Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Lord Pope v. Commissioner
T.C. Memo. 2020-62

On May 18, 2020, the Tax Court issued a Memorandum Opinion in the case of Pope v. Commissioner (T.C. Memo. 2020-62). The basic issue before the court in Pope was whether the Tax Court lacks jurisdiction to redetermine a deficiency under IRC § 6213(a) when no deficiency was determined but which determination reduces the petitioners’ claimed entitlement to a refund. Background to Pope v. Commissioner Nothing against Judge Lauber – I genuinely appreciate his no “fluff,” straight-to-the-point opinions – but I wish Judge Holmes would have been assigned this case. He would have had a field day with Lord S. Pope. As is, the opinion is deferential to Lord Pope, though reading between the lines of the facts, this deference may be a tad unwarranted. Lord Pope is a “supervisor,” at least that is what he listed as his occupation on his 2017 Form 1040. With a name as evocative…

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May 18, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Nesbitt v. Commissioner
T.C. Memo. 2020-61

On May 18, 2020, the Tax Court issued a Memorandum Opinion in the case of Nesbitt v. Commissioner (T.C. Memo. 2020-61). The basic issue before the court in Nesbitt v. Commissioner was whether the IRS abused its discretion in sustaining a proposed levy and rejecting a proposed collection alternative on the grounds that the petitioners failed to provide sufficient information, which information was requested multiple times by the IRS. Procedural Background to Nesbitt v. Commissioner Petitioners received a Notice of Intent to Levy (and Right to CDP Hearing) and requested a CDP hearing using a Form 12153 (Request for CDP Hearing). The petitioners indicated that they were interested in an installment agreement (IA) as a collection alternative. In advance of the CDP hearing, the IRS advised petitioners that, to consider an IA, they needed to provide (1) a completed Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals),…

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May 18, 2020
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Richlin v. Commissioner
T.C. Memo. 2020-60

On May 18, 2020, the Tax Court issued a Memorandum Opinion in the case of Richlin v. Commissioner (T.C. Memo. 2020-60). The issues before the court in Richlin v. Commissioner were (1) whether Form 12257 (Summary Notice of Determination, Waiver of Right to Judicial Review of a Collection Due Process Determination, and Waiver of Suspension of Levy Action) is a binding contract between the petitioner and the IRS; (2) whether IRM 8.22.9.13 prohibits rescission of a Form 12257; (3) whether the IRS is equitably estopped from making a determination contrary to the terms of the Form 12257; (4) whether the IRS erred as a matter of law in allocating estimated payments of tax to husband’s account through reference to petitioner’s premarital agreement with husband. Summary of Decision in Richlin v. Commissioner The petitioner and her late husband, H, filed a joint return for 2005 and elected to apply the overpayment…

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May 18, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Lemay v. Commissioner
T.C. Memo. 2020-59

On May 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Lemay v. Commissioner (T.C. Memo. 2020-59). The primary issue before the court in Lemay v. Commissioner was whether petitioner is liable for a penalty under IRC § 6700 (promoting abusive tax shelters, etc.) for consistently promoting a tax avoidance scheme that everyone and their mother told him (and that he objectively knew himself) to be contrary to the law. (This case is the companion case (tried together) of Davison v. Commissioner (T.C. Memo. 2020-57), and, as in Davison, the Tax Court found, without great difficulty, that the petitioner was liable for penalties under IRC § 6700.) Cross-Reference to Companion Case in Lemay v. Commissioner The facts and analysis of Lemay are identical to those in Davison v. Commissioner (T.C. Memo. 2020-57), which can be found here. For that reason, I will not duplicate them here.…

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May 14, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Davison v. Commissioner
T.C. Memo. 2020-58

On May 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Davison v. Commissioner (T.C. Memo. 2020-58). The primary issue before the court in Davison v. Commissioner was whether petitioner is liable for a penalty under IRC § 6700 (promoting abusive tax shelters, etc.) for consistently promoting a tax avoidance scheme that everyone and their mother told him (and that he objectively knew himself) to be contrary to the law. (This case is the companion case (tried together) of Lemay v. Commissioner, T.C. Memo. 2020-59, and, as in Lemay, the Tax Court found, without great difficulty, that the petitioner was liable for penalties under IRC § 6700.) (more…)

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May 14, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Kirkley v. Commissioner
T.C. Memo. 2020-57

On May 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Kirkley v. Commissioner (T.C. Memo. 2020-57). The primary issue before the court in Kirkley v. Commissioner was whether the IRS’s determination that petitioners must liquidate all of their property, including their residence, as a condition for the IRS’s acceptance of an installment agreement, was a (rather egregious) abuse of discretion. Statement of Facts in Kirkley v. Commissioner The common perception of IRS agents and appeals officers is not, on the whole, a particularly favorable one. Case in point: I have never seen a bumper sticker that says “If 10% is good enough for God, it’s good enough for [enter any other profession here, other than the IRS].” Having worked with some lovely people at the IRS over the years, I have a rather higher opinion of them than Joe Taxpayer, who regards the employees of…

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May 13, 2020
Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions

NCA Argyle LP v. Commissioner
T.C. Memo. 2020-56

On May 13, 2020, the Tax Court issued a Memorandum Opinion in the case of NCA Argyle LP v. Commissioner (T.C. Memo. 2020-56). The basic issue before the court in NCA Argyle LP v. Commissioner was whether proceeds received from the settlement of a lawsuit involving punitive damages which proceeds were received in exchange for the plaintiff/taxpayer’s interests in joint ventures (a capital asset) were properly treated as gain on the sale of a capital asset. Background to NCA Argyle LP v. Commissioner Of the 25-page opinion, over 12 pages are dedicated to the factual background of the case. As the reproduction of the facts below is only a paragraph long, it glosses over a few details along the way. The petitioner, NCA, entered into real estate joint ventures with Commonfund. When Commonfund later disavowed those joint ventures, the two parties ended up in litigation. NCA was awarded damages for…

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May 13, 2020