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Charlton C. Tooke, III
United States Tax Court · 2026-06-23
This U.S. Tax Court case involved petitioner Charlton C. Tooke III challenging an IRS Independent Office of Appeals determination in a combined collection due process hearing that rejected his proposed offer-in-compromise and installment agreement and sustained a notice of federal tax lien for 2013-2017 plus proposed levies for 2012-2017 to collect unpaid self-assessed income taxes. The court first dismissed the 2012 levy issue as moot. On the remaining issues, the court granted the IRS's motion for summary judgment and denied the petitioner's, holding that Appeals did not abuse its discretion because the administrative record showed proper evaluation of the petitioner's financial information under national and local standards, rejection of unsubstantiated expense deviations, and a valid balancing of collection needs against intrusiveness. The court sustained the lien and levy actions for the taxable years at issue.
taxes
James D. Sullivan & Colleen M. Sullivan
United States Tax Court · 2026-02-05
This U.S. Tax Court case involved petitioners James and Colleen Sullivan challenging IRS deficiencies for 2017-2019, specifically whether their activities through Traders Abacus, LLC (software development and home construction on a Maine property) and a 2019 mulching business called Leaf-Cutter qualified as for-profit endeavors under IRC section 183, allowing deduction of related expenses. After trial on the profit-motive issue, the court held that the software development activities were conducted for profit, the home construction expenses were deductible to the extent of 75% (allocating the remainder to personal use based on land area, personal residence, and recordkeeping issues), and the Leaf-Cutter mulching activities lacked a profit motive. The decision rested on an evaluation of the Sullivans' background, extensive self-taught experience in construction and engineering, documented efforts and investments, credible testimony about business goals, actual sales profits from developed property, and the absence of similar profit indicators for the mulching venture. Related accuracy penalties under section 6662 and expense substantiation were reserved for later proceedings.
taxesbusiness & regulatory
Asia Zaheen, and Kamran Ehsan, Intervenor
United States Tax Court · 2026-01-22
In this U.S. Tax Court case, petitioner Asia Zaheen sought equitable relief under Internal Revenue Code section 6015(f) from joint and several liability for a 2019 federal income tax deficiency and accuracy-related penalty arising from a joint return filed with her soon-to-be ex-husband and intervenor Kamran Ehsan. The court granted Zaheen full relief after finding that she had been subjected to financial control and abuse by Ehsan, lacked meaningful involvement in or knowledge of the tax understatement, and would suffer economic hardship if held liable. The decision rested on weighing multiple equitable factors under Revenue Procedure 2013-34, including marital status, economic hardship, lack of significant benefit, and mental health impacts, which collectively made it inequitable to hold Zaheen responsible.
taxesfamily law
Sunil S. Patel & Laurie McAnally Patel
United States Tax Court · 2025-11-12
The case concerned taxpayers who claimed deductions under IRC section 162 for payments made to captive insurance companies and a related reinsurer on their 2013 through 2016 returns. The IRS disallowed the deductions and asserted accuracy-related penalties, including under the codified economic substance doctrine in sections 6662(b)(6) and 7701(o). Following earlier decisions that the arrangements did not qualify as insurance for tax purposes, the Tax Court held that the economic substance doctrine was relevant and that the taxpayers were liable for the penalties at the increased rate under section 6662(i), as well as remaining accuracy-related penalties, because they lacked reasonable cause and should have recognized the transactions as too good to be true given their sophistication.
taxesbusiness & regulatory
Middle Department Inspection Agency, Inc.
United States Tax Court · 2025-10-01
This Tax Court case involved a company, Middle Department Inspection Agency, seeking review of an IRS Appeals determination that rejected its offer-in-compromise to settle unpaid excise taxes arising from failure to meet minimum funding standards for its defined benefit pension plan over 18 years and sustained a proposed levy to collect the liability. The parties filed cross-motions for summary judgment. The court granted the IRS's motion, holding that Appeals did not abuse its discretion because the offer was below the reasonable collection potential calculated from the company's assets and income, and acceptance would not serve public policy given the extended period of noncompliance with funding rules. It also found no procedural errors in the CDP hearing process and noted that the company had conceded the balancing analysis under section 6330.
taxesbusiness & regulatorylabor & employment
Joseph R. Gottesman
United States Tax Court · 2025-09-10
This U.S. Tax Court case involved petitioner Joseph R. Gottesman challenging IRS determinations of federal income tax deficiencies and civil fraud penalties for tax years 2009 through 2012. The court granted the Commissioner's motion for summary judgment and denied Gottesman's motion to stay proceedings. The decision rested on deemed admissions from the Commissioner's answer due to Gottesman's failure to respond, his failure to file a response to the summary judgment motion despite extensions, and the conclusion that the government's interest in resolving the civil tax case outweighed any burden from a related criminal investigation. The court also found the stay request untimely and effectively sought an indefinite delay while Gottesman avoided arraignment on criminal charges.
taxescriminal lawprocedure