Income Tax Issues
Accuracy Related Penalty

Berry v. Commissioner
T.C. Memo. 2021-52

On May 5, 2021, the Tax Court issued a Memorandum Opinion in the case of Berry v. Commissioner (T.C. Memo. 2021-52). The primary issues presented in Berry v. Commissioner were whether certain amounts characterized as gross receipts of a company should actually be other income to the petitioners, whether the company is entitled to deduct racecar expenses, and whether or not the petitioners substantiated COGS or a depreciation deduction under IRC § 167(a). Background to Berry

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Scott St. Amand May 5, 2021
Income Tax Issues
Books and Records

Chancellor v. Commissioner
T.C. Memo. 2021-50

On May 4, 2021, the Tax Court issued a Memorandum Opinion in the case of Chancellor v. Commissioner (T.C. Memo. 2021-50). The primary issue presented in Chancellor v. Commissioner was whether the IRS erred in disallowing deductions the petitioner claimed for certain business expenses, charitable contributions, and state and local tax. Brief Background to Chancellor v. Commissioner Ms. Viola Chancellor, of Nevada, is a notary and a paralegal.  In 2015, she received $400 from her

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Scott St. Amand May 4, 2021
Procedural Issues
Books and Records

Procedural Considerations on Collection (Levies and Distraints) – Part Three: Enforcement of Levy

In the first article in this series of posts regarding the IRS’s enforced collection through levies, we discussed the IRS’s authority and limits thereto regarding levies and distraints. In the second article of this series on levies, we discussed the procedure requiring notice and hearing before a levy attaches.  In this third article in this series, we discuss the IRS’s enforcement of levies and distraints. Enforcement of Levy If a person (including an officer or

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Scott St. Amand April 29, 2021
Procedural Issues
Books and Records

The Record Keeping Requirement of IRC § 6001

Uncle Bill has gotten somewhat of a large bee in his bonnet (a murder hornet of sorts, if you want to know the truth), and he has asked you to teach him everything that you know about civil tax procedure. You note that you are far too busy with your burgeoning practice, but you are intrigued by the Ol’ Codger’s desire to learn the ins and outs of the process through which the IRS collects

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Scott St. Amand April 29, 2021
Income Tax Issues
Books and Records

The Cohan Rule and the IRC § 274 Exception

A taxpayer may deduct all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.[1] In contrast, a taxpayer may not deduct personal, living, or family expenses unless the Code expressly provides otherwise.[2] The determination of whether an expense satisfies the requirements of IRC § 162 is a question of fact for the Tax Court.[3] Proving Entitlement A taxpayer must prove his entitlement to all deductions and

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Scott St. Amand April 29, 2021
Income Tax Issues
Bank Deposits Analysis

Haghnazarzadeh v. Commissioner
T.C. Memo. 2021-47

On April 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Haghnazarzadeh v. Commissioner (T.C. Memo. 2021-47). The primary issue presented in Haghnazarzadeh v. Commissioner was whether certain deposits into the petitioners’ nine bank accounts are ordinary income or nontaxable deposits. A Bit of Context to Haghnazarzadeh v. Commissioner This is an unreported income case, and the opinion is all of six pages long.  One has expectations of a couple thousand

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Scott St. Amand April 29, 2021
Income Tax Issues
Accuracy Related Penalty

Baum v. Commissioner
T.C. Memo. 2021-46

On April 27, 2021, the Tax Court issued a Memorandum Opinion in the case of Baum v. Commissioner (T.C. Memo. 2021-46). The primary issues presented in Baum were whether the petitioners were entitled to deductions for expenses as reported on Schedules C (Profit or Loss from Business) for the years in issue and whether the petitioners were entitled to a theft loss deduction pursuant to IRC § 165 for 2015. Background to Baum v. Commissioner:

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Scott St. Amand April 27, 2021
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Berry v. Commissioner
T.C. Memo. 2021-52

On May 5, 2021, the Tax Court issued a Memorandum Opinion in the case of Berry v. Commissioner (T.C. Memo. 2021-52). The primary issues presented in Berry v. Commissioner were whether certain amounts characterized as gross receipts of a company should actually be other income to the petitioners, whether the company

Read More »
Scott St. Amand May 5, 2021

Chancellor v. Commissioner
T.C. Memo. 2021-50

On May 4, 2021, the Tax Court issued a Memorandum Opinion in the case of Chancellor v. Commissioner (T.C. Memo. 2021-50). The primary issue presented in Chancellor v. Commissioner was whether the IRS erred in disallowing deductions the petitioner claimed for certain business expenses, charitable contributions, and state and local

Read More »
Scott St. Amand May 4, 2021

The Record Keeping Requirement of IRC § 6001

Uncle Bill has gotten somewhat of a large bee in his bonnet (a murder hornet of sorts, if you want to know the truth), and he has asked you to teach him everything that you know about civil tax procedure. You note that you are far too busy with your

Read More »
Scott St. Amand April 29, 2021

The Cohan Rule and the IRC § 274 Exception

A taxpayer may deduct all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.[1] In contrast, a taxpayer may not deduct personal, living, or family expenses unless the Code expressly provides otherwise.[2] The determination of whether an expense satisfies the requirements

Read More »
Scott St. Amand April 29, 2021

Haghnazarzadeh v. Commissioner
T.C. Memo. 2021-47

On April 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Haghnazarzadeh v. Commissioner (T.C. Memo. 2021-47). The primary issue presented in Haghnazarzadeh v. Commissioner was whether certain deposits into the petitioners’ nine bank accounts are ordinary income or nontaxable deposits. A Bit of Context to

Read More »
Scott St. Amand April 29, 2021

Baum v. Commissioner
T.C. Memo. 2021-46

On April 27, 2021, the Tax Court issued a Memorandum Opinion in the case of Baum v. Commissioner (T.C. Memo. 2021-46). The primary issues presented in Baum were whether the petitioners were entitled to deductions for expenses as reported on Schedules C (Profit or Loss from Business) for the years

Read More »
Scott St. Amand April 27, 2021