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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Scott St. Amand October 3, 2021
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 v. Commissioner was whether the petitioner was entitled to deduct business expenses for 2016 and 2017 (the years in issue). Adler v. Commissioner 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

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Scott St. Amand May 10, 2021
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
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 v. Commissioner 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 in Jacobs v. Commissioner The petitioner was a trial lawyer with the Department of Justice for 20 years before

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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
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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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
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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 »
Scott St. Amand October 3, 2021

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 v. Commissioner was whether the petitioner was entitled to deduct business expenses for 2016 and 2017 (the years in issue). Adler v. Commissioner

Read More »
Scott St. Amand May 10, 2021

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

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 v. Commissioner was whether the petitioner was entitled to reasonable litigation and administrative costs pursuant to IRC § 7430 and Tax Court Rule

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

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 »
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