Peter L. Clinco, Deceased, C. M. Barone-Clinco, Successor in Interest, and C. M. Barone-Clinco v. Commissioner of Internal Revenue
United States Tax Court · U.S. Tax Court
Conduct
Here counsel cited three Tax Court cases that do not exist as cited, did not explain them after the Commissioner flagged them, and re-listed one in his table of authorities.
Consequence
No sanction. The court said "a bit of embarrassment" was "enough for now," noting the Tax Court has not yet sanctioned AI misuse: "Yet."
Lesson
Here the court weighed counsel's silence after the Commissioner flagged the citations, not only the citations themselves.
Verified September 29, 2026
- Citation
- Clinco v. Commissioner, T.C. Memo. 2026-16, No. 8077-23 (T.C. Feb. 9, 2026) (Holmes, J.)
- Decided
- February 9, 2026
Summary
Challenging the validity of the notice of deficiency, petitioners' counsel Abraham R. Wagner cited four cases, and Judge Holmes wrote that "[t]hree appear to be hallucinations generated by a large language model AI." "Cacchillo v. Commissioner, 130 T.C. 132 (2008)," offered as holding that an unsigned notice ousts the court of jurisdiction, "does not, however, exist"; the cited page is in Porter v. Commissioner, on section 6015(f) relief. "Miller v. Commissioner, 57 T.C. 440 (1971)" and "Tefel v. Commissioner, 118 T.C. 324 (2002)" do not exist as cited: the Miller page is in Winfield Manufacturing Co. v. Renegotiation Board, which never mentions a notice of deficiency, and the Tefel page is in Hillman v. Commissioner, on S corporation management fees. The Commissioner catalogued the citations in his answering brief, but Wagner "chose not to clarify their origins in his reply" and listed Cacchillo again in his table of authorities. The court wrote that the "bouillabaisse of case names, reporter citations, and legal propositions suggests something cooked up by AI," and that the presence of such citations is "unacceptable."
- AI tool:
- Unidentified (the court said three citations "appear to be hallucinations generated by a large language model AI" but that it is "not absolutely clear from the record" whether counsel used generative AI; no tool is named)
- Amount or terms:
- None
What did the court warn about?
No sanction. In footnote 8 the court wrote that "[i]t is not absolutely clear from the record whether Mr. Wagner used generative AI" and that "[a] bit of embarrassment for failure to citecheck, failure to 'fess up, and (if it occurred) use of AI to write a section of the brief is enough for now," adding that courts have begun to sanction lawyers more seriously for using AI as a drafting shortcut: "Tax Court has not done so. Yet." The court also wrote that submitting fictitious caselaw is "a recipe for sanctions and a clear violation of Rule 11(b)," while noting in footnote 7 that the Tax Court has no Rule 11 equivalent apart from Rule 33(b) and applies the Model Rules of Professional Conduct. On the merits the court rejected the signature challenge, sustained the Commissioner's unreported-gross-receipts determination (as revised before trial), and disallowed the Schedule E depreciation; decision will be entered under Rule 155.
Why does Peter L. Clinco, Deceased, C. M. Barone-Clinco, Successor in Interest, and C. M. Barone-Clinco v. Commissioner of Internal Revenue matter for law firms using AI?
Clinco is a Tax Court memorandum opinion that addressed, in the court’s words, “a garnish we’ve reviewed in orders but not in an opinion: What should we do when lawyers cite hallucinated authorities likely generated through artificial intelligence (AI)?” Judge Holmes traced each of counsel’s three problem citations to the page it actually cites: Porter v. Commissioner for “Cacchillo,” Winfield Manufacturing for “Miller,” and Hillman for “Tefel.” None concerned the signature requirements for a notice of deficiency that counsel cited them for, and the court separately explained that settled caselaw treats even an unsigned notice as valid.
The opinion’s AI language is consistently hedged. The three citations “appear to be hallucinations”; the mix of names, cites, and propositions “suggests something cooked up by AI”; and footnote 8 says “[i]t is not absolutely clear from the record whether Mr. Wagner used generative AI.” What the court treated as established was the conduct around the citations: the Commissioner catalogued them, counsel “chose not to clarify their origins in his reply,” and he listed Cacchillo again in his table of authorities.
The court chose embarrassment over sanctions “for now,” quoting Chief Justice Roberts that citing nonexistent cases is “Always a bad idea,” and closed footnote 8 with “Tax Court has not done so. Yet.” Footnote 7 explains that the Tax Court has no Rule 11 equivalent apart from Rule 33(b) but that lawyers appearing before it must follow the Model Rules of Professional Conduct, including Rule 3.3(a)(1)‘s duty to correct a false statement of law. Firms documenting compliance may wish to consider that here the failure to correct after the Commissioner’s brief weighed in the court’s account alongside the citations themselves.
Implications for your firm
Operational steps a firm reading this case may wish to consider documenting. Strategic and rule-application calls belong to your firm's attorneys.
- Verify reporter citations against the cited page. Here each nonexistent citation pointed into a real, unrelated Tax Court opinion.
- Review the reply brief when an opponent challenges a citation. The court faulted counsel's choice not to clarify the citations' origins and his re-listing of Cacchillo.
- Consider which professional-conduct rules apply in a forum whose only Rule 11 analogue is Rule 33(b). The Tax Court noted that lawyers before it must follow the Model Rules, including Rule 3.3(a)(1).
Sources
Primary sources
- The opinion does not confirm Mr. Wagner used generative AI; the court explicitly stated, "It is not absolutely clear from the record whether Mr. Wagner used generative AI to secure legal precedent for his arguments." AI use is the court's surmise from the pattern of the citations, not a finding.