Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Strashny v. Commissioner
T.C. Memo. 2020-82

On June 11, 2020, the Tax Court issued a Memorandum Opinion in the case of Strashny v. Commissioner (T.C. Memo. 2020-82). The issue before the court in Strashny v. Commissioner was whether Appeals abused its discretion in sustaining the proposed collection action. Background to Strashny v. Commissioner The petitioners timely filed their 2014 Form 1040 but did not pay the tax shown as due. The IRS assessed the tax and an addition to tax for failure to pay. The petitioners sent (by certified mail) a Form 9465 (Installment Agreement Request) proposing to pay their 2017 liability ($1.1m as of December 2018) in installments over a six-year period. The petitioners attached a completed Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals). The IRS sent petitioners a Notice CP90 (Intent to Seize Your Assets and Notice of Your Right to a Hearing). Petitioners timely requested a CDP hearing, expressing…

0 Comments
June 11, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Nelson v. Commissioner
T.C. Memo. 2020-81

On June 10, 2020, the Tax Court issued a Memorandum Opinion in the case of Nelson v. Commissioner (T.C. Memo. 2020-81). The primary issue before the court in Nelson v. Commissioner was whether the limited partnership interests, transferred on December 31, 2008, and January 2, 2009, were fixed dollar amounts or percentage interests, which in turn affected whether the gifts were complete when transferred, which in turn affected inclusion on the petitioners’ income tax returns for certain years. Background to Longspar in Nelson v. Commissioner Longspar Partners, Ltd. was formed in October 2008, as a Texas limited partnership. It was formed as part of a tax planning strategy to (1) consolidate and protect assets, (2) establish a mechanism to make gifts without fractionalizing interests, and (3) ensure that petitioner-wife’s father’s holding company (owning 7 subsidiary Caterpillar dealerships) remained in business and under family control. The petitioners are Longspar’s sole general…

1 Comment
June 10, 2020
Procedural Issues
Tax Opinions / International Issues / Memorandum Opinions / Procedural Issues

Flume v. Commissioner (T.C. Memo. 2020-80)

On June 9, 2020, the Tax Court issued a Memorandum Opinion in the case of Flume v. Commissioner (T.C. Memo. 2020-80). The primary issue before the court in Flume v. Commissioner was whether the petitioners had subpart F income. Burden of Proof in Unreported Income Cases as in Flume v. Commissioner Generally, the IRS’s determinations regarding income set forth in a notice of deficiency are presumed correct and the taxpayer bears the burden of proving otherwise. See Tax Court Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). However, in cases (such as this one) involving unreported income, the IRS bears the burden of first producing or providing “some reasonable foundation” that connects the taxpayer with the income-producing activity. See Blohm v. Commissioner, 994 F.2d 1542, 1549 (11th Cir. 1993), aff’g T.C. Memo. 1991-636; Portillo v. Commissioner, 932 F.2d 1128, 1133 (5th Cir. 1991), aff’g in part, rev’g in…

0 Comments
June 9, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Johnson v. Commissioner
T.C. Memo. 2020-79

On June 8, 2020, the Tax Court issued a Memorandum Opinion in the case of Johnson v. Commissioner (T.C. Memo. 2020-79). The issues before the court in Johnson v. Commissioner were (1) whether the petitioner is entitled to deduct certain expenses on his Schedules F (Profit or Loss from Farming) for the years in issue; and (2) the valuation of a conservation easement. Driving Between Two Places of Business Deductible (if One is Not Your House) Generally, expenses that a taxpayer incurs in commuting between his home and his place of business are personal and nondeductible. See Commissioner v. Flowers, 326 U.S. 465, 473-474 (1946); Heuer v. Commissioner, 32 T.C. 947, 951 (1959), aff’d per curiam, 283 F.2d 865 (5th Cir. 1960); Treas. Reg. § 1.162-2(e); Treas. Reg. § 1.262-1(b)(5). However, expenses incurred for traveling between two or more places of business may be deductible as ordinary and necessary business…

0 Comments
June 8, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Howe v. Commissioner (T.C. Memo. 2020-78)

On June 8, 2020, the Tax Court issued a Memorandum Opinion in the case of Howe v. Commissioner (T.C. Memo. 2020-78). The issues before the court in Howe were (1) whether the notice of deficiency is valid and (2) whether respondent is equitably estopped from denying the executed settlement agreement in Form 870-AD (Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment). (more…)

0 Comments
June 8, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Penalties Under the Code / Procedural Issues

Koh v. Commissioner
T.C. Memo. 2020-77

On June 4, 2020, the Tax Court issued a Memorandum Opinion in the case of Koh v. Commissioner (T.C. Memo. 2020-77). The issue before the court in Koh v. Commissioner was whether Counsel for the IRS may make an initial determination for purposes of satisfying IRC § 6751(b)(1). Personal Note I was ready to write this case off. It is only six pages long, and so imagine how pleased I was to see an actual issue other than a petitioner ignoring the IRS the plague (which it turns out, we, as Americans, don’t like to avoid all that much). Also, congrats to Judge Greaves on an auspicious start to his tax court career. Koh was Judge Greave’s first opinion (and as of the date of this post, his only opinion) since he replaced Judge Vasquez, who went to senior status in 2018, but continues to churn out the opinions. The…

0 Comments
June 4, 2020
Read more about the article Brannan Sand & Gravel Co. LLC v. Commissioner <section> T.C. Memo. 2020-76 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Brannan Sand & Gravel Co. LLC v. Commissioner
T.C. Memo. 2020-76

On June 4, 2020, the Tax Court issued a Memorandum Opinion in the case of Brannan Sand & Gravel Co. LLC v. Commissioner (T.C. Memo. 2020-76). The issue before the court in Brannan Sand & Gravel Co. LLC v. Commissioner was whether the petitioner substantiated (as required by Treas. Reg. § 1.170A-13(c)) a $200,000 charitable contribution claimed for the donation of certain water storage rights. Background to Donation in Brannan Sand & Gravel Co. LLC v. Commissioner The petitioner is in the business of extracting rock, sand, and gravel from the ground and processing those materials into asphalt. It owned 157 acres in Colorado which it mines. Silver Peaks Metropolitan District No.1 (District) is a political subdivision of Colorado, to which contributions made for exclusively public purposes are treated as charitable contributions under IRC § 170. Bromley District Water Providers, LLC, provided (as you may have guessed) water to the District.…

0 Comments
June 4, 2020