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Alvie N. Paschall & Patricia C. Paschall
United States Tax Court · 2026-06-04
The case involved taxpayers Alvie N. Paschall and Patricia C. Paschall challenging an IRS notice of deficiency for unreported income from cryptocurrency staking rewards in 2021. The Tax Court held that the $33,354 in staking rewards constituted taxable gross income under section 61. The court reasoned that the rewards represented an accession to wealth clearly realized over which the taxpayers had complete dominion, rejecting arguments that they were akin to a loan, return of capital, or self-created property. The distribution increased the supply of the cryptocurrency, and the taxpayers did not create the tokens themselves through their staking activities.
taxes
Stephen Martin & Amanda Martin
United States Tax Court · 2026-05-14
The case involved petitioners Stephen and Amanda Martin, who claimed a charitable contribution deduction under Internal Revenue Code section 170 for donating a 50% interest in Utah property to Highland City in 2018, which the IRS disallowed in a Notice of Deficiency. The Tax Court addressed the Commissioner's motion for summary judgment, which argued that the deduction failed because petitioners did not obtain a valid contemporaneous written acknowledgment (CWA) satisfying section 170(f)(8). The court examined the 2018 warranty deed, a joint letter from the donors, and the city council agenda report, finding that none of the documents (individually or together) included the required affirmative statement that the donee provided no goods or services in exchange or properly addressed any consideration. As a result, the court granted summary judgment to the Commissioner and disallowed the entire deduction related to the property.
taxes
Clint L. Martin & Jenifer Martin
United States Tax Court · 2026-05-14
The case involved petitioners Clint and Jenifer Martin challenging the IRS's disallowance of a charitable contribution deduction claimed on their 2018 return for a 50% interest in 13.33 acres of Utah property donated to Highland City. The Tax Court considered the Commissioner's motion for partial summary judgment, which argued that the donation failed to meet the contemporaneous written acknowledgment (CWA) requirements under section 170(f)(8). The court granted the motion, concluding that the 2018 warranty deed (which referenced $10 and other consideration) and joint letter did not affirmatively state that no consideration was provided or estimate the value of any consideration provided. As a result, the deduction was disallowed in full, with only the accuracy-related penalty issue remaining for trial.
taxespropertyprocedure
Walker Church Greene 819, LLC, 830 Oconee, LLC, Tax Matters Partner
United States Tax Court · 2026-02-03
The case concerned a partnership's petition challenging an IRS Final Partnership Administrative Adjustment that disallowed a charitable contribution deduction claimed for the donation of a conservation easement, along with associated penalties. After the tax matters partner reached a settlement with the IRS, 40 other partners filed late motions seeking to participate in the Tax Court proceedings to reject the settlement terms. The court denied the motions, holding that the partners had not made the substantial showing required under Rule 248(b)(4) to justify participation out of time, given their failure to act earlier under Rules 245(b) or 245(c) and the lack of specific facts explaining their delay or the tax matters partner's alleged shortcomings.
taxesprocedure
Jabir Algarawi & Amira Hachim
United States Tax Court · 2026-01-26
The case involved petitioners Jabir Algarawi and Amira Hachim challenging IRS notices of deficiency for federal income taxes in 2020 and 2021, which attributed unreported discharge of indebtedness income of $5,615 in 2020, unreported business income from Algarawi's tax preparation sole proprietorship of $72,130 in 2020 and $93,614 in 2021, and related accuracy-related penalties under section 6662. The Tax Court held that the petitioners failed to meet their burden of proving the IRS determinations incorrect, as they provided no records or substantiation for the cash donations they claimed were nontaxable or for their business receipts, and the IRS's bank deposits analysis supported the underreporting findings. The court also upheld the penalties, finding that the IRS met its burden of production through supervisor approval and evidence of negligence or substantial understatements, while petitioners offered no reasonable cause defense despite Algarawi's experience as a tax preparer. An evidentiary issue regarding certain exhibits was resolved in favor of exclusion where they lacked foundation.
taxesbusiness & regulatory
Mark Chernomordikov
United States Tax Court · 2025-12-15
In this consolidated U.S. Tax Court case, petitioners Mark and Jessica Chernomordikov challenged IRS notices of deficiency asserting large tax deficiencies and additions to tax under sections 6651 and 6654 for tax years 2012 through 2014, primarily based on unreported other income, business gross receipts from ONY Sales, Inc., and related penalties for failure to file and pay. After the parties resolved issues for 2014 and narrowed those for 2012 and 2013, the remaining disputes centered on Mr. Chernomordikov's liability for unreported income, eligibility for cost of goods sold reductions, petitioners' entitlement to married filing jointly status and community property treatment for 2013, and the computation of additions to tax. The court relied primarily on documentary evidence due to credibility concerns with witness testimony and concluded that petitioners qualified for married filing jointly status for 2013, that the required annual payment for the section 6654 penalty was based on 90% of the 2013 tax liability, and that Mrs. Chernomordikov was not separately liable for an estimated tax penalty. Decisions were directed to be entered under Rule 155 following these determinations.
taxesbusiness & regulatoryfamily law