Penalties Under the Code
Full Tax Court Opinions / Penalties Under the Code / Tax Opinions

Sand Investment Co. v. Commissioner
157 T.C. No. 11

On November 23, 2021, the Tax Court issued its opinion in Sand Investment Co. v. Commissioner, 157 T.C. No. 11. The primary issue presented in Sand Investment Co. was whether the IRS obtained prior written supervisory approval pursuant to IRC § 6751(b)(1) insofar as whether the individual who made the initial determination received approval from its immediate supervisor. Held: Yeah…no dice, petitioner. Dueling Determinations The RA’s case and issue manager, Mr. Burris, signed the form on November 20, 2018, and the RA’s new team leader, Mr. Wilson, signed the form on November 23, 2018. The definite decision to assert penalties was communicated to Sand Investment Co. more than two months later, in the Final Partnership Audit Adjustment dated February 8, 2019. The IRS, thus, contends that timely approval of these penalties was secured.[1] The petitioner contends that supervisory approval came too late, and its argument has two essential steps. First,…

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April 19, 2022
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Charitable Issues / Memorandum Opinions / Tax Opinions

901 South Broadway Limited Partnership v. Commissioner
T.C. Memo. 2021-132

 On November 23, 2021, the Tax Court issued a Memorandum Opinion in the case of 901 South Broadway Limited Partnership v. Commissioner (T.C. Memo. 2021-132). The primary issue presented in 901 South Broadway Limited Partnership was whether a partnership’s gift to a qualified organization satisfied the requirement of IRC § 170(h)(5)(A) that the gift’s conservation purposes must be protected in perpetuity. Held: DO NOT GET CREATIVE WITH CONSERVATION EASEMENTS!!! Background to 901 South Broadway Limited Partnership v. Commissioner The petitioner, 901 South Broadway Limited Partnership, contributed a facade easement on a building at 901 South Broadway Avenue, Los Angeles, California to the Los Angeles Conservancy. When the petitioner granted the easement to the Conservancy, the underlying property was subject to five deeds of trust securing loans made to the partnership. The lenders to which the petitioner was indebted (and for which loans the building served as collateral) were the beneficiaries…

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April 18, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Roberts v. Commissioner
T.C. Memo. 2021-131

On November 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Roberts v. Commissioner (T.C. Memo. 2021-131). The primary issue presented in Roberts was whether the settlement officer abused his discretion in determining that petitioner was ineligible for a collection alternative. Held: No. Background to Roberts v. Commissioner The petitioner has unpaid tax liabilities for 2004-2007. In an effort to collect these liabilities the IRS filed an NFTL, and in May 2019, the IRS mailed the petitioner a Notice of Federal Tax Lien. The petitioner timely requested a CDP hearing, indicating that she was interested in an installment agreement. She stated that the NFTL would have “severe negative impacts” upon her family. She raised no other issues in her hearing request. The IRS sent the petitioner a letter explaining that the IRS could not consider her request for an installment agreement unless she became current in…

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April 15, 2022
Procedural Issues
Full Tax Court Opinions / Procedural Issues / Tax Opinions

Ruhaak v. Commissioner
157 T.C. No. 9

On November 16, 2021, the Tax Court issued its opinion in Ruhaak v. Commissioner, 157 T.C. No. 9. The primary issue presented in Ruhaak was whether the petitioner’s request for a hearing made before the expiration of the 30-day period following the mailing date of the levy notice necessarily triggered a CDP hearing and not an equivalent hearing. Held: Timing is everything. Background to Ruhaak v. Commissioner The IRS sent the petitioner a Notice of Intent to Levy, and the petitioner dutifully requested a hearing regarding the proposed levy by submitting a Form 12153, Request for a Collection Due Process or Equivalent Hearing, within 30 days of the notice, during which the petitioner had a statutory right to request a collection due process (CDP) hearing.[1] Thinking he was being clever, however, the petitioner checked the box on the Form 12153 to request an equivalent hearing in the event that his request…

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April 15, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Marino v. Commissioner
T.C. Memo. 2021-130

On November 22, 2021, the Tax Court issued a Memorandum Opinion in the case of Marino v. Commissioner (T.C. Memo. 2021-130). The primary issue presented in Marino was whether the IRS Whistleblower Office abused its discretion in denying the petitioner an award for information on an alleged ne’er-do-well taxpayer…who, apparently, was dead. Background The petitioner in Marino v. Commissioner filed a Form 211 (Application for Award for Original Information) in 2014, in which he claimed an award for information regarding alleged violations of income tax laws by a subchapter S corporation and its shareholders. Among other things, the petitioner claimed the S corporation had overstated its cost of goods sold and improperly deducted payments, ostensibly for marketing rights, made to “Taxpayer 3.” Taxpayer 3 was a minority shareholder of the S corporation who owned 15% of the corporation’s stock. Her father, “Taxpayer 1,” owned the remaining 85% of the stock.…

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April 14, 2022
Procedural Issues
Memorandum Opinions / Procedural Issues / Tax Opinions

Holland v. Commissioner
T.C. Memo. 2021-129

On November 18, 2021, the Tax Court issued a Memorandum Opinion in the case of Holland v. Commissioner (T.C. Memo. 2021-129). The primary issue presented in Holland was whether petitioner is taxable on retirement income he received during 2017. Held:  #Protester? Yes. #Winning? Not so much. Basics of Argument in Holland v. Commissioner Although the petitioner conceded that he retirement income received payments…he nonetheless asserted that such payments did not constitute “taxable income” because they were received in exchange for his prior labor and were “unconnected with his exercise of any Federal privilege.”     Background to Holland v. Commissioner The petitioner was retired during 2017. He had previously been employed as a service technician by PepsiCo. He drove a truck for a period of time and was a member of the Teamsters union. During 2017 petitioner received Social Security benefits of $26,292. The Social Security Administration (SSA) reported these…

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April 4, 2022