Income Tax Issues
Tax Opinions / Income Tax Issues / Penalties Under the Code

Rivera v. Commissioner
T.C. Memo. 2020-7

On January 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Rivera v. Commissioner (T.C. Memo. 2020-7). The issues presented in Rivera v. Commissioner were whether (1) the petitioners’ partnership received and failed to report gross receipts on Forms 1065, (2) the partnership is entitled to certain deductions claimed on the partnership returns, and (3) the petitioners are liable for IRC § 6662(a) accuracy-related penalties.

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January 13, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Seely v. Commissioner
T.C. Memo. 2020-6

On January 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Seely v. Commissioner (T.C. Memo. 2020-6). The issue presented in Seely v. Commissioner was whether the taxpayers provided sufficient extrinsic evidence to demonstrate the timely mailing of a petition, even though the envelope in which the petition was mailed bore no postmark. If so, then the Tax Court had jurisdiction to redetermine the deficiency.  If not, then no jurisdiction would lie. Background in Seely v. Commissioner The petitioners are residents of the Richland, Washington, about as far away from Washington, D.C., as one can get in the contiguous United States (2,603 miles, give or take). The IRS mailed a notice of deficiency on March 28, 2017, by certified mail, advising the petitioners of the 90-day deadline (from the date of notice) to file a petition with the Tax Court, or until June 26, 2017. The…

1 Comment
January 13, 2020
Business Related Issues
Tax Opinions / Business Related Issues / Memorandum Opinions

Hommel v. Commissioner
T.C. Memo. 2020-4

On January 8, 2020, the Tax Court issued a Memorandum Opinion in the case of Hommel v. Commissioner (T.C. Memo. 2020-4). The issue presented in Hommel v. Commissioner was whether a petitioner, who presented no evidence to the contrary, could challenge a bank deposits analysis for abuse of discretion.  The real issue, however, was how close Judge Holmes could get to calling the petitioner a #^&%$ idiot without actually doing so. Personal Note in Hommel v. Commissioner – When I Grow Up, I Want to be Like Judge Holmes Rarely are we given an opinion where the sarcasm isn’t veiled, where the puns aren’t scrapped for platitudes, where the passive aggression is not tamed if not wholly eliminated, and where the Judge doesn’t even attempt to hide his utter scorn for a litigant whose sheer incompetence landed him in the quagmire that he now finds himself mired in. Judge Holmes’…

1 Comment
January 8, 2020
International Issues
Tax Opinions / Full Tax Court Opinions / International Issues

Adams Challenge UK Limited v. Commissioner
154 T.C. No. 3

On January 8, 2020, the Tax Court issued its opinion in Adams Challenge UK Limited v. Commissioner, 154 T.C. No. 3. The issue presented in Adams Challenge UK Limited v. Commissioner was whether a United Kingdom private limited liability company, whose vessel was leased to a U.S. company operating on portions of the U.S. Outer Continental Shelf (OCS) received income effectively connected with a U.S. trade or business pursuant to IRC § 882(a)(1), thereby giving rise to a U.S. income tax liability. Effectively Connected Income in Adams Challenge UK Limited v. Commissioner IRC § 882(a)(1) provides that a foreign corporation engaged in trade or business within the United States during the taxable year is taxed on its income that is effectively connected with the conduct of a trade or business in the United States. Effectively connected income generally includes all income, gain, or loss from sources within the United States. IRC…

1 Comment
January 8, 2020
Penalties Under the Code
Tax Opinions / Full Tax Court Opinions / Penalties Under the Code

Frost v. Commissioner
154 T.C. No. 2

On January 7, 2020, the Tax Court issued its opinion in Frost v. Commissioner (154 T.C. No. 2). The issue presented in Frost v. Commissioner was whether the IRS satisfied the burden of production under IRC § 7491(c) in offering evidence of compliance with the requirement of IRC § 6751(b)(1) that the agent initially determining accuracy-related penalties obtained timely written supervisory approval to assert IRC § 6662(a) accuracy-related penalties against the petitioner. Parsing the Semantics in Frost v. Commissioner: Burden of Proof and Burden of Production A burden is a burden, right? When you’re thirty-three, living in your mother’s basement in the ‘burbs, with a Cheeto-stained, ironical (your word, not mine) hipster mustache, then yes. That’s a burden, no matter how you slice it. No need to prove it or to produce evidence to support it. You’re a bum and a burden. Shave the flavor saver, and get a damn…

6 Comments
January 7, 2020
Read more about the article Loube v. Commissioner <section> T.C. Memo. 2020-3 </section>
Tax Opinions / Charitable Issues

Loube v. Commissioner
T.C. Memo. 2020-3

On January 6, 2020, the Tax Court issued a Memorandum Opinion in the case of Loube v. Commissioner (T.C. Memo. 2020-3). The issues presented in Loube v. Commissioner were whether the petitioners had complied with § 155 of the Deficit Reduction Act of 1984 (DEFRA) with respect to the appraisal that they obtained regarding charitable deductions claimed on their return; and if not, whether the petitioners were in substantial compliance with DEFRA. Charitable Contributions, Generally in Loube v. Commissioner The deductibility of a charitable contribution depends on the donor-taxpayer meeting several conditions, which conditions are determined by the size and type of contribution.  The larger the contribution, the more stringent the documentation and substantiation that is needed.  See IRC § 170(a)(1).  With respect to non-cash donations, the amount of the contribution is generally equal to the fair market value of the property at the time of contribution. See Treas. Reg.…

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January 6, 2020