The Tax Court in Brief July 5 – July 9, 2021

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The Tax Court in Brief July 5 – July 9, 2021

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 July 5 – July 9, 2021


Tax Court Case: Peter Freund v. Commissioner, T.C. Memo. 2021-83 

July 7, 2021 | Weiler, J. | Dkt. No. 4013-20W

Tax Dispute Short Summary

Petitioner, acting as a whistleblower, filed a Form 211, Application for Award for Original Information, regarding a target taxpayer’s mischaracterization of loan payments.  Petitioner discovered the improper characterization after review of a decedent’s estate records.  The IRS Whistleblower Office received the Form 211, which an IRS employee reviewed.  The IRS employee determined that the statute of limitations for assessment had expired. And ultimately, the IRS never assigned the petitioner’s Form 211 to any examiner.  The Whistleblower Office issued a final determination letter to the petitioner denying his whistleblower award.  Petitioner filed in the Tax Court for review of the Whistleblower Office’s determination.

Key Issue:

Primary Holdings

Key Points of Law:

Tax Litigation InsightAn individual pursuing a whistleblower action must remember that simply taking the rightful action fails to pay, sometimes.  While the IRS may have broad discretion when determining whether to pursue a whistleblower claim, it will not reward where the law clearly restricts their ability to collect.


Tax Court Case: Delgado v. Commissioner, T.C. Memo. 2021-84

July 7, 2021 | Greaves, J. | Dkt. No. 191-20

Tax Dispute Short Summary

Two companies paid the Petitioner for services performed as an independent contractor.  The companies submitted Forms 1099-MISC, Miscellaneous Income, to the IRS reporting the payments.  For the tax period, the Petitioner timely filed two Forms 1040EZ, Income Return, reporting zero income.  Based on the two Forms 1099-MISC it received, the IRS issued a Notice of Deficiency, which provided an increase in tax liability as well as a section 6662(a) penalty.  Petitioner timely petitioned the court for redetermination based on the Petitioner’s interpretation of section 7701(a)(26).

TaxLitigation Key Issues:

Primary Holdings

Key Points of Law:

Tax Litigation Insight: The Court’s decision reminds potential tax protestors that the Courts ignore the persuasiveness and credibility of the arguments formulated in the depths of the internet and in a Bohemian book clubs.


Tax Court Case:

Mathews v. Commissioner, T.C. Memo. 2021-85

July 8, 2021 | Urda, J. | Dkt. No. 7999-19

Tax Dispute Short Summary

The IRS mailed a Notice of Deficiency to the Petitioner in 2016 covering a four-year tax period to an address on file with the IRS.  In 2019, Petitioner mailed a letter to the Tax Court regarding the Notice of Deficiency that he received.  Likewise, the Petitioner challenged an additional tax year that the Notices did not mention.  Tax Court accepted the Petitioner’s letter, which the Court filed as his petition.  The IRS filed a motion for summary judgment, alleging that the Court lacks jurisdiction to decide the Petitioner’s case.

Tax Litigation Key Issues:

Primary Holdings

Key Points of Law:

Tax Litigation Insight

Taxpayers sometimes suffer the hard lesson that putting an IRS notice on the backburner may often lead to being singed.  The IRS moves quickly when it makes its assessments.  The sooner the taxpayer can make contact with the IRS…the better!

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