Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Larkin v. Commissioner (T.C. Memo. 2020-70)

On May 28, 2020, the Tax Court issued a Memorandum Opinion in the case of Larkin v. Commissioner (T.C. Memo. 2020-70). The underlying issue before the court in Larkin v. Commissioner was whether the petitioners provided substantial, credible evidence to support their deductions claimed on their returns for the years at issue. Although there are a number of sub-issues, the entry of arguments and evidence into the record through pleading and briefs is the primary lesson of this case. A Harsh Lesson – If You Want the Tax Court to Consider an Issue, Plead it then Brief It! The Larkins’ opening brief challenges some (but not all) of the IRS’s determinations in the statutory notice of deficiency (SNOD). The Tax Court will not consider any issue or argument that the petitioners did not advance on brief as having been abandoned. See Mendes v. Commissioner, 121 T.C. 308, 312-13 (2003); Nicklaus…

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May 28, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Engle v. Commissioner
T.C. Memo. 2020-69

On May 28, 2020, the Tax Court issued a Memorandum Opinion in the case of Engle v. Commissioner (T.C. Memo. 2020-69). The sole issue before the court in Engle v. Commissioner was whether the criminal restitution order in this case falls within the scope of Firearms Excise Tax Improvement Act of 2010 (FETIA), Pub. L. No. 111-237, sec. 3, 124 Stat. at 2497, and therefore under the guidance of Klein v. Commissioner, 149 T.C. 341, 350 (2017). Background in Engle v. Commissioner Frederick Engle and the IRS have long been “acquainted” with one another. The petitioner evaded taxes for 16 years since 1984. Apparently Big Brother was not watching Mr. Engle’s finances quite closely enough, as it wasn’t until 2004 when Engle plead guilty to one count of criminal tax evasion. Engle was sentenced by the Western District of North Carolina in 2008, but the sentence was reversed and remanded by…

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May 28, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Novoselsky v. Commissioner
T.C. Memo. 2020-68

On May 28, 2020, the Tax Court issued a Memorandum Opinion in the case of Novoselsky v. Commissioner (T.C. Memo. 2020-68). The issues before the court in Novoselsky v. Commissioner were (1) whether (1) the litigation advance support payments were loans or gross income, and whether petitioners were liable for accuracy-related penalties. Background Facts to Novoselsky v. Commissioner During 2009 and 2011, the petitioner-husband (PH) practiced law with a focus on class action litigation. In those years he executed “litigation support agreements” with various individuals and entities (counterparties). Under these agreements the counterparties made an upfront payment to support the cost of litigation. If the litigation was successful, petitioner was obligated to return to the counterparty, from his award of attorney’s fees and costs, the counter-party’s initial payment plus a premium. If the litigation was unsuccessful, petitioner had no obligation to pay the counterparty anything. The petitioners did not report…

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May 28, 2020