Income Tax Issues
IRC § 183

Gaston v. Commissioner (T.C. Memo. 2021-107)

On September 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gaston v. Commissioner (T.C. Memo. 2021-107). The primary issue presented in Gaston was whether the petitioner engaged in acting as a trade or business in the tax years at issue and, if so, whether the petitioner is entitled to deduct any reported expenses relating to that trade or business. Background: A Pink Cadillac The petitioner is a former national sales

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Income Tax Issues
Deductions

Estate of Morgan v. Commissioner (T.C. Memo. 2021-104)

On August 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Morgan v. Commissioner (T.C. Memo. 2021-104). The primary issues presented in Estate of Morgan were whether the petitioners (1) are entitled to deductions claimed on Schedule C for expenses incurred by Falcon, LLC (Falcon), and Falcon Legacy, LLC (Legacy); (2) are entitled to a net operating loss deduction attributable to an alleged NOL carryover from tax years 2010

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Income Tax Issues
Books and Records

Adler v. Commissioner (T.C. Memo. 2021-56)

On May 10, 2021, the Tax Court issued a Memorandum Opinion in the case of Adler v. Commissioner (T.C. Memo. 2021-56). The primary issue presented in Adler was whether the petitioner was entitled to deduct business expenses for 2016 and 2017 (the years in issue). In Short The petitioner was a consultant for an entertainment company in Los Angeles.  He incurred business-related expenses, including travel expenses, and he reported these expenses on his Schedule C

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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 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 You may remember

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Procedural Issues
Burden of Proof

Jacobs v. Commissioner (T.C. Memo. 2021-51)

On May 5, 2021, the Tax Court issued a Memorandum Opinion in the case of Jacobs v. Commissioner (T.C. Memo. 2021-51). The primary issue presented in Jacobs was whether the petitioner was entitled to reasonable litigation and administrative costs pursuant to IRC § 7430 and Tax Court Rule 231. A Lawyer, Scholar, and Author The petitioner was a trial lawyer with the Department of Justice for 20 years before he became a full-time professor at

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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 was whether the IRS erred in disallowing deductions the petitioner claimed for certain business expenses, charitable contributions, and state and local tax. Brief Background Ms. Viola Chancellor, of Nevada, is a notary and a paralegal.  In 2015, she received $400 from her duties as such.  She reported a

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Income Tax Issues
Capital Expenditures

Deducting Legal and Professional Fees

Income tax deductions are rather like hard truths. A client may not want to hear that an item is not deductible, but you know in your heart of hearts that you cannot, in good conscience, advise them otherwise. No doctor relishes the prospect of telling a patient that he is terminal. Often met with a similar grief-stricken reaction, explaining to a client that the “big ticket” deduction that they wanted to claim (or in my

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Gaston v. Commissioner (T.C. Memo. 2021-107)

On September 2, 2021, the Tax Court issued a Memorandum Opinion in the case of Gaston v. Commissioner (T.C. Memo. 2021-107). The primary issue presented in Gaston was whether the petitioner engaged in acting as a trade or business in the tax years at issue and, if so, whether the

Read More »

Estate of Morgan v. Commissioner (T.C. Memo. 2021-104)

On August 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Estate of Morgan v. Commissioner (T.C. Memo. 2021-104). The primary issues presented in Estate of Morgan were whether the petitioners (1) are entitled to deductions claimed on Schedule C for expenses incurred by Falcon, LLC

Read More »

Adler v. Commissioner (T.C. Memo. 2021-56)

On May 10, 2021, the Tax Court issued a Memorandum Opinion in the case of Adler v. Commissioner (T.C. Memo. 2021-56). The primary issue presented in Adler was whether the petitioner was entitled to deduct business expenses for 2016 and 2017 (the years in issue). In Short The petitioner was

Read More »

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 were whether certain amounts characterized as gross receipts of a company should actually be other income to the petitioners, whether the company is

Read More »

Jacobs v. Commissioner (T.C. Memo. 2021-51)

On May 5, 2021, the Tax Court issued a Memorandum Opinion in the case of Jacobs v. Commissioner (T.C. Memo. 2021-51). The primary issue presented in Jacobs was whether the petitioner was entitled to reasonable litigation and administrative costs pursuant to IRC § 7430 and Tax Court Rule 231. A

Read More »

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 was whether the IRS erred in disallowing deductions the petitioner claimed for certain business expenses, charitable contributions, and state and local tax. Brief

Read More »

Deducting Legal and Professional Fees

Income tax deductions are rather like hard truths. A client may not want to hear that an item is not deductible, but you know in your heart of hearts that you cannot, in good conscience, advise them otherwise. No doctor relishes the prospect of telling a patient that he is

Read More »