Mathews v. Commissioner (T.C. Memo. 2021-85)

On July 8, 2021, the Tax Court issued a Memorandum Opinion in the case of Mathews v. Commissioner (T.C. Memo. 2021-85). The primary issue presented in Mathews was whether the Tax Court had jurisdiction to hear a petitioner when the pro se petitioner filed his petition (sent a letter to the Tax Court) well after the 90 day deadline had passed, and whether because the Tax Court had jurisdiction over one year’s petition, the Tax Court ipso facto had jurisdiction over another. Held: No, and No. The Timeliness Problem The IRS sent the notice of deficiency by certified mail on March 24, 2016, to the petitioner at his address in Conway, Arkansas address as evidenced by the notice itself and the certified mailing list, which was the same address he has used in all of his correspondence in this case. The petitioner did not file his “petition” (a letter to…

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Delgado v. Commissioner (T.C. Memo. 2021-84)

On July 7, 2021, the Tax Court issued a Memorandum Opinion in the case of Delgado v. Commissioner (T.C. Memo. 2021-84). The primary issue presented in Delgado was whether the petitioner’s frivolous argument that he did not receive taxable income in 2017 because he was not engaged in a “trade or business” as defined by IRC § 7701(a)(26) held any water… Quick Work of the Frivolousness Compensation for services is included in gross income. IRC § 61(a)(1). Petitioner argues that the payments he received as an independent contractor were not taxable to him because he did not participate in a “trade or business” as defined in IRC § 7701(a)(26). Specifically, petitioner contends that a person is only in a “trade or business” if he or she performs “the functions of a public office” and that earnings received from private companies are not taxable income.  Not unsurprisingly, a similar argument was…

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Peterfreund v. Commissioner (T.C. Memo. 2021-83)

On July 7, 2021, the Tax Court issued a Memorandum Opinion in the case of Peterfreund v. Commissioner (T.C. Memo. 2021-83). The primary issue presented in Peterfreund was whether the IRS’s Whistleblower Office (WBO) abused its discretion because it did not initiate an administrative or judicial action and it did not collect any proceeds from the target taxpayer on the basis of the information the petitioner furnished. Whistleblowin’ Jurisdiction The Tax Court has jurisdiction to review final determinations by the IRS regarding whistleblower award claims including so-called rejections and denials as classified by the Whistleblower Office (WBO). See Lacey v. Commissioner, 153 T.C. 146, 163-164 (2019); see also Cooper v. Commissioner, 135 T.C. 70, 75-76 (2010). The regulations provide that a rejection is a determination limited to the whistleblower and the information provided on the face of the claim. Treas. Reg. § 301.7623-3(c)(7). On the other hand “[a] denial is…

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Pragias v. Commissioner (T.C. Memo. 2021-82)

On June 30, 2021, the Tax Court issued a Memorandum Opinion in the case of Pragias v. Commissioner (T.C. Memo. 2021-82). The primary issue presented in Pragias was whether the six-year statute of limitations under IRC § 6501(e) (substantial omission of items) applied. The Substantial Omission Extension under IRC § 6501(e) IRC § 6501(a) generally requires that the IRS assess tax within three years after the taxpayer files his return. However, IRC § 6501(e), as relevant to this case and as in effect at the relevant time, extends this period to six years for returns that satisfy a two-part test. See Quick Tr. v. Commissioner, 54 T.C. 1336, 1346 (1970), aff'd per curiam, 444 F.2d 90 (8th Cir. 1971). First, the extended limitations period applies only if “the taxpayer omits from gross income an amount properly includible therein” and that amount “is in excess of 25% of the amount of…

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Long v. Commissioner (T.C. Memo. 2021-81)

On June 30, 2021, the Tax Court issued a Memorandum Opinion in the case of Long v. Commissioner (T.C. Memo. 2021-81). The primary issue presented in Long was whether the petitioner was entitled to dispute her underlying liabilities when she failed to do so with prior opportunity arising out of a notice of deficiency that was mailed to the petitioner’s last known address—which she did not receive. Underlying Liability in CDP Case A taxpayer's underlying liability is properly at issue if she did not receive a statutory notice of deficiency or did not otherwise have an opportunity to dispute the liability. IRC § 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 609 (2000). Generally, a notice of deficiency is valid if it was properly mailed to the taxpayer at her last known address. IRC § 6212(b)(1); Hoyle v. Commissioner, 131 T.C. 197, 200, 203-204 (2008), supplemented by 136 T.C. 463 (2011).…

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Geiman v. Commissioner (T.C. Memo. 2021-80)

On June 30, 2021, the Tax Court issued a Memorandum Opinion in the case of Geiman v. Commissioner (T.C. Memo. 2021-80). The primary issue presented in Geiman was whether the petitioner was a tax “itinerant” or whether he had a tax home, for purposes of unreimbursed business expenses. Background The petitioner is a union electrician who spent most of 2013 on jobs in various parts of Wyoming and Colorado. He claimed on his 2013 Federal income tax return: an unreimbursed employee business expense deduction of $39,392 for meals, lodging, vehicle expenses, and union dues and a (2) deduction for “other” expenses of $6,025. The petitioner was a licensed journeyman electrician who owned a trailer home in Clifton, Colorado, as well as a rental property in nearby Grand Junction, Colorado. He had lived in Clifton since at least 2007 with his 2013 tax return showing that he claimed a home mortgage…

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Nurumbi v. Commissioner (T.C. Memo. 2021-79)

On June 30, 2021, the Tax Court issued a Memorandum Opinion in the case of Nurumbi v. Commissioner (T.C. Memo. 2021-79). The primary issue presented in Nurumbi was whether the petitioner was subject to the heightened substantiation rules under IRC § 274(d), or whether the exception to such rules for vehicles for hire applied. Held:  Background The petitioner was an Uber pimp. He maintained a stable of Uber drivers under his iron fist and gold cane.  Just guessing here. Every week Uber would pay petitioner for his own driving activity and for that of the drivers under his Uber account, subtracting its fee and depositing the remaining funds into a Bank of America account. Petitioner would withdraw funds from the BoA account, deposit some of the withdrawn funds into the BBVA account, and retain the remainder as cash. Then he would pay the drivers their individual earnings, as shown on…

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