Travis A. Greaves

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

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

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

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

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

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

This case involves Phoenix Design Group, Inc., an engineering consulting firm, disputing the IRS's disallowance of section 41 research tax credits claimed for 2013-2016 on over 200 projects and the imposition of accuracy-related penalties. The Tax Court reviewed a nonbinding sample of three projects and held that none constituted qualified research under the statute. The core reasoning was that PDG failed to present adequate evidence that its engineers' activities involved qualifying investigative work or a process of experimentation for a permitted purpose, even after attempting to apply the shrinking-back rule to narrower project components; time records and design documents did not bridge the evidentiary gaps. The court also enforced the parties' stipulation that accuracy-related penalties would apply if the projects did not qualify.

taxesbusiness & regulatory

This case involved a U.S. taxpayer who failed to file required Forms 5471 reporting his ownership interests in foreign corporations for tax years 2002 through 2013. The IRS assessed penalties under section 6038(b)(1), proposed a levy, and filed a lien notice to collect the unpaid amounts, prompting the taxpayer to request a collection due process hearing. After the hearing, the IRS sustained the collection actions, and the taxpayer petitioned the Tax Court for review. The court held that the IRS lacks statutory authority to assess the section 6038(b)(1) penalties and therefore may not proceed with the lien or proposed levy to collect them. The decision reaffirmed the court's prior conclusion on this issue, noting that any appeal would lie in the Eighth Circuit, which has not addressed whether the penalty is assessable.

taxesfederal power

This U.S. Tax Court case involved a petition filed by Mark F. Coble seeking review of tax deficiencies and additions for 2006, 2007, and 2008 after the IRS prepared a substitute return for 2006 and assessed amounts, followed by levies on Social Security benefits. The Commissioner moved to dismiss for lack of jurisdiction, arguing the 2006 petition was untimely and no notices of deficiency existed for 2007 or 2008. The court denied the motion as to 2006 but dismissed the case sua sponte, finding the 2006 notice invalid because the IRS failed to prove proper mailing through required evidence like Form 3877 or equivalent documentation; it granted dismissal as to 2007 and 2008 due to the absence of any qualifying notice or determination. The core reasoning centered on the court's limited jurisdiction under the Internal Revenue Code, which requires a valid, properly mailed notice of deficiency to confer authority to review the merits.

taxesprocedure

This case concerned a petition filed in the U.S. Tax Court by Belagio Fine Jewelry, Inc. challenging an IRS determination of employment tax liability under IRC section 7436. The petition was mailed four days before the 90-day deadline but arrived one day late via a non-designated delivery service, prompting the IRS to move for dismissal on jurisdictional grounds. The court denied the motion, holding that the 90-day filing deadline is not jurisdictional. It reasoned that the statute's text, context, and historical treatment lack a clear statement from Congress making the deadline jurisdictional, unlike certain other tax provisions.

taxeslabor & employmentprocedure

The case involved Pamela Cashaw challenging the IRS's determination to collect trust fund recovery penalties assessed against her for unpaid employment taxes of Riverside General Hospital, where she served as temporary chief administrator during periods of financial difficulty. The Tax Court held that Cashaw was liable for the penalties for the tax periods at issue. The court found that she was a responsible person with authority over the hospital's finances and that her failure to remit the taxes was willful, as she knowingly prioritized payments to other creditors and staff over the tax obligations, despite state court agreements and her beliefs about patient care priorities; state law did not preempt federal tax liability, and no reasonable cause defense applied.

taxesbusiness & regulatoryhealthcare

The case concerned whether taxpayer Charles H. Leyh could deduct as alimony amounts he paid in 2015 for his then-spouse's health insurance premiums under a separation agreement pending divorce. The payments were made as pretax payroll reductions through his employer's cafeteria plan, which he had excluded from gross income under sections 106 and 125 while also claiming an alimony deduction under sections 62 and 215; the IRS disallowed the deduction via a notice of deficiency. The Tax Court, deciding the case on stipulated facts under Rule 122, held that the taxpayer was entitled to the alimony deduction. The court reasoned that the payments met the definition of alimony, the recipient spouse was required to include them in income, and neither the common-law prohibition on double deductions nor section 265's disallowance for expenses allocable to tax-exempt income applied to bar the deduction.

taxesfamily lawhealthcare

The case concerned whether Rebecca A. Tressler could exclude a $55,000 settlement payment received from her former employer Amtrak in 2014 from her gross income under Internal Revenue Code section 104(a)(2). Tressler had sued Amtrak over workplace harassment and related claims, and the settlement agreement allocated the $55,000 specifically to emotional distress damages. The Tax Court held that she could exclude only $6,980, corresponding to her out-of-pocket payments for psychotherapy sessions from mid-2012 through 2014 that constituted medical care for emotional distress. The court reasoned that the settlement was not paid on account of physical injuries or sickness, and section 104(a)(2) permits exclusion of emotional distress damages only to the extent of documented medical expenses actually paid, which Tressler established solely for those therapy costs.

taxes

This case involved the Estate of Kwang Lee challenging the IRS's filing of a notice of federal tax lien for unpaid estate taxes through a collection due process hearing. The Tax Court granted the Commissioner's motion for summary judgment, upholding the IRS determination to sustain the lien. The court reasoned that the settlement officer properly included potential collections from the executor under fiduciary liability and from beneficiaries as transferees when calculating the estate's reasonable collection potential for the offer-in-compromise, as the applicable periods of limitations remained open. The officer's verification of procedures and rejection of the offer were found consistent with law and not arbitrary.

taxesprocedure

This case involved a taxpayer, Francisco Steven Delgado, who received $122,889 in payments from two private companies for services performed as an independent contractor in 2017 but reported zero income on his tax returns. The IRS determined a tax deficiency of $39,412, including self-employment tax, based on Forms 1099-MISC, and the taxpayer petitioned the Tax Court arguing that the payments were not taxable because he was not engaged in a "trade or business" under section 7701(a)(26), which he interpreted as limited to performing functions of a public office. The court held that the IRS had established an evidentiary foundation for the unreported income, shifting the burden to the taxpayer, and rejected the argument as frivolous, noting that section 7701(c) clarifies that "includes" does not exclude other activities and that compensation for services is included in gross income under section 61(a)(1). The court sustained the deficiency determination, including liability for self-employment tax under section 1401, while the IRS conceded the accuracy-related penalty.

taxes

This Tax Court case involved petitioners who moved for summary judgment, arguing that the IRS notice of deficiency for their 2006 tax year was untimely under the standard three-year limitations period because their return adequately disclosed the relevant items. The deficiency stemmed from petitioners' failure to report their full distributive share of capital gain from a partnership interest on Schedule E of their Form 1040, though they reported a lump-sum capital gain figure elsewhere. The court denied the motion, holding that the six-year limitations period under section 6501(e) applied because the return did not adequately disclose the omitted income amount as required by section 6501(e)(1)(B)(ii), assuming the understatement exceeded 25% of gross income. The ruling rested on the lack of specific attribution to the partnership and the late filing of the partnership return, which provided no clue on the face of petitioners' return about the omitted amount.

taxesprocedure

This case is a collection due process proceeding in which a taxpayer sought Tax Court review of an IRS notice of determination sustaining a proposed levy to collect unpaid employment taxes (Form 941 liabilities) assessed for the third and fourth quarters of 1998 in connection with his law practice. The taxpayer contended that another entity had assumed the liabilities, that the collection period of limitations had expired (including due to prior bankruptcy proceedings), and that the IRS had violated applicable laws and procedures in assessing and collecting the taxes. The court held for the IRS and sustained the levy, ruling that the taxpayer failed to present sufficient evidence to substantiate any of his claims and that the settlement officer had properly verified that all legal and administrative requirements were met, including proper notices and suspension of the limitations period during bankruptcies.

taxesprocedure

This U.S. Tax Court case involved petitioners Fred Lavat Frederick-Bey and Monica Noble, who reported a Schedule C business loss of $52,409 from network marketing activities selling Xtreme Fuel Treatment for the 2016 tax year. The IRS determined a $12,902 deficiency after disallowing all claimed expenses, though it conceded the accuracy-related penalty. The court held that petitioners were not entitled to the deductions because they failed to substantiate that the reported expenses, such as advertising, vehicle, insurance, and other costs, were ordinary and necessary business expenses under section 162 rather than nondeductible personal expenses. Petitioners provided spreadsheets and statements but did not sufficiently link specific charges to the business or explain their business purpose, despite the court acknowledging some potential related expenses from prior years.

taxesbusiness & regulatory

This U.S. Tax Court case involved petitioners Brian and Denae Beland, who challenged the IRS's determination of a civil fraud penalty under I.R.C. section 6663(a) for their 2011 tax year. The revenue agent presented them with a completed and signed Form 4549 during a closing conference, reflecting the penalty, but obtained written supervisory approval only afterward and before issuing a notice of deficiency. Petitioners moved for partial summary judgment, arguing that the penalty lacked timely supervisory approval as required by I.R.C. section 6751(b)(1). The court granted the motion, holding that the Form 4549, in the context of its presentation, embodied the revenue agent's initial determination of the penalty, which necessitated prior approval that was not secured. The decision rested on the plain text of section 6751(b)(1) and prior precedent interpreting when an initial determination occurs.

taxesprocedure

In this U.S. Tax Court case, petitioner Terry T. Brown, Sr. challenged IRS determinations of federal income tax deficiencies and section 6662 accuracy-related penalties for 2012 and 2013, stemming from claimed itemized deductions on Schedule A, business expenses on Schedule C, rental losses on Schedule E for multiple properties, and unreported IRA distribution income. After concessions by the IRS, the court addressed whether Brown was entitled to the deductions and losses, whether he had unreported taxable income, and whether he was liable for the penalties. The court ruled entirely in favor of the Commissioner, sustaining the deficiencies and penalties. The core reasoning was that Brown failed to substantiate any of the disputed deductions or losses with adequate records, provided no credible defense for omitting the IRA income, and did not establish reasonable cause or good faith to avoid the penalties given his lack of documentation and position as a former business executive.

taxesbusiness & regulatory