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

Villanueva v. Commissioner
T.C. Memo. 2022-27

On March 31, 2022, the Tax Court issued a Memorandum Opinion in the case of Villanueva v. Commissioner (T.C. Memo. 2022-27). The primary issue presented in Villanueva v. Commissioner was whether the petitioner was entitled to a net operating loss deduction. Held: Sorry, Edgardo, not today. Background to Villanueva v. Commissioner The IRS determined deficiencies against the petitioner for 2013 and 2014 of $61,832 and $90,408, respectively, and an IRC § 6662(a) accuracy-related penalty and an IRC § 6651(a)(1) addition to tax for failure to timely file a return for each year. The petitioner had his 2013 tax return prepared by an enrolled agent, who also assisted petitioner with the audit of his 2013 and 2014 tax returns. Strike one, Edgardo. The petitioner reported a loss of $112,357 on Form 4797, Sales of Business Property, attached to his 2013 return, from the disposition of a condominium in Newport Beach, California…

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November 21, 2022
Penalties Under the Code
Memorandum Opinions / Penalties Under the Code / Tax Opinions

Golditch v. Commissioner
T.C. Memo. 2022-26

On March 29, 2022, the Tax Court issued a Memorandum Opinion in the case of Golditch v. Commissioner (T.C. Memo. 2022-26). The primary issues presented in Golditch v. Commissioner were (i) whether the taxpayer was permitted to challenge his underlying tax liability at CDP hearing; (ii) whether the taxpayer’s argument that liabilities were not properly assessed because substitutes for return were invalid was frivolous; and (iii) whether the imposition of frivolous position penalty on taxpayer was warranted. Held: Oh, Jason, frivolity will get you nowhere…especially with Judge Lauber presiding… Background to Golditch v. Commissioner Judge Lauber leads with this ignominious line, which never bodes well for the petitioner: Petitioner is a serial nonfiler.[1] The many years for which he failed to file Federal income tax returns include 2011 and 2012. The IRS prepared for each year a substitute for return (SFR) that met the requirements of IRC § 6020(b). The…

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November 18, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Porter v. Commissioner
T.C. Memo. 2022-25

On March 28, 2022, the Tax Court issued a Memorandum Opinion in the case of Porter v. Commissioner (T.C. Memo. 2022-25). The primary issues presented in Porter v. Commissioner were whether (i) delays in examination and litigation were attributable to IRS officer or could significantly be attributed to taxpayer; and (ii) whether the interest on a deficiency settlement should be abated. Held: Not today, Jeremy. Porter v. Commissioner (Very) Briefly The IRS audited the petitioner’s 2011 and 2012 taxes, issuing a notice of deficiency in 2014, in response to which the petitioner timely filed a Tax Court petition, which was ultimately settled in 2019. The petitioner paid $1,720 of interest on the stipulated deficiency for 2011 on or around August 12, 2019, and $1,349 of interest on the stipulated deficiency for 2012 on or around February 3, 2020. The Request for Abatement of Interest On or around October 19, 2019,…

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November 17, 2022
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