Business Related Issues

ES NPA HOLDING LLC v. Commissioner (T.C. Memo. 2021-68)

On June 3, 2021, the Tax Court issued a Memorandum Opinion in the case of ES NPA HOLDING, LLC v. Commissioner (T.C. Memo. 2021-68). The primary issue presented in ES NPA HOLDING, LLC was whether the adjustment to ES NPA’s 2011 ordinary income originates at the level of another limited liability company, IDS, in which the petitioner held an interest, which is to say that the adjustment is a partnership item of IDS and not

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Business Related Issues

New Capital Fire Inc. v. Commissioner (T.C. Memo. 2021-67)

On June 2, 2021, the Tax Court issued a Memorandum Opinion in the case of New Capital Fire, Inc. v. Commissioner (T.C. Memo. 2021-67). The primary issue presented in New Capital Fire, Inc. was whether the petitioner is barred under the doctrine of equitable estoppel from changing its reporting of its bases in certain assets that the petitioner acquired in the merger because the statute of limitations bars assessment. Dancing the Merger Two Step The

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Business Related Issues

Mylan Inc. v. Commissioner (156 T.C. No. 10)

On April 27, 2021, the Tax Court issued its opinion in Mylan, Inc. v. Commissioner, 156 T.C. No. 10. The underlying issues presented in Mylan, Inc. were (1) whether the legal expenses incurred in preparing notice letters to brand name drug companies of petitioner’s intent to make generic versions of its drugs as part of the FDA approval process to do the same were capital or ordinary expenses; and (2) whether the legal expenses incurred

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Business Related Issues

Plentywood Drug Inc. v. Commissioner (T.C. Memo. 2021-45)

On April 26, 2021, the Tax Court issued a Memorandum Opinion in the case of Plentywood Drug, Inc. v. Commissioner (T.C. Memo. 2021-45). The primary issues presented in Plentywood Drug, Inc. were whether the petitioner’s owners received “fair rent” or constructive dividends for the rental of the petitioner’s drug store, and whether the petitioner (a corporation) satisfied its burden to show that the IRS failed to receive prior supervisory approval for the accuracy-related penalties at

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Business Related Issues

De Los Santos v. Commissioner (156 T.C. No. 9)

On April 12, 2021, the Tax Court issued its opinion in De Los Santos v. Commissioner, 156 T.C. No. 9. The underlying issue presented in De Los Santos was whether the benefits (a split-dollar life insurance arrangement) received by the petitioners were received in their capacity as employees or shareholders, and, in turn, whether such economic benefits or taxable to the petitioner’s as ordinary compensation income or as a distribution under IRC § 301. The

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Business Related Issues

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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Business Related Issues

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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McCrory v. Commissioner (T.C. Memo. 2021-116)

On October 4, 2021, the Tax Court issued a Memorandum Opinion in the case of McCrory v. Commissioner (T.C. Memo. 2021-116). The primary issue presented in McCrory was whether the IRS Whistleblower Office’s rejections of the petitioner’s claims were unsupported by the administrative record and were arbitrary, capricious, an abuse

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Gregory v. Commissioner (T.C. Memo. 2021-115)

On September 29, 2021, the Tax Court issued a Memorandum Opinion in the case of Gregory v. Commissioner (T.C. Memo. 2021-115). The primary issue presented in Gregory was whether the claimed deductions permitted under IRC § 183(b) for activities not engaged in for profit are not subject to the 2%

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A Primer on Employment Tax Withholding

When the IRS is involved, monetary transactions are never as simple as they appear on the surface. The late, great comedian Mitch Hedberg once told a story about being given a receipt after buying a doughnut. I bought a doughnut, and they gave me a receipt for the doughnut. I

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Clark v. Commissioner (T.C. Memo. 2021-114)

On September 28, 2021, the Tax Court issued a Memorandum Opinion in the case of Clark v. Commissioner (T.C. Memo. 2021-114). The primary issue presented in Clark was whether the petitioner fraudulently underreported his income. Held:  Oh, dear God.  The fraud! The Tax Court’s Summary of the Issue in Clark

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Whistleblower 14377-16W v. Commissioner (T.C. Memo. 2021-113)

On September 27, 2021, the Tax Court issued a Memorandum Opinion in the case of Whistleblower 14377-16W v. Commissioner (T.C. Memo. 2021-113). The primary issues presented in Whistleblower 14377-16W were whether the whistleblower could proceed anonymously, and whether the WBO abused its discretion in denying the whistleblower-petitioner an award. Held:

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Brown v. Commissioner (T.C. Memo. 2021-112)

On September 23, 2021, the Tax Court issued a Memorandum Opinion in the case of Brown v. Commissioner (T.C. Memo. 2021-112). The sole issue presented in Brown was whether the Tax Court has jurisdiction to order the refund of a TIPRA payment. What is a TIPRA Payment? The Tax Increase

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