Fed. Circuit: Taxpayer Failed to Certify WOTC and WtW Credits

The Court of Appeals for the Federal Circuit affirms the Court of Federal Claims grant of summary judgment in favor of the United States ruling that the taxpayer failed to meet the necessary certification requirements to be eligible for the Work Opportunity Tax Credit (WOTC) and Welfare to Work (WtW) tax credit.

Read the Opinion:
Manor Care v. U.S., No. 2010-5038 (Jan. 21, 2011)

7th Circuit: Overstatement of Basis triggers 6 Year Statute of Limitations

The Seventh Circuit Court of Appeals overturns the Tax Court holding that a taxpayer’s overstatement of basis in a Son of Boss tax shelter is an omission of income under § 6501(e) triggering the six year statute of limitations.

For commentary on the implications of this opinion visit Tax Appellate Blog.

Read the Opinion:
Beard v. Commissioner, No. 09-3741 (7th Cir. Jan. 26 2011)

Tax Court: Ordinary Business Expenses not Subject to Gambling Loss Limitations

The Tax Court rules that ordinary business expenses, other than the cost of wagers, incurred by a professional gambler are not subject to limitation on gambling losses under section 165(d).

[Please note: This is not the U.S. Supreme Court's medical resident/Chevron deference opinion. For that opinion, please click here.]

Read the Opinion:
Mayo v. Commissioner, 136 T.C. No. 4 (2011)

What does Mayo Foundation mean for Tax Litigation?

The Supreme Court’s decision in Mayo Foundation will have a lasting impact. Chevron deference is now the standard. One scholar asks whether that is always the case.

What to do about regulations that appear to be promulgated in order to affect the outcome of a pending case? Does Chevron deference still apply? Does another standard apply? Should another standard apply?

Prof. Lederman of the Univeristy of Indiana at Bloomington will present “Hold the Mayo: What Respect Should Courts Accord Tax Regulations and Rulings Issued During Litigation?” at the University of Florida Faculty Colloquia Series.

Please visit Tax Prof Blog for an abstract.

3rd Circuit Reverses Tax Court on Innocent Spouse Statute of Limitations

The Third Circuit Court of Appeals reversed the Tax Court on the validity of Treas. Reg. 1.6015-5(b)(1) which establishes a two year statute of limitations for innocent spouse relief under IRC Sec. 6015(f). The Court of Appeals remanded to the Tax Court for a finding on the petitioner’s argument for an equitable tolling of the statute.

For more on this question, see the Lantz opinion out of the Seventh Circuit.

Mannella v. Commissioner, No. 10-1308 (3rd Cir. Jan. 19, 2011)