Patrick J. Urda

The case involved Cathryn A. Simmons challenging IRS deficiency determinations for her 2017 and 2019 tax years, plus an accuracy-related penalty under section 6662(a) for 2017. The disputed issues centered on business deductions claimed by Stuff, LC (a boutique she co-owned), expenses for two rental properties she owned, and the penalty. The Tax Court held that Simmons failed to substantiate the deductions in dispute and did not qualify for the reasonable cause exception to the penalty. The court reasoned that the taxpayer did not provide adequate records or evidence to support the claimed expenses, including interest, travel, and utility costs, and that her conclusory statements were insufficient to show reasonable cause.

taxesbusiness & regulatory

The case involved Kelby Daniel Reyes Barrios challenging the IRS's determination of a $3,842 federal income tax deficiency for 2022, based on his failure to report $15,206 in nonemployee compensation from Antigua Floral & Styling, LLC. The Tax Court granted the Commissioner's motion for summary judgment, sustaining the deficiency determination. The court reasoned that the IRS's determinations are presumed correct, the taxpayer did not respond to the motion or provide any evidence to contest the unreported income, and failure to receive tax forms does not excuse the obligation to report income.

taxes

In this U.S. Tax Court case, Jeffrey Pesarik challenged a notice of deficiency for his 2020 tax year after failing to report gains from selling two properties—one in Wakefield, New Hampshire, for $187,000, and one in Hull, Massachusetts, for $556,800. Pesarik argued that renovation costs and closing expenses increased his basis in the Wakefield property and that the Hull property qualified for the section 121 exclusion as his principal residence. The court held that Pesarik could estimate allowable basis adjustments for the Wakefield property under the Cohan rule based on partial substantiation of expenses, but he failed to prove the Hull property met the two-year residency requirement for exclusion. It further upheld the accuracy-related penalty under section 6662, finding no reasonable cause for the underreporting given Pesarik's background in property management and lack of evidence that disabilities prevented compliance.

taxes

This case involved petitioner David S. Alioto challenging IRS deficiency determinations for his 2014 and 2015 tax years, along with additions to tax for 2015, based on allegations that he failed to report wage income, constructive dividends, and capital gains while improperly claiming business expense deductions on his personal returns. The Tax Court ruled in favor of the Commissioner, upholding the deficiencies and additions to tax. The court reasoned that Alioto's corporation, Probity Enterprises, Inc., was a separate taxable entity, so any business expenses and related deductions belonged to the corporation rather than Alioto personally; various stock transfers, payments from third parties, and unreported income were properly characterized as taxable to Alioto; and Alioto had abandoned his challenge to the additions to tax by not addressing them in his post-trial brief.

taxesbusiness & regulatory

The case involved Lake Jordan Holdings, LLC, which claimed a $12,740,000 charitable contribution deduction on its 2017 tax return for donating a conservation easement over 157 acres of rural property in Alabama. The Tax Court found that Holdings met the basic requirements for a deduction under section 170 but determined that the claimed value was grossly overstated based on objective evidence of the property's recent purchase price, rural location, lack of utilities, and limited development potential. The court valued the easement at $1,091,760 and imposed a 40% gross valuation misstatement penalty under section 6662(h) because the reported amount exceeded the correct value by more than 1,000%. The decision rested on the absence of a reasonable cause defense for such penalties and the partnership's failure to substantiate the higher appraisal.

taxesenvironmentpropertybusiness & regulatory

This case involves petitioner Gary B. Nelson's challenge in the U.S. Tax Court to an IRS determination upholding a notice of intent to levy for unpaid federal income taxes from 2015 through 2019, which totaled over $186,000 after assessments, additions to tax, and interest. Nelson had requested a collection due process hearing and expressed interest in an installment agreement but did not provide his wife's required signature on the request form, submit a completed financial information form, or respond to multiple communications or attend the scheduled hearing. The court granted the Commissioner's motion for summary judgment, holding that the Appeals officer did not abuse discretion in sustaining the levy because Nelson failed to engage with the process or provide requested information, and there was no dispute over the underlying tax liabilities or the balancing of collection needs. The opinion notes that Nelson remains free to pursue collection alternatives directly with the IRS.

taxes

In this U.S. Tax Court case, Carol Rae Foulds challenged an IRS determination to uphold a notice of intent to levy for her unpaid federal income taxes for 2014 and 2016 after she failed to file returns for multiple years. The IRS had prepared substitute returns, issued notices of deficiency that went uncontested, assessed the liabilities, and proceeded with collection efforts. Foulds requested a collection due process hearing, raising issues about the assessments and seeking alternatives, but she did not submit required tax returns or financial documentation. The court granted the Commissioner's motion for summary judgment, holding that the Office of Appeals properly verified legal requirements, addressed raised issues, and balanced collection needs against intrusiveness without abusing its discretion.

taxesprocedure

In this United States Tax Court case, Dax Xavier Johnson challenged a notice of deficiency issued by the IRS for his 2018 tax year, which determined a tax deficiency of $10,230 along with additions to tax for failure to file and pay timely. Johnson contested the proper mailing of the notice to his address and claimed various deductions, including substantial charitable contributions to a foundation he helped establish. The court found that the IRS properly mailed the notice to Johnson's last known address, as evidenced by postal records. It sustained the deficiency determination because Johnson failed to substantiate his claimed deductions with adequate documentation, particularly the cash charitable contributions. The court also upheld the additions to tax, noting Johnson did not contest them.

taxes

In this U.S. Tax Court collection due process case, petitioner Christopher B. Epps challenged an IRS Appeals Office determination upholding a notice of intent to levy to collect his unpaid 2014 federal income tax liability of $159,066, after he had filed a late return reporting tax due but made no payment. Epps requested alternatives including currently-not-collectible status, penalty abatement, an installment agreement, or an offer-in-compromise, citing his incarceration, but provided financial information showing monthly disposable income of $2,628 plus substantial assets including bank accounts, investments, and real property equity. The court granted the Commissioner's motion for summary judgment, finding no abuse of discretion because Epps's own Form 433-A demonstrated ability to pay and he did not establish that collection would cause hardship by preventing payment of basic living expenses. The court also noted that Epps had conceded the balancing analysis under section 6330(c)(3)(C).

taxesprocedure

This U.S. Tax Court case involved the estate of Billy S. Rowland, which sought to use the deceased spousal unused exclusion (DSUE) amount from the estate of his late wife Fay to reduce its federal estate tax liability. Fay's estate had received an extension to file its estate tax return by July 8, 2017, but did not mail the Form 706 until December 2017, after the deadline, and the IRS received it in January 2018. The return included language electing portability under Rev. Proc. 2017-34, but the Commissioner moved for partial summary judgment on grounds that the filing was untimely and did not qualify for the safe harbor. The court granted the motion, holding that the DSUE election was not timely made under the revenue procedure or applicable regulations, and rejecting the estate's arguments regarding substantial compliance, regulatory ambiguity, and equitable estoppel due to lack of affirmative IRS misconduct or detrimental reliance.

taxesprocedure

In this U.S. Tax Court collection due process case, petitioner Steven J. Schwartz challenged IRS notices of intent to levy for his unpaid federal income tax liabilities from 2013 through 2015 after the Appeals Office rejected his proposed installment agreement of $1,500 per month. The Commissioner moved for summary judgment, and the court granted it, upholding the levy notices and finding no abuse of discretion by the Appeals officer. The court reasoned that Schwartz failed to comply with estimated tax payment requirements for 2022 and 2023, had a pattern of underwithholding, did not disclose necessary financial accounts, and held significant equity in real property, all of which independently disqualified him from a collection alternative. The decision also confirmed that the proposed levy balanced efficient tax collection with the taxpayer's concerns.

taxesprocedure

This case involves Virgil Joseph Aiello challenging an IRS notice of determination that upheld a proposed levy to collect over $120,000 in unpaid 2015 federal income taxes. The Tax Court received his petition more than six months after the 30-day statutory deadline for filing had passed. The court held an evidentiary hearing to consider whether equitable tolling could apply due to the late filing. It concluded that Aiello did not demonstrate diligent pursuit of his rights after misdirecting his petition to the IRS Appeals officer or any extraordinary circumstances preventing timely filing, such as his earlier medical issues which had resolved by 2019. Accordingly, the court dismissed the case for failure to state a claim upon which relief could be granted.

taxesprocedure

The case involved David Nwafor challenging an IRS notice of deficiency that determined tax deficiencies of $64,110 for 2019 and $71,105 for 2020, plus accuracy-related penalties, based on his sole proprietorship engineering firm. Nwafor had reduced his reported business income by claiming deductions or adjustments for the value of his own time developing software, contract labor payments, equipment and vehicle purchases, and customer discounts or allowances. The Tax Court sustained most of the IRS determinations, concluding that Nwafor failed to substantiate the items, that his own unpaid labor did not qualify as a deductible expense, that certain contract payments did not match the cash-basis accounting year, and that discounts were either already incorporated into sales prices or lacked supporting evidence. The court also upheld the penalties on the basis of negligence due to insufficient records.

taxesbusiness & regulatory

This case involved a challenge by Drew J. Pfirrman to the IRS's certification to the State Department that he owed a seriously delinquent tax debt for 2018, which could lead to passport revocation or denial. The IRS had assessed over $180,000 in unpaid income tax, penalties, and interest after determining unreported income, issued a notice of intent to levy, and later made the certification under IRC section 7345 following an automated levy. Pfirrman petitioned the Tax Court under section 7345(e) seeking review of the certification. The court granted the Commissioner's motion for summary judgment, holding that the certification was proper because the statutory requirements for a seriously delinquent tax debt were met, Pfirrman had not timely contested the underlying liability or levy through available administrative processes like a collection due process hearing, and partial payments did not require reversal of the certification.

taxesprocedurefederal power

In this case, taxpayer Thomas W. Langlois challenged the IRS's determination of a $27,820 tax deficiency and a $5,564 accuracy-related penalty for his 2015 tax year, stemming from disallowed deductions for unreimbursed employee business expenses and losses from two partnerships, Forbearance Power Line Construction, LLC and Hair Station Express, LLC. The Tax Court upheld the IRS's determinations after finding that Langlois lacked sufficient tax basis in the partnerships to deduct the claimed losses, as his contributions were insufficient to cover prior carryforward losses and current year losses, and that he failed to substantiate the employee business expenses. The court also sustained the penalty due to a substantial understatement of income tax, which was approved by the IRS supervisor and not contested by the petitioner.

taxesbusiness & regulatory

The case involved Capitol Places II Owner, LLC, which donated a facade easement over the exterior of a building in a historic district in Columbia, South Carolina, and claimed a $23.9 million charitable contribution deduction under I.R.C. § 170(h) on its 2014 tax return. The IRS issued a final partnership administrative adjustment disallowing the deduction, and the notice partner petitioned the Tax Court to challenge it. The court granted partial summary judgment to the IRS, holding that the donation did not qualify as a conservation contribution because the building was not a certified historic structure and the easement deed failed to protect a valid conservation purpose. The core reasoning was that the building was not listed in the National Register of Historic Places and lacked the required certification from the Secretary of the Interior, the deed only covered a single facade without preserving a historically important land area, and the conservation purposes could not be unilaterally amended after the fact.

taxes

This case involved petitioner Stacey Renen Powers seeking review of an IRS determination to uphold a levy on her state tax refund to collect an assessed 2015 federal income tax deficiency of $2,279. The Tax Court granted the Commissioner's motion for summary judgment, sustaining the levy action. The court reasoned that Powers was precluded from challenging her underlying tax liability in the collection due process proceeding because she had not timely petitioned the Tax Court after receiving the notice of deficiency and had failed to respond to the settlement officer's communications or attend the scheduled hearing. The settlement officer was found not to have abused her discretion in verifying compliance with legal requirements and balancing collection needs, as Powers provided no information or collection alternatives despite multiple opportunities over an extended period.

taxesprocedure

This case involves a taxpayer, David James Dick, Jr., who petitioned the U.S. Tax Court to review the IRS Appeals Office's determination to uphold a notice of intent to levy for unpaid federal income taxes for the years 2011 through 2016 and 2018. The court granted the Commissioner's motion for summary judgment, affirming the IRS's decision. The core reasoning was that the taxpayer failed to provide requested financial documentation and delinquent tax returns necessary to evaluate his request for currently-not-collectible status, despite multiple opportunities, which justified the rejection of collection alternatives under established precedents.

taxesprocedure

This case involves Theron Jay Moore petitioning the Tax Court to review an IRS Appeals Office determination that upheld the filing of a notice of federal tax lien for unpaid income taxes from 2011, 2012, 2014, 2015, and 2017, following termination of an installment agreement. The Commissioner moved for summary judgment, arguing that the determination was proper as a matter of law with no disputed material facts. The court granted the motion, concluding there was no abuse of discretion because Moore did not respond to information requests, participate in the CDP hearing, submit a viable collection alternative, or show any statutory basis for lien withdrawal. The settlement officer had provided adequate time for response before sustaining the lien, and the balancing of collection needs was not challenged.

taxesprocedure

The case involved JL Minerals, LLC, which acquired 64.7 acres of land in Georgia and donated a perpetual conservation easement on the property to a qualified organization in 2017, claiming a $16.745 million charitable contribution deduction on its tax return based on a professional appraisal. The IRS issued a final partnership administrative adjustment disallowing the deduction, leading to a Tax Court petition by the tax matters partner. The court determined that the donation qualified as a conservation contribution under I.R.C. § 170(h) with a qualified appraisal, but found the claimed value grossly overstated and allowed only a $93,690 deduction. The court further held that the overstatement triggered the 40% gross valuation misstatement penalty under I.R.C. § 6662(h).

taxesenvironmentproperty