Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions / Procedural Issues

Elkins v. Commissioner
T.C. Memo. 2020-110

On July 16, 2020, the Tax Court issued a Memorandum Opinion in the case of Elkins v. Commissioner (T.C. Memo. 2020-110). The primary issue before the court in Elkins v. Commissioner was whether Appeals abused its discretion when it sustained the rejection of the petitioner’s offer-in-compromise (OIC) on the ground that it was not in the best interest of the Government. Computational Adjustments to Partner’s Liabilities After Conclusion of Partnership-Level Proceeding in Elkins v. Commissioner The petitioner stipulated to decision in a separate partnership case, which found that the partnership (of which the petitioner was a partner) was a sham. The Tax Court granted judgment in favor of the IRS based on the stipulations of the petitioner and others. Once the decision in a partnership-level proceeding is final, the IRS is permitted to assess computational adjustments that do not require partner-level determinations against a partner without first issuing a notice…

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July 16, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Weiderman v. Commissioner
T.C. Memo. 2020-109

On July 15, 2020, the Tax Court issued a Memorandum Opinion in the case of Weiderman v. Commissioner (T.C. Memo. 2020-109). The primary issue before the court in Weiderman v. Commissioner was whether the court should permit the reopening of the record to allow the IRS to submit evidence that it complied with the supervisory approval requirements of IRC § 6751(b)(1). Satisfying Presumption of Correctness of IRS Determination in Cases Involving Unreported Income in Weiderman v. Commissioner For the presumption of correctness of an IRS determination to adhere in cases involving unreported income the IRS must provide “some reasonable foundation connecting the taxpayer with the income-producing activity” or demonstrate that the taxpayer received unreported income. See Weimerskirch v. Commissioner, 596 F.2d 358, 360-361 (9th Cir. 1979) (reasonable foundation), rev’g 67 T.C. 672 (1977); Hardy v. Commissioner, 181 F.3d 1002, 1004 (9th Cir. 1999) (receipt), aff’g T.C. Memo. 1997-97. Once the…

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July 15, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Duffy v. Commissioner
T.C. Memo. 2020-108

On July 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Duffy v. Commissioner (T.C. Memo. 2020-108). The primary issue before the court in Duffy v. Commissioner was whether, because the petitioners’ debt to the bank was nonrecourse, the discharge of indebtedness was included in the petitioners amount realized on the sale of the property and did not give rise to cancellation of indebtedness income under Treas. Reg. § 1.1001-2(a). A secondary issue was whether the supervisor who signed the penalty approval form was required to be the direct supervisor of the individual proposing the penalty. Background to Duffy v. Commissioner Petitioners bought a home in 2006 for $2m, paying the sellers a total of $431,000, but being unable to pay the remaining balance. In 2008, when the loan became due, they borrowed $1.4m from JPMorgan Chase Bank (JPMC). Petitioners sold the home in March 2011…

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July 13, 2020
Read more about the article Smith Lake LLC v. Commissioner <section> T.C. Memo. 2020-107 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Smith Lake LLC v. Commissioner
T.C. Memo. 2020-107

On July 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Smith Lake LLC v. Commissioner (T.C. Memo. 2020-107). The primary issue before the court in Smith Lake 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 Smith Lake 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 13, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Dodson v. Commissioner
T.C. Memo. 2020-106

On July 9, 2020, the Tax Court issued a Memorandum Opinion in the case of Dodson v. Commissioner (T.C. Memo. 2020-106). The primary issue before the court in Dodson v. Commissioner was whether the IRS abused its discretion by denying the petitioners’ proposed installment agreement. Petitioners in Dodson v. Commissioner Not Paragons of Tax Compliance The petitioners are in the real estate business, earning income from real estate brokerage and from rental of properties that they own. They filed delinquent Federal income tax returns for 2013, 2014, 2015, and 2016. They did not pay, by estimated tax or otherwise, the full amounts of tax shown as due on those returns. The IRS assessed the amounts shown as due along with additions to tax for failure to file, failure to timely pay, and failure to pay estimated tax. As a part of the collection efforts, the IRS sent the petitioners a…

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July 9, 2020
Read more about the article Englewood Place LLC v. Commissioner <section> T.C. Memo. 2020-105 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Englewood Place LLC v. Commissioner
T.C. Memo. 2020-105

On July 9, 2020, the Tax Court issued a Memorandum Opinion in the case of Englewood Place LLC v. Commissioner (T.C. Memo. 2020-105). The primary issue before the court in Englewood 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 Englewood 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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July 9, 2020
Read more about the article Maple Landing LLC v. Commissioner (T.C. Memo. 2020-104)
Tax Opinions / Charitable Issues / Memorandum Opinions

Maple Landing LLC v. Commissioner (T.C. Memo. 2020-104)

On July 9, 2020, the Tax Court issued a Memorandum Opinion in the case of Maple Landing LLC v. Commissioner (T.C. Memo. 2020-104). The primary issue before the court in Maple Landing 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 Maple Landing 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.…

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July 9, 2020