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Tag Archive for Tax Court

Tax Court Explores Qualified Appraisals

Tax Court Explores Qualified Appraisals

Emanouil v. Comm’r, T.C. Memo. 2020-120 | August 17, 2020 | Gustafson, J. | Dkt. No. 5089-17

Short Summary:  Mr. Emanouil is a real estate developer.  In 1999, he purchased approximately 200 acres of undeveloped property in Westford, Massachusetts.  Although he made several attempts to develop or sell the property over the next several years, he ultimately obtained approval for an affordable housing project on 104 acres of the property.  Towards the conclusion of the project in 2008, he donated 16 acres of the property to Westford.  The following year, after Westford had approved the affordable housing project, Mr. Emanouil donated an additional 71 acres of the property to Westford.

On his 2008 return, Mr. Emanouil reported a $1.5 million charitable contribution deduction with respect to the 16-acre donation.  On his 2009 return, he reported a $2.5 million charitable contribution deduction with respect to the 71-acre donation.  Due to limitations on claiming the charitable contribution deductions for each year, Mr. Emanouil carried forward the deductions to his 2010 through 2012 tax years.

The IRS examined Mr. Emanouil’s 2010, 2011, and 2012 returns and issued a notice of deficiency disallowing the carryover charitable contribution deductions.  The notice of deficiency disallowed the carryovers because, according to the IRS, Mr. Emanouil had failed to substantiate the reported values of the properties transferred and failed to show that the properties were transferred with charitable intent.  The IRS also determined accuracy-related penalties for such years.

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Written by | Posted in Qualified Appraisals • Tax Court

Minister’s Housing Allowance Loses a Court Battle

John Stancil Tax Advisor

In a 2013 count case in Wisconsin the Freedom From Religion Foundation (FFRF) challenged the Minister’s housing allowance, claiming it provided an unconstitutional subsidy of religion. They won that case, but it was overturned on appeal. The reason for overturning it was that the appeals court indicated that the FFRF did not have standing (or reason to sue) as they had not been damaged by the housing allowance law. The FFRF took it to heart and certain leaders in FFRF paid themselves a housing allowance and excluded it from tax on their individual 1040’s. The IRS disallowed some of them. This led to a new suit, heard by the same Wisconsin judge who made the 2013 ruling. Once again, she ruled the housing allowance unconstitutional.

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Written by | Posted in TaxConnections

Concerns About The IRS’s Commitment To Taxpayer Rights

About this time every year, my wonderful staff of attorney-advisors presents me with early drafts of the discussion of the ten most litigated issues in federal courts that are ultimately published in the National Taxpayer Advocate’s Annual Report to Congress. Editing these drafts is one of my favorite tasks, because I get to review in a concentrated fashion a significant swath of tax litigation. There are always one or two cases I have missed over the year that leap out at me during the editing process. Mescalero Apache Tribe v. Commissioner is one such case. Read More

Written by | Posted in IRS

Indiana Advocating For Online Sales Tax With A Lawsuit

Monika Miles, Online Sales Tax

Every time we turn around, it seems there’s a new development in the online sales tax debate. As states continue to get involved and look for new ways to bolster their revenue, the issue continues to grow larger and more complex. Now Indiana is looking to the courts to settle the matter.

Indiana’s Online Sales Tax Lawsuit Read More

Written by | Posted in State Tax

Higher Court Decision Confirms – FATCA Is Here To Stay

The linchpin legislation of the U.S. government in its effort to combat tax evasion abroad over recent years has been the Foreign Account Tax Compliance Act (FATCA). Last week, the latest legal challenge to FATCA was thwarted when the United States Court of Appeals for the Sixth Circuit affirmed a lower court’s decision to dismiss the case against FATCA.

Quick FATCA Background Read More

Written by | Posted in FATCA

FTC v. Affordable Media: Foreign Asset Protection Trust Failures

Hale Stewart, Asset Protection

High net worth individuals are loathe to transfer assets to any entity over which they have no control. This fact creates an unresolvable problem when forming an offshore asset protection trust: so long as a U.S. person can exert even a modicum of control over a foreign entity, a U.S. court has sufficient grounds to rule that a U.S. based debtor can repatriate assets. More importantly, failure to comply with a repatriation order could lead to contempt citation against the U.S. debtor. The facts of Federal Trade Commission v. Affordable Media typify this problem. Read More

Written by | Posted in International

Canadian Man Pleads Guilty to Conspiring to Defraud U.S.

A Canadian man pleaded guilty today in Rochester, New York to conspiring to defraud the United States and stealing government funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney James P. Kennedy Jr. for the Western District of New York. Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Are You Really Covered By Your Policies?

One of the primary objections I hear from insurance agents about captives is that commercial policies are comprehensive.  But, the devil is really in the details here — or, more specifically, in the legal precedent interpreting the policies.

For example, how comprehensive is a duty to defend?  On the surface, the wording looks pretty iron clad.  But there’s a big split among the states as to what duties this actually encompasses: Read More

Written by | Posted in Captives

Turbo Tax Defense Fails Again in Tax Court

Self-preparing your tax return can be a risky endeavor, especially for U.S. expats with heightened reporting obligations.

Expat taxpayers are particularly susceptible to errors because of the complex international tax issues and additional reporting requirements that can significantly affect the tax return of a U.S. citizen living abroad.

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Written by | Posted in Expatriate

Court Revisits Willful Requirement For Enhanced FBAR Penalties

A recent U.S. District court case has again shone a spotlight on the lack of a clear statutory or regulatory definition of “willful” for purposes of applying the more severe penalties for failure to file the FBAR.

In Bedrosian v. United States, 2017 U.S. Dist. LEXIS 56535 (ED PA 2017), the Court denied summary judgments by the both taxpayer and government on the issue of the taxpayer’s culpability in failing to report a Swiss bank account on a timely-filed FBAR.

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Written by | Posted in FBAR

Did Mr. FBAR Pay A Surprise Visit To Canada?

John Richardson

This is one more of my posts about Mr. FBAR. Mr. FBAR is a mean, nasty vicious thug who has no place in any civilized society.

Thomas Jefferson once said:

Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.

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Written by | Posted in International

Tax Court Denies FEIE In Two Recent Cases

Ephraim Moss

Following the trend of the past several years, the Tax Court continues to review foreign earned income exclusion cases at a relatively high rate. In most of the recent cases, the Tax Court has denied the FEIE claims on a number of different grounds.

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Written by | Posted in Foreign Income
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