Slip opinions decided 2005 — Tax Court Memorandum

Ps filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R to proceed with collection by levy of… Held: R's rejection of a $ 2,000 offer in compromise proposed by Ps did not constitute an abuse of discretion. Held, further, R's motion for summary judgment is granted, and R may proceed with collection of balances due as determined in a Notice Of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330.

Ps excluded a portion of H's disability benefits from gross income for the 1999 and 2000 taxable years. R determined that Ps were required to include in gross income an additional portion of H's benefits. Held: Ps are not entitled under sec. 105, 104(a)(3), or 72,I.R.C., to exclude from gross income disability retirement benefits in an amount greater than permitted by R. Held, further, R is not precluded from making adjustments to Ps' gross income by reason of R's decision not to adjust prior years' income.

R determined a deficiency in Federal income tax with    respect to the joint return for 1998 made by P and her then    husband (which determination P did not contest); R denied P's    subsequent request for relief from joint and several liability    under I.R.C. sec. 6015(b), (c), or (f).      1. Held  P is eligible to elect relief under I.R.C.   sec. 6015(c), and R has failed to nullify the election by    demonstrating that she had actual knowledge at the time she    signed the joint return of the item giving rise to the    deficiency.      2. Held, further, R erred in denying P relief    under I.R.C. sec. 6015(c).      3. Held, further, P has no liability for the    deficiency.

P appealed a sec. 6330, 1All section references are to the Internal Revenue Code in effect for the years in issue. I.R.C., determination from R's Appeals Office. Held: The Court may retain jurisdiction over the case while on remand. Held, further, we shall not invalidate the Notice of Determination.

P received disability benefits under the Public Employees Retirement System, Ohio Rev. Code Ann. sec. 145.35(B) (Anderson 2001), which provides disability coverage to each member who has at least… Held: P received benefits under a provision in the statute that is not in the nature of a workmen's compensation act. Sec. 1.104-1(b), Income Tax Regs. Consequently, the benefits are not excludable from P's 1999 gross income.

R determined that (1) substantial amounts of income from P- H's plumbing business had not been reported on Ps' separate income tax returns; (2) Ps' marriage contract did not have the effect of… Held: R's position on income-splitting was substantially justified; P-W was not prevailing party on that issue. Sec. 7430(c)(4)(B)(i), I.R.C. 1986. 2.

P filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R that levy action was appropriate. Held: Because P has advanced groundless complaints in dispute of the notice of intent to levy, R's determination to proceed with collection action is sustained. Held, further, a penalty under sec. 6673, I.R.C., is due from P and is awarded to the United States in the amount of $ 2,500.

In the summer of 2000, Ps, H and W, retained an attorney, M, to represent them as to their 1993 and 1994 income taxes. Held: The Court shall grant Ps' motion in that we find that M was not authorized by Ps to agree to either settlement on their behalf.

P filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R that levy action was appropriate. Held: Because P has advanced groundless complaints in dispute of the notice of intent to levy, R's determination to proceed with collection action is sustained. Held, further, a penalty under sec. 6673, I.R.C., is due from P and is awarded to the United States in the amount of $ 2,500.

P filed a petition for judicial review pursuant to sec.    6330, I.R.C., in response to a determination by R that levy    action was appropriate.      Held: Because P has advanced groundless complaints    in dispute of the notice of intent to levy, R's determination to    proceed with collection action is sustained.      Held, further, a penalty under sec. 6673,    I.R.C., is due from P and is awarded to the United States in the    amount of $ 5,000.

Held: R's Appeals officer did not abuse his discretion by sustaining a determination to proceed with collection by levy of P's unpaid… Held: R's Appeals officer did not abuse his discretion by sustaining a determination to proceed with collection by levy of P's unpaid liabilities following a telephonic conversation and an exchange of correspondence with P. P failed to prove that she requested a face-to-face interview with the Appeals officer during the course of the sec.…

P filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R that levy action was appropriate. Held: Because P has advanced groundless complaints in dispute of the notice of intent to levy, R's determination to proceed with collection action is sustained.

P failed to file a Federal income tax return for the 2000 year. Held: P is liable for the deficiency determined by R and for additions to tax under secs. 6651(a)(1) and 6654, I.R.C.

S1 and S2, Delaware business trusts, were formed in 1998    and were capitalized by the contribution thereto of stock by D    through a revocable trust and by WTC as trustee of various    trusts created for the benefit of D's children and    grandchildren. At his death in 1999, D held through the    revocable trust a 45.236-percent interest in S1 and a 47.336-    percent interest in S2.      Held: D's transfers of stock to S1 and S2 were bona    fide sales for adequate and full consideration within the    meaning of secs. 2036(a) and 2038, I.R.C., such that the value    of the transferred assets is not included in his gross estate    under these statutes.

D's gross estate included a 6.44-percent interest in a closely held corporation (C) whose assets consisted primarily of marketable securities. Held: The built-in capital gain tax liability should be discounted to reflect when it is reasonably expected to be incurred. Held further: Amounts of discounts for lack of control and marketability decided.

P stopped working in 1999 to attend college. At that time, P had $ 34,656.29 in a public employees retirement system (PERS) account. Held: Sec. 72(t)(2)(E), I.R.C., does not allow P to escape the additional tax of sec. 72(t)(1), I.R.C., as to any part of the distributions used for her 1999 and 2000 expenses; to escape that tax, sec. 72(t)(2)(E), I.R.C., requires that qualified higher education expenses be for the taxable year of the distribution.

P filed no income tax return for 2000, and R determined a deficiency in tax and additions to tax on account thereof. Held: P's claim that he has no obligation to file a tax return and pay tax is without merit. 2. Held, further, P has failed to prove that his basis in any of the securities is greater than zero. 3. Held, further, P is liable for an addition to tax under sec. 6651(a)(1), I.R.C., for failure to file a return. 4.

Kelley A. Blaine and Robert V. Boeshaar, for

F is a foreign corporation. P, a U.S. subsidiary of F, is a film processing company. Held: P did not establish that it had a tax basis in each of the three terminated relationships and, thus, is not entitled to deduct losses related to these relationships. 2. Held, further, R's section 482, I.R.C., adjustments, relating to the intercompany transaction, are arbitrary and capricious. 3.

Monica J. Miller and Robert W. Dillard for respondent.

Petitioner (P) and Daniel O'Dowd each owned 50 percent of the stock of an S corporation (GH). O'Dowd exercised his rights under the shareholders' agreement to buy P's shares. Held: P is taxable on the payment he received for his GH stock and related interest in the years paid. Held, further, P is taxable on a distributive share of GH's income in 2000.

P filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R that levy action was appropriate. Held: Because P has advanced groundless complaints in dispute of the notice of intent to levy, R's determination to proceed with collection action is sustained. Held, further, a penalty under sec. 6673, I.R.C., is due from P and is awarded to the United States in the amount of $ 3,000.