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

Bordelon v. Commissioner
T.C. Memo. 2020-26

On February 20, 2020, the Tax Court issued a Memorandum Opinion in the case of Bordelon v. Commissioner (T.C. Memo. 2020-26). The issues presented in Bordelon v. Commissioner were (1) whether the petitioner-husband’s personal guarantee of a loan established sufficient amounts “at risk” under IRC § 465 to permit deduction of a loss related to a wholly-owned LLC in 2008; and (2) whether petitioner-husband’s personal guarantee of a second loan increased his basis in a second wholly owned LLC under IRC § 704(d), thereby establishing sufficient “at risk” amounts under IRC § 465 to entitle him to deduct in 2011 his share of suspended losses from 2008. Between a Rock and a Hard Place in Bordelon v. Commissioner Rock Bordelon was in the healthcare business. His name wasn’t Peter, and he did not simply go by “Rock.” No, dear reader, the name his momma gave him was Rock. It’s likely…

1 Comment
February 20, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Keels v. Commissioner
T.C. Memo. 2020-25

On February 19, 2020, the Tax Court issued a Memorandum Opinion in the case of Keels v. Commissioner (T.C. Memo. 2020-25). The issues presented in Keels v. Commissioner were (1) whether petitioner substantiated his expenses underlying his claimed deductions by maintaining adequate records, and (2) whether, because the IRS raised the application of IRC § 409A as a new basis for disallowance of the petitioner’s deductions (which had not been raised in the notice of deficiency), consequently shifting the burden of proof to the IRS as to such new basis of disallowance, the IRS met its burden of proof as to the elements of IRC § 409A. Substantiation of Expenses Underlying Deductions in Keels v. Commissioner The fact that a taxpayer claims a deduction on his income tax return is not sufficient to substantiate the deduction. Wilkinson v. Commissioner, 71 T.C. 633, 639 (1979); Roberts v. Commissioner, 62 T.C. 834,…

0 Comments
February 19, 2020
Read more about the article Oakhill Woods LLC v. Commissioner (T.C. Memo. 2020-24)
Tax Opinions / Charitable Issues / Memorandum Opinions

Oakhill Woods LLC v. Commissioner (T.C. Memo. 2020-24)

On February 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Oakhill Woods, LLC v. Commissioner (T.C. Memo. 2020-24). The issues presented in Oakhill Woods, LLC were whether the petitioner satisfied for this donation the substantiation requirements of Treas. Reg. § 1.170A-13(c), and if it did not, whether Treas. Reg. § 1.170A-13(c) is, itself, invalid. (more…)

5 Comments
February 13, 2020
Read more about the article Railroad Holdings LLC v. Commissioner <section> T.C. Memo. 2020-22 </section>
Tax Opinions / Charitable Issues / Memorandum Opinions

Railroad Holdings LLC v. Commissioner
T.C. Memo. 2020-22

On February 5, 2020, the Tax Court issued a Memorandum Opinion in the case of Railroad Holdings LLC v. Commissioner (T.C. Memo. 2020-22). The issue presented in Railroad Holdings LLC v. Commissioner was whether the extinguishment provisions contained in the grant of a conservation easement violated IRC § 170(h)(5)(A). Background to Railroad Holdings LLC v. Commissioner The petitioner executed a conservation easement deed in favor of a charitable organization. The deed provided that, if the easement were ever extinguished and proceeds were to be allocated between the petitioner and the charitable organization, then the organization would be entitled to a portion of the proceeds at least equal to the fair market value of the conservation easement as of the date of the grant of the conservation easement, rather than being entitled to a proportionate share of the proceeds. The petitioner claimed a charitable contribution deduction for the contribution, and the IRS…

2 Comments
February 5, 2020
Penalties Under the Code
Tax Opinions / Charitable Issues / Memorandum Opinions / Penalties Under the Code

Carter v. Commissioner
T.C. Memo. 2020-21

On February 3, 2020, the Tax Court issued a Memorandum Opinion in the case of Carter v. Commissioner (T.C. Memo. 2020-20). The issues presented in Carter v. Commissioner were whether the restrictions contained in a conservation easement violated IRC § 170(h) and whether the IRS had satisfied the prior written supervisory approval requirement of IRC § 6751(b)(1). Background to Carter v. Commissioner The petitioners, through their partnership, conveyed an easement to NALT, a “qualified organization” within the meaning of IRC § 170(h)(3), which easement restricts the use of the covered property and generally prohibits the construction or occupancy of any dwellings. Petitioner’s partnership retained the right, however, to build single-family dwellings in specified "building areas," the locations of which were to be determined, subject to NALT's approval. The partnership reported a charitable contribution deduction equal to the easement's purported value, and the petitioners claimed deductions on their individual returns equal…

1 Comment
February 3, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Alber v. Commissioner
T.C. Memo. 2020-20

On January 30, 2020, the Tax Court issued a Memorandum Opinion in the case of Alber v. Commissioner (T.C. Memo. 2020-20). The issue presented in Alber v. Commissioner was whether the Whistleblower Office of the IRS abused its discretion in summarily rejecting a whistleblower’s claim on the basis that the information provided to support such claim was speculative and/or did not provide specific or credible information regarding tax underpayments or violations of internal revenue laws. Background to Alber v. Commissioner The petitioner in Alber was engaged in a lifelong game of Marco Polo with reality, which by all metrics, he was winning handily. The petitioner is a non-U.S. citizen residing in Germany. He submitted a Form 211 (Application for Award for Original Information) to the Whistleblower office of the IRS (WBO) that alleged, and I quote: the “fake Federal Republic of Germany banana republic has been treating [the petitioner] badly…

2 Comments
January 30, 2020