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Tax Opinions / Charitable Issues

Loube v. Commissioner
T.C. Memo. 2020-3

On January 6, 2020, the Tax Court issued a Memorandum Opinion in the case of Loube v. Commissioner (T.C. Memo. 2020-3). The issues presented in Loube v. Commissioner were whether the petitioners had complied with § 155 of the Deficit Reduction Act of 1984 (DEFRA) with respect to the appraisal that they obtained regarding charitable deductions claimed on their return; and if not, whether the petitioners were in substantial compliance with DEFRA. Charitable Contributions, Generally in Loube v. Commissioner The deductibility of a charitable contribution depends on the donor-taxpayer meeting several conditions, which conditions are determined by the size and type of contribution.  The larger the contribution, the more stringent the documentation and substantiation that is needed.  See IRC § 170(a)(1).  With respect to non-cash donations, the amount of the contribution is generally equal to the fair market value of the property at the time of contribution. See Treas. Reg.…

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January 6, 2020
Procedural Issues
Tax Opinions / Penalties Under the Code / Procedural Issues

Chicago Baseball Holdings LLC v. Commissioner
T.C. Memo. 2020-2

On January 6, 2020, the Tax Court issued a Memorandum Opinion in the case of Chicago Baseball Holdings LLC v. Commissioner (T.C. Memo. 2020-2). The issue presented in Chicago Baseball Holdings LLC v. Commissioner was whether prior written supervisory approval of penalties was required before the IRS communicates the penalties to the taxpayer for the first time, even if such communication was informal. Jurisdiction in Chicago Baseball Holdings LLC v. Commissioner The Tax Court has jurisdiction to redetermine a deficiency if a taxpayer files a timely petition challenging a notice of deficiency. IRC § 6213(a). This jurisdiction includes the authority to redetermine any penalties or additions to tax and to readjust the adjustments made in a final partnership administrative adjustment (FPAA), if a timely petition is filed. IRC § 6214(a) (redetermination of penalties); IRC § 6226(a) (readjustment of adjustments made in FPAA). Further the Tax Court has the authority to determine…

3 Comments
January 6, 2020
Penalties Under the Code
Full Tax Court Opinions / Penalties Under the Code / Tax Opinions

Belair Woods LLC v. Commissioner
154 T.C. No. 1

On January 6, 2020, the Tax Court issued its opinion in Belair Woods LLC v. Commissioner (154 T.C. No. 1). The issue presented in Belair Woods LLC v. Commissioner was when, precisely, was written supervisory approval required pursuant to IRC § 6751(b)(1) (initial determination of penalty assessment). The penalties at issue in Belair Woods were gross overvaluation (IRC § 6662(h)), negligence (IRC § 6662(c)), and substantial understatement (IRC § 6662(d)). Written Supervisory Approval (IRC § 6751(b)(1) in Belair Woods LLC v. Commissioner No penalty under Title 26 (the Internal Revenue Code) may be assessed unless the initial determination of such assessment is personally approved in writing by the immediate supervisor of the individual/agent making such determination (or another higher-level official). IRC § 6751(b)(1). In Clay v. Commissioner, 152 T.C. 223, 249 (2019), the Tax Court interpreted IRC § 6751(b)(1) to require supervisory approval to be secured by the earlier of (1)…

12 Comments
January 6, 2020