Murphy Archives

Tax Court Rejects Offer in Compromise Despite Extraordinary Personal Circumstances

Aug 14, 2026

In Tooke v. Commissioner,[1] the United States Tax Court recently reaffirmed the considerable discretion afforded to the Internal Revenue Service Independent Office of Appeals (“Appeals”) when evaluating collection alternatives. Although the taxpayer presented compelling evidence of significant personal hardship, including a Parkinson’s disease diagnosis, the financial consequences of a contentious divorce, and substantial expenses associated…
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Lapsed Life Insurance Policy Generated Taxable Income and Limited Interest Deductions

Income Tax, Tax Controversy, Tax Court

Apr 29, 2026

A recent United States Tax Court memorandum[1] opinion provides an important reminder that life insurance policies with outstanding loans can create unexpected income tax consequences when the policy lapses or is surrendered.[2] In Sawyer v. Commissioner, the Tax Court held that a taxpayer realized taxable income when the cash surrender value of his life insurance…
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Murphy Case – Reasonable Reliance for Failure to File

Cases, District Court, Estate Administration, Estate Planning, Income Tax, Tax

Jul 14, 2025

In a recent case issued from the United States District Court for the Eastern District of California, the Court held that a Trustee’s reliance on the advice of a CPA that no trust income tax return was due was enough to establish reasonable cause for such failure and thus avoid late payment and filing penalties.[1]…
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Tag: Murphy

Tax Court Rejects Offer in Compromise Despite Extraordinary Personal Circumstances

Lapsed Life Insurance Policy Generated Taxable Income and Limited Interest Deductions

Murphy Case – Reasonable Reliance for Failure to File

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Tax Court Rejects Offer in Compromise Despite Extraordinary Personal Circumstances

IRS Provides Guidance on Dividing Inherited IRAs Through Trustee-to-Trustee Transfers

A Review on Listed Transactions