Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Thomas v. Commissioner
T.C. Memo. 2020-33

On March 5, 2020, the Tax Court issued a Memorandum Opinion in the case of Thomas v. Commissioner (T.C. Memo. 2020-33). The single issue presented in Thomas v. Commissioner was whether the petitioners timely filed their petition within the time prescribed by IRC § 6213(a) or IRC § 7502, which in turn depended on whether a private postmark bearing a previous date to the USPS postmark was controlling. Background to Thomas v. Commissioner In November 2017, the IRS mailed petitioners, by certified mail to their last known address, a statutory notice of deficiency (SNOD) for tax year 2015. The SNOD, dated December 2017, advised petitioners that they had 90 days from the date of the notice to file a petition in the Tax Court for a redetermination of the deficiency. The notice of deficiency also stated that the last day to petition the Tax Court was March 5, 2018. On…

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March 5, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Wong v. Commissioner
T.C. Memo. 2020-32

On March 5, 2020, the Tax Court issued a Memorandum Opinion in the case of Wong v. Commissioner (T.C. Memo. 2020-32). The single issue presented in Wong v. Commissioner was whether Wong was right, which is to say, whether the IRS’s determination to sustain the collection action against the petitioner was proper as a matter of law. Background to Wong v. Commissioner Petitioner, Do Wong, filed a timely Federal income tax return for 2013, reporting a tax liability of $10,395. Because his tax payments for 2013 exceeded that amount, he reported an overpayment on his 2013 return and elected to have the overpayment applied to his tax liability for 2014. The IRS selected petitioner’s 2013 return for examination. Finding that Do Wong, in fact, did wrong, the IRS made numerous adjustments to his return, including the disallowance (for lack of substantiation) of deductions for several hundred thousand dollars of business…

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March 5, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Liu v. Commissioner
T.C. Memo. 2020-31

On March 5, 2020, the Tax Court issued a Memorandum Opinion in the case of Liu v. Commissioner (T.C. Memo. 2020-31). The single issue presented in Liu v. Commissioner was whether the Tax Court had jurisdiction to determine whether petitioners were liable for interest on the deficiencies determined by the IRS because the IRS filed an erroneous notice of Federal tax lien (NFTL). Background to Liu v. Commissioner Petitioners each owned a 50% interest in an S corporation. The petitioners reported receiving qualified dividends from the S corporation rather than ordinary income. The IRS examined the returns and determined that the petitioners received ordinary income rather than qualified dividends. The IRS issued notices of deficiency in which it determined that the petitioners overstated their qualified dividend income, and, as a consequence, the IRS increased the petitioners’ ordinary income received by an S corporation on the petitioners’ Schedule E (Supplemental Income…

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March 5, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Sun River Financial Trust v. Commissioner
T.C. Memo. 2020-30

On March 5, 2020, the Tax Court issued a Memorandum Opinion in the case of Sun River Financial Trust v. Commissioner (T.C. Memo. 2020-30). The single issue presented in Sun River Financial Trust v. Commissioner was whether the IRS abused its discretion in sustaining a proposed levy and the filing of a notice of Federal tax lien (NFTL) with respect to petitioner’s unpaid IRC § 6702 (frivolous return) penalties for 2010 and 2011. Background to Sun River Financial Trust v. Commissioner Any case that contains a long footnote in which the Tax Court summarizes the petitioner’s frivolous arguments promises to be interesting, and Sun River Financial does not disappoint. The petitioner filed delinquent returns for 2010 and 2011. Not an auspicious start. Though the petitioner reported $42,000 and $54,000 in taxable income for these years, it also reported zero tax due and claimed a full refund of the amount of tax…

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March 5, 2020
Procedural Issues
Tax Opinions / Memorandum Opinions / Procedural Issues

Pulcine v. Commissioner (T.C. Memo. 2020-29)

On March 2, 2020, the Tax Court issued a Memorandum Opinion in the case of Pulcine v. Commissioner (T.C. Memo. 2020-29). The primary issue presented in Pulcine was whether a whistleblower, whose report initiated an audit of the alleged bad actor, which ultimately resulted in the “bad actor” receiving a refund on his return, demonstrated that the IRS’s Whistleblower Office (WBO) abused its discretion in not awarding the whistleblower for his information. (more…)

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March 2, 2020
Income Tax Issues
Tax Opinions / Income Tax Issues / Memorandum Opinions

Grieve v. Commissioner
T.C. Memo. 2020-28

On March 2, 2020, the Tax Court issued a Memorandum Opinion in the case of Grieve v. Commissioner (T.C. Memo. 2020-28). The primary issue presented in Grieve v. Commissioner was the valuation of the petitioner’s 99.8% member interests in two LLCs, Rabbit 1, LLC and Angus MacDonald, LLC, transferred to the petitioner from a GRAT and an irrevocable trust, respectively. Background to Grieve v. Commissioner – A Three Hour Tour This is the cautionary tale of Pierson Grieve, who I imagine has the look and affectations of Thurston Howell, III, sans the deserted island or the comic relief of Gilligan and the Skipper. Nor did Mr. Grieve have the Professor to engineer a way out of his tax liabilities with little more than coconuts and a sincere suspension of disbelief. He did have a cravat, though; that much I am sure of. Mr. Grieve had a daughter, Margaret, a lawyer,…

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March 2, 2020
Penalties Under the Code
Tax Opinions / Memorandum Opinions / Penalties Under the Code

Tran v. Commissioner
T.C. Memo. 2020-27

On February 26, 2020, the Tax Court issued a Memorandum Opinion in the case of Tran v. Commissioner (T.C. Memo. 2020-27). The three primary issues presented in Tran v. Commissioner were (1) whether the IRS is barred by the doctrine of collateral estoppel from relitigating the petitioners’ tax liability for 2006; (2) whether the petitioners failed to report gross receipts on Schedule C (Profits or Loss From Business) with regard to their nail salons in 2004, 2005, and 2006; and (3) whether both the petitioner-husband and petitioner-wife were liable for the civil fraud penalty of IRC § 6663 and the accuracy related penalty of IRC § 6662, respectively. Background to Tran v. Commissioner The petitioner-husband (Le) and the petitioner-wife (Tran) owned and operated CA Nails and Cali Nails in Lincoln, Nebraska. Tran, whose first name is Nghia, goes by the stage name “Nancy.” Le, whose first name is Dung, goes…

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February 26, 2020