Burden of Proof

Berry v. Commissioner (T.C. Memo. 2021-42)

On April 7, 2021, the Tax Court issued a Memorandum Opinion in the case of Berry v. Commissioner (T.C. Memo. 2021-42). The primary issues presented in Berry were whether the petitioners S corporation underreported its income, whether the petitioners’ S corporation is entitled to certain claimed deductions, whether the petitioners are entitled to certain claimed deductions, and whether the petitioners are liable for accuracy-related penalties under IRC § 6662. Background In 2013, Ronald Berry and

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Deductions

Olsen v. Commissioner (T.C. Memo. 2021-41)

On April 6, 2021, the Tax Court issued a Memorandum Opinion in the case of Olsen v. Commissioner (T.C. Memo. 2021-41). The primary issues presented in Olsen were whether the petitioners were entitled to depreciation deductions reported on Schedules C (Profit or Loss from Business) and whether they were entitled to energy tax credits reported on Forms 3800 (General Business Credit) for deductions and credits related to a solar energy tax shelter.  Held: Hells no.

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Deductions

Max v. Commissioner (T.C. Memo. 2021-37)

On March 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Max v. Commissioner (T.C. Memo. 2021-37). The primary issue presented in Max was whether drawing fashion sketches qualify as “qualified research” under IRC § 41. General Observations Who knew Judge Buch was such a fashionista? If you don’t believe me, read the first 21 pages of the opinion.  The editor of Teen Vogue better watch out.  Judge Buch knows his stuff

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Deductions

(Non)Deductibility of Fines and Penalties under New § 162(f) Regulations

Introduction As you sat down one fine Tuesday morning in January 2021, and you cycled through the emails that rolled into your inbox in the 12 minutes since you last checked them, you notice an update announcing that the IRS is issued final regulations on IRC § 162(f) – deductibility of fines and penalties. You have had prior experience with the Code section, due to Uncle Bill’s penchant for minor violations of laws, regulations, and

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International
Badaracco

Adams Challenge (UK) Limited v. Commissioner (156 T.C. No. 3)

On January 25, 2021, the Tax Court issued its opinion in Adams Challenge (UK) Limited v. Commissioner, 156 T.C. No. 3. The underlying issue presented in Adams Challenge (UK) Limited was whether the IRS erred in disallowing the petitioner’s deductions and credits and whether the IRS’s action violated the business profits and the nondiscrimination articles of the bilateral income tax treaty between the United States and the U.K. Background The petitioner is a U.K. corporation

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C Corporations

Aspro Inc. v. Commissioner (T.C. Memo. 2021-8)

On January 21, 2021, the Tax Court issued a Memorandum Opinion in the case of Aspro, Inc. v. Commissioner (T.C. Memo. 2021-8). The sole issue presented in Aspro, Inc. was whether the petitioner was entitled to deductions for management fees paid to three shareholders. Background I find the petitioner suspect.  First off, it is an Iowa C corporation, but it is not involved with the production or processing of corn.  Strike one, Aspro.  Second, the

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Deductions

San Jose Wellness v. Commissioner (156 T.C. No. 4)

On February 17, 2021, the Tax Court issued its opinion in San Jose Wellness v. Commissioner, 156 T.C. No. 4. The underlying issue presented in San Jose Wellness was whether the petitioner, a marijuana dispensary, was prohibited from claiming deductions for depreciation and charitable contributions under IRC § 280E. Background The petitioner operated a medical marijuana dispensary pursuant to California law from 2010 to 2015. It sold marijuana to individuals who held a valid doctor’s

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Berry v. Commissioner (T.C. Memo. 2021-42)

On April 7, 2021, the Tax Court issued a Memorandum Opinion in the case of Berry v. Commissioner (T.C. Memo. 2021-42). The primary issues presented in Berry were whether the petitioners S corporation underreported its income, whether the petitioners’ S corporation is entitled to certain claimed deductions, whether the petitioners

Read More »

Olsen v. Commissioner (T.C. Memo. 2021-41)

On April 6, 2021, the Tax Court issued a Memorandum Opinion in the case of Olsen v. Commissioner (T.C. Memo. 2021-41). The primary issues presented in Olsen were whether the petitioners were entitled to depreciation deductions reported on Schedules C (Profit or Loss from Business) and whether they were entitled

Read More »

Max v. Commissioner (T.C. Memo. 2021-37)

On March 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Max v. Commissioner (T.C. Memo. 2021-37). The primary issue presented in Max was whether drawing fashion sketches qualify as “qualified research” under IRC § 41. General Observations Who knew Judge Buch was such a fashionista?

Read More »

Adams Challenge (UK) Limited v. Commissioner (156 T.C. No. 3)

On January 25, 2021, the Tax Court issued its opinion in Adams Challenge (UK) Limited v. Commissioner, 156 T.C. No. 3. The underlying issue presented in Adams Challenge (UK) Limited was whether the IRS erred in disallowing the petitioner’s deductions and credits and whether the IRS’s action violated the business

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Aspro Inc. v. Commissioner (T.C. Memo. 2021-8)

On January 21, 2021, the Tax Court issued a Memorandum Opinion in the case of Aspro, Inc. v. Commissioner (T.C. Memo. 2021-8). The sole issue presented in Aspro, Inc. was whether the petitioner was entitled to deductions for management fees paid to three shareholders. Background I find the petitioner suspect. 

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San Jose Wellness v. Commissioner (156 T.C. No. 4)

On February 17, 2021, the Tax Court issued its opinion in San Jose Wellness v. Commissioner, 156 T.C. No. 4. The underlying issue presented in San Jose Wellness was whether the petitioner, a marijuana dispensary, was prohibited from claiming deductions for depreciation and charitable contributions under IRC § 280E. Background

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