United States Tax Court Decision for the Week – You be the Judge

Unsubstantiated Business Deductions Denied; Penalties Upheld

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United State Tax Court, upholding accuracy-related penalties, sustained the IRS’s disallowance of an individual’s deductions for unsubstantiated employee business expenses for his work with a publishing company but allowed the individual to deduct mileage expenses for traveling to county courthouses around the state to build his law practice.
MARTY DALE MARTIN,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent
 
T.C. Memo. 2016-189

United States Tax Court Decision for the Week – You be the Judge

United States Tax Court Upholds Levy Action, Rejection of Installment Agreement, and Finds No IRS Abuse of Discretion

The United States Tax Court held that an IRS settlement officer in the Appeals Office didn’t abuse his discretion by rejecting a couple’s proposed installment agreement and sustaining a levy action against them because they had sufficient equity in their assets to pay the taxes, they failed to offer acceptable collection alternatives, and they had a history of noncompliance.

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

RANDY TILLERY AND RACHEL BENATOR,
Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2015-170

 

United States Tax Court Decision for the Week – You be the Judge

The United States Tax Court Holds Restaurant Owner Fraudulently Underpaid Taxes

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United States Tax Court held that civil fraud penalties applied to a restaurant owner’s tax underpayments, finding that several badges of fraud were present to support a determination that his underpayments were due to fraud; however, the court allowed some additional business expense deductions for nonemployee compensation.

ALAA I. MUSA,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2015-58

United States Tax Court Decision for the Week – You be the Judge

A Prior Bankruptcy Decision Bars Challenge to Tax Deficiency and Innocent Spouse Relief

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United States Tax Court, sustaining a collection action, held that the doctrine of res judicata bars a married couple from challenging the timeliness and validity of notices of deficiency, finding that those issues were previously resolved during bankruptcy proceedings, and that res judicata also bars the wife from seeking innocent spouse relief.

RICHARD E. SNYDER AND MARION B. SNYDER,
Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

RICHARD E. SNYDER AND MARION SNYDER,
Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2015-26

 

United States Tax Court Decision for the Week – You be the Judge

United States Postal  Postmark Used to Decide Whether Petition Was Timely

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United States Tax Court dismissed for lack of jurisdiction an individual’s untimely petition challenging a deficiency, finding that a timely postmark from the postage software the individual used must be disregarded in favor of the U.S. Postal Service postmark that indicated the petition was mailed the day after the United States Tax Court filing due date.

JOSEPH SANCHEZ,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2014-223

United States Tax Court Decision for the Week – You be the Judge

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The Tax Court upheld the IRS’s determination to proceed with collection actions against a taxpayer for unpaid taxes for three tax years, finding that the taxpayer hadn’t provided any evidence to challenge the underlying liability and that the settlement officer based her determination on the required factors and hadn’t abused her discretion.

JAMES CROPPER,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2014-139

United States Tax Court Decision for the Week – You be the Judge

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United Tax Court held that an attorney wasn’t entitled to business expense deductions beyond those allowed by the IRS because he failed to show that they were ordinary and necessary to carrying on his law practice; the court also sustained an addition to tax for failure to timely file a return and upheld an accuracy-related penalty.

RICHARD A. CANATELLA,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2014-102

United States Tax Court Decision for the Week – You be the Judge

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United States Tax Court held that the operator of a bee and wasp removal business maintained insufficient records to substantiate business deductions and the IRS was entitled to use the bank deposits method to reconstruct the income of the business and impose additions to tax under Code Section 6651 and 6654.

GEORGE R. BRISTOL,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2014-84

United States Tax Court Decision for the Week – You be the Judge

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United States Tax Court upheld the IRS’s deficiency determination and imposed an accuracy-related penalty against a couple who claimed deductions for business use of their vehicles, finding the couple hadn’t met the substantiation requirements of Code Section 274(d); the court declined to impose a fraud penalty, finding the IRS hadn’t met its evidentiary burden.

JIM F. FLAKE AND MARTHA N. FLAKE,
Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

T.C. Memo. 2014-76

United States Tax Court Decision for the Week – You be the Judge

A recent Tax Court decision was reported that may be of interest to individuals potentially dealing with tax litigation. J. Frank Best, Certified Public Accountant and United States Tax Court Practitioner, works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients.

The United States Tax Court, in a summary opinion, held that a doctor and his wife weren’t entitled to business expense deductions for their Amway distribution activity, finding that the activity wasn’t conducted in a businesslike manner or with the requisite profit objective; the court declined to hold them liable for an accuracy-related penalty.

AMER MIKHAIL AND MARIANA MIKHAIL,
Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

T.C. Summ. Op. 2014-40