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

Addis v. Commissioner
T.C. Memo. 2022-24

On March 28, 2022, the Tax Court issued a Memorandum Opinion in the case of Addis v. Commissioner (T.C. Memo. 2022-24). The primary issue presented in Addis v. Commissioner was whether the frivolous taxpayer’s CDP rights had been violated. Held: Not quite, Jonah. Mr. Addis’s 2014 Tax Reporting On March 17, 2017, Jonah Addis filed a delinquent tax return for his 2014 tax year, reporting zero dollars of income and a refund due of approximately $3,000. In support of his return, he submitted Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., for various employers (Navigant Consulting, Inc., Click Click Boom LLC, Treliant Risk Advisors, Clayton Support Services, and Francis David Corp.), on which he reported no income. Mr. Addis also submitted Form 8888, Allocation of Refund (Including Savings Bond Purchases), on which he…

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November 16, 2022
Penalties Under the Code
Memorandum Opinions / Penalties Under the Code / Tax Opinions

Oxbow Bend LLC v. Commissioner
T.C. Memo. 2022-23

On March 21, 2022, the Tax Court issued a Memorandum Opinion in the case of Oxbow Bend LLC v. Commissioner (T.C. Memo. 2022-23). The primary issue presented in Oxbow Bend LLC v. Commissioner was whether a telephone conference in which IRS agent stated to taxpayer’s representative what adjustments would be made and what penalties were under consideration constituted an “initial determination” of penalties that would require timely supervisory approval under IRC § 6751(b)(1). Held: Not so much. Background to Oxbow Bend LLC v. Commissioner In September 2014 Oxbow acquired roughly 133 acres of land in Elmore County, Alabama. On December 4, 2014, Oxbow granted to the National Wild Turkey Federation Research Foundation (NWT) a conservation easement over the land. Three weeks later, Oxbow donated a fee simple interest in the land to a passthrough entity wholly owned by NWT. Oxbow timely filed Form 1065, U.S. Return of Partnership Income, for…

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November 15, 2022
Read more about the article Pickens Decorative Stone LLC v. Commissioner <section> T.C. Memo. 2022-22 </section>
Charitable Issues / Memorandum Opinions / Tax Opinions

Pickens Decorative Stone LLC v. Commissioner
T.C. Memo. 2022-22

On March 17, 2022, the Tax Court issued a Memorandum Opinion in the case of Pickens Decorative Stone LLC v. Commissioner (T.C. Memo. 2022-22). The primary issues presented in Pickens Decorative Stone LLC v. Commissioner were (1) whether the taxpayer was entitled to qualified charitable contribution deduction for claimed easement, and (2) whether the IRS revenue agent secured timely supervisory approval from supervisor, as required for imposition of accuracy-related penalties due to substantial understatement of tax. Holding in Pickens Decorative Stone LLC v. Commissioner: The Tax Court denied the Motion for Summary Judgment on the IRC § 170(h)(5)(A) question but granted it with respect to IRC § 6751(b)(1). Background to Pickens Decorative Stone LLC v. Commissioner This is a syndicated conservation easement case. The IRS disallowed the charitable contribution deduction claimed for the easement by Pickens Decorative Stone LLC and determined penalties. In a motion for summary judgment, the IRS…

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November 14, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Hamilton v. Commissioner
T.C. Memo. 2022-21

On March 15, 2022, the Tax Court issued a Memorandum Opinion in the case of Hamilton v. Commissioner (T.C. Memo. 2022-21). The primary issues presented in Hamilton v. Commissioner were (1) whether the Tax Court would consider taxpayers’ testimony and documentary evidence; (2) whether the notices of determination contained plain errors; (3) whether the omission of documents from administrative record called into question completeness of record (and, if so, whether settlement officer’s determination to sustain notice would have been same had she been aware of documents); and (4) whether taxpayers presented officer with substantial reason to grant extension of time to submit financial information. Held: Yes, on all counts. Remanded. Background to Hamilton v. Commissioner During 2016 and 2017, Mr. Hamilton worked as an attorney (first as a solo practitioner and then in a partnership), while Mrs. Hamilton worked as a chaplain. The Hamiltons reported on their 2016 Form 1040…

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June 17, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Bunton v. Commissioner
T.C. Memo. 2022-20

On March 10, 2022, the Tax Court issued a Memorandum Opinion in the case of Bunton v. Commissioner (T.C. Memo. 2022-20). The primary issues presented in Bunton v. Commissioner were (1) whether Brian and Karen were entitled to challenge the existence and amounts of their underlying tax liabilities for the tax years at issue during their collection due process (CDP) proceeding, (2) whether Appeals properly verified the requirements of applicable law and procedure were met, (3) whether Appeals abused its discretion in denying Brian and Karen a face-to-face hearing, and (4) whether Appeals abused its discretion in considering issues raised under IRC § 6330(c)(2). Held: No, not even a little bit. Also, tax protester alert! Background to Bunton v. Commissioner (Featuring the Tax Protesters, Brian and Karen Bunton) On April 15, 2014, Brian and Karen (Brian and Karen…of course she’s a Karen) timely filed a joint 2013 Form 1040. Brian…

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June 16, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

DelPonte v. Commissioner
158 T.C. No. 7

On May 5, 2022, the Tax Court issued the full opinion in DelPonte v. Commissioner (158 T.C. No. 7). The primary issue presented in DelPonte v. Commissioner was whether the IRS’s Cincinnati Centralized Innocent Spouse Operation (CCISO) or the IRS’s Office of Chief Counsel has the final authority to determine whether taxpayer was entitled to innocent spouse relief when such relief is first raised as an affirmative defense in a Tax Court petition. Held: Chief Counsel, all the way. Background to DelPonte v. Commissioner Michelle DelPonte separated from her ex-husband, William Goddard, in 2000. She is still, more than twenty years later, trying to untangle his affairs from her own. What concerns the Tax Court is her effort to be relieved of her liability on the joint tax returns she filed with Goddard while they were married. The part of the IRS bureaucracy that usually handles these sorts of requests…

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June 15, 2022
Business Related Issues
Business Related Issues / Memorandum Opinions / Tax Opinions

Treece Financial Services Group v. Commissioner
158 T.C. No. 6

On April 19, 2022, the Tax Court issued the full opinion in Treece Financial Services Group v. Commissioner (158 T.C. No. 6). The primary issue presented in Treece Financial Services Group v. Commissioner was whether the Tax Court had jurisdiction to determine whether Voluntary Classification Settlement Program (VCSP) entered into computation of taxes owed by the taxpayer. Held: Indeed, it did. Treece Financial Services Group v. Commissioner in a Nutshell Treece Financial Services Group, a corporation, petitioned for review of a notice of employment tax determination under IRC § 7436. The parties agree that the IRS properly determined that Mr. Treece is an employee of Treece Financial Services Group, but they dispute the proper amount of employment tax under that determination. Treece Financial Services Group asserts that the amount should be computed using the IRS’s Announcement 2012-45, and that it is entitled to use the Voluntary Classification Settlement Program (VCSP)…

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June 14, 2022