Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Cosio v. Commissioner
T.C. Memo. 2020-90

On June 18, 2020, the Tax Court issued a Memorandum Opinion in the case of Cosio v. Commissioner (T.C. Memo. 2020-90). The primary issue before the court in Cosio v. Commissioner was whether the petitioner received a reasonable opportunity to present evidence pertaining to his tax liability for 2015, when all notices sent to the petitioner referenced his 2012 liability and his right to a hearing thereupon. Background to Cosio v. Commissioner From the limited facts set forth in the Tax Court opinion, the petitioner does not appear to have been a “model” taxpayer. Petitioner filed his 2015 return a month after the extended due date (though it’s not clear whether his return was actually on extension), which was bad enough, but he also failed to remit any payment with the return. The IRS assessed the tax a month later, and four months after the assessment, the IRS issued a…

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June 18, 2020
Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions

Santos v. Commissioner
T.C. Memo. 2020-88

On June 17, 2020, the Tax Court issued a Memorandum Opinion in the case of Santos v. Commissioner (T.C. Memo. 2020-88). The sole issue before the court in Santos v. Commissioner was whether the individuals listed on the notice of determination should be legally classified as employees (IRS’s position) or as independent contractors (petitioner’s position). The Entrepreneurial Housekeeper in Santos v. Commissioner The petitioner was born and raised in Brazil and moved to the U.S. in 1996. Shortly thereafter, she began cleaning residential homes. It turned out that the petitioner had the knack for bringing beauty out of the dingiest homes, and soon the word got around, and she began cleaning apartments and later the apartment buildings themselves. The petitioner could not do this alone, and so she recruited other Brazilian immigrants to assist her through advertisements she posted in Brazilian hair salons. Can’t fault the lady for knowing her…

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June 17, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Abrego v. Commissioner
T.C. Memo. 2020-87

On June 16, 2020, the Tax Court issued a Memorandum Opinion in the case of Abrego v. Commissioner (T.C. Memo. 2020-87). The issue before the court in Abrego v. Commissioner was whether the petitioners received excess advance payments of the premium assistance tax credit (commonly known as the premium tax credit or PTC) allowed under section 1412 of the Patient Protection and Affordable Care Act, which in turn increased their tax due by the amount of the excess, subject to the limitations set forth in IRC § 36B(f)(2)(B). A Succinct Opinion in Abrego v. Commissioner? Not so Much If you read the opinion, you will notice something after a bit. Nothing in the first 13.5 pages of acronyms and algebra and more acronyms actually deals with the issues in the case. Not directly (or relevantly) at least. Indeed, for those who are keeping score at home, it takes Judge Copeland…

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June 16, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Abeuova v. Commissioner
T.C. Memo. 2020-86

On June 16, 2020, the Tax Court issued a Memorandum Opinion in the case of Abeuova v. Commissioner (T.C. Memo. 2020-86). The issue before the court in Abeuova v. Commissioner was whether the IRS sent the notice of deficiency to the petitioners last known address, and if so, whether the Tax Court has jurisdiction because of the untimely filing of the petition. The Erroneous Zip Code Addendum in Abeuova v. Commissioner Petitioners’ five-digit ZIP Code was 10017 at all relevant times, and their nine-digit ZIP Code was 10017-3522 at all relevant times. Petitioners correctly included their five-digit ZIP Code on their 2015 tax return, which was the last return they filed before respondent sent the notice. The ZIP Code printed on the notice is 10017-3522946, that is, petitioners’ nine-digit ZIP Code followed by “946” erroneously added at the end. This may have been enough to carry the day for the…

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June 16, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Bidzimou v. Commissioner
T.C. Memo. 2020-85

On June 15, 2020, the Tax Court issued a Memorandum Opinion in the case of Bidzimou v. Commissioner (T.C. Memo. 2020-85). The primary issue before the court in Bidzimou v. Commissioner was whether a state court’s order awarding the petitioner the right to claim a tax exemption for petitioner’s minor child, despite not being the child’s custodial parent, could operate as a substitute Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent), or equivalent declaration signed by the custodial parent. Dependency Exemption Deduction in Bidzimou v. Commissioner The Code allows taxpayers an annual exemption deduction for each of the taxpayer’s dependents. IRC § 151(a); IRC § 151(c). A dependent is either a qualifying child or a qualifying relative. IRC § 152(a). A qualifying child must meet five requirements for the taxpayer to qualify for the deduction. IRC § 152(c). To be a taxpayer’s qualifying child,…

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June 15, 2020
Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions / Procedural Issues

Sellers v. Commissioner (T.C. Memo. 2020-84)

On June 15, 2020, the Tax Court issued a Memorandum Opinion in the case of Sellers v. Commissioner (T.C. Memo. 2020-84). The primary issue before the court in Sellers v. Commissioner was whether the petitioner provided sufficient evidence to substantiate his bases in certain companies and his material participation (for passive activity loss purposes). This case also presents a very interesting question of whether the burden of proof really shifts to the IRS to prove additional deficiencies first asserted subsequent to the initial notice of deficiency (i.e., in the IRS’s answer to the petition). Brief Background to Sellers v. Commissioner Randy Sellers, the petitioner, was a Utahan jack-of-all-trades. Among his many trades were CPA, businessman, irascible bulldog collector of defunct real estate and semi-tractor trailer loans, investor, and seller of boats, boat parts, and marine accessories for enthusiasts of the great Salt Lake. The loan collector and boat businesses were…

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June 15, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Schwager v. Commissioner (T.C. Memo. 2020-83)

On June 15, 2020, the Tax Court issued a Memorandum Opinion in the case of Schwager v. Commissioner (T.C. Memo. 2020-83). The issue before the court in Schwager v. Commissioner was whether the IRS abused its discretion in dismissing as frivolous the petitioner’s arguments made during the CPD hearing and sustaining the proposed levy action. Background to Schwager v. Commissioner The petitioner, Fritz Schwager, failed to file his income tax returns from 2009 through 2012. The IRS prepared substitutes for returns (SFRs) pursuant to its authority under IRC § 6020(b), and it sent Fritz a notice of deficiency for each year, consistent with the SFRs. Fritz weinte schlecht (cried foul) and filed a petitioner filed a petitioner with regard to 2012 but failed to prosecute. The case as dismissed, and the IRS assessed the deficiencies and additions to tax under IRC § 6651(a)(1) (failure to file); IRC § 6651(a)(2) (failure…

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June 15, 2020