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 ยง 6501(e) triggering the six year statute of limitations.
For commentary on the implications of this opinion visit Tax Appellate Blog.
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Beard v. Commissioner, No. 09-3741 (7th Cir. Jan. 26 2011)
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.]
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Mayo v. Commissioner, 136 T.C. No. 4 (2011)
Writer/producer cannot amortize and deduct personal film and television memorabilia collection. The Tax Court rejected petitioner’s argument that IRS acceptance of the position under a prior audit (with a no change letter) was an agreement between the parties or binding on the court.
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Rooney v. Commissioner, TC Memo 2011-14
In yet another variation on the mailbox rule, the Tax Court rules that a petition mailed from a foreign country was timely without a U.S. postmark where the petitioner was able to show domestic receipt using a tracking service.
The Tax Court holds that a partnership can assert a reasonable cause defense to section 6662 penalties. However, reliance on a promoter, defined as an “advisor who participates in structuring the transaction”, is not reasonable cause for purposes of avoiding the penalty.
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)
The Ninth Circuit Court of Appeals rules that it does not have jurisdiction over partner’s bifurcated interests (direct and indirect) in a TEFRA partnership.
The Tax Court follows the instructions of the Court of Appeals for the D.C. Circuit on the question of jurisdiction over Sec. 6662 partner level penalties in a partnership level proceeding.
Judge Holmes of the Tax Court provides historical context in a substantiation case. Pursuit of the unified life does not relieve the taxpayer of the obligation under the Internal Revenue Code to identify, segregate and substantiate expenses.
Tenth Circuit Court of Appeals holds that the U.S. Tax Court did not abuse its discretion when it considered and ruled upon a new legal theory raised by the Government in a post-trial brief because the taxpayers did not show prejudice.
Klass v Commissioner, Docket No. 09-9012 (10th Cir. Oct. 26, 2010)
