Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

Chancellor v. Commissioner
T.C. Memo. 2021-50

On May 4, 2021, the Tax Court issued a Memorandum Opinion in the case of Chancellor v. Commissioner (T.C. Memo. 2021-50). The primary issue presented in Chancellor v. Commissioner was whether the IRS erred in disallowing deductions the petitioner claimed for certain business expenses, charitable contributions, and state and local tax. Brief Background to Chancellor v. Commissioner Ms. Viola Chancellor, of Nevada, is a notary and a paralegal.  In 2015, she received $400 from her duties as such.  She reported a whopping $252 in tax due, determined on the basis of a $40,000 pension, itemized deductions of $14,000, and a business loss of $19,000.  These latter two categories caused a bit of a disagreement between the petitioner and the IRS. The Deductions The petitioner claimed deductions for, inter alia, charitable contributions of $6,000 in cash contributions and $500 in noncash contributions, as well as a state and local tax deduction…

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May 4, 2021
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Barnes v. Commissioner
T.C. Memo. 2021-49

On May 4, 2021, the Tax Court issued a Memorandum Opinion in the case of Barnes v. Commissioner (T.C. Memo. 2021-49). The primary issues presented in Barnes v. Commissioner were whether the statute of limitations on collections had run with respect to the petitioners 2003 liability, whether their 2003 tax liability had been discharged in bankruptcy, whether the IRS abused its discretion in sustaining a Notice of Federal Tax Lien as to the 2003 liability. Background to Barnes v. Commissioner The petitioners’ trials and tribulations with the IRS began when they jointly filed an untimely Federal income tax return for 2003 reporting a tax liability of $31,000. The IRS sent them a timely notice of deficiency determining a tax deficiency of $55,000, an accuracy-related penalty of $11,000, and a late-filing addition to tax of $6,000.  They had their day in court in 2010, and a month after their Tax Court…

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May 4, 2021
Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

Estate of Jackson v. Commissioner
T.C. Memo. 2021-48

On May 3, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Jackson v. Commissioner (T.C. Memo. 2021-48). Two primary issues were dealt with in this gargantuan (271 pages) opinion by Judge Holmes. The primary issue in Estate of Jackson v. Commissioner was the valuation of three contested assets, Michael Jackson’s image and likeness, and the estate’s interest in two trusts through which the estate held an interest in Sony/ATV Publishing and an interest in Mijac Music, a music publishing catalog that owned the copyrights to compositions that Jackson wrote or cowrote, as well as compositions by other songwriters.  The secondary issue was whether, due to the huge discrepancy (hundreds of millions) in valuations, the estate was liable for a $200 million penalty. Judge Holmes’ Magnum Opus If you have read Briefly Taxing with any regularity, you will know two things.  I have a judge…

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May 3, 2021