Business Related Issues
Tax Opinions / Business Related Issues / Charitable Issues / Full Tax Court Opinions

Deckard v. Commissioner
155 T.C. No. 8

On September 17, 2020, the Tax Court issued its opinion in Deckard v. Commissioner (155 T.C. No. 8). The primary issue presented in Deckard v. Commissioner was whether as the officer and director of a Kentucky non-stock, non-profit corporation (as constrained by Kentucky law and the company’s articles of incorporation), the taxpayer had an ownership interest in the company equivalent to that of a shareholder for purposes of applying the passthrough loss provisions of subchapter S of the Code. A Fabulous Plan Gone Awry Because of Kentucky in Deckard v. Commissioner The road to hell is paved with good intentions. The road to Milan, apparently, passes through Louisville, Kentucky. That is what Clinton Deckard believed when he sunk $275,000 into a Louisville fashion week through his company Waterfront Fashion Week, Inc (“Waterfront”). The petitioner had been advised to create a nonprofit, tax-exempt entity to conduct the fashion week. He was…

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September 17, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Belanger v. Commissioner
T.C. Memo. 2020-130

On September 10, 2020, the Tax Court issued a Memorandum Opinion in the case of Belanger v. Commissioner (T.C. Memo. 2020-130). The primary issues before the court in Belanger v. Commissioner were (1) whether the IRS timely mailed a notice of deficiency to the petitioner; (3) whether the petitioner had unreported income; and (3) whether the petitioner was liable for civil fraud penalties. Background to Belanger v. Commissioner The petitioner is French-Canadian, so he can’t be too bad a guy, eh. He is not, however, the brightest bulb in the shed. He dropped out of high school in 10th grade, and though he went the trade school and founded a successful foundation…company, that is to say a company that laid foundations, his method of “accounting” left much to be desired. The “Step Method” of Accounting The petitioner did not use QuickBooks or other accounting software to maintain Number One Foundations’…

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September 10, 2020
Read more about the article The Korean American Senior Mutual Assoc. Inc. v. Commissioner <section> T.C. Memo. 2020-129 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

The Korean American Senior Mutual Assoc. Inc. v. Commissioner
T.C. Memo. 2020-129

On September 9, 2020, the Tax Court issued a Memorandum Opinion in the case of The Korean American Senior Mutual Assoc. Inc. v. Commissioner (T.C. Memo. 2020-129). The primary issue before the court in Korean-American was whether The Korean-American Senior Mutual Association, Inc. (KASMA) was operated exclusively for one or more exempt purposes as set forth in IRC § 501(c)(3). Background to The Korean American Senior Mutual Assoc. Inc. v. Commissioner The Korean-American Senior Mutual Association, Inc. (KASMA) was founded in 1996 informed for four purposes: (1) to provide burial benefits and assistance to the surviving families of deceased; (2) to provide information to senior citizens in regard to their burial concerns and general welfare; (3) to provide organized activities for senior citizens to enhance their effective use of free time and friendship; and (4) to provide annual scholarships to needy, promising students. In August 1998, the IRS sent a…

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September 9, 2020
Procedural Issues
Tax Opinions / Full Tax Court Opinions / Procedural Issues

Fowler v. Commissioner
155 T.C. No. 7

On September 9, 2020, the Tax Court issued its opinion in Fowler v. Commissioner (155 T.C. No. 7). The primary issue presented in Fowler v. Commissioner was whether the electronic filing of a tax return which was rejected by the IRS’s software for failure to include and Identity Protection Personal Identification Number (IP PIN) triggered the three-year limitations period to assess tax pursuant to IRC § 6501(a). Background to Fowler v. Commissioner The petitioner timely applied for an extension to file his 2013 return until October 15, 2014. The petitioner submitted his 2013 Form 1042 the IRS on October 15, 2014; October 28, 2014; and April 30, 2015. Each 2013 Form 1040 contain the same information to calculate tax liability; however, the IRS accepted only the final submission. The IRS rejected the first submission which was e-filed for failure to provide a valid Identity Protection Personal Identification Number (IP PIN)…

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September 9, 2020
Procedural Issues
Tax Opinions / Full Tax Court Opinions / Procedural Issues

Sutherland v. Commissioner
155 T.C. No. 6

On September 8, 2020, the Tax Court issued its opinion in Sutherland v. Commissioner (155 T.C. No. 6). The primary issues presented in Sutherland v. Commissioner were whether IRC § 6015(e)(7) applied to a petition filed prior to July 1, 2019, and whether remand to appeals in a standalone innocent spouse case to allow the petitioner to present additional evidence was appropriate. Changes to Innocent Spouse Statute under Taxpayer First Act in Sutherland v. Commissioner The Taxpayer First Act (Act), 133 Stat. at 988 (2019), added IRC § 6015(e)(7) and IRC § 6015(f)(2). IRC § 6015(e)(7) addresses the scope and standard of our review in stand-alone innocent spouse cases, while IRC § 6015(f)(2) sets forth a limitation on the IRS’s authority to grant requests for equitable relief. Congress specified that the amendments effected by § 1203(b) of the Act, which addressed the innocent spouse additions, applied to petitions or requests…

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September 8, 2020
Read more about the article Dickinson v. Commissioner <section> T.C. Memo. 2020-128 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Dickinson v. Commissioner
T.C. Memo. 2020-128

On September 3, 2020, the Tax Court issued a Memorandum Opinion in the case of Dickinson v. Commissioner (T.C. Memo. 2020-128). The primary issue before the court in Dickinson v. Commissioner was whether the IRS’s recharacterization of the petitioners’ stock donations as taxable redemptions followed by donations of the cash proceeds was appropriate, or whether the form of the transaction should be respected. Background to Dickinson v. Commissioner The petitioner-husband was the CFO and shareholder of GCI during the years at issue. The GCI board of directors authorized the shareholders to donate GCI shares to the Fidelity Investment Charitable Gift Fund, a tax-exempt organization under IRC § 501(c)(3). Upon transfer of the stock, Fidelity liquidated it. The petitioner-husband signed a letter of understanding to Fidelity, indicating that the transferred stock was exclusively owned and controlled by Fidelity. The petitioner-husband received confirmation letters from Fidelity, which explained that Fidelity had exclusive…

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September 3, 2020
Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions

Franklin v. Commissioner
T.C. Memo. 2020-127

On September 3, 2020, the Tax Court issued a Memorandum Opinion in the case of Franklin v. Commissioner (T.C. Memo. 2020-127). The primary issues before the court in Franklin v. Commissioner were whether the petitioner was entitled to meal, entertainment, and travel expense deductions and whether the petitioner was entitled to deduct certain business losses. Creating Substantiation in Franklin v. Commissioner The petitioner was in the real estate investment consulting business, which appears to be a fancy way of saying he told rich people what to buy.  The petitioner and timely filed his Form 1040 for 2014. After receiving notice of the IRS was examining his 2014 return, the petitioner created three travel logs to substantiate his travel expenses. The first travel log was created immediately after he received notice of examination of his 2014 return and was submitted with the petition. This first travel log was an incomplete record…

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September 3, 2020