Procedural Issues
Full Tax Court Opinions / Procedural Issues / Tax Opinions

McCrory v. Commissioner
156 T.C. No. 6

On March 2, 2021, the Tax Court issued its opinion in McCrory v. Commissioner (156 T.C. No. 6). The underlying issue presented in McCrory v. Commissioner was whether the preliminary award recommendation issued by the IRS’s Whistleblower Office under IRC § 7623(a) constitutes a binding “determination” within the meaning of IRC § 7623(b)(4).  Not so much. Procedural Background to McCrory v. Commissioner The petitioner filed 21 Forms 211 (Application for Award for Original Information) with the IRS’s Whistleblower Office (WBO), alleging that 21 taxpayers underreported their tax obligations. The WBO sent the petitioner a letter recommending a preliminary award under IRC § 7623(a). The petitioner neither agreed nor disagreed with the preliminary award recommendation. What the petitioner did instead was file a petition seeking review of the preliminary award recommendation. The IRS moved to dismiss, arguing that the Tax Court lacked jurisdiction. Short Holding and Takeaway in McCrory v. Commissioner…

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March 2, 2021
Read more about the article Substantiation of Charitable Contributions Under DEFRA
Tax Articles / All Articles / Charitable Issues

Substantiation of Charitable Contributions Under DEFRA

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.[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.[2] Determining the FMV, however, is the factor that taxpayers so often fail to meet. Are You (Compliant with) DEFRA? In 1984, Congress passed the Deficit Reduction Act of 1984 (DEFRA).[3] Section 155(a) of DEFRA authorized (and required) the Treasury to prescribe regulations implementing substantiation requirements for noncash charitable contributions in excess of $5,000, which substantiation necessarily would require “qualified appraisals” of the donated property.[4] The Treasury’s authority to promulgate regulations related to charitable donations is further set forth in IRC § 170(a)(1). In response to DEFRA,…

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March 2, 2021
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Gallegos v. Commissioner
T.C. Memo. 2021-25

On March 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gallegos v. Commissioner (T.C. Memo. 2021-25). The primary issue presented in Gallegos v. Commissioner was whether the team roping expenses the petitioner claimed on his Schedule C as business losses were business or personal in nature. Giddy-up, ya’ll… Setting the Stage for Gallegos v. Commissioner First, this is a Judge Holmes opinion, so you know it’s going to be gold. Second, it involves competition team roping, which might even make for an entertaining opinion if it were authored by Judge Gustafson, who is a rather straight-laced jurist. How many sentences will Judge Holmes be able to write without a pun? One. One sentence. I am so excited…like, Jessie Spano on caffeine pills excited. Background (on Roping Steers) The petitioner grew up on the “largest ranch” in the largest town in New Mexico.  “But it was…

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March 2, 2021