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

Parker v. Commissioner
T.C. Memo. 2021-111

On September 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Parker v. Commissioner (T.C. Memo. 2021-111). The primary issues presented in Parker v. Commissioner were (1) whether petitioners can deduct, on Schedule C (Profit or Loss From Business), car and truck expenses in excess of the amount the IRS allowed; (2) whether petitioners can deduct retirement contributions in excess of the amount the IRS allowed; (3) whether petitioners can deduct expenses on Schedule A (Itemized Deductions), in excess of the amount the IRS allowed; and (4) whether petitioners can deduct the cost of demolishing a structure and their basis in that structure. Background to Parker v. Commissioner In 2015, Mrs. Parker was a personal trainer enrolled in a Ph.D. program at Georgia State. As part of this program she conducted research by traveling in the Atlanta metro area to collect data and meet with study participants.…

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October 10, 2021
Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

Sutherland v. Commissioner
T.C. Memo. 2021-110

On September 9, 2021, the Tax Court issued a Memorandum Opinion in the case of Sutherland v. Commissioner (T.C. Memo. 2021-110). The primary issue presented in Sutherland v. Commissioner was whether the petitioner was eligible for relief from joint and several liability under IRC § 6015(f). Background to Sutherland v. Commissioner Donna Sutherland Scott Sutherland operated Sutherland Installation and Services (SIS), a business that installed and maintained draft beer systems at restaurants, sports complexes, and other large venues. Scott’s wife Donna, the petitioner in the present case, was at times a “dispatcher,” but her primary responsibility with SIS was as its bookkeeper. Donna reviewed receipts, billed customers, and deposited customers’ checks into the business bank account. She wrote checks for business expenses, including payroll checks, on the SIS bank account. During the Tax Court trial, she would vehemently deny that she ever issued Forms W-2, but Judge Lauber was not convinced.…

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October 9, 2021
International Issues
International Issues / Memorandum Opinions / Tax Opinions

Kaebel v. Commissioner
T.C. Memo. 2021-109

On September 9, 2021, the Tax Court issued a Memorandum Opinion in the case of Kaebel v. Commissioner (T.C. Memo. 2021-109). The primary issues presented in Kaebel v. Commissioner were (a) whether the petitioner was precluded from arguing that the IRS did not send him deficiency notices; (b) whether the IRS erred in certifying that the petitioner had seriously delinquent tax debt; and (c) whether the petitioner should be sanctioned for advancing the groundless argument that the IRS had not sent him deficiency notices. Summary of Kaebel v. Commissioner The IRS certified the petitioner under IRC § 7345 as an individual having a seriously delinquent tax debt. The petitioner challenges the certification as erroneous, arguing that, because the IRS failed to send him statutory notices of deficiency in tax for five of the six tax years underlying the IRS’s certification, he owes no tax for those years and his remaining tax…

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October 8, 2021
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Pazden v. Commissioner
T.C. Memo. 2021-108

On September 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Pazden v. Commissioner (T.C. Memo. 2021-108). The primary issues presented in Pazden were (1) whether Ms. Pazden is entitled to challenge her underlying tax liability for 2010, and (2) whether Appeals abused its discretion in sustaining the proposed levy in this case. Held: Nope and Nope. Background Ms. Pazden failed to timely file her 2010 Federal income tax return. The IRS thereafter sent Ms. Pazden a notice of deficiency dated June 3, 2013, based upon a substitute for return that the IRS had prepared under the authority conferred by IRC § 6020(b). The notice determined a deficiency of $449,934, as well as additions to tax under IRC § 6651(a)(1) for failure to file her tax return, IRC § 6651(a)(2) for failure to pay tax, and IRC § 6654 for failure to pay estimated tax, and…

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October 7, 2021
Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

Gaston v. Commissioner
T.C. Memo. 2021-107

On September 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gaston v. Commissioner (T.C. Memo. 2021-107). The primary issue presented in Gaston v. Commissioner was whether the petitioner engaged in acting as a trade or business in the tax years at issue and, if so, whether the petitioner is entitled to deduct any reported expenses relating to that trade or business. Background to Gaston v. Commissioner: A Pink Cadillac The petitioner is a former national sales director for the Mary Kay, Inc. (Mary Kay). She began working for Mary Kay in 1967 and reached the position of national sales director (NSD) in 1974. As an NSD, the petitioner was entitled to participate in Mary Kay’s deferred compensation program known as the Family Security Program (FSP), which she joined in September 1991. The FSP imposed a mandatory retirement age of 65 and provided that, upon her retirement,…

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October 6, 2021
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Chow v. Commissioner
T.C. Memo. 2021-106

On September 1, 2021, the Tax Court issued a Memorandum Opinion in the case of Chow v. Commissioner (T.C. Memo. 2021-106). The primary issue presented in Chow v. Commissioner was whether the IRS’s Whistleblower Office (WBO) abused its discretion when it denied the petitioners’ claim on the basis that the information that they provided was bullshit (rather, “not credible”). Held: No. You people are crazy. Background to Chow v. Commissioner Mr. and Mrs. Wai-Cheung Wilson Chow rented a home in California from an individual (target taxpayer or target). The Chows claim that the target boasted about owning several other rental properties that she rented to tenants on a cash-only basis to avoid paying taxes on the income. In April 2018, after moving out of the target’s property, the Chows filed Form 211 (Application for Award for Original Information) with the IRS. On the Form 211, the Chows alleged that the target…

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October 5, 2021
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Webb v. Commissioner
T.C. Memo. 2021-105

On August 31, 2021, the Tax Court issued a Memorandum Opinion in the case of Webb v. Commissioner (T.C. Memo. 2021-105). The primary issue presented in Webb v. Commissioner was whether Appeals abused its discretion when it declined to place the petitioner in currently not collectible (CNC) status. Background to Webb v. Commissioner On March 4, 2019, the IRS issued to the petitioner a Notice of Intent to Levy and Notice of Your Right to a Hearing (CDP levy notice) advising her that the IRS intended to levy to collect her outstanding tax for the tax year 2017. The petitioner’s representative timely requested a collection due process (CDP) hearing in response to the CDP levy notice, in which the petitioner sought to be placed in CNC status. The petitioner’s representative submitted a completed Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals), and copies of bank statements, pay stubs,…

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October 4, 2021