As I have written about previously[1], if a Tax Court petition is not timely filed, the Tax Court will generally[2] lack jurisdiction to hear such petition.[3] In the cases mentioned in my previous article, taxpayers’ petitions were dismissed for lack of jurisdiction despite the taxpayers having good excuses, such as (1) the taxpayers mailed their…
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The recent Tax Court decision in McDougall v. Comm’r, 163 T.C. No. 5 (2024) provides important insights into the intersection of Qualified Terminable Interest Property (QTIP) trusts and the associated gift tax implications. This article delves into the case’s facts, legal issues, court holdings, and practical implications for estate planners and tax professionals. Factual Background…
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In a recent Tax Court opinion[1], the taxpayer Michael Shaut (“Mr. Shaut”), representing himself, contested the IRS’s determination of a tax deficiency. The court had to decide on several key issues, including whether Mr. Shaut was entitled to deductions for theft loss, legal fees, and net operating losses, as well as whether he was liable…
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We are often contacted by clients, other attorneys, CPA’s, or others, looking to deal with unjust tax outcomes. Often, we are able to assist in avoiding those results. Sometimes, however, tax law simply allows what many see as injustices to occur. This can be the case, for example, when owners of a pass-through entity, S…
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In a recent decision, the Tax Court addressed the complexities of gift tax and qualified terminable interest property (“QTIP”) rules, providing important insights for estate planning professionals and taxpayers alike.[1] The case centered on the interpretation of provisions related to the taxation of transfers between spouses, and in this context, termination of QTIP interests and…
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In a recent Tax Court case, the Court determined that the 90-day deadline for filing a petition for redetermination of employment status is not jurisdictional and thus does not prevent the Court from hearing the case.[1] While an all-too-familiar statute pertaining to the jurisdiction of the Tax Court to hear a matter has generally been…
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Taxpayers who are issued a notice of deficiency by the Internal Revenue Service (“IRS”) have ninety (90) days from the date such notice of deficiency is mailed to file a petition with the Tax Court for a redetermination of the deficiency.[1] Last year, the Tax Court dismissed several cases for lack of jurisdiction when the…
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How is relief of debt treated for tax purposes? Does it matter if the debt is recourse or non-recourse? Does it matter if the debtor is a separate entity guaranteed by the owner(s)? Does it matter if the debt is forgiven as part of a sale of property securing the debt? These issues were addressed…
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The Tax Court recently issued an order declining to grant either the IRS’s or taxpayers’ motions for partial summary judgement.[1] The taxpayers in question are the shareholders of a subchapter S corporation that in prior, now closed years, deducted losses from the corporation in excess of their adjusted bases in the corporation’s stock. The IRS…
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Generally, expenses related to activities that are not engaged in for profit are not deductible.[2] In a recent memorandum opinion[3], the United States Tax Court reiterated the criteria upon which the Court considers if an activity is engaged in for profit. While the recent decision was not a landmark case[4], it provides some cautionary guidance…
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