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

Sherwin Community Painters Inc. v. Commissioner
T.C. Memo. 2022-19

On March 9, 2022, the Tax Court issued a Memorandum Opinion in the case of Sherwin Community Painters Inc. v. Commissioner (T.C. Memo. 2022-19). The primary issues presented in Sherwin Community Painters Inc. v. Commissioner were whether the taxpayer was entitled to certain substantiated certain expenses it claimed were “ordinary and necessary business expenses” and whether Swanette Ward received constructive dividends from Sherwin. Also at issue is how obstinate the IRS can actually be. (Hint: More than you can imagine.) Held: Mostly. Held also: The IRS was a recalcitrant ass in this case. Sherwin Community Painters Inc. v. Commissioner in a Nutshell The IRS determined a deficiency against Sherwin Community Painters, Inc. (Sherwin), of $8,224 and an accuracy-related penalty under IRC § 6662(a) for the taxable year 2016. The IRS also determined a deficiency against Robert Ward, Jr., and Swanette Ward of $4,890 and an addition to the tax under…

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June 8, 2022
Estate Tax Issues
Estate Tax Issues / Memorandum Opinions / Tax Opinions

Estate of Levine v. Commissioner
158 T.C. No. 2

On February 28, 2022, the Tax Court issued the full opinion in Estate of Levine v. Commissioner (158 T.C. No. 2). The primary issues presented in Estate of Levine v. Commissioner were whether the taxpayer made a voluntary inter vivos transfer (yep); whether the taxpayer retained the right—either alone or in conjunction with her attorney-in-fact—to designate who could possess or enjoy property transferred to irrevocable life insurance trust or the income from it (thereby precluding inclusion of cash-surrender values of policies in taxpayer's estate) (nope); whether the taxpayer had a unilateral power to terminate split-dollar life insurance policies held by irrevocable trust (thereby precluding inclusion of policies' cash-surrender values in gross value of taxpayer's estate for estate tax purposes) (nope and nope); and whether IRC § 2703 (disregarding restrictions on right to sell or use property in determining its value) applied (no ma’am, Marion, it did not). Estate of Levine…

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June 8, 2022