Read more about the article Red Oak Estates LLC v. Commissioner <section> T.C. Memo. 2020-116 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Red Oak Estates LLC v. Commissioner
T.C. Memo. 2020-116

On August 4, 2020, the Tax Court issued a Memorandum Opinion in the case of Red Oak Estates LLC v. Commissioner (T.C. Memo. 2020-116). The primary issue before the court in Red Oak Estates LLC v. Commissioner was whether the IRS properly disallowed the charitable contribution deduction with respect to the donation of a conservation easement in full because the conservation purpose underlying the easements was not “protected in perpetuity” as required by IRC § 170(h)(5)(A), insofar as the charitable grantee was not absolutely entitled to a proportionate share of the proceeds in the event the property was sold following a judicial extinguishment of the easement. Issues in Red Oak Estates LLC v. Commissioner The questions of law are identical to those presented in PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d 193 (5th Cir. 2018); Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. No. 10 (May 12, 2020); Coal Prop. Holdings,…

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August 4, 2020
Read more about the article Cottonwood Place LLC v. Commissioner <section> T.C. Memo. 2020-115 </section>
Memorandum Opinions / Charitable Issues / Tax Opinions

Cottonwood Place LLC v. Commissioner
T.C. Memo. 2020-115

On August 4, 2020, the Tax Court issued a Memorandum Opinion in the case of Cottonwood Place LLC v. Commissioner (T.C. Memo. 2020-115). The primary issue before the court in Cottonwood Place LLC v. Commissioner was whether the IRS properly disallowed the charitable contribution deduction with respect to the donation of a conservation easement in full because the conservation purpose underlying the easements was not “protected in perpetuity” as required by IRC § 170(h)(5)(A), insofar as the charitable grantee was not absolutely entitled to a proportionate share of the proceeds in the event the property was sold following a judicial extinguishment of the easement. Issues in Cottonwood Place LLC v. Commissioner The questions of law are identical to those presented in PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d 193 (5th Cir. 2018); Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. No. 10 (May 12, 2020); Coal Prop. Holdings, LLC v. Commissioner,…

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August 4, 2020
Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions

Reflectxion Resources Inc. v. Commissioner (T.C. Memo. 2020-114)

On August 3, 2020, the Tax Court issued a Memorandum Opinion in the case of Reflectxion Resources Inc. v. Commissioner (T.C. Memo. 2020-114). The primary issue before the court in Reflectxion Resources Inc. v. Commissioner was whether the Tax Court has jurisdiction to determine whether the petitioner was entitled to relief from worker classification liabilities pursuant to § 530 of the Revenue Act of 1978. Background to Reflectxion Resources Inc. v. Commissioner The petitioner was as a medical staffing agency during 16 quarters (at least) from 2008 through 2011 (the periods at issue). It employed various therapists to fulfill contracts with healthcare facilities, who sought therapists for temporary staffing and for direct hire purposes. Though the petitioner operated throughout the country, they hired local therapists for the client. The petitioner also has “travel” shrinks, some of whom were reimburse correctly (and withheld) for travel expenses, but others were reimbursed with the…

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August 3, 2020
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Biggs-Owens v. Commissioner
T.C. Memo. 2020-113

On July 30, 2020, the Tax Court issued a Memorandum Opinion in the case of Biggs-Owens v. Commissioner (T.C. Memo. 2020-113). The issue before the court in Biggs-Owens v. Commissioner was whether the IRS abused its discretion in sustaining the filing of an NFTL by rejecting a collection alternative prior to giving the petitioner a meaningful chance to bring herself into compliance with outstanding estimated tax obligations. The CDP Proceeding in Biggs-Owens v. Commissioner In December 2014, the petitioner entered into an installment agreement (IA) with the IRS. This agreement proved short-lived, with the IRS terminating it just six months later. Two years later, the IRS got around to issuing a notice informing her of the filing of an NFTL with respect to those years and apprising her of her right to request a CDP hearing. The petitioner timely filed a Form 12153 (Request for a Collection Due Process or Equivalent…

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July 30, 2020
Read more about the article Belair Woods LLC v. Commissioner <section> T.C. Memo. 2020-112 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Belair Woods LLC v. Commissioner
T.C. Memo. 2020-112

On July 22, 2020, the Tax Court issued a Memorandum Opinion in the case of Belair Woods LLC v. Commissioner (T.C. Memo. 2020-112). The primary issue before the court in Belair Woods LLC v. Commissioner was whether the IRS properly disallowed the charitable contribution deduction with respect to the donation of a conservation easement in full because the conservation purpose underlying the easements was not “protected in perpetuity” as required by IRC § 170(h)(5)(A), insofar as the charitable grantee was not absolutely entitled to a proportionate share of the proceeds in the event the property was sold following a judicial extinguishment of the easement. Issues in Belair Woods LLC v. Commissioner The questions of law are identical to those presented in PBBM-Rose Hill, Ltd. v. Commissioner, 900 F.3d 193 (5th Cir. 2018); Oakbrook Land Holdings, LLC v. Commissioner, 154 T.C. No. 10 (May 12, 2020); Coal Prop. Holdings, LLC v. Commissioner,…

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July 22, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Oropeza v. Commissioner
T.C. Memo. 2020-111

On July 21, 2020, the Tax Court issued a Memorandum Opinion in the case of Oropeza v. Commissioner (T.C. Memo. 2020-111). The primary issue before the court in Oropeza v. Commissioner was whether IRS secured timely written supervisory approval, as required by IRC § 6751(b)(1), for three penalties determined in the notice of deficiency for petitioners’ 2012 tax year. The Initial Determination in Oropeza v. Commissioner In November 2015, the IRS sent petitioners a Letter 5153 with an attached Form 4549-A (Income Tax Discrepancy Adjustments or Revenue Agent’s Report (RAR)). The RAR proposed to increase by $1,070,200 petitioner husband’s distributive share of his company’s income. In a schedule captioned “Accuracy-Related Penalties under IRC § 6662(a),” the RAR asserted a 40% penalty attributable to one or more of the following: (1) a gross valuation misstatement, (2) a non-disclosed transaction lacking economic substance, and (3) undisclosed foreign financial assets. See IRC §…

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July 21, 2020
Procedural Issues
Tax Opinions / Full Tax Court Opinions / Procedural Issues

Barnhill v. Commissioner (155 T.C. No. 1)

On July 21, 2020, the Tax Court issued its opinion in Barnhill v. Commissioner (155 T.C. No. 1). The issue presented in Barnhill v. Commissioner is whether a taxpayer, who receives a Letter 1153 (Trust Fund Recovery Penalty (TFRP) Letter), and who timely appeals the TFRP, but who does not receive a meaningful opportunity to challenge his liability for the TFRP (because the taxpayer, for instance and as here, did not receive subsequent correspondence scheduling a meeting to challenge the liability) may thereafter challenge the underlying liability for the TFRP in a CDP proceeding. Background to Barnhill v. Commissioner Petitioner was the director of a Chesterfield, Virginia corporation, Iron Cross, Inc, who failed to collect or pay over employment taxes for ten – yes, ten - quarters from June 2010 through September 2012.  Although it is unclear from the Tax Court opinion the exact nature of Iron Cross (and they…

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July 21, 2020