Income Tax Issues
Accrual Method Accounting

Hoops LP v. Commissioner
T.C. Memo. 2022-9

On February 23, 2022, the Tax Court issued a Memorandum Opinion in the case of Hoops LP v. Commissioner (T.C. Memo. 2022-9). The primary issues presented in Hoops LP v. Commissioner were whether partnership was entitled to deduct deferred compensation owed to two of its basketball franchise’s players, and whether the partnership was required to take into account the amount of its deferred compensation liability for players when computing its taxable gain or loss from

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Income Tax Issues
IRC § 446

Examining the Method of Accounting and the IRS’s Broad Discretion to Change Them

The Practical Limits of IRC § 446(a) A taxpayer must compute taxable income under the method of accounting it regularly uses in keeping its books.[1] The IRS has rather broad statutory discretion to change a taxpayer’s accounting method in certain circumstances.[2] If the method of accounting used by the taxpayer does not clearly reflect income, the IRS generally will see fit to change the taxpayer’s method of accounting to a method that, in its not

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Income Tax Issues
Cancellation of Indebtedness (COD) Income

Wienke v. Commissioner
T.C. Memo. 2020-143

On October 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Wienke v. Commissioner (T.C. Memo. 2020-143). The issues before the court in Wienke v. Commissioner are numerous and varied; in fact, the Tax Court lists eight specific, separate issues.

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Business Related Issues
COGS

Morning Star Packing Company L.P. v. Commissioner
T.C. Memo. 2020-142

On October 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Morning Star Packing Company L.P. v. Commissioner (T.C. Memo. 2020-141). The issues before the court in Morning Star Packing Company L.P. v. Commissioner. were whether the accrued production costs were: (1) fixed and binding where economic performance did not occur until the year following the tax year claimed for and (2) whether the partnerships’ inclusion of such production costs in

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Income Tax Issues
Deductions

Pinkston v. Commissioner
T.C. Memo. 2020-44

On April 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Pinkston v. Commissioner (T.C. Memo. 2020-44). The issue properly before the court in Pinkston v. Commissioner was whether the IRS appropriately “recaptured” depreciation deductions that the petitioners claimed on rental properties prior to the years at issue, as to which years the limitation period had expired. Background to Pinkston v. Commissioner In 2003 and 2010, the petitioners acquired two rental

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Penalties Under the Code
Amended Return is Admission by Taxpayer

Mei Productions v. Commissioner
T.C. Memo. 2020-11

On January 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Mei Productions v. Commissioner (T.C. Memo. 2020-11). The issue presented in Mei Productions v. Commissioner was whether the petitioner was liable for the failure to pay under IRC § 6651(a)(3) (failure to timely pay tax assessed as an amendment to an original return). Background to Mei Productions v. Commissioner The petitioner is a California corporation, which admitted that it erroneously claimed

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Income Tax Issues
Bad Advice

Cuthbertson v. Commissioner
T.C. Memo. 2020-9

On January 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Cuthbertson v. Commissioner (T.C. Memo. 2020-9). The issues presented in Cuthbertson v. Commissioner were (1) whether the petitioners were entitled to loss deductions arising from the sale or abandonment of golf course improvements, and (2) whether the installment method of accounting was an appropriate method of accounting to report the transfer of property between two companies, both wholly owned by

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Hoops LP v. Commissioner
T.C. Memo. 2022-9

On February 23, 2022, the Tax Court issued a Memorandum Opinion in the case of Hoops LP v. Commissioner (T.C. Memo. 2022-9). The primary issues presented in Hoops LP v. Commissioner were whether partnership was entitled to deduct deferred compensation owed to two of its basketball franchise’s players, and whether

Read More »

Wienke v. Commissioner
T.C. Memo. 2020-143

On October 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Wienke v. Commissioner (T.C. Memo. 2020-143). The issues before the court in Wienke v. Commissioner are numerous and varied; in fact, the Tax Court lists eight specific, separate issues.

Read More »

Morning Star Packing Company L.P. v. Commissioner
T.C. Memo. 2020-142

On October 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Morning Star Packing Company L.P. v. Commissioner (T.C. Memo. 2020-141). The issues before the court in Morning Star Packing Company L.P. v. Commissioner. were whether the accrued production costs were: (1) fixed and binding where

Read More »

Pinkston v. Commissioner
T.C. Memo. 2020-44

On April 13, 2020, the Tax Court issued a Memorandum Opinion in the case of Pinkston v. Commissioner (T.C. Memo. 2020-44). The issue properly before the court in Pinkston v. Commissioner was whether the IRS appropriately “recaptured” depreciation deductions that the petitioners claimed on rental properties prior to the years

Read More »

Mei Productions v. Commissioner
T.C. Memo. 2020-11

On January 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Mei Productions v. Commissioner (T.C. Memo. 2020-11). The issue presented in Mei Productions v. Commissioner was whether the petitioner was liable for the failure to pay under IRC § 6651(a)(3) (failure to timely pay tax assessed

Read More »

Cuthbertson v. Commissioner
T.C. Memo. 2020-9

On January 14, 2020, the Tax Court issued a Memorandum Opinion in the case of Cuthbertson v. Commissioner (T.C. Memo. 2020-9). The issues presented in Cuthbertson v. Commissioner were (1) whether the petitioners were entitled to loss deductions arising from the sale or abandonment of golf course improvements, and (2)

Read More »