Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Northside Carting Inc. v. Commissioner
T.C. Memo. 2020-18

On January 23, 2020, the Tax Court issued a Memorandum Opinion in the case of Northside Carting Inc. v. Commissioner (T.C. Memo. 2020-18). The primary issue presented in Northside Carting Inc. v. Commissioner was whether the IRS abused its discretion by rejecting collection alternatives (an installment agreement) raised in an equivalent hearing. Background to Northside Carting Inc. v. Commissioner The petitioner’s business is garbage and has been garbage since 1996. At the time the petition was filed, the company had approximately 50 garbagemen on its payroll. The trouble was, although the petitioner filed its Forms 941 (quarterly Federal employment tax return), it did not, technically, pay the taxes that it reported. If we’re splitting hairs, it paid some of the taxes due, but not enough to satisfy Uncle Sam, who commenced a collection action in 2016. With due deference to Judge Lauber, this case could have (and should have) been decided…

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January 23, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Isaacson v. Commissioner
T.C. Memo. 2020-17

On January 23, 2020, the Tax Court issued a Memorandum Opinion in the case of Isaacson v. Commissioner (T.C. Memo. 2020-17). The issues presented in Isaacson v. Commissioner were whether the petitioner (1) failed to report taxable income for tax year 2007, and (2) if so, was the petitioner, therefore, liable for the civil fraud penalty under IRC § 6663. Background to Isaacson v. Commissioner The petitioner, a trial attorney, who specialized in (among other areas) tax fraud litigation, secured a $12.75m settlement for four victims of abuse by Catholic clergy when they were children. He “earned” a 60% contingency fee for his services in 2007. This, apparently, was legal in California. Notwithstanding this boon, the petitioner got greedy, invested the money (intended for his firm’s trust fund account) in risky securities at UBS (Switzerland), and cried foul when the market dropped out in 2008, and he lost much of…

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January 23, 2020