Rising Rock Partners, LLC, Robert Schill, LLC, Tax Matters Partner
United States Tax Court · 2026-06-02
This case involved a Georgia limited liability company and related individual taxpayers who claimed large noncash charitable contribution deductions for granting perpetual conservation easements over rural acreage in Meriwether County, with the deductions based on asserted pre-easement land values exceeding $13 million. The IRS disallowed the deductions entirely via an FPAA and notices of deficiency and imposed accuracy-related penalties under section 6662. The Tax Court held that the easements' fair market value was only $649,955, determining the before-easement property value at $3,900 per acre based on recent arm's-length comparable sales and a prior sale of the subject property, while rejecting the taxpayers' higher income-based appraisals. Because the claimed values exceeded 1,900% of the correct amount, the court upheld 40% gross valuation misstatement penalties, noting that the reasonable cause defense was unavailable for such misstatements involving charitable deduction property.
taxesproperty
Gary C. George & Robin George
United States Tax Court · 2026-02-03
This U.S. Tax Court case involved petitioners Gary and Robin George, who claimed research tax credits under Internal Revenue Code section 41 for activities by their S corporation, George’s of Missouri, Inc., related to developing an improved poultry product through seven broiler chicken research trials in 2012–2014. The IRS disallowed the credits on original and amended returns for tax years 2011, 2012, 2014, and 2016, and asserted accuracy-related penalties for 2014 and 2016, arguing that the trials were not qualified research but rather routine data collection retrofitted into the statutory framework. The court held that some but not all of the claimed qualified research expenses were substantiated by contemporaneous records meeting the four-part test for qualified research, allowing credits of $5,115,281 for 2012, $7,280,578 for 2013, and $1,919,559 for 2014 (subject to the section 41(c)(5)(B) limitation), while denying the rest. It further held that the taxpayers were not liable for the accuracy-related penalties because they reasonably relied in good faith on professional advice from alliantgroup in claiming the credits.
taxesbusiness & regulatory
John J. Mongogna & Michelle L. Mongogna
United States Tax Court · 2025-08-18
This U.S. Tax Court case involved petitioners John and Michelle Mongogna challenging an IRS notice of intent to levy for unpaid income taxes from 2008-2015, 2017-2019, and 2021, following their chapter 7 bankruptcy discharge. The IRS had filed tax liens before the bankruptcy, which remained enforceable against exempt and abandoned property. Petitioners requested a collection due process hearing and proposed collection alternatives including an installment agreement, but the settlement officer rejected the proposal. The court granted the IRS's motion for summary judgment, holding that the settlement officer did not abuse discretion because petitioners failed to submit a written installment agreement proposal or required financial information such as Form 433-A detailing their ability to access equity in exempt assets.
taxesprocedure
Michael Austin French & Dawn Michelle French
United States Tax Court · 2025-06-04
The case involved petitioners Michael and Dawn French challenging an IRS determination of a $10,650 tax deficiency for 2020, arising from unreported wages earned by Mrs. French from her employer and small interest payments received from banks and investments. The petitioners argued that these amounts were not taxable income, advancing constitutional arguments distinguishing direct and indirect taxes and claiming exemptions for certain employment activities. The Tax Court ruled in favor of the Commissioner, holding that wages, compensation for services, and interest are includible in gross income under section 61(a) and that the petitioners' positions were frivolous and groundless. The court also imposed a $1,000 penalty under section 6673(a) for advancing frivolous arguments and maintaining the proceedings primarily for delay.
taxes
Belagio Fine Jewelry, Inc.
United States Tax Court · 2025-04-15
This case involved Belagio Fine Jewelry, Inc., which received an IRS notice of employment tax determination under section 7436 concerning worker classification and unpaid employment taxes for 2016 and 2017. The company mailed its petition for redetermination via FedEx Express Saver four days before the 90-day statutory deadline, but the petition arrived one day late. The Tax Court had previously ruled the deadline was a nonjurisdictional claim-processing rule and now addressed whether it is subject to equitable tolling. The court held that the deadline is subject to equitable tolling but that the circumstances did not warrant it, because the attorney's staff's choice of a nondesignated private delivery service amounted to garden-variety negligence that does not justify tolling. It therefore granted the Commissioner's motion to dismiss for failure to state a claim.
taxesprocedurelabor & employment
Kaleb J. Pierce
United States Tax Court · 2025-04-07
The case involved a dispute over the value of interests in Mothers Lounge, LLC, that petitioner transferred in 2014 to irrevocable trusts and a related company, leading to a determined federal gift tax deficiency by the IRS. After concessions, the Tax Court focused on determining the fair market value of the gifted and sold interests using expert valuations. The court accepted one expert's forecasts for the company's operations and terminal value, along with excess cash calculations, a discount rate from the other expert, and specific control and marketability discounts from the first expert to arrive at the proper valuation for gift tax purposes.
taxesbusiness & regulatory