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
All Articles / International Issues / Tax Articles

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…

1 Comment
September 3, 2021
Penalties Under the Code
Memorandum Opinions / Penalties Under the Code / Tax Opinions

Catlett v. Commissioner
T.C. Memo. 2021-102

On August 16, 2021, the Tax Court issued a Memorandum Opinion in the case of Catlett v. Commissioner (T.C. Memo. 2021-102). The primary issue presented in Catlett v. Commissioner was whether the IRS satisfied its burdens of production and proof to dismiss the petition for lack of prosecution…because the petitioner died…in prison…on a 17 ½ year stint in the hoosegow for tax crimes and conspiracy to defraud the United States. Background to Catlett v. Commissioner Irvin Hannis Catlett, Jr. was not good at taxes…in life or in death. You see, Irvin ran a tax mill called Tax Resolutions, Inc. in Maryland. In the early 2000s, ol’ Irvin devised a tax shelter scheme. But Irvin wasn’t alone. Oh, no...he wasn't alone by a long shot... Irvin had a man on the inside—Mark Hunt, and IRS officer. Irvin incorporated sham entities that the Tax Court referred to collectively as Motors Holding. He urged…

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September 3, 2021
Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

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
Procedural Issues
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