Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose. The Court issued six Memorandum Opinions the week of August 17, 2026, and five of them turned on a piece of paper with signature lines on it.
One taxpayer signed a Form 870–LT and gave up the right to argue about the adjustments behind it. A Columbus attorney never finished a Form 656 and drew a $10,000 sanction for delay — then drew a second $10,000 sanction the same day, in his law firm’s companion case. A New Orleans business owner got a partial remand because the Appeals officer’s determination announced that the levy notices went to his last known address without ever saying how she knew. And a JetBlue IT manager with two accounting degrees lost most of a Schedule C because his credit card statements said things like “Idigic.”
Forms bind the person who signs them. They also bind the agency that sends them, and this was the week the Court said both halves out loud.
How Much of an Influencer’s Marketing Spend Is Actually Deductible?
Less than the influencer thinks, but more than the IRS allowed. Sami v. Commissioner, T.C. Memo. 2026-69 (Aug. 18, 2026) (Copeland, J.), is the most useful opinion of the week, and it’s the one to send to any client whose business plan involves a phone and a following.
Suleiman Sami worked full time as an IT manager at JetBlue and ran S Sami Services LLC on the side — driving passengers for hire, reselling event tickets, and building a social media presence. For 2019 through 2021 the IRS determined deficiencies of $63,219, $27,421, and $39,910, plus accuracy-related penalties of $12,644, $5,484, and $7,982. The disputed deductions ran across nine or ten categories, and Judge Copeland worked through them one at a time.
He won some real money. The Court allowed 80% of the claimed car and truck expenses — $29,015, $9,464, and $17,414 — because Mr. Sami directly transported people for compensation, which brings him inside the section 280F(d)(5)(B)(ii) exception and out from under the harshest listed-property treatment. Tolls and parking came in at the same 80% rate. Credit card processing fees were allowed in full, at $10,904, $6,749, and $9,186, as ordinary and necessary costs of getting paid. The Court allowed 25% of his cell service under the Cohan rule, bearing heavily against him for an inexactitude that was his own doing. And the section 199A qualified business income deduction survived: driving and ticket reselling are neither specified service trades nor employee services.
Then the marketing. Mr. Sami spent heavily on celebrity experiences — Grammy attendance, meeting athletes, catching passes — and posted about all of it. He first claimed the outlays as charitable contributions. When that didn’t work he recharacterized them as marketing.
The Court disallowed every dollar. An expense is deductible under section 162(a) only if it’s primarily undertaken for business rather than personal purposes, and the Court applied the primary-purpose analysis from Danville Plywood Corp. v. United States, 899 F.2d 3 (Fed. Cir. 1990), and Tucker v. Commissioner, T.C. Memo. 2023-87. The question isn’t whether the spending produced revenue. Plenty of enjoyable things produce revenue. The question is what the taxpayer was primarily doing, and a person who pays to attend the Grammys is primarily attending the Grammys.
That’s the holding worth carrying into a client meeting. The content-creator economy has generated a lot of confident advice that anything posted becomes a marketing expense, and Sami is a clean rejection of it. Television and streaming subscriptions went the same way, as personal consumption. General marketing died on substantiation, because cryptic credit card descriptions in a commingled account prove nothing.
The accuracy-related penalties stuck. Written supervisory approval was in order under section 6751(b)(1), and the reasonable cause defense failed on the same facts that sank the deductions — a taxpayer with accounting degrees who commingled personal and business charges and kept no usable books hasn’t exercised ordinary business care and prudence.
Read our full brief of Sami v. Commissioner.
LaBorde v. Commissioner | What Does an Appeals Officer Actually Have to Verify?
More than she wrote down. LaBorde v. Commissioner, T.C. Memo. 2026-74 (Aug. 20, 2026) (Landy, J.), is the taxpayer win of the week, and it hands collection practitioners a lever that doesn’t come along often.
Brian LaBorde was assessed trust fund recovery penalties under section 6672 for unpaid employment taxes of Standard Glass & Mirror Works, LLC. The IRS issued two levy notices and filed a Notice of Federal Tax Lien. He argued the levy notices never reached his last known address, and the record gave that argument room to breathe: he had filed returns listing three different New Orleans addresses — Poydras, Poeyfarre, and Girod — inside a short span. The 2020 Form 1040 he filed on February 4, 2022, showed the Poeyfarre address. The July 2022 levy notice went to Girod.
Section 6330(c)(1) directs the Appeals officer to obtain verification that the requirements of applicable law and administrative procedure have been met, and a taxpayer’s last known address is generally the one on the most recently filed and properly processed return. Treas. Reg. § 301.6212-2(a). Under Fifth Circuit law the Service must also exercise reasonable diligence to determine that address in light of all the circumstances. Williams v. Commissioner, 795 F. App’x 920, 924–25 (5th Cir. 2019).
What the determinations contained instead was boilerplate. The Court sustained the lien determination but remanded the two levy determinations to the IRS Independent Office of Appeals, because a conclusory recital that verification occurred doesn’t tell a reviewing court which documents the officer looked at or how she resolved the address problem the file plainly presented.
Practitioners read a lot of notices of determination that say very little. LaBorde says that when the administrative file contains a live factual question, the officer has to show her work on it — and that the remedy is a remand rather than a shrug.
Read our full brief of LaBorde v. Commissioner.
Ballengee v. Commissioner | The Form You Signed Is the Deal You Made
Ballengee v. Commissioner, T.C. Memo. 2026-73 (Aug. 19, 2026) (Landy, J.), is the week’s clearest lesson in reading before signing.
James Ballengee and A.C. Heyde executed a Form 870–LT resolving TEFRA partnership adjustments for 2016 and 2017. The form incorporated a Form 886–A by reference, and the incorporating sentence sat right there on the page. When the resulting computational adjustments arrived, the petitioners went to collection due process and tried to fight the underlying liabilities.
They couldn’t. A Form 870–LT operates as a settlement agreement, and section 7121(b) makes such an agreement final — not to be annulled, modified, set aside, or disregarded — absent fraud, malfeasance, or misrepresentation of a material fact. Incorporation by reference isn’t a misrepresentation. A misrepresentation requires an intentional incorrect statement relied on to another’s detriment, and a mutual mistake about what the numbers would ultimately produce is a different animal entirely.
Two structural points ride along. Under TEFRA, partnership items and the penalties relating to them get determined at the partnership level, not the partner level, so the recourse-versus-nonrecourse debt characterization was never available in this proceeding. And by signing Part II of the form, the petitioners waived the affected-items notice of deficiency that would otherwise have been their forum. The Court also noted that Mr. Ballengee’s accounting education and prior CPA experience made the sophistication argument a hard one to run.
The collection determination was sustained. Section 6323(j) lien withdrawal is permissive, and a petitioner who offers no ground for withdrawal beyond attacking the settlement he signed hasn’t given Appeals anything to abuse its discretion about.
Read our full brief of Ballengee v. Commissioner.
Can the Tax Court Sanction You for an Offer in Compromise You Never Finished?
It can, and on August 19 it did so twice to the same person. Squire v. Commissioner, T.C. Memo. 2026-71, and Percy Squire Co. LLC v. Commissioner, T.C. Memo. 2026-72 (Aug. 19, 2026) (Ashford, J.), are companion collection cases — one for the individual’s income taxes for 2011 and 2018 through 2020, one for the law firm’s Forms 940 and 941 and a section 6721 penalty, running from 2009 through 2021.
In the individual case, Appeals rejected a $24,000 offer in compromise against a calculated reasonable collection potential of $591,652.42, noting assets placed in an irrevocable trust and unresolved compliance problems at the wholly owned businesses. In the entity case, the firm owed $221,246.10 as of February 2023 and had until August 22, 2023, to submit a completed offer. It never did. An Appeals officer doesn’t abuse her discretion by declining to consider a collection alternative the taxpayer never proposed.
Then section 6673. Seven petitions in roughly fifteen years, a prior warning about using offers in compromise to buy time, and a prior $5,000 sanction produced $10,000 in each case — with notice that the $25,000 statutory ceiling remains available. The Court’s standard is familiar and worth repeating: a position is frivolous if it’s contrary to established law and unsupported by a reasoned, colorable argument for changing that law.
The practical reading is narrower than it looks. Nothing in either opinion penalizes a taxpayer for making an offer that gets rejected. What drew the sanction was a pattern of raising the possibility of an offer, letting the deadline pass without submitting one, and repeating the sequence across proceedings. Collection alternatives are a right. Announcing one is not the same as making one.
Read our full brief of Squire v. Commissioner, and our brief of the companion employment tax case.
Tabaka v. Commissioner | How Fast Does the IRS Have to Be?
Faster than sixteen months, apparently, is fast enough. Tabaka v. Commissioner, T.C. Memo. 2026-70 (Aug. 18, 2026) (Lauber, J.), is short and it settles a question clients ask constantly.
The Tabakas left $93,200 of retirement income off their 2016 return. The IRS proposed a $23,960 deficiency and a $4,792 penalty; the case settled at $18,438 with no penalty. Mr. Tabaka then asked the Service to abate $1,649 of accrued interest, pointing to delays and errors along the way.
Judge Lauber found none that count. Section 6404(e)(1) reaches unreasonable error or delay in performing a ministerial or managerial act, and the timeline here ran sixteen months from first contact in April 2018 to the stipulated decision in August 2019. That’s expeditious by any measure. More to the point, the mere passage of time during litigation isn’t error, and the substantive determinations an examiner or an Appeals officer makes about the merits are neither ministerial nor managerial. Lee v. Commissioner, 113 T.C. 145 (1999).
Interest runs because the tax went unpaid, not because anyone misbehaved. That’s the answer to give the client who wants to know why they owe interest on a liability they successfully cut by a quarter.
Read our full brief of Tabaka v. Commissioner.
What the Forms Decided
Six opinions, and the paperwork does the work in nearly every one. Mr. Ballengee is bound by a form he signed. Mr. Squire and his firm were sanctioned over a form they didn’t finish. Mr. Sami kept records that couldn’t distinguish a marketing expense from a night out. Mr. Tabaka wanted relief from interest that no form had anything to do with, and didn’t get it.
And then there’s Mr. LaBorde, who won the only real victory of the week because the government’s own form — the notice of determination — recited a conclusion it never supported. That’s the symmetry worth holding onto. The Code is unforgiving about what a taxpayer signs and unforgiving about what a taxpayer fails to document, and it applies the same discipline to the Service when a notice of determination has to explain itself. Reciprocity shows up rarely in tax collection practice. It showed up on Thursday.
Freeman Law’s Tax Court litigation attorneys handle deficiency, collection, and penalty cases nationwide. If a notice of determination just arrived and the verification section reads like a form letter, it’s worth having someone review the administrative file before the response deadline runs.
More weekly briefs are collected in The Tax Court in Brief archive.
The full opinions are available from the U.S. Tax Court’s opinions search, and copies of each are posted at CourtListener: Sami, Tabaka, Squire, Percy Squire Co. LLC, Ballengee, and LaBorde.
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. Tax outcomes turn on specific facts, and the law changes. Consult qualified counsel about your own situation.
