Schedule F Farming Expense Deductions And Deficiencies Relating To Same

Hoakison v. Comm’r, T.C. Memo. 2022-117| December 5, 2022 | Paris, J. | Dkt. No. 16577-17 

Short Summary:  Mr. and Mrs. Hoakison (collectively, the “Hoakisons”) are long-time farmers.  They own real estate used for farming and utilize various equipment to assist with their farming operations, including tractors and pickup trucks.  In 2012, the Hoakisons also constructed a machine shed for a cost of $108,856, which was paid in cash.

The Hoakisons are not tax professionals and do not have advanced educations.  Accordingly, for their 2013, 2014, and 2015 tax years, they relied on Mr. Powell, a farm management specialist with a master’s degree in agricultural education, to prepare their returns on their behalf.

The IRS selected the Hoakisons’ 2013, 2014, and 2015 tax returns for examination.  The IRS disallowed many of the Schedule F, Profit or Loss from Farming (“Schedule F”), deductions they claimed related to their farming activities.  The IRS also imposed accuracy-related penalties regarding the disallowed deductions and related underpayment of tax for 2013, 2014, and 2015.

Key Issues

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