Crystal R. Vettel
United States Tax Court · 2025-10-22
This case involved Crystal R. Vettel’s petition for innocent spouse relief under IRC section 6015 from joint and several liability on understatements of tax for the years 2006 through 2010 and 2014, arising from her husband’s unreported foreign business income and investments. In a prior deficiency proceeding that resulted in a stipulated decision, Vettel had not raised the innocent spouse claim. The Tax Court held that res judicata barred the current request because Vettel had a full and fair opportunity to litigate the issue in the earlier case, as the petition was filed more than a year before settlement and nothing prevented her from amending the petition or filing Form 8857. The court found she meaningfully participated through counsel and that strategic decisions not to raise the claim did not negate the prior opportunity, so it did not reach the merits of relief under section 6015(b), (c), or (f).
taxesprocedure
Blomquist Holdings, LLC, Crestlawn Investors, LLC, Tax Matters Partner
United States Tax Court · 2025-09-17
This case involved a TEFRA partnership, Blomquist Holdings, LLC, that claimed a large charitable contribution deduction under IRC section 170 for donating a conservation easement, which the IRS largely disallowed in a Final Partnership Administrative Adjustment along with penalties. The tax matters partner, Crestlawn Investors, LLC, entered into a settlement with the IRS, prompting 39 nonparticipating partners to file amended motions for leave to participate late under Tax Court Rule 248(b)(4) in order to avoid the settlement and litigate further. The Tax Court ruled that partners' rights to participate under IRC section 6226(c)(2) are not absolute but are governed by the Tax Court Rules of Practice and Procedure. The court held that late participation requires a substantial showing justifying the request, which the partners failed to provide given their prior inaction, lack of evidence of misconduct by the tax matters partner, and absence of any explanation for the delay. Accordingly, the court denied the motions.
taxesprocedurebusiness & regulatory
Michael D. Taylor
United States Tax Court · 2025-03-03
This case involved Michael D. Taylor challenging an IRS Notice of Deficiency for his 2017 federal income tax return, which disallowed a claimed $49,500 casualty loss deduction under section 165 for damage from Hurricane Harvey to the Gatehouse Property. The Tax Court ruled that Taylor was not entitled to the deduction after the parties settled other issues. The court reasoned that a casualty loss deduction requires ownership of the affected property, but Taylor transferred his interest in the Gatehouse Property to his former spouse in 2000, held it only as guardian for his minor daughters until transferring it outright to his adult daughters in 2012, and had no ownership interest in 2017.
taxesproperty
Ana M. Franklin
United States Tax Court · 2025-01-22
The case involved consolidated Tax Court petitions by Ana M. Franklin challenging IRS notices of deficiency for her 2015 and 2018 federal income taxes. The court addressed whether Franklin had unreported income of $155,000 from a county jail food account in 2015 (and related net operating loss carryback and late-filing penalty issues), and whether $44,967 received in 2018 was business gross receipts or other income along with associated deductions for legal and professional expenses. The court held that the $155,000 was not includible in 2015 gross income and that Franklin was not entitled to the NOL carryback, though she remained liable for the section 6651(a)(1) addition to tax to the extent of any underpayment; it further held that the 2018 amount was properly characterized as other income rather than trade-or-business receipts and sustained the disallowance of the claimed deductions. The reasoning centered on findings that Franklin's handling of the jail food funds and related activities were performed as part of her duties as an elected county sheriff (an employee of the county commission) rather than as a separate trade or business, with the expenses either personal, employee-related, or suspended miscellaneous itemized deductions under section 67(g).
taxes
Ronald M. Goldberg
United States Tax Court · 2021-10-19
This Tax Court case involved a petition challenging a Notice of Determination that sustained a proposed IRS levy to collect Ronald Goldberg's unpaid income tax liabilities for 1998 and 2000. Goldberg, a partner in two oil and gas partnerships subject to TEFRA audit procedures, had his individual tax liabilities adjusted based on partnership-level determinations; he did not timely request a hearing after an earlier NFTL filing and did not participate in the TEFRA proceedings. The court addressed cross-motions for summary judgment on whether Goldberg could contest his underlying tax liabilities in the CDP hearing and whether the settlement officer abused discretion in sustaining the levy. The court granted the Commissioner's motion and denied Goldberg's, holding that he was barred from challenging the liabilities due to his prior failures to act and finding no abuse of discretion because all procedural requirements were met and no collection alternatives were proposed.
taxesprocedure
Blossom Day Care Centers, Inc.
United States Tax Court · 2021-07-13
This U.S. Tax Court case involved Blossom Day Care Centers, Inc., an Oklahoma corporation operating child care centers, and its sole shareholders and officers, Barry and Celeste Hacker. The IRS determined that the Hackers were employees for employment tax purposes in 2005-2008, requiring the company to pay FICA and FUTA taxes on their compensation, along with failure-to-deposit and accuracy-related penalties. After concessions, the court addressed whether the Hackers qualified as employees, the amount of additional wages, and the penalties. The court sustained the IRS determinations, holding that the Hackers were employees based on their roles as corporate officers performing services for the company, that the company owed the taxes on the determined wages, and that the penalties applied due to lack of reasonable cause or supervisory approval issues.
taxeslabor & employmentbusiness & regulatory