The Tax Court in Brief – January 9 -15th 2022

Share this Article
Facebook Icon LinkedIn Icon Twitter Icon

Freeman Law is a tax, white-collar, and litigation boutique law firm. We offer unique and valued counsel, insight, and experience. Our firm is where clients turn when the stakes are high and the issues are complex.

The Tax Court in Brief – January 9 – 15th 2022

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.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigation:  The Week of January 9, 2022, through January 15, 2022

Elbasha v. Comm’r, T.C. Memo. 2022-1

January 12, 2022 | Wells, J. | Dkt. No. 25192-13

Short Summary: Taxpayer Elbasha, an ER doctor in rural Georgia, challenged the disallowance of most of his Schedule C deductions for two years. At trial, the IRS moved to increase the deficiencies based on a change in the status of his filing.

Key Issues

Primary Holdings:

Key Points of Law:

Insight: This opinion provides a useful application of the different burdens of proof in different contexts and underscores the importance of good record-keeping (and, failing that, the need to be prepared to provide some corroborating evidence in support of claimed deductions). At every step of the court’s analysis (from filing status, through disallowed deductions, to penalties), the taxpayer could have improved his results with better records and corroborating evidence.

Long Branch Land, LLC v. Comm’r, T.C. Memo. 2022-2

January 13, 2022 | Lauber, J. | Dkt. No. 7288-19

Short SummaryThe IRS disallowed a charitable contribution deduction claimed by Long Branch Land, LLC, related to a conservation easement.  The IRS also determined that accuracy-related penalties were appropriate.  After the taxpayer filed a petition challenging the IRS’s determinations in the Tax Court, the taxpayer moved for partial summary judgment on the issue of whether the IRS complied with Section 6751(b).

Key IssuesWhether the IRS complied with the written managerial approval requirement of Section 6751(b)?

Primary HoldingsThe IRS complied with Section 6751(b) because:  (1) there is no evidence that the immediate supervisor lacked authority to make the penalty determination at all relevant times; and (2) the presumption of regularity supports the actions of the IRS officer in this case.

Key Points of Law

InsightsThe decision in Long Branch Land demonstrates that in many instances, the taxpayer must rebut the IRS’s “presumption of regularity,” i.e., that government agencies and employees are presumed to discharge their official duties, in the absence of clear evidence to the contrary.  In some instances, as in this case, that presumption may carry the day.


Tax Court Litigation Attorneys

Need assistance litigating in the U.S. Tax Court? Freeman Law’s tax attorneys are experienced litigators with trial-tested litigation skills and in-depth substantive tax knowledge, having collectively litigated hundreds of cases before the U.S. Tax Court. Our tax controversy lawyers have extensive experience in Tax Court matters involving partnership audits and litigation under both the TEFRA and BBA regimes, international tax penalties, foreign trusts, valuation, reasonable compensation disputes, unreported income, fraud penalties, other tax penalties, and many other matters. We draw on our experience and wealth of tax knowledge to advise and guide clients through the entire tax controversy process, building the right strategy to resolve tax controversies from day one. Schedule a consultation or call (214) 984-3000 to discuss your Tax Court concerns or questions.