On February 26, 2020, the Tax Court issued a Memorandum Opinion in the case of Tran v. Commissioner (T.C. Memo. 2020-27). The three primary issues presented in Tran v. Commissioner were (1) whether the IRS is barred by the doctrine of collateral estoppel from relitigating the petitioners’ tax liability for 2006; (2) whether the petitioners failed to report gross receipts on Schedule C (Profits or Loss From Business) with regard to their nail salons in 2004, 2005, and 2006; and (3) whether both the petitioner-husband and petitioner-wife were liable for the civil fraud penalty of IRC § 6663 and the accuracy related penalty of IRC § 6662, respectively. Background to Tran v. Commissioner The petitioner-husband (Le) and the petitioner-wife (Tran) owned and operated CA Nails and Cali Nails in Lincoln, Nebraska. Tran, whose first name is Nghia, goes by the stage name “Nancy.” Le, whose first name is Dung, goes…