The Tax Court in Brief August 30 – September 3, 2021

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The Tax Court in Brief August 30 – September 3, 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 Court Cases: The Week of August 30 – September 3, 2021

Karson C. Kaebel v. Comm’r, No. 16171-18P, T.C. Memo 2021-109 

September 9, 2021 | Halpern | Dkt. No. 16171-18P

Tax Dispute Short Summary:

This case focuses on 26 U.S.C. § 7345, which gives the IRS the authority to recommend to the Secretary of State of the United States that a taxpayer’s passport be denied, revoked, or limited as a result of a seriously delinquent tax debt.  Here, the taxpayer was certified by the IRS pursuant to § 7345 as having such a seriously delinquent tax debt.  The taxpayer argued first that the alleged tax debt was incorrect and second, that § 7345 is unconstitutional.

Tax Litigation Key Issues:

Facts and Primary Holdings

Key Points of Tax Law:

Tax Litigation InsightAlthough not directly identified as such, the arguments asserted in this case by the taxpayer generally appear to be tax protester-type arguments, and like most such arguments, they do not fare well in the Tax Court (or any other court).  This case provides yet another reason that taxpayers should respect their obligations under the Internal Revenue Code – because § 7345 described in this case provides authority that could ultimately end in the revocation of a taxpayer’s passport and concomitant ability to travel internationally.

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[1] Congress enacted I.R.C. § 7345 in 2015 as part of the Fixing America’s Surface Transportation (FAST) Act, Pub. L. No. 114-94, section 32101, 129 Stat. at 1729.

[2] Sec. 7345(b)(1)(B) requires that the liability be greater than $50,000. That amount is adjusted for inflation beginning in tax years after 2016. Sec. 7345(f). The adjusted amount for tax year 2018 was $51,000. See Rev. Proc. 2017-58, sec. 3.53, 2017-45 I.R.B. 489, 499.