US Tax Court Updates
US Tax Court Updates
Here are brief summaries and links to recent Tax Court Decisions involving issues that an Enrolled Agent will likely see in regular practice with links to the whole case. Some may cover old ground, but it is good to have an occasional up to date refresher. Previously listed cases can be found in the Archive
Caveat: The webmaster has made the decision what cases to include. Chapter members with suggestions about other cases can email the webmaster, Include a brief summary and case number and "your case" will be added.
Reminder: Summary decisions, while often interesting, cannot be quoted as precedent but you can mention the decisions or cut and paste the opinions into correspondence where the reasoning fits your case.
Depreciation deductions must follow IRS guidelines even if a the realistic life of the property is different.
A
tax attorney (with 40 years experience) was not allowed to deduct the cost of
pornography or visits to prostitutes as a medical expense. (Negligence
Penalty Added) Halby, Memo
Opinion 2009-2004
LLCs are not partnerships for the purposes of applying limits to passive losses.
Hegarty, T.C. Summ. Op. 2009-153
Offer in Compromise was remanded to appeals to reconsider petitioner's offer in
light of 48 month payment rule instead of life of collection statute.
Blair, T.C.
Memo. 2009-232
Taxpayer awarded litigation fees because
Commissioner unreasonably ignored taxpayer's documentation of deductions
Chapman,
T.C. Summary Opinion 2009-155
Sole member of LLC was liable for full employment tax liability,
not lower IRC 6672 penalty
Commensoli TC Memo 2009-242
Tax Protestor assessed maximum $25,000 penalty for
filing a frivolous petition in Tax Court. Eight previous trips didn't convince
him
Davenport TC Memo 2009-248
Profit on surrender of life insurance policy was
taxable. Loan against cash value was irrelevant.
Barr T.C. Memo 2009
250
Ex-wife granted innocent spouse relief for half the tax on an amended return
changing from separate to joint after a divorce court ordered the couple to
prepare and file amended Federal and State tax returns for 2002 and 2003 using
the status of married filing jointly.
Bruen T.C. Memo.
2009-249
The Tax Court was sympathetic but still denied exemptions and child credits to a
non-custodial father who was awarded right to exemptions for children by divorce
decree if child support was paid timely which it was. The custodial parent
never signed Form 8332 and absconded with the children.
Himes, T.C.
Memo 2010-97 Lesson: Make sure the entitled non-custodial
parent gets a signed Form 8332 or other document containing the required
wording.
A taxpayer win happened here when
IRS was not able to produce a signed agreement to a deficiency or proof that
statutory notice was mailed so assessments of petitioners’ additional income
taxes for the years involved were declared invalid.
Marlow T.C.
Memo. 2010-113
There was a heavy weight of factors in favor of granting innocent spouse relief
Venables
T.C. Summary Opinion 2010-62
A Form 1099-C was not
proof that the taxpayer cancellation of debt income in
the year of the form. Evidence showed the cancellation
occurred in an earlier year for which the statute had
expired. Dennis Gaffney,
T.C. Summary Opinion 2010-128
A husband dominated and
abused by his wife was granted Innocent Spouse Relief
for five years of unpaid taxes. Timothy Schultz
TC Memo 2010-233
Other Cases Reported Previously now in the Archive
When a non-custodial parent claims an exemption for a child IRS doesn't care who
the court says is entitled to the deduction. That parent must have a signed Form
8832 or similar document from the other parent.
Sanchez T.C.
Summary Opinion 2009-167
If the Himes case above didn't make the case strongly
enough, here is another (Summary) Tax Court case on the
issue of non-custodial parents needing Form 8332. In
Clinton, T.C. Summary Opinion 2010-75
were the custodial parent,
the bad mother,
was actually found in contempt of state court for
refusing to sign Form 8332 but that was still not good
enough for
the good father to
get the exemption.
If you like your tax cases local, here is a nice fresh
SUCCESSFUL innocent spouse case from Modesto,
Karen M Wilson T.C. Memo. 2010-134