Clinco v. Commissioner

What happened

The underlying dispute concerned a restaurant. The Commissioner reconstructed roughly $2.2 million in unreported gross receipts and disallowed depreciation deductions for want of substantiation, and the estate contested both along with the validity of the notice of deficiency.

In support of one argument, counsel for the petitioners cited four cases. Three of them do not exist. The court identified them as Cacchillo v. Commissioner, 130 T.C. 132 (2008); Miller v. Commissioner, 57 T.C. 440 (1971); and Tefel v. Commissioner, 118 T.C. 324 (2002). Each carries the outward form of a real citation, with a volume, a reporter, a page and a year.

What the court did

The court addressed the citations in the opinion rather than in a separate order. Its language is quotable and was plainly meant to be: the persuasiveness of the argument, it wrote, collapses like an overmixed souffle when one looks at the citations used to prop it up, and three of the four cited cases appear to be hallucinations generated by a large language model.

It went on to state that submitting a brief with fictitious caselaw is a recipe for sanctions and a clear violation of Rule 11(b) of the Federal Rules of Civil Procedure, and quoted the Chief Justice's observation that it is always a bad idea.

No sanction followed. The court named the attorney, said what the conduct was, and left it there. On the merits the Commissioner prevailed on the notice of deficiency, on the reconstruction of receipts and on the depreciation deductions.

Where it stands

The opinion issued February 9, 2026 as a memorandum opinion. No sanctions proceeding, disciplinary referral or appeal was located as of September 28, 2026.

Read it beside Mata v. Avianca, where a $5,000 penalty followed fabricated citations in 2023, and Lnu v. Blanche, where the Ninth Circuit suspended two attorneys in 2026. The distance between those outcomes and this one is not explained by the conduct, which is materially the same in each. It is explained by what happened after the court asked.

The matter is also the clearest reminder available that a fabricated citation is not a technical defect. The three cases here were offered to establish a proposition, and the proposition failed with them.

The obligation it engaged

Clause 3, independent authority, is the whole of it. Nothing enters on the authority of a system; every citation is confirmed against a source that exists independently of it, and the person offering it can identify that source. A citation with a plausible volume and page is exactly the output this clause exists to catch, because plausibility is what a generative system produces most reliably.

Clause 4, checkability before adoption, is the procedural half. Before adopting an output, identify the specific thing it would be checked against. For a case citation that thing is the reporter, and the check takes a minute. Three minutes would have prevented this.

Sources

• United States Tax Court · February 9, 2026
  Clinco v. Commissioner, T.C. Memo. 2026-16
• Journal of Accountancy · September 2026
  A recipe for sanctions: AI-hallucinated citations in tax

What could not be confirmed

The opinion attributes the fabricated citations to a large language model but identifies no particular system, and no statement by counsel about which system was used was located. Whether any sanctions proceeding or disciplinary referral followed was not determined. The full caption is Peter L. Clinco, Deceased, C. M. Barone-Clinco, Successor in Interest, and C. M. Barone-Clinco v. Commissioner.