY:

Petitioner’s summary judgment Declaration and

Exhibits satisfied the following substantiation requirements of IRC 170(f )(12):

(B) Content of acknowledgement: An

acknowledgement meets the requirements of

this subparagraph if it includes the following

information:

(i) The name and taxpayer identification

number of the donor. PETITIONER’S SUPPORTING EVIDENCE: Izen’s Declaration In

Support of Petitioner’s Second Motion for

Summary Judgment; Exhibit D and E, Letter

of Acknowledgment (Name of Donor) ROA

571-581, 623-626; Exhibit G, Form 8283

attached to Amended Return

SSN/Tax ID No.) ROA 663-664.

(Donor’s

(ii) The vehicle identification number or

similar number. PETITIONER’S SUPPORTING EVIDENCE: Izen’s Declaration; Exhibit

C; McKenzie Appraisal; Pg. 5; ROA 594; Izen

Declaration; Exhibit D; Pg. 1, ROA 623; and

Declaration of Philippe Tanguy; Exhibits A

and B, ROA 557-568.

(iii) In the case of a qualified vehicle to

which subparagraph (A)(ii) applies:

(I) a certification that the vehicle was sold in

an arm’s-length transaction between unrelated parties,

(II)

the gross proceeds from the sale, and

(III) a statement that the deductible amount

may not exceed the amount of such gross proceeds.

(iv) In the case of a qualified vehicle to which

subparagraph (A)(ii) does not apply:

(X) a certification of the intended use or

material improvement of the vehicle and the

intended duration of such use; PETITIONER’S SUPPORTING EVIDENCE: Izen

Declaration; Exhibit D. Pg. 1, ROA 623. “ . . .

This donation allows us to enhance our collection significantly. This will make an excellent

addition to the museum’s collection. The

Hawker is an excellent fit for the museum’s

diverse collection. The museum looks forward

to adding the Hawker to our collection not

only for its educational benefits but for its significance as a part of flight and aircraft history.” (Use as a museum piece displayed to

public).

(II) a certification that the vehicle would not

be transferred in exchange for money, other

property, or services before completion of such

use or improvement. PETITIONER’S SUPPORTING EVIDENCE: Izen Declaration; Exhibit E; Pg. 2, ROA 625. “The Museum

represents that it accepts full and complete

ownership of the Aircraft and full legal and financial responsibility for it and will not sell

the aircraft for at least two years after accepting its donation.”

(v) Whether the donee organization provided any goods or service in consideration, in

whole or in part, for the qualified vehicle. PETITIONER’S SUPPORTING EVIDENCE:

Izen Declaration; Exhibit E; Pg. 3, ROA 626.

“The Museum represents and warrants that

no goods, services, or other tangible benefits

have been conferred upon or transferred to donor in return for the aircraft and that the donation described herein was given solely for

the purpose of benefiting the operations of the

Museum, which is a tax exempt, non-profit

corporation under Section 501(c)(3) of the Internal Revenue Code and the laws of the State

of Texas. Donors delivered a signed original of

the Donation Agreement to the Museum on or

before December 31, 2010. Donors, On Point

and Izen, never exercised any further control

over the donated Aircraft or made any use

thereof.

(vi) A description and good faith estimate of

the value of any goods or services referred to

in clause (v) or, if such goods or services consist solely of intangible religious benefits (as

defined in paragraph (8)(B), a statement to

that effect. PETITIONER’S SUPPORTING

EVIDENCE: – There is no compensation referred to in “ . . . clause (v) above. . . .” Izen

Declaration; Exhibit E; Pg. 3, ROA 626.

The Tax Court rejected Petitioner’s supporting evidence and granted summary judgment for the Commissioner. The Tax Court refused to read all of

Petitioner’s Exhibits and supporting documents together in order to satisfy the proof required by the

above enumerated provisions of IRC 170(B)(12).

The Tax Court refused to consider Petitioner’s supporting evidence attached to Petitioner’s 2010 1040X.

ROA 927. (App. D)

The Tax Court “assumed without deciding” that

Petitioner’s 2010 1040X was a valid return, but rejected any of its attachments such as the Houston Air

Museum’s Form proving Petitioner’s entitlement to a

charitable deduction because it found that the documents were “not contemporaneous.” Tax Court Opinion, ROA 932-933 fn 3. (App. D)

Petitioner’s 2010 1040X and its attachments satisfied any contemporaneous written acknowledgement

requirements.

Both Sec. 170 and the Regulations promulgated

thereunder recognize that disclosure of required information which supports a charitable deduction must be

included only on the “ . . . first return which claims the

deduction . . . ” which in this case is Petitioner’s 2010

1040X.

Winston McKenzie’s Appraisal is qualified as well

as contemporaneous. See Izen Declaration, ROA 571581; Exhibit C. ROA 587-622. The Appraisal identified

the Aircraft; Provided the aircraft serial number(s);

stated the qualifications of the appraiser; set out the

method of appraisal; stated the purpose of the appraisal, including a statement it is made for tax purposes; and included all the other required information

and disclosures, including comparable sales used to

reach a value, and was completed within thirty days

prior to the donation.

The Bankruptcy Court’s December 18, 2007 Order

of Sale removed all doubt that On Point and Izen acquired title to the aircraft and supported the donation.

The Bill of Sale further supported the title of On Point

and Izen. Izen Declaration, ROA 571-581; Exhibits A

and B, ROA 582-586.

The Donation Agreement conveyed On Point’s and

Izen’s title in the aircraft to the museum. Izen Declaration, ROA 571-581; Exhibit E; Pg. 1, ROA 624.

“Donors and the Museum hereby agree that

effective on the Delivery Date (on or before

December 31, 2010), all right, title, and interest, in the Aircraft is hereby transferred from

the Donor invested exclusively in the Museum. SUPPORTING EVIDENCE: Izen Declaration; P. 10, Para. 26, ROA 580-581; and

Tanguy Declaration, P. 7-8, Para. 13-16. ROA

563-564.

The Tax Court found the following facts which Petitioner accepts as true unless otherwise indicated below:

Petitioner timely filed his 2010 Federal income tax

return, pursuant to an extension, on October 17, 2011.

On this return he claimed the standard deduction and

did not claim any deduction for charitable contributions.

The IRS commenced an examination of Petitioner’s 2009 and 2010 returns and determined that he

failed to substantiate certain deductions claimed on

his Schedules C, Profit or Loss From Business, and

Schedules E, Supplemental Income or Loss. On August

17, 2012, the IRS mailed him a notice of deficiency determining deficiencies of $93,123 and $18,643, and section 6662(a) accuracy-related penalties of $27,612 and

$5,522, for 2009 and 2010, respectively.

Petitioner timely petitioned the Tax Court. His

petition challenged respondent’s disallowance of his

Schedule C and Schedule E deductions, but did not

allege any charitable contribution deductions.

On March 28, 2014, Izen filed, ROA 98-144, and on

April 1, 2014, ROA 156, the Tax Court granted, a motion for leave to file an amended petition. Petitioner

alleged in his amended petition that, on December 31,

2010, he had donated a 50% interest in a 1969 model

Hawker-Siddley DH125-400A private jet aircraft to

the Houston Aeronautical Heritage Society (Society),

an organization tax exempt under section 501(c)(3),

which operates a museum at the William P. Hobby Airport. Izen alleged that his 50% interest in the aircraft

had been appraised at $338,080, and that he was entitled for 2010 to a charitable contribution deduction in

that amount. ROA 157-158.

Izen and On Point Investments, LLP (On Point), a

partnership, purchased the aircraft in December, 2007

for $42,000. Izen and On Point each paid $21,000 for a

50% undivided interest. After its purchase, the aircraft

remained in storage for three years at an airfield in

Montgomery County, Texas. ROA 557-568, 582-584,

ROA 767-777.

On December 31, 2010, Izen and On Point contended that they made completed gifts to the Society

of their respective 50% interests. Contrary to the Tax

Court’s reference to Tanguy’s alleged representation of

On Point and Izen during the donation of the aircraft

to the Houston Air Museum, the documents and summary judgment evidence submitted by Petitioner conclusively confirmed Tanguy’s representation and

participation in the donation of the mutually-owned

aircraft. ROA 557-568; 582-584.

On January 23, 2016, Izen filed a motion for partial summary judgment seeking a ruling that he was

entitled to a charitable contribution deduction for the

gift he claimed he made. ROA 260-324. The Tax Court

denied that motion on March 9, 2016, (App. E) finding

that there existed several disputes of material fact.

ROA 348-349. These included: (1) whether Izen had

secured from the Society and attached to his return a

“contemporaneous written acknowledgment” as required by section 170(f )(12) ROA 623, 626; (2) whether

the required Form 8283, Noncash Charitable Contributions, had been properly signed and dated by an officer of the Society, ROA 664; and (3) whether the fair

market value of Izen’s 50% interest, as of December 31,

2010, was $338,080. ROA 594, 605.

Contrary to the Tax Court’s finding, Petitioner

claimed a charitable deduction for his gift of his interest in the Hawker jet aircraft to the Houston Air Museum in his Amended Tax Court Petition which Izen

filed after the Tax Court entered an order granting

Izen leave to file. ROA 658-668. Izen claimed a charitable deduction for the gift of the jet Hawker aircraft

to the Houston Air Museum for the first time on a tax

return on April 14, 2016, when Petitioner filed his 2010

Form 1040X, ROA 658-704. Izen included with this

amended return: (1) an acknowledgment letter addressed to Philippe Tanguy, dated December 30, 2010,

and signed by Drew Coats as president of the Society,

ROA 681; (2) a Form 8283 executed by Amy Rogers,

managing director of the Society, and dated April 13,

2016, ROA 664, and signed December 15, 2010 by Appraiser McKenzie; (3) a copy of an “Aircraft Donation

Agreement” executed on December 31, 2010, by Joe

Alfred Izen, Jr. and Drew Coats as president of the

Society, ROA 626; and (4) an appraisal by Winston

McKenzie dated April 7, 2011, opining that the fair

market value of Izen’s 50% interest in the aircraft, as

of December 30, 2010, was $338,080. ROA 669-704.

The Commissioner represented that the IRS “will not

process petitioner’s amended 2010 tax return.” ROA

927.

On May 27, 2016, the Commissioner filed a motion

for partial summary judgment, contending that Petitioner’s charitable contribution deduction should be

denied on the ground that he failed to satisfy the substantiation requirements of Section 170(f )(12). ROA

415-426. On July 18, 2016 Petitioner filed a renewed

motion for partial summary judgment, urging that the

defects previously discerned by the Court had been

cured by his subsequent filing of the 2010 amended X

return. ROA 555-722. Petitioner contended that his

claimed charitable contribution deduction of $338,080

should be allowed in full after denying Petitioner’s

Motion to Compel “Branerton” discovery from the

Commissioner, ROA 553-554, and after refusing to

grant Petitioner’s Motion to Allow the filing of the

declaration of witness, Kevin Williams, ROA 758, the

Tax Court entered a decision and Memorandum Opinion on October 19, 2016, ROA 932-933, denying Petitioner’s Second Motion for Summary Judgment and

granting the Commissioner’s Motion for Summary

Judgment.

After Petitioner and the Commissioner entered

into several stipulations, the Tax Court entered a final

decision on those stipulations disposing of all remaining claims on May 18, 2021. ROA 1230-1231. (App. B).

---------------------------------♦---------------------------------

REASONS FOR GRANTING THE PETITION

EQUITABLE TOLLING MAY EXTEND SUBSTANTIATION EVIDENCE GATHERING

DEADLINES UNDER I.R.C. § 170(F)(12).

EQUITY JURISDICTION COMES TO THE U.S.

TAX COURT:

In Boechler, P.C. v. Comm’r of Internal Revenue,

142 S. Ct. 1493 (2022) this Court extended the remedy

of equitable tolling to the jurisdiction of the U.S. Tax

Court. This unanimous decision recognized the power

of Tax Court Judges to grant equitable tolling relief

from filing deadlines imposed by Congressional tax

statutes which did not contain absolute language prohibiting any extension. The Court reasoned that without such absolute language mandating that a filing

deadline was jurisdictional and could not be extended,

a Tax Court Judge has the power and duty to entertain claims of equitable relief seeking such tolling and

to grant extensions of deadlines when they are factually supported and in conformity with equitable principles.

Hidden within this opinion, however, is a footnote

which supports this Court’s reasoning for application

of equitable principles in Tax Court practice. See

Boechler at fn. 1. Never has a footnote in an Opinion

of this Court so transcended and swallowed the

significance of the ground breaking opinion which it

underlies.

In rejecting the Commissioner’s “suggestion” that

traditional equitable principles cannot be extended to

non-Article III Judges, this unanimous Court noted

that it had already done so in various prior cases. See

Boechler at fn. 1 (equitable principles extended to enforcement of bankruptcy filing deadlines and deadlines

to file claims with federal agencies.)

In reaching its conclusion that equitable principles apply to Tax Court practice, this Court reached

and decided one of the issues underlying a Tax Court

decision reversed and remanded by the Ninth Circuit

previously presented to this Court by a Petition for

Writ of Certiorari. See Dixon v. C.I.R., 316 F.3d 1041,

1048 (9th Cir. 2003) (IRS counsel bribed party witnesses in Tax Court Test Case proceedings committing

fraud on Court.)

In Dixon the Commissioner asserted that the Tax

Court had no equitable powers which would enable it

to entertain bills of review or equitable proceedings

analogous to those permitted by Federal Rules of Civil

Procedure Rule 60(b) allowing collateral attacks on

Tax Court judgments based on fraud on Court. A

unanimous Panel of the Ninth Circuit ruled otherwise

in Dixon and remanded that case to the Tax Court to

hold evidentiary hearings on the aggrieved taxpayers’

pleadings seeking relief and to fashion a remedy which

would accord those taxpayers the same settlement

benefits which the Commissioner fraudulently

extended to the bribed party witnesses. See Dixon at

P. 1048. Notably, this Court later declined to consider

the matter when it refused the aggrieved taxpayers’

Petition for Writ of Certiorari in Hongsermeier v.

Comm’r, 621 F.3d 890 (9th Cir. 2010) (cert. denied Dkt.

No. 10-749 March 7, 2011). Thus, in Boechler this Court

merely determined the extent of non-Article III

Judges’ equitable powers.

HISTORICAL NOTE:

The federal common law which still exists and has

application where not replaced by state law derives

from ancient origins and a divided legal system under

which legal causes of action were decided by common

law courts and cases in equity were filed separately

with the King’s Chancellor and decided in a separate,

but parallel system.

Relief under equitable principles became part of

the bundle of rights of a U.S. citizen under the adoptive

reach of the Ninth Amendment (App. H) to the United

States Constitution when that so-called “forgotten”

amendment was enacted with the Bill of Rights.

Later the right to equitable relief in separate

courts of equity was abolished by many of the states

and by federal statute, but the Ninth Amendment

rights to equitable relief were preserved by vesting equitable jurisdiction in the federal Article III courts and

judges by “merger” of law and equity powers in the

same court.

The extension of the power to grant equitable relief to non-Article III courts, judges, and agencies, was

necessary to accord complete relief to parties forced to

venture before those Courts and agencies in order to

obtain complete justice: “There shall be no wrong without a remedy.” The extension of equitable powers to

non-Article III judges and agencies was presaged by

Congressional laws allowing Tax Court judges to enjoin collection of deficiencies in collection due process

hearings – an issue which greatly troubled the Commissioner in Boechler – and was inevitable.

The reach of Boechler is just this and no more. A

Court of the United States or an agency acting as a

Court under delegated powers must have the power to

grant complete justice among the parties; therefore,

that power must include the right to equitable relief

when warranted by the facts and circumstances of the

case.

The Commissioner’s counter argument that Congressional intent set out in statutory wording cannot

be overridden or harsh or absurd results be softened

by the conscience of equity is no more than the argument that the common law may be overridden by statute.1

The rule requiring strict construction of statutes in derogation of common law has, itself, been softened by the countervailing

view that it is inapplicable to statutory schemes which require a

liberal construction. A liberal construction of a statutory scheme

which prohibits application of equitable principles should be applied, however, only where demonstrable prejudice would result

EQUITY ABHORS A FORFEITURE:

In making its holding in Boechler this unanimous

Court did nothing more than extend this equitable

principle to avoid the forfeiture of a taxpayer’s legal

rights to obtain relief. This equitable maxim is the underpinning and the very essence of the doctrine of equitable tolling. What harm or prejudice resulted or

could result from a decision by the Tax Court, on remand, equitably tolling and excusing the taxpayer’s

one day filing default of his petition? The Commissioner could not show any. When the taxpayer “drops

the ball,” equity may pick it up.

Further, Boechler does not extend equitable powers lightly. Boechler’s mandate that harsh results required by Congressional statutes which undermine the

general purpose of the statutory scheme – such as the

charitable deduction here – may be ameliorated and

softened by application of equitable principles absent

absolute statutory language requiring the penalty if

consistent with the complimentary legal and equitable

maxims: “Equity follows the law” and “What the law

does not prohibit, it allows.” Guedes v. Bureau of Alcohol, Tobacco, Firearms & Explosives, 140 S. Ct. 789,

790 (Mem), 206 L. Ed. 2d 266(Mem) (2020).

Instead, we have emphasized, courts bear an

“obligation” to determine independently what

the law allows and forbids. Abramski v.

United States, 573 U.S. 169, 191, 134 S.Ct.

underlying the main purpose of the statutory scheme – prejudice

which was not present in Boechler.

2259, 189 L.Ed.2d 262 (2014) ; see also 920

F.3d at 39-40 (opinion of Henderson, J.);

Esquivel-Quintana v. Lynch, 810 F.3d 1019,

1027-1032 (C.A.6 2016).

NO HARM OR PREJUDICE HERE PREVENTS

GRANT OR LITIGATION OF PETITIONER’S

CHARITABLE DEDUCTION:

The labyrinth of hoops Congress set up which

must be traversed in order to substantiate an IRC

170(f )(12) charitable deduction for the Hawker Jet in

this case set out in IRC 170(f)(12) were completely

satisfied and met by the Petitioner’s substantiation

evidence which the Tax Court refused to read and consider as a whole. See 15 W. 17th St. LLC v. Comm’r, 147

T.C. No. 19 (2016, en banc). The only missing element

– Petitioner’s social security number – would have

been inevitably discovered and known to the Commissioner’s auditors or counsel upon the filing of Petitioner’s “first-filed income tax return” claiming the

deduction.

Finally, the Petitioner’s claim of the charitable deduction itself could not have evaded the scrutiny of the

Commissioner in this case or his legal power to challenge it. Petitioner claimed the charitable deduction

for the first time in a Tax Court Amended Petition

properly filed with the Tax Court Clerk and served on

the Commissioner before Petitioner filed his first return claiming the charitable deduction.

The harm or prejudice here – avoidance of audit

scrutiny – was impossible under the facts of this case.

The Tax Court’s “new matters” jurisdiction addressed

by Tax Court Rules of Practice and Procedure Rule 142

has never been challenged and allows a taxpayer to

present and have determined new claims to tax deductions, credits, and exemptions, which were not claimed

on a taxpayer’s challenged return. Leathers v. Leathers,

No. 08-CV-1213, (D. Kan. 2015, 9-25-15) affirmed at

856 F.3d 729 (10th Cir. 2017) (taxpayer sued in Federal

District Court for collection of assessments entitled to

raise offsets, credits and deductions which were not

claimed before IRS, but failed to provide such proof ).

See Leonhart v. Commissioner, 27 T.C.M. (CCH) 443,

1968 T.C. Memo 98 (U.S.T.C., 1968) and Griffith v. Commissioner, 56 T.C.M. (CCH) 220, 1988 T.C. Memo 445,

1988, WL 95665 (U.S.T.C., 1988) (newly-raised charitable deductions reviewed and decided by Tax Court under Rule 142).

Clearly, Congress did not pass IRC 170(f )(12) with

the Tax Court’s New Matters jurisdiction in mind. A

taxpayer who waits until filing a Petition in Tax Court

to raise the challenged charitable deduction has zero

chance of evading detection by the IRS and has the

same zero chance in avoiding IRS challenges to overstated values by able and proficient and sometimes

even vicious IRS counsel and agents. Thus the concerns of Congress concerning IRS failure to detect

grossly overstated charitable deductions has no application under these facts, a reality which apparently escaped both the Commissioner, the Tax Court, and even

the Fifth Circuit, when they refused to allow the charitable deduction.

The evidence gathering deadlines for substantiation set out in IRC 170(f )(12) are subject to equitable

tolling and should be extended under Boechler’s authority.

CONGRESS LACKS THE POWER TO DELEGATE UNBRIDLED DISCRETION TO THE

COMMISSIONER TO REFUSE TO PROMULGATE REGULATIONS WHICH PROVIDE

EQUITABLE RELIEF FROM FILING DEADLINES IN APPROPRIATE CASES.

COMMISSIONER’S REFUSAL TO PROMULGATE

REGULATIONS:

Congress left the door open for the Commissioner

to promulgate regulations placing the burden of ameliorating the harsh results of IRC 170(f )(12)’s evidencegathering mandates on the donee charity receiving

charitable gifts rather than the harried taxpayer. The

Commissioner wreaked havoc by refusing to exercise

his delegated powers and, instead, by enforcing the

harsh results, without any amelioration or application

of equitable principles, on the taxpayers including

Petitioner. Literally billions of dollars in disallowed

charitable deductions have resulted from the Commissioner’s unconscionable non-action.

Faced with this quandary the Tax Court, en banc,

could not devine the seemingly clear path of adoption

and application of equitable principles found by this

unanimous Court in Boechler. Instead, in a divided en

banc opinion the Tax Court ruled that the Commissioner had unbridled discretion to refuse Congress’ invitation to promulgate needed regulations protecting

taxpayers from harsh results which would deprive

them of the chance to be heard on their cases or on the

validity of their deductions. See 15 W. 17th St. LLC v.

Comm’r., 147 T.C. No. 19, P. 1 (2016, en banc).

The substantiation requirements of subparagraph (A) do not apply to a contribution

“if the donee organization files a return, on

such form and in accordance with such regulations as the Secretary may prescribe,” that

includes the information specified in subparagraph (B). I.R.C. sec. 170(f )(8)(D). To date, the

Secretary has not issued regulations to implement the donee-reporting regime referred to

in subparagraph (D).

The proper course to remediate the Commissioner’s

unconscionable inaction was not the one suggested by

the Tax Court Majority – to grant the Commissioner

unbridled discretion to refuse to act nor the course suggested by the Tax Court dissent – to imply that the

Commissioner had acted and to provide ameliorating

relief remedying the harsh results.

The proper path devined by this unanimous Court

in Boechler was to enforce the mandate of equity jurisprudence upon the Commissioner and the Tax Court in

conformity with the dictates of the Ninth Amendment.

Since the day the non-delegability of legislative

function was decided by this Court, questions have

lingered over the non-delegability of judicial function

– a constitutional prohibition most recently addressed

in this Court’s opinions in Stern v. Marshall, 131 S. Ct.

2594 (2011), deciding that the power to conduct jury

trials was limited by the Constitution to Article III

Judges.

If the judicial function is delegable by Congress to

federal agencies including the IRS and non-Article III

Judges who oversee their administrative determinations, such delegation must perforce include the ambit

of equitable powers possessed by the Article III Courts

to render complete justice to the parties before it with

the full panoply of the equitable rights preserved by

the Ninth Amendment. To the extent that Congress attempted to delegate otherwise, it exceeded the limits of

its legislative clout. Congress, the legislative branch,

has no power to decree the abolition of equitable powers without the strict and absolute language this Court

did not find in Boechler.

MATTERS OF GRACE, TAX DEDUCTIONS, AND

THE COMMISSIONER’S JUDICIAL CAPACITY:

Subject to appeal to the Tax Court, Court of Appeals, and thence to this Court, the Commissioner is

endowed with administrative powers containing judicial capacity. The first determination of the validity of

a taxpayer’s charitable deduction will be made by IRS

auditors in the quasi-administrative proceeding

known as IRS audit unless, like here, the taxpayer has

raised the challenged charitable deduction, for the first

time, before the Tax Court as a “new matter.”

The oft repeated tax maxim: “Deductions are a

matter of grace and not of right” still holds true and

requires the taxpayer to assume the burden of proof

required to substantiate his deductions. School District

of Abington Township, Pennsylvania v. Schempp Murray III v. Curlett, 374 U.S. 203, 289, 83 S. Ct. 1560, 10

L. Ed. 2d 844 (1963).

I think Speiser v. Randall, 357 U.S. 513,

78 S.Ct. 1332, 2 L.Ed.2d 1460, suggests a further answer. We held there that a State may

not condition the grant of a tax exemption

upon the willingness of those entitled to the

exemption to affirm their loyalty to the Government, even though the exemption was itself a matter of grace rather than of

constitutional right.

However, those granted the power to extend grace

may fall from grace. To the extent that the Commissioner failed to act with the equitable conscience he inherited from the Chancellor and his judicial progeny in

our federal system under the Ninth Amendment, the

Commissioner fell from grace and his inaction was

properly remedied by this Court’s unanimous action in

Boechler and should likewise be remedied by grant of

Petitioner’s writ with appropriate relief. Henceforth,

the equitable decisions of the Commissioner and the

Tax Court such as those recited by IRS in its collection

due process findings in Boechler should conform to and

be guided by those traditional equitable standards of

fair play and substantial justice that guide the equitable conscience and rulings of Article III judges and

their Courts.

IN A STATUTORY SCHEME CONFLICTING

PROVISIONS MUST BE CONSTRUED AND

APPLIED, IF POSSIBLE, SO THAT BOTH

COMPETING PURPOSES CAN BE REALIZED.

“What the Lord giveth, the Lord taketh away.

Blessed be the name of the Lord.” In the imperfect tax

context of the federal legal tax system, what is given

by Congress paradoxically is taken away by the same

statutory scheme.

So it is with the charitable deductions under the

I.R.C. 170(B)(12) which allows charitable deductions

for gifts of aircraft, vehicles, and boats, with a value

in excess of $5,000.00 which is conflicted by I.R.C.

170(f )12 setting deadlines for gathering “contemporaneous” substantiation evidence supporting the charitable deductions and taking the deductions away if the

deadlines are not complied with.

Statutory construction of federal law requires that

the entire statutory scheme into which a particular

statute falls must be considered and each competing

purpose, if possible, must be achieved through enforcement. The general purpose of the statutory scheme

must be determined and upheld. Norfolk Southern

Corp. v. Comm’r of Internal Revenue, 104 T.C. 13, 104

T.C. No. 2 (T.C. 1995).

CHARITABLE DEDUCTIONS – LIBERAL CONSTRUCTION:

Since the enactment of the original Internal Revenue Code of 1913 and the later enactment of the Internal Revenue Code of 1926, the US Congress has

from time to time passed general statutory schemes

which have the purpose of encouraging charitable donations to worthy causes which benefit the general

public through deductions in the various Internal Revenue Codes which offset a contributing taxpayer’s net

taxable income by various percentages based on the

fair market value of the gift.

The general purpose of all these Congressional

schemes has been to liberally support charitable giving

and the Courts have interpreted the IRC statutes liberally in support of charitable gifts in line with Congressional intent. The favored status of charitable gifts

as well as the deductibility of same has been a fixture

of the IRC for almost a century. See Markle v. Comm’r,

28 BTA 201 (B.T.A. 1933) and discussion. Emanouil v.

Comm’r., T.C. Memo. 2020-120 (2020).

IRC Sec. 170 represents the general statutory

scheme governing deductions for charitable giving set

out by the US Congress in legislation dating from at

least the adoption of the Internal Revenue Code of

1954.

As will be established hereafter by the authorities

set out below this Court begins its construction of charitable deduction statutes by determining the general

statutory scheme Congress intended and giving it effect wherever possible.

ENHANCED AUDIT SCRUTINY – CONFLICTING

PURPOSE:

For a while the requirements for charitable deductions were given a liberal construction without any

legislative or regulatory limitations. However, the

Commissioner’s audit statistics began to present dark

clouds of questionable tax reporting and outright gross

misrepresentations of the value of gifts by taxpayers

convincing Congress to enact certain heightened substantiation requirements applicable to gifts over a certain monetary value so that what the Commissioner

referred to as “gross overstatement in value abuse”

could be rectified.

STATUTORY PURPOSE OF IRC 170(f )(12)

Then came Sec. 170(f )(12) which imposed on taxpayers claiming charitable deductions of vehicles with

a fair market value of $500 or more to obtain various

forms of written documentation called a contemporaneous written acknowledgement prior to various deadlines provided by that statute.2 The time deadlines

IRC § 170 also contemplated that charitable organizations

who were donees might be required to independently report these

charitable gifts in a manner identifying the donors and thereby

exempting the identified donors from having to comply with IRC

170(f )(12). As further discussed above the Commissioner ignored

Congress’ invitation to pass regulations requiring the charitable

donees to make such reporting. The responsibility for any errors

imposed by Congress to gather such contemporaneous

documentation were fixed at “ . . . before . . . ” January

31 of the year after the tax year in which the charitable

deduction was claimed. Various portions of the contemporaneous written acknowledgement had to be attached to the taxpayer’s “ . . . first filed return . . . ” on

which the charitable deduction was first claimed.3 A

careful examination of the legislative history of IRC

170(f )(12) and its companion “remedial” sections was

to enhance, if not insure, “audit scrutiny.” Gross over

valuations of the stated value of charitable gifts were

being taken, purportedly, on tens of thousands of taxpayers’ returns resulting in gross understatements of

those taxpayers’ income tax liability. The Commissioner’s cries entered sympathetic Congressional ears

and these legislators resolved to take action to remedy

the situation.

in reporting the required information supporting an IRC 170

charitable deduction therefore remained the donor taxpayer’s onerous burden. Thereafter the Commissioner to his discredit uniformly took the position that any errors in the donee charity’s

contemporaneous written acknowledgement papers would disallow the charitable deduction.

The taxpayer did not claim the charitable deduction for the

gift of his interest in the Jet Hawker aircraft to the Houston Air

Museum at Hobby Airport until he was already in U.S. Tax Court

on a Petition challenging the Commissioner’s Notice of Deficiency

for the tax year 2010 in which the charitable gift was made. The

first filed income tax return which claimed the taxpayer’s charitable gift deduction for the first time was filed while the taxpayer

was in Tax Court for determination of his correct tax liability for

tax year 2010.

The action taken involved creating a set of legal

hoops to jump through in the form of substantiation

gathering. Protecting a claimed charitable gift deduction from disallowance at audit and qualifying under

the enhanced reporting requirements imposed by Congress under which some of the substantiation had to

be gathered before certain dates and supplied to the

IRS became increasingly onerous. The taxpayer had to

comply with the following:

Obtain an expensive written appraisal before

the end of the tax year setting out the fair

market value of the gift by a qualified appraiser, get an accurate acknowledgement of

the gift from the donee charity before the end

of the tax year in which the deduction is taken

or before January 31 of the following year, and

make sure the donee charity inserts your (the

taxpayer’s) SSN.

Couple the above with proof of an actual transfer of the

gift during the tax year in which the deduction was

claimed with a statement from the donee denying that

the gift is going to be sold by the charity within a certain period of time and denying that the donor has received any benefit or interest in the gift are also

required. Recognizing that all of the above might be

extremely difficult, if not impossible, for a particular

taxpayer who has benefited the public by his gift, Congress enacted the “reasonable cause” curative provisions of IRC 170(f )(11) which Petitioner argued and

the Tax Court refused to consider. Congress also empowered the Commissioner to make regulations

softening the effect of the above evidence gathering

and reporting gyrations which might work hardship

on taxpayers who made reasonable efforts to comply

with the law.4 See IRC 170(f )(10)(D), (f )(11)(H) and

(f )(12)(F). Suffice it to say that the statutory purpose

of heightened audit scrutiny or disclosure of IRC

170(f )(12) and the intent of Congress are satisfied

where, as here, “audit scrutiny” is enhanced or the statute is enforced in such a way that gross over valuations

of charitable gifts cannot escape reporting or detection

by the Treasury and its Commissioner. See Scheidelman v. Comm’r, 682 F.3d 189, 109 A.F.T.R.2d 2012 (2nd

Cir. 2012) (IRC Sec. 170 charitable deduction allowed

despite defects in appraisal where sufficient disclosure

of taxpayer information satisfied Congressional intent.)

ENHANCED AUDIT SCRUTINY SATISFIED

UNDER FACTS OF THIS CASE:

Evidence And Content Of Taxpayer’s Contemporaneous Written Acknowledgement And FirstFiled/Amended 1040 2010 Personal Income Tax

Return:

Petitioner procured a timely appraisal of the fair

market value of the gift of his interest in the Hawker

The Commissioner’s declination to take up this regulatory

invitation apparently due to the enormous volume of protests received from charitable donees who did not wish to be responsible

for reporting was fully discussed and lamented by the dissent in

an opinion of the full U.S. Tax Court which was considering the

denial of a large charitable endowment deduction. See 15 W. 17th

St, LLC, supra

Jet aircraft. The rationale for the requirement to obtain a contemporaneous appraisal and to attach that

appraisal to the first-filed return on which the charitable deduction is claimed not only discloses the possibility to the IRS that a grossly overvalued deduction has

been claimed for the gift, but also allows the IRS to

obtain its own expert appraisal if it desires to do so

in order to resolve the issue of over valuation. The requirement that a qualified appraiser make the appraisal was inserted as an obvious safeguard to

prevent overstatement since any qualified appraiser

making a grossly over valued appraisal could become

subject to other penalty of law provided in the statutory scheme.

Appraisal And Contents of Contemporaneous

Written Acknowledgement Satisfied All But One

IRC 170(f )(12) Requirement:

Petitioner not only acquired a timely contemporaneous appraisal and timely provided it to the IRS on

his first filed/amended 2010 tax return, he also presented various documents including an acknowledgement of gift which, when read together, satisfied all of

the reporting and disclosure requirements of IRC

170(f )(12) save and except for the taxpayer’s SSN.

When read together the appraisal and all of the documents Petitioner received from the donee Air Museum

proved that Petitioner had made a charitable gift to

the air museum of his interest in the Hawker Jet prior

to December 31, 2010, that the Air Museum acknowledged that it would not resell the aircraft without

waiting to do so for the statutory-required time period

preventing resale, that the aircraft was going to be utilized by the Air Museum to display to the general public and that Petitioner retained no interest in the

aircraft and would receive no other form of private inurement back from the Museum as a result of the gift.

ROA 557-568, 571-581, 594, 582-586, 587-622, 623-626,

663-664.

IRC 170(f )(12)’s reporting requirements other

than a contemporaneous appraisal were inserted by

Congress to further enhance the ease of the Commissioner’s audit with one important exception. The requirement to provide a taxpayer identification number,

here the taxpayer’s SSN, could only be for the purpose

of identifying the taxpayer claiming the deduction. Under IRC Sec. 170’s statutory scheme, the donor taxpayer’s SSN will be supplied by the “first-filed return”

claiming the deduction if it is not provided on the contemporaneous written acknowledgement.

DISHARMONY IN THE LOWER COURTS CONCERNING PROPER RULES OF CONSTRUCTION

FOR CHARITABLE GIFT STATUTE:

Here, unless absolutely required to do so in order

to meet the intent of Congress, a rule of statutory construction should be followed by this Court which rejects a literal “crabbed” construction of both 170(f )(11)

and 170(f )(12). See Rickey v. US, 592 F.2d 1251 (5th

Cir. 1979) at P. 1258:

Nevertheless, the Crawford court was another

of the courts which rejected “slavish” interpretations of the Code in order to obtain results

more in line with the Congressional intent in

enacting the attribution and waiver sections

of the Code. In this case the Rickey estate terminated all of its actual interest in the corporation. We join the list of courts and reject a

crabbed reading of the Code when the rationale for applying a rule is absent, and

where application of the rule leads to inappropriately harsh results.

The above quoted rule announced in Rickey should

be applied here and here is why:

Despite the Commissioner’s and the Tax

Court’s insistence that Congressional intent

required the disallowance of the Petitioner’s

charitable deduction, the opposite is true because Congressional intent was satisfied. Although the Air Museum’s contemporaneous

written acknowledgement did not contain Petitioner’s social security number, Petitioner

could not claim the deduction without placing

the claim for deduction on his first-filed

amended return claiming the deduction.

This is so because a taxpayer’s return must be

signed AND CONTAIN THE TAXPAYER’S

IDENTIFICATION NUMBER. Otherwise,

the form 1040 submitted will not be considered a return and will be returned by the IRS

with instructions that it cannot be filed. Any

taxpayer who intended to claim and receive

the benefit of an overstated charitable

deduction would not submit the return claiming the overstated deduction without his signature or social security number. Therefore,

there was never any chance that Petitioner’s

charitable deduction for the gift of his interest

in the Hawker Jet in 2010 would have ever

evaded the audit scrutiny of the IRS simply

because the donee Houston Air Museum gave

Petitioner an incompetently drafted acknowledgement of the gift which did not contain

Petitioner’s social security number.

STRICTISSIMI JURIS AND HARSH RESULTS

VERSUS ABSURD RESULTS AND COMMON

SENSE READING REQUIREMENT. WHICH

SHOULD APPLY HERE?

The modern day insistence of the Secretary and

his Commissioner that tax statutes must be read

strictly and the harsh results of a strict reading must

be imposed has its roots in the ancient common law

interpretive doctrine of strictissimi juris. Under a

strictissimi juris reading, all the words of a statute

must be given effect regardless of the results even if

the results are harsh, unfair, or seem immoral to the

jurist applying the doctrine.

First, we must note that this Court recognizes and

applies the doctrine to statutory construction as well

as the interpretation of documents. It has done so since

its inception as a Federal Constitutional Court beginning at least as early as 1800. In a watershed decision

linking these ancient US Supreme Court cases applying that rule to modern tax practice, this Court opined

in Mobile Co. v. State of Tennessee, 153 U.S. 486, 490,

14 S. Ct. 968, 38 L. Ed. 793 (1894) as follows:

And the court is of opinion, and doth accordingly so adjudge and decree, that said eight

per cent clause is arbitrary, insensate, and absurd, and is void and unenforceable, and furnishes no obstacle whatever to the taxation of

said properties.

This Court in Mobile announced an exception to the

rule of strictissimi juris interpretation requiring federal statutes be enforced as worded regardless of harsh

results. The results of such a reading according to

Mobile must not be absurd.

The Mobile case was cited at least forty-eight

times after Mobile was handed down in 1894 leading

up to this Court’s United States v. Davis, 25 L. Ed. 2d

323, 90 S. Ct. 1041, 397 U.S. 301 (1970) decision supposedly requiring harsh application of Congress’ words

under a strict reading of statutes regardless of the absurdity which might result. None of this Court’s cases

citing Mobile which followed that decision reversed,

modified, or even mentioned Mobile’s absurd result exception to the strictissimi juris rule of statutory construction.

Most of these cases followed the example of

Combes v. Getz, 285 U.S. 434, 52 S. Ct. 435, 76 L. Ed.

866 (1932) which applied other grounds in Mobile to

the cases and facts before the High Court in each decision. (Impairment clause challenge can be mounted in

Federal Court to state law impairment of contracts.)

The Fifth Circuit has applied the rule of strictissimi juris interpretation as a legal rule of construction.

An example of such an application is Atlantic & Gulf

Stevedores, Inc. v. M/V Grand Loyalty, 608 F.2d 197

(5th Cir. 1979).

We are of the further opinion that 971 et seq.

is not to be viewed through the constricting

glass of Stricti juris, or as some would suggest,

Strictissimi juris. We view the legislative history of these sections to mandate a more liberal application than that which existed prior

to the 1971 amendments to the Maritime Lien

Act. Our review leads us inexorably to the

conclusion that it was the intent of the Congress to make it easier and more certain for

stevedores and others to protect their interests by making maritime liens available

where traditional services are routinely rendered. See Nacirema Operating Co., Inc. v.

S. S. Al Kulsum, 407 F.Supp. 1222 (S.D.N.Y.

1975). 1973) which interpreted a zoning ordinance.

See also Gilbert Imported Hardwoods, Inc. v. 245 Packages of Guatambu Squares, More or Less, 508 F.2d 1116

(5th Cir. 1975) (U.S. tariffs subject to strictissimi juris

construction.)

In modern legal practice including tax practice

this Court has engrafted an additional consideration

ameliorating the harsh effects of a strictissimi juris

construction which may lead to absurd results. Federal

Courts reviewing a tax statute must give it a common

sense reading in an effort to avoid absurd results in

enforcing the statute considered. See Griffin v. Oceanic

Contractors, Inc., 458 U.S. 564, 575, 102 S. Ct. 3245,

3252, 73 L. Ed. 2d 973 (1982). An example of proper

application of this Court’s rule of construction which

is an exception to the harsh reading of IRC 170(f )(12)

advocated by the Secretary and his Commissioner and

swallowed far too frequently by the Tax Court’s current

jurists can be found in Transbrasil S.A. Linhas Aereas

v. Department of Transp., 791 F.2d 202, 205 (D.C. Cir.

1986).

In addition, it seems semantic nonsense for

the FAA to calculate the “frequency of operations” during months in which Transbrasil

could not or did not operate. Statutory language must be accorded a common sense reading, yet the FAA’s interpretation of Sec. 124(f )

requires an airline which has been operating

six flights a month during its three month period of actual operation to reduce its frequency of operations to just over one flight a

month as the result of a provision whose purpose is merely a provision to maintain the

status quo with respect to frequency of operations. The Supreme Court has instructed that

“interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the

legislative purpose are available.” Griffin v.

Oceanic Contractors, Inc., 458 U.S. 564, 575,

102 S.Ct. 3245, 3252, 73 L.Ed.2d 973.

To the ameliorating effects of a requirement that

Federal Courts give a common sense reading when giving construction to a tax statute must be added the

requirement that the statute in question must be read

logically to uphold rather than frustrate the intent of

any statutory scheme enacted by Congress to which

the statute is applicable. See Word v. US Commodity

Futures Trading Comm’n, 924 F.3d 1363, 1369 (11th

Cir. 2019).

Third, Word’s interpretation would lead to absurd results thwarting Congress’ intent.

Lewis v. Barnhart, 285 F.3d 1329, 1332 (11th

Cir. 2002) (courts will interpret statutes to

avoid “absurdity of results” (internal quotation marks omitted)). All a petitioner would

have to do is simply not appeal the original

order requiring him to pay, refuse to pay, move

to set aside the original order later, and, if he

loses that motion, appeal the denial, never

having to post a bond while continuing to delay payment. That would encourage the very

dilatory tactics and mounting of expenses in

collection of the reparation awarded that Congress intended to discourage by imposing the

statutory bond requirement. The more logical

reading is that the bond required must be

twice the size of at least the reparation order

originally entered “against the [petitioner]”

before the CFTC. 7 U.S.C. 18(e).

Here, logic dictates that a taxpayer like Petitioner

who has supplied the Commissioner with his social security number while reporting and claiming the deduction on an amended first-filed return within the

contemplation of IRC 170(f )(12) has complied with all

of the substantiation proof and reporting requirements

to sustain his charitable gift deduction even if his

social security number was incompetently omitted

from his acknowledgement of gift. Congressional intent that an overstated deduction by Petitioner would

not escape detection by the Commissioner due to a failure to identify Petitioner so that he could be located

was obviated by Petitioner’s voluntary identification of

himself when he placed his social security number on

his properly filed amended 2010 1040 which first

claimed the charitable deduction.

DE MINIMUS NON CURAT LEX:

Recently this Court opined that an absurd result

which must be avoided in a statutory construction is

one which reaches a consequence:

“So monstrous, that all mankind would, without hesitation, unite in rejecting the application.” Sturges, 4 Wheat., at 203.

King v. Burwell, 135 S. Ct. 2480, 2505, 192 L. Ed. 2d

483, 576 U.S. 473, 514 (2015). This Court derived its

definition of an absurd result from Sturges v. Crowninshield, 4 Wheat. 122, 17 U.S. 122, 4 L. Ed. 529 (1819),

an 1819 decision which rejected an interpretation of

the law and the U.S. Constitution which would allow

the institution of debtor’s prison to prevail over state

bankruptcy laws. Yet, in Mobile, supra, this Court rejected any statutory construction which would exempt

property from taxation as absurd. These two definitions of absurd results utilized by this Court cannot be

reconciled, but they prove that both the monster and

the monstrous result lie within the eye of the jurist

making the statutory construction.

In any event Petitioner suggests that denial of his

charitable deduction based on a donee’s error in failing

to include the donor’s social security number is an absurd result which any reasonable member of the public

would deem monstrous, if not immoral.

Application of the statutory rule of construction

“de minimus non curat lex” should be applied here. See

Houston v. U.S. Gypsum Co., 580 F.2d 815 (5th Cir.

1978). In light of all of Petitioner’s substantiation

which he submitted to the Commissioner, the Tax

Court, and the Fifth Circuit, omission of his social security number in the donee Museum’s acknowledgement of gift letter was a “trifle” which cannot serve as

a basis for a denial for the Petitioner’s charitable deduction.

PETITIONER WAS ENTITLED TO A HARDSHIP EXEMPTION UNDER I.R.C. § 170(F)(11).

IRC Sec. 170(f)(11) provides that a taxpayer

proving “reasonable cause” for delay and lack of wilful neglect is excused from the IRC Sec. 170 deadlines

for obtaining an appraisal and other documents substantiating his deduction. A taxpayer’s proof of reasonable cause and lack of wilful neglect saves all

charitable deductions under IRC § 170 from disallowance due to defects and timeliness even if the taxpayer

cannot prove substantial compliance. Tax Court Judge

Laro made this clear in Alli v. Comm’r, T.C. Memo.

2014-15 at PP 60-61:

Even if a taxpayer does not strictly or substantially comply with the qualified appraisal

and other documentation requirements, a

charitable contribution deduction will not be

denied if the failure to meet those requirements is due to “reasonable cause and not to

willful neglect”. Sec. 170(f )(11)(A)(ii)(II). The

burden of proving reasonable cause is on the

taxpayer. Rule 142(a).

In Crimi v. Commissioner, T.C. Memo. 2013-51,

we interpreted the section 170(f)(11)(A)(ii)(II)

reasonable cause standard by looking to the

reasonable cause standard of other Code provisions. “Reasonable cause” requires that the

taxpayer have exercised ordinary business

care and prudence as to the challenged item.

Thus, the inquiry is inherently a fact-intensive one, and facts and circumstances must be

judged on a case-by-case basis.” Id. at *99*102 (citing United States v. Boyle, 469 U.S.

241 (1985)).

Alli destroys the Commissioner’s argument that IRC

Sec. 170(f )(11)’s reasonable cause provision does not

apply to charitable deductions subject to the provisions

of IRC Sec. 170(f )(12). Petitioner was entitled to a trial

in the Tax Court on his claims of “reasonable cause”

excusing any alleged defects in the timeliness or content of his substantiation. Petitioner’s appraisal met

all 15 requirements of a qualified appraisal under IRC

Sec. 170.

Government counsel maligns Petitioner’s Declaration testimony describing the serious illness which

Izen acquired prior to December, 2010, Lyme neuroboroleosis, a spirochete infection of the brain and nervous system which severely reduced Petitioner’s

eyesight, caused high blood pressure which could not

be controlled by traditional blood pressure medication

and which inhibited Izen from conducting his legal

business and his financial affairs including tax reporting obligations. Contrary to the Government’s unsupported surmise that Petitioner could have timely

corrected the lack of an acknowledgement of gift from

the donee containing Petitioner’s SSN if Petitioner

filed his personal income tax return 1040 for tax year

2010 on the extended date in October, 2011 and managed to file a Tax Court Petition and amend his petition, Petitioner’s actions in filing a return, a Tax Court

Petition and later an amendment many years later, are

just as consistent with a taxpayer who first contracted

a serious illness and acted in good faith and as diligently as he could to meet his tax filing and substantiation requirements. (ROA 574-577). The Tax Court’s

summary judgment order (App. E) which deprived Izen

of trial on his issue of reasonable cause should be reversed and alternatively remanded for a new trial if

this Court does not reverse and render in Petitioner’s

favor and allow Petitioner’s charitable deductions.

PETITIONER IZEN WAS ENTITLED TO

SUMMARY JUDGMENT BECAUSE THE

COMMISSIONER FAILED TO PRESENT

CONTROVERTING EVIDENCE SUPPORTING HIS CLAIM THAT A CHARITABLE DEDUCTION WAS NEVER MADE AND THAT

THE CHARITABLE DEDUCTION HAD NO

VALUE.

The Commissioner’s summary judgment evidence

did not provide any opinion of the amount of the aircraft’s fair market value. (ROA 571-581). The Commissioner’s attack on the veracity of Petitioner’s qualified

appraisal and its appraiser was a smoke screen put

forth in an effort to avoid the consequences of the Government’s failure to present competent summary judgment evidence controverting qualified appraiser

McKenzie’s opinions.

Tax Court Judge Lauber had no unbridled discretion to totally disregard qualified expert opinion as to

value. He is no qualified appraiser and his failure to

even mention the comparable sales utilized by appraiser McKenzie in reaching his opinion are more reflective of the bias Tax Court Judge Lauber has

continually demonstrated in his Tax Court opinions

disfavoring allowance of charitable contributions rather than any specialized knowledge he or any other

Tax Court Judge could profess to hold as a result of

serving in that position.

The Government’s failure to properly prepare its

case and present competent summary judgment proof

in support of its valuation opinions which properly

controverted the expert opinion of Petitioner’s qualified appraiser mandates reversal and rendition in this

Court in Petitioner’s favor sustaining Petitioner’s charitable deduction. The Commissioner, like any other litigant under the Tax Court Rules of Practice and

Procedure, must meet summary judgment standards

requiring presentation of controverting summary

judgment proof or face the consequences.

The Tax Court’s summary judgment standard of

proof governing summary judgment evidence under

Tax Court Rules of Practice and Procedure Rule 121(a)

is no different than Federal Rules of Civil Procedure

Rule 56. R & J Partners v. Comm’r of Internal Revenue

(5th Cir. 2011).

---------------------------------♦---------------------------------

CONCLUSION

The opinion and judgment of the Court of Appeals

should be reversed and this Court should render judgment granting Petitioner his charitable deduction disallowed by the Commissioner and the Tax Court.

Alternatively, the opinion and decision of the Court of

Appeals should be reversed and this case should be remanded with instructions for a new trial before the

United States Tax Court on the validity of Petitioner’s

charitable deduction.

Respectfully submitted,

JOE ALFRED IZEN, JR.

Counsel of Record

5526 McKnight Street

Houston, TX 77035

(713) 668-8815

jizen@comcast.net

Counsel for Petitioner

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.