Income Tax Issues
Accuracy Related Penalty

Purple Heart Patient Center Inc. v. Commissioner
T.C. Memo. 2021-38

On March 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Purple Heart Patient Center Inc. v. Commissioner (T.C. Memo. 2021-38). The primary issues presented in Purple Heart Patient Center Inc. v. Commissioner were whether the petitioner (1) was entitled to offset its gross receipts with any cost of goods sold (COGS), (2) underreported its gross income, and (3) is liable for the accuracy-related penalty pursuant to IRC § 6662(a). Background to Purple

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Scott St. Amand March 29, 2021
Business Related Issues
Accuracy Related Penalty

Caylor Land & Development v. Commissioner
T.C. Memo. 2021-30

On March 10, 2021, the Tax Court issued a Memorandum Opinion in the case of Caylor Land & Development v. Commissioner (T.C. Memo. 2021-30). The primary issues presented in Caylor Land & Development v. Commissioner were whether consulting payments made between the petitioner and its microcaptive insurance company were ordinary and necessary business expenses or insurance expenses. Brief Background (to Lay a Foundation for Judge Holmes’ Puns) in Caylor Land & Development v. Commissioner The

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Scott St. Amand March 10, 2021
Penalties Under the Code
Accuracy Related Penalty

Sells v. Commissioner
T.C. Memo. 2021-12

On January 28, 2021, the Tax Court issued a Memorandum Opinion in the case of Sells v. Commissioner (T.C. Memo. 2021-12). The main issue presented in Sells v. Commissioner was whether the conservation easement deduction was appropriately denied, but it is the prior supervisory approval that we’ll focus on below. Background to the Penalty Issue in Sells v. Commissioner The IRS asserted penalties for both the conservation easement and the timber donation. However, the parties

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Scott St. Amand January 28, 2021
Business Related Issues
Economic Substance Doctrine

Daichman v. Commissioner
T.C. Memo. 2020-126

On August 31, 2020, the Tax Court issued a Memorandum Opinion in the case of Daichman v. Commissioner (T.C. Memo. 2020-126). The primary issue before the court in Daichman v. Commissioner was whether the petitioners are entitled to a short-term capital loss deduction of $2.1 million in connection with the dissolution of their S corporation or whether their tax transactions lacked economic substance. Brief Background to the Shenanigans in Daichman v. Commissioner During 2009 the

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Scott St. Amand August 31, 2020
Penalties Under the Code
30-Day Letter

Thompson v. Commissioner
155 T.C. No. 5

On August 27, 2020, the Tax Court issued its opinion in Thompson v. Commissioner (155 T.C. No. 5). The primary issue presented in Thompson v. Commissioner was whether the offer of settlement of the petitioners’ tax liabilities under reduced penalty rates on any later-determined underpayment arising out of an abusive tax transaction was an “initial determination” of a penalty for purposes of IRC § 6751(b)(1)’s prior written supervisory approval requirement. Background to Thompson v. Commissioner The

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Scott St. Amand August 27, 2020
Procedural Issues
Accuracy Related Penalty

McCarthy v. Commissioner
T.C. Memo. 2020-74

On June 3, 2020, the Tax Court issued a Memorandum Opinion in the case of McCarthy v. Commissioner (T.C. Memo. 2020-74). The issues before the court in McCarthy v. Commissioner were (1) whether the petitioner is entitled to deductions for qualified residence indebtedness with respect to real properties in New York and California, and (2) whether petitioner is liable for an accuracy-related penalty under IRC § 6662. Brief Background on Residences of Petitioner in McCarthy

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Scott St. Amand June 3, 2020
Penalties Under the Code
A Petitioner Named Dung

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

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Scott St. Amand February 26, 2020
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Purple Heart Patient Center Inc. v. Commissioner
T.C. Memo. 2021-38

On March 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Purple Heart Patient Center Inc. v. Commissioner (T.C. Memo. 2021-38). The primary issues presented in Purple Heart Patient Center Inc. v. Commissioner were whether the petitioner (1) was entitled to offset its gross receipts with any

Read More »
Scott St. Amand March 29, 2021

Caylor Land & Development v. Commissioner
T.C. Memo. 2021-30

On March 10, 2021, the Tax Court issued a Memorandum Opinion in the case of Caylor Land & Development v. Commissioner (T.C. Memo. 2021-30). The primary issues presented in Caylor Land & Development v. Commissioner were whether consulting payments made between the petitioner and its microcaptive insurance company were ordinary

Read More »
Scott St. Amand March 10, 2021

Sells v. Commissioner
T.C. Memo. 2021-12

On January 28, 2021, the Tax Court issued a Memorandum Opinion in the case of Sells v. Commissioner (T.C. Memo. 2021-12). The main issue presented in Sells v. Commissioner was whether the conservation easement deduction was appropriately denied, but it is the prior supervisory approval that we’ll focus on below.

Read More »
Scott St. Amand January 28, 2021

Daichman v. Commissioner
T.C. Memo. 2020-126

On August 31, 2020, the Tax Court issued a Memorandum Opinion in the case of Daichman v. Commissioner (T.C. Memo. 2020-126). The primary issue before the court in Daichman v. Commissioner was whether the petitioners are entitled to a short-term capital loss deduction of $2.1 million in connection with the

Read More »
Scott St. Amand August 31, 2020

Thompson v. Commissioner
155 T.C. No. 5

On August 27, 2020, the Tax Court issued its opinion in Thompson v. Commissioner (155 T.C. No. 5). The primary issue presented in Thompson v. Commissioner was whether the offer of settlement of the petitioners’ tax liabilities under reduced penalty rates on any later-determined underpayment arising out of an abusive tax

Read More »
Scott St. Amand August 27, 2020

McCarthy v. Commissioner
T.C. Memo. 2020-74

On June 3, 2020, the Tax Court issued a Memorandum Opinion in the case of McCarthy v. Commissioner (T.C. Memo. 2020-74). The issues before the court in McCarthy v. Commissioner were (1) whether the petitioner is entitled to deductions for qualified residence indebtedness with respect to real properties in New

Read More »
Scott St. Amand June 3, 2020

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

Read More »
Scott St. Amand February 26, 2020