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

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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

Opinion

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

Opinion

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.


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