September 2, 2021 | Briefly Taxing

Vennes v. Commissioner
T.C. Memo. 2021-93

On July 20, 2021, the Tax Court issued a Memorandum Opinion in the case of Vennes v. Commissioner (T.C. Memo. 2021-93). The primary issues presented in Vennes v. Commissioner were whether the petitioner was entitled to passthrough theft loss deductions for 2008, and whether the petitioner was liable for the accuracy‑related penalty pursuant to IRC § 6662(a). The Petitioner's Checkered Past in Vennes v. Commissioner In 1990, the petitioner completed a prison sentence for money laundering, narcotics, and firearms offenses. After his release from prison, he worked for a machine shop. Later he started a coin business in which he bought and sold certified numismatic products from and to dealers. To finance his coin business, petitioner sought investments from members of a charitable organization whom he had met while he was in prison. The Petters Scheme In 1996 because of the success of initial transactions with a conman named Petters,…

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September 2, 2021

Memorandum Opinions / Procedural Issues / Tax Opinions

Estate of Lee v. Commissioner
T.C. Memo. 2021-92

On July 20, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Lee v. Commissioner (T.C. Memo. 2021-92). The primary issue presented in Estate of Lee v. Commissioner was whether the IRS abused its discretion in rejecting the petitioner’s offer-in-compromise by erring to properly compute the estate’s reasonable collection potential by including amounts distributed by the executor. Challenging the IRS Lien before Appeals in Estate of Lee v. Commissioner IRC § 6320(b) permits a taxpayer to challenge an IRS lien before the Appeals Office, and IRC § 6320(c) (incorporating IRC § 6330(d)) provides for Tax Court review of an Appeals Office determination. Abuse of discretion exists when a determination is “arbitrary, capricious, or without sound basis in fact or law.” Schwartz v. Commissioner, 348 F. App'x 806, 808 (3d Cir. 2009) (quoting Murphy v. Commissioner, 125 T.C. 301, 320), aff'g T.C. Memo. 2008-117. In this regard…

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September 2, 2021

Read more about the article New World Infrastructure Organization v. Commissioner <section> T.C. Memo. 2021-91 </section>

Charitable Issues / Memorandum Opinions / Tax Opinions

New World Infrastructure Organization v. Commissioner
T.C. Memo. 2021-91

On July 20, 2021, the Tax Court issued a Memorandum Opinion in the case of New World Infrastructure Organization v. Commissioner (T.C. Memo. 2021-91). The primary issue presented in New World Infrastructure was whether the petitioner qualified for tax exempt status for purposes of IRC § 501(c)(3). Background to New World Infrastructure Organization v. Commissioner The petitioner is “a successor to a for-profit business that never made any profit.” This, according to the petitioner, made it eligible to seek nonprofit status. The Tax Court had its doubts. The petitioner was incorporated as a nonprofit corporation in Nevada in 2015. Petitioner's articles of incorporation provide: “It's [sic] purposes shall, at all times, conform to one or more of the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.” Shortly after its incorporation, the petitioner submitted…

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September 2, 2021