Procedural Issues
Procedural Issues

Belair v. Commissioner
157 T.C. No. 2

On August 2, 2021, the Tax Court issued its opinion in Belair v. Commissioner (157 T.C. No. 2). The primary issue presented in Belair v. Commissioner  was whether in a CDP nonliability case the traditional rules of summary judgment are appropriate. Holding in Belair v. Commissioner In a CDP nonliability case such as this, the Tax Court’s decision turns on whether the administrative record shows an abuse of discretion, and the Tax Court’s traditional rules of summary judgment are generally not appropriate. Instead, summary judgment serves as a mechanism for deciding, as a matter of law, whether Appeals’ determination is supported by the administrative record and is not arbitrary, capricious, or without sound basis in fact or law. Procedural Background to Belair v. Commissioner The petitioner, Mary T. Belair, timely petitioned the Tax Court after Appeals determined that she was not eligible for an installment agreement as she had requested. See…

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August 31, 2021
International Issues
International Issues / Memorandum Opinions / Tax Opinions

Garcia v. Commissioner
157 T.C. No. 1

On July 19, 2021, the Tax Court issued its opinion in Garcia v. Commissioner (157 T.C. No. 1). The primary issues presented in Garcia v. Commissioner were whether the petition to reverse the certification of a seriously delinquent tax debt was mooted by the actual reversal and whether the Tax Court had jurisdiction in a passport certification case to determine whether the rejection of a collection alternative was in error. Background of Certification Statute in Garcia v. Commissioner IRC § 7345, enacted in 2015, is captioned “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.” It provides that, if the IRS certifies that an individual has a “seriously delinquent tax debt,” that certification will be transmitted “to the Secretary of State for action with respect to denial, revocation, or limitation of a passport.” IRC § 7345(a). A taxpayer aggrieved by such action may petition this Court “to determine whether…

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August 31, 2021
Income Tax Issues
Income Tax Issues / Memorandum Opinions / Tax Opinions

Hussey v. Commissioner
156 T.C. No. 12

On June 24, 2021, the Tax Court issued its opinion in Hussey v. Commissioner (156 T.C. No. 12). The primary issues presented in Hussey v. Commissioner were whether the petitioner was required to reduce his bases in disposed depreciable real properties immediately before sales of those properties in year of discharge of qualified real property business indebtedness (QRPBI), rather than in subsequent year; whether the taxpayer had discharge of indebtedness income; and whether the taxpayer had reasonable cause to avoid accuracy related penalties. Background of Hussey v. Commissioner In 2012 the petitioner received a discharge of qualified real property business indebtedness (QRPBI). The discharge of QRPBI may be excluded from income if the taxpayer's bases in depreciable real properties are reduced by the amount of the debt discharge. IRC § 108(a)(1)(D), (c)(1). A basis reduction occurs only to the extent that the taxpayer's aggregate bases in depreciable real properties equal…

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August 31, 2021
Procedural Issues
All Articles / Procedural Issues / Tax Articles

On Penalties and Burdens

A burden is a burden, right?  A thirty-three-year-old man-child, living in his mother’s basement, with a Cheeto-stained, self-described “ironical” mustache, then yes.  That’s a burden, no matter how you slice it.  No need to prove it or to produce evidence to support it.  He’s a bum and a burden.  Shave the flavor saver, and get a damn job, hippie. Proof and production, though.  Six of one, half a dozen of another?  Not when it comes to Tax Court proceedings, or so we found out last January in Frost v. Commissioner.[1]  The burden of production is found in IRC § 7491(c), whereas proof—as well as in the pudding—is found in IRC § 7491(a). On Penalties and Burdens and Individuals In any Tax Court proceeding, under IRC § 7491(c), the IRS bears the burden of production with respect to the liability of an individual for any penalty.[2]  To satisfy this burden the…

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August 30, 2021
Procedural Issues
All Articles / Procedural Issues / Tax Articles

Perfection of Imperfect CDP Appeals

On Latin Nerdery and Perfection of Imperfect CDP Appeals If you have read many of the posts on Briefly Taxing, it should come as no surprise to you that I was a Latin nerd in high school…and college…and at present. The truth of the matter is that I competed nationally, my specialty being Greek mythology. My sophomore year of high school I missed a single question on the national exam. One question. My Latin teacher, one of my favorite people in the entire world, patted me on the shoulder and reminded me that no one is perfect. It was cold comfort to me then, and remembering it as I begin this post, it is cold comfort to me now. That being said, I will never forget that the staff Dionysus carries is called a thyrsus. Meanwhile, Back at the Tax Ranch What the bloody hell does this have to do…

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August 12, 2021
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Morreale v. Commissioner
T.C. Memo. 2021-90

On July 15, 2021, the Tax Court issued a Memorandum Opinion in the case of Morreale v. Commissioner (T.C. Memo. 2021-90). The primary issue presented in Morreale v. Commissioner was whether the petitioner was entitled for reasonable litigation fees from the IRS. Background to Morreale v. Commissioner The petitioner filed a Tax Court petition in November 2017 disputing certain adjustments to his return. The petitioner and the IRS settled in January 2019, with the IRS agreeing to two adjustments and conceding all penalties.  In February 2019, the petitioner filed a motion for reasonable litigation or administrative costs pursuant to IRC § 7430. When Costs are Reasonable IRC § 7430(a) authorizes an award for “reasonable administrative costs [and] reasonable litigation costs” to the “prevailing party” in a Tax Court dispute. A party that otherwise qualifies as a “prevailing party” will not be entitled to an award if the IRS can prove…

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

Ryder & Associates Inc. v. Commissioner
T.C. Memo. 2021-88

On July 14, 2021, the Tax Court issued a Memorandum Opinion in the case of Ryder & Associates Inc. v. Commissioner (T.C. Memo. 2021-88). The primary issues presented in Ryder & Associates Inc. v. Commissioner were whether the petitioners received unreported gross receipts from their company, and whether the petitioners had significant unreported dividend income. Author’s Note on Ryder & Associates v. Commissioner As I mentioned earlier this year, I have never seen it bode well for a petitioner to whom the Tax Court describes first in the background of the case as a tax attorney.  Not only was Mr. Ryder a tax attorney, but he also held his LLM in taxation from NYU. Not only was Mr. Ryder a tax attorney, but he specialized in ERISA and qualified retirement plans. Not only did he specialize in ERISA and qualified retirement plans, but the IRS also determined that he had bamboozled the…

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July 29, 2021