Tax Court in Brief | September 7 – September 11, 2026

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

Thirteen days. That’s the gap between the deadline Katanga Properties, LLC wanted the Court to enforce and the day the IRS actually mailed its Notice of Final Partnership Adjustment. Judge Weiler denied its motion for summary judgment, and the reasoning reaches well past one Louisiana LLC. If you’ve ever signed a Form 872–M on a client’s behalf, this opinion tells you what that signature actually does. The week’s other two opinions press on the same nerve from different directions: an art dealer who couldn’t produce a single contemporaneous document, and a whistleblower who has spent nine years trying to add to a record that closed in 2017.

Does a Form 872–M Extension Also Extend the FPA Deadline?

Petitioner is an LLC taxed as a partnership and subject to the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015. It filed its 2020 Form 1065 on June 10, 2021, designating Evans as its partnership representative on Form 8979. The IRS selected the return for examination the following May. In January 2023, the partnership signed a Form 872–M, Consent to Extend the Time to Make Partnership Adjustments, and the IRS countersigned it in February, moving the section 6235(a)(1) period to May 30, 2025. The IRS issued a Notice of Proposed Partnership Adjustment on April 16, 2024, and mailed the FPA, disallowing a charitable contribution deduction, on March 25, 2025.

Taxpayer read section 6235(a) as a sequence, not a menu. Paragraph (1), on that reading, governs the NOPPA. Paragraph (2) governs the FPA when a partnership asks to modify an imputed underpayment. And paragraph (3), which gives the Commissioner 330 days after the NOPPA, governs the FPA when nobody asks. Katanga never requested a modification, so paragraph (3) supplied the deadline, and paragraph (3) ran on March 12, 2025. The argument was that Form 872–M extended the NOPPA clock and nothing else. Thirteen days late. Case over.

But the Court’s answer starts with five words Congress added. Section 6235(a) forbids an adjustment “after the later of” the three paragraphs that follow, and it separates those paragraphs with “or.” Judge Weiler read the two together: the paragraphs are disjunctive, and the Commissioner may act until the latest of the three dates runs. That reading tracks Mammoth Cave Property, LLC and JM Assets, LP, both of which say the same thing. Section 6235(b), in turn, lets the parties extend “the period described in subsection (a),” which is the whole subsection and not one favored paragraph inside it. The Form 872–M pushed section 6235(a)(1) to May 30, 2025, and May 30 comes after March 25.

And Taxpayer’s fallback fared no better. It distinguished between mailing notices under section 6231(b) and making adjustments under section 6235(a). The Court found no such seam in the Code. “Adjustment” is broad enough to cover the process by which the Commissioner makes one, first proposed and then final, so an extension of the adjustment period necessarily carries the FPA along with it. Section 6231(b)(2) sets a floor rather than a ceiling: it tells the Commissioner how early he may mail an FPA, then points back to section 6235 for how late. Footnote 6 includes a warning for anyone who counts to 330 and relaxes. The Court acknowledged that sections 6231(b)(2) and 6235(a)(3) together guarantee at least a 60-day window, then added that nothing stops the Commissioner from issuing an FPA on day 331 or later so long as the limitations period is still open.

So the practical lesson runs the other way from how a Form 872–M usually gets sold to a client. Signing one doesn’t merely give the examiner room to finish a NOPPA. It also moves the outer boundary for the final notice, by however many months the consent says. Our full brief on Katanga Properties covers the timeline and the statutory text in detail.

When Is Money You Have to Give Back Still Income?

Taxpayer brokered art for more than 45 years and did 13 deals with Robert Mnuchin’s New York gallery, worth between $100 and $200 million. The fourteenth involved Picasso’s Man with Ice Cream Cone. Mnuchin would put in $16.5 million, Tunkl would add $2 million, and they would split resale profits. On January 11, 2018, the gallery wired $16.5 million to Ganymede International, Inc., Tunkl’s S corporation. Five days later, Ganymede wired $17.4 million to a Swiss account to close on a Francis Bacon painting that had nothing to do with the Picasso. The Picasso deal collapsed that spring. And nobody reported the $16.5 million on anything.

But Tunkl offered two reasons the money wasn’t gross income: it was a nontaxable customer deposit or a loan. Judge Landy rejected both, and the analysis in each case turned on the same date. Indianapolis Power & Light instructs a court to examine the parties’ relationship at the time of the deposit, and on January 11, 2018, Mnuchin was a co-investor rather than a customer. Tunkl wasn’t selling him the Picasso and wasn’t earning a commission on it. No obligation to repay existed that day either. The obligation showed up on June 14, 2018, when Mnuchin’s lawyers handed Tunkl an agreement and a demand note for $44 million.

The one document that pointed the other way was an invoice dated January 10. It was created in May and backdated at Mnuchin’s insistence. An invoice written in May and dated January is not the sort of contemporaneous evidence that wins a dominion-and-control fight, and the Court said as much, describing Tunkl’s supporting testimony as unreliable, unsupported, and thoroughly unconvincing.

And the loan theory fared no better under the Ninth Circuit’s seven-factor test in Welch. On the day the money moved, there was no note, no interest, no repayment schedule, and no collateral. The note that eventually appeared was payable on demand without interest and set no schedule at all. Tunkl has paid $2.5 million against a $44 million debt, the gallery has never sued to collect, and the $16.5 million piece was severed into its own note that he offered no evidence of having paid. He got to keep the money. That, more than any doctrinal point, is what sank him.

One footnote deserves a practitioner’s attention. The Court noted that the facts smelled like a joint venture, walked through what subchapter K would have required, and then declined to go there because neither party briefed it. Arguments nobody makes are arguments the Court treats as conceded. The full brief on Tunkl collects the authorities on deposits, advance payments, and true loans.

Can a Whistleblower Add to the Administrative Record After the Fact?

A word on posture before the substance. Berenblatt carries the citation T.C. Memo. 2026-75 and a filing date of August 27, 2026, and the Court served a corrected version of it on September 9. The opinion below is the corrected one.

Taxpayer traded foreign exchange. In 2000, he was pitched a digital-options shelter, funded an account, worked through the mechanics, concluded the payout would never materialize, and pulled his money back out. Seven years later, IRS Criminal Investigation interviewed him as one of more than a hundred potential witnesses in a shelter prosecution already two years old. Eight years later, with the collections from those prosecutions well publicized, he filed a Form 211 claiming his interview handed the government the economic substance doctrine and turned the whole campaign around. The IRS Whistleblower Office denied the claim because he gave them nothing new, and the special agent who interviewed him said so on a Form 11369.

Judge Copeland denied all three of Berenblatt’s motions. On supplementing the administrative record, Van Bemmelen separates completing a record from supplementing it, and supplementation requires one of the three narrow categories in City of Dania Beach: documents the agency deliberately or negligently excluded, background needed to see whether the agency weighed the right factors, or an explanation so thin it frustrates review. None of Berenblatt’s three document categories fit. The post-petition emails didn’t exist when the Whistleblower Office decided; the criminal trial excerpts were never before it; and his own client binder was in his possession the whole time and could have gone into the Form 211.

But he did win one point on the way down, and it’s the part of this opinion worth clipping. The Commissioner argued that “recorded interviews” in Treasury Regulation section 301.7623-3(e)(2)(ii) reaches only taint debriefings conducted after a Form 211. The Court declined to read a limitation into plain text that Treasury didn’t write, and it added that written notes count as a recording just as audio does. That reading survives Berenblatt’s loss and helps the next claimant whose debriefing notes the Service would rather leave out. It follows the same direction as Whistleblower 972-17W, where the Court pushed back on an overbroad redaction.

The grand jury request went nowhere, and the reasoning is structural. Under Baggot, a Whistleblower Office investigation isn’t preliminary to or connected to a judicial proceeding, so the office had no way to obtain grand jury material in the first place. A record can’t be supplemented with documents the agency was never entitled to see. Berenblatt also failed the particularized-need standard of Procter & Gamble and Sells Engineering by asking the Court to sample 800 boxes without saying what he expected to find. The Court called it a fishing expedition. The judicial notice motion met the same fate: 14 proposed adjudicative facts, most of them narrating a prosecution that touched Berenblatt only obliquely, several of them inference dressed as fact, and two of them grand jury testimony that isn’t public record at all. Judicial notice reaches procedural facts about other proceedings, not the contents of a sealed one. Read the full brief on Berenblatt for the standards and the citations.

Three Tax Court Opinions, One Question

Every one of this week’s Tax Court opinions turned on what the file showed on a particular day. For Katanga it was a countersigned consent that moved one date and, with it, every date measured from that one. Tunkl had a wire with nothing behind it, papered five months later by a man who by then had every reason to want paper. Berenblatt has an administrative record that closed in January 2017 and hasn’t reopened in the nine years since, through three motions and two trips to this Court. None of these three lost to a hostile rule of law. Each lost because the file had already closed.

If you’re holding an FPA, a notice of deficiency, or a whistleblower denial with a 30-day fuse attached, the Freeman Law Tax Court litigation attorneys can help you build the record before the deadline builds it for you. Prior weeks are collected in The Tax Court in Brief, and the opinions themselves are available through the Court’s opinion search.

The information in this article is for general educational purposes only and is not legal advice. Reading it does not create an attorney-client relationship with Freeman Law. Every matter turns on its own facts, and you should consult a qualified tax attorney about your circumstances.