Volume 131 — Tax Court Reports

The issue is whether R's determination upholding the notice of Federal tax lien (NFTL) issued to P, which was based upon P's income tax liability for 1999, was an abuse of… Held: Freije I addressed an assessment for 1999 made without the issuance of a notice of deficiency, and the assessment based upon the notice of deficiency for 1999 was not addressed in Freije I. The second assessment created a distinct right of hearing subject to a separate review by this Court.

P-H was eligible for retirement when he was laid off in 2002. Later that year P-H began day trading. Held: Sec. 274(h)(7), I.R.C., prohibits the expenses relating to the course from being deducted under sec. 212(1), I.R.C., because the course is a convention, seminar, or similar meeting.

P, a Missouri corporation, claimed a deduction under I.R.C. sec. 404(k) for payments made to its employee stock ownership plan in redemption of P's preferred stock owned by the plan, where the… Held: I.R.C. sec. 162(k) renders the payments nondeductible because the payments are in connection with a redemption of stock.

P did not timely request a hearing with R's Appeals Office with respect to a proposed levy action. Held: The document that R's Appeals Office sent P does not embody a determination under sec. 6330, I.R.C.Held, further, that document is not a valid notice of determination under sec. 6330, I.R.C., that P is entitled to appeal under sec. 6330(d)(1), I.R.C.Held, further, the Court does not have jurisdiction over this case.

P filed a petition timely seeking redetermination of deficiencies in income tax for 1993-2000 and attempting to put at issue certain liabilities for which he received no notice from R: P's income tax… Held: The Tax Court lacks jurisdiction to redetermine P's income tax liability for 2001, liability for unassessed interest, and liability for the FBAR penalty.

R issued a notice of final partnership administrative adjustment (FPAA) to partnership J and its partners without providing a notice under sec. 6223(a), I.R.C. Ps, partners of J other than the tax… Held: Section 6223 allows partners holding different partnership interests in the same partnership to make different elections for each interest. Ps' election, otherwise conforming to the requirements of sec. 301.6223(e)-2T(c), Proced. & Admin. Regs., is therefore effective.

On June 4, 2001, D's estate (E) filed D's 2000 Federal income tax return and paid the liability reported on that return. Held: The disputed funds represent a payment of D's Federal estate tax and enter into the calculation of the overpayment of that tax.

P challenges adjustments in a final partnership administrative adjustment (FPAA) issued to a partnership (PFP). Held: The issue of whether PFP should be disregarded for tax purposes is a partnership item. Held, further, because we conclude that we have jurisdiction to determine that PFP should be disregarded for tax purposes, we may determine that the partners had no outside bases in PFP.

The parties agree that W, a partnership, is entitled to a charitable contribution deduction on account of its having made a qualified conservation contribution to a qualified organization. Held: A is qualified to testify as an expert. 2. Held, further, Fed.

Ps filed a motion for reconsideration of our Memorandum Opinion in Knudsen v. Commissioner, T.C. Memo. 2007-340 (Knudsen I). Held: Ps' motion for reconsideration will be denied. This Court did not err by concluding that the Court did not need to decide whether the burden of proof shifted to respondent under sec. 7491(a), I.R.C.

P filed a joint 1996 Federal income tax return reporting zero income tax liability. Held: The quoted word taxes includes the accrued interest related to P's 1996 income tax; thus, the Court has jurisdiction under sec. 6015(e)(1), I.R.C., as amended by TRHCA sec. 408(a), to review R's denial of equitable relief under sec. 6015(f), I.R.C., from P's liability for the accrued interest.

R sent P a notice of Federal tax lien, and P filed a request for an Appeals hearing pursuant to sec. 6320, I.R.C. Subsequently, R sent P a notice of determination… Held: This Court will review whether R's Appeals officer verified compliance with applicable law under sec. 6330(c)(1), I.R.C., i.e. whether a duly mailed notice of deficiency preceded the assessment of tax as required by sec. 6213(a), I.R.C., without regard to whether P raised the issue at the Appeals hearing.

On Feb. 28, 2008, five indirect partners filed a petition pursuant to sec. 6226(b)(1), I.R.C., as members of a 5-percent group challenging adjustments to partnership… Held: The initial petition filed by the five indirect partners on Feb. 28, 2008, as members of a 5-percent group was valid under sec. 6226(b)(1), I.R.C., and must go forward pursuant to sec. 6226(b)(2), I.R.C.Sec. 6226(b)(4), I.R.C., provides that subsequent actions regarding the same FPAA must be dismissed.

P-W received distributions during 2001 made pursuant to a QDRO after her ex-husband retired from the U.S. Air Force. Held: Distributions received by P-W are income to P-W and are includable in petitioners' taxable income.

In 1997, P entered into an offer-in-compromise (OIC) covering tax years 1989, 1990, 1991, and 1993. The OIC included a term requiring P to timely file and pay his taxes for five years. Held: P did not gain the benefit of the exceptions listed in sec. 7502, I.R.C., to the general rule that a tax return is filed when received. Under Rule 122, the Court could not make a finding on P's credibility and overwhelming evidence indicated that R did not receive either return on time.

In calculating ordinary income relating to $ 1,622,050 in loan payments received from two S corporations, for purposes of sec. 1366(a)(1), I.R.C.,… Held: among other things: For purposes of sec. 1366(a)(1), I.R.C., petitioners' $ 1,437,248 capital contributions to the S corporations do not constitute income to the S corporations and under sec. 1367(b)(2)(B), I.R.C., petitioners' capital contributions do not restore or increase petitioners' tax bases in their loans to the S…

P challenges adjustments in a notice of final partnership administrative adjustment (FPAA) issued to NM. Held: Sec. 301.6221-1T(c) and (d), Temporary Proced. & Admin. Regs., supra, is valid. Held, further: Sec. 301.6221-1T(c) and (d), Temporary Proced. & Admin. Regs., supra, applies to the instant proceeding, so that partner-level defenses cannot be asserted in this partnership proceeding if we should sustain R's substantive determinations.

MP decided to sell its wholly owned subsidiary, MLCR but wanted to retain a portion of MLCR's assets within MP's affiliated group. Held: Under sec. 304, I.R.C., MLCR is the only shareholder whose interest in the issuing corporations must be tested pursuant to sec. 302, I.R.C. Because MLCR's interest was completely terminated, the redemption was properly treated as a distribution in exchange for stock under sec. 302(a), I.R.C.