Penalties Under the Code
Memorandum Opinions / Penalties Under the Code / Tax Opinions

Harrington v. Commissioner
T.C. Memo. 2021-95

  On July 26, 2021, the Tax Court issued a Memorandum Opinion in the case of Harrington v. Commissioner (T.C. Memo. 2021-95). The primary issue presented in Harrington was whether the IRS’s assessment was assessment is barred by the three-year period of limitations in IRC § 6501(a), or whether the statute of limitations remained open due to fraud under IRC § 6501(c)(1). Summary1 “Sarah, I feel like I don’t even know you.” “It’s Vivian. Would you say that you’re completely full of shit, or just 50 percent.” “I hope just 50, but who knows?” Spoiler alert:  The petitioner, Mr. Harrington, was, unquestionably, unabashedly, and completely full of shit, and Judge Lauber had a field day sticking it to the petitioner. Background and Bad Judgment in Harrington v. Commissioner The petitioner was a glorified lumberjack. A U.S. citizen, the petitioner worked in the “forest product industry.” He started his career in…

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September 25, 2021
Read more about the article Ononuju v. Commissioner <section> T.C. Memo. 2021-94 </section>
Charitable Issues / Memorandum Opinions / Tax Opinions

Ononuju v. Commissioner
T.C. Memo. 2021-94

On July 26, 2021, the Tax Court issued a Memorandum Opinion in the case of Ononuju v. Commissioner (T.C. Memo. 2021-94). The primary issue presented in Ononuju v. Commissioner was whether the petitioner was liable for excise tax pursuant to IRC § 4958 as a “disqualified person” who engages in an “excess benefit transaction” with a tax-exempt charity. Background to Assessment in Ononuju v. Commissioner The IRS determined that the petitioner was a disqualified person with respect to American Medical Missionary Care, Inc. (AMMC), an organization tax exempt under IRC § 501(a) and IRC § 501(c)(3), and that she engaged in excess benefit transactions with it during 2014. The IRS accordingly determined a first-tier tax of $32,500 under section 4958(a) and (because petitioner failed to correct the improper transactions during the applicable period) a second-tier tax of $260,000 under section 4958(b). The IRS also determined additions to tax under IRC…

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September 24, 2021
Estate Tax Issues
All Articles / Estate Tax Issues / Tax Articles

Effects of the Build Back Better Act on Estates and Trusts

Examining the Effects of the Build Back Better Act on Estates and Trusts On September 13, 2021, the House Ways and Means Committee released the legislative text of proposed tax changes to be incorporated into the omnibus reconciliation bill known as the “Build Back Better Act.”  One wonders if the geniuses behind the BBBA intended the acronym to be pronounced as “Bubba,” but one thing is sure—having now read BBBA as “Bubba” you will never not pronounce it that way in your head going forward. So what are the effects of the Build Back Better Act on estates & trusts? While most of the focus has been the corporate[1] and individual tax changes,[2] the proposed changes to grantor trusts and other long-standing estate planning techniques will be the focus of this article. In Part One of this article, we’ll look to the technical provisions in the House Ways and Means…

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September 20, 2021
Procedural Issues
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Disqualification of an IRS Appeals Officer for Prior Involvement

Background to a Fair Collection Due Process Hearing In a previous Taxing, Briefly article, we discussed the IRS collection process including Collection Due Process (CDP) appeal procedures.  As we noted in that article, a CDP appeal is a taxpayer’s opportunity to dispute the appropriateness of a lien or levy.[1] In this post, we'll discuss the disqualification of an IRS Appeals Officer for prior involvement in a collection due process hearing and the IRS's vehement arguments against such "fairness" in a CDP hearing. When someone fails to pay tax, the IRS will assess the liability against her and send a notice and demand letter.[2] After that, things only get worse for the taxpayer. The taxpayer’s tax liability will become a lien in favor of the IRS against all of its property,[3] and if the taxpayer does nothing, shortly thereafter, the taxpayer will receive a notice of intent to levy (a politely…

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September 17, 2021
Estate Tax Issues
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Valuing a Complex Legacy: Lessons in Valuation From Estate of Jackson

My second article, published in Bloomberg Tax is entitled "Valuing a Complex Legacy: Lessons in Valuation from Estate of Jackson."  It was published in Bloomberg's Estates, Gifts, and Trusts Journal (46 Tax Mgmt. Est. Gifts Tr. J. No 5 (Sept. 9, 2021)). The article was written in response to the inestimable Judge Mark Holmes' opinion in Estate of Jackson v. Commissioner, T.C. Memo. 2021-48, a 271 page leviathan of an opinion regarding the trials and tribulations in the valuation of the estate of the King of Pop himself, Michael Jackson.  It is, quite probably, my magnum opus. Whether it's a footnote that reads: "Compare Alanis Morrissette and Glen Ballard, ‘‘Ironic,’’ Jagged Little Pill (Maverick-Warner Brothers 1995), with Søren Kierkegaard, On the Concept of Irony with Continual References to Socrates (1841)" or another that reads "Kubla Khan was written (Coleridge himself admitted) under the heavy influence of laudanum in 1797 and published in 1816.…

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September 9, 2021
Procedural Issues
Full Tax Court Opinions / Procedural Issues / Tax Opinions

Rogers v. Commissioner
157 T.C. No. 3

On August 2, 2021, the Tax Court issued its opinion in Rogers v. Commissioner (157 T.C. No. 3). The primary issue presented in Rogers v. Commissioner was whether the IRS Whistleblower Office abused its discretion when it rejected/denied the petitioner’s claim. Held: Oh yeah. Side Note One of the attorneys for the IRS is named Bartholomew Cirenza. There’s a fair to middling chance that he has been given more swirlies, wedgies, and other sundry childhood punishments than he can (or cares to) remember. Summary and Holding in Rogers v. Commissioner IRC § 7623 provides for awards to individuals (commonly referred to as whistleblowers) who submit information to the Government about third parties who have underpaid their taxes or otherwise violated the internal revenue laws. The IRS Whistleblower Office (WBO) has been entrusted with the responsibility of reviewing claims under IRC § 7623 to determine whether a whistleblower is entitled to an…

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September 8, 2021
International Issues
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A Necessary Conversation: Explaining FBAR Filings to the Uninitiated

Explaining FBAR Filings to the Uninitiated This is not the normal Briefly Taxing post.  Usually, I post articles written exclusively for the blog, but today I am excited to post an article I wrote for someone else. In late July, I received a comment on the blog from an editor at Bloomberg Law, saying that she had read one of my posts, and asking whether I would be willing to write for them.   I pitched two ideas for an article, and they asked me to write both.     So I did. Earlier today, Bloomberg Law published my first article in their Tax Management Memorandum.  The article is entitled A Necessary Conversation: Explaining FBAR Filings to the Uninitiated, 62 Tax Mgmt. Memo. No. 19, 229 (Sept. 13, 2021). Although Bloomberg Tax is a subscription service (and very worth it!), the editors have allowed me to reproduce it on the…

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September 3, 2021