Author: Bryan Camp
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Lesson From The Tax Court: Temporary vs. Indefinite Commutes
When I worked in downtown Washington D.C. I had a 50+ minute commute from my home in Wheaton Md. But I did not have to drive. I walked 15 minutes to Wheaton metro, had a 30+ minute metro ride to Federal Triangle, and then a 5 minute walk to my office. That was a lovely…
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Lesson From The Tax Court: Substantiating Gambling Losses On Per-Casino Basis
The old saying “you win some, you lose some” is not true for most recreational gamblers. For them, the saying is more like “you win some, you lose more.” But proving that proves a problem. In Jacob Bright v. Commissioner, Docket No. 10095-22 (May 4, 2023), Judge Buch teaches us how taxpayers can use their…
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8th Annual Texas Tax Faculty Workshop
Houston hosted the 8th Annual Texas Tax Faculty Workshop (program): Johnny Buckles (Houston), Constitutional Law and Tax Expenditures: A Prelude, 76 Ark. L. Rev. 1 (2023)Commenter: Susan Morse (Texas; Google Scholar) Orly Mazur (SMU; Google Scholar), Cooperative Federalism and the Digital Tax Impasse, 51 Fla. St. U. L. Rev. __ (2023) (with Adam B. Thimmesch…
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Lesson From The Tax Court: On Time Is Late
In law, even more than in comedy, timing can be critical. In comedy you just lose a laugh. In law, you lose a case. In Roy A. Nutt and Bonnie W. Nutt v. Commissioner, 160 T.C. No. 10 (May 2, 2023) (Judge Buch), we learn why a petition seemingly submitted on time will be rejected…
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Lesson From The Tax Court: Allocating Between Excludable Child Support and Includable Interest
As inflation rises so does interest in interest. Certainly when my 1-year CD matures next month I will be looking for a rate better than the 2% rate that seemed so great last year! If I get a 4.5% I will be happy … but who knows what my dollars will be worth next year?…
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Lesson From The Tax Court: Exclusion Rules For Disability Payments
A tax break is just another way of saying “government subsidy.” Most folks do not even think about that when they get a medical bill. They are generally just upset about the size of the co-pay! But Congress subsidizes medical care by allowing taxpayers to exclude from income everything the health insurance plans pay the…
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Lesson From The Tax Court: Better Deals With Appeals
One recurring lesson I teach in Tax Practice and Procedure is that you generally serve your client better by resolving their issues at the lowest level. That requires helping them be realistic in understanding the range of potential outcomes. It requires an understanding that IRS offices, such as the Office of Appeals, generally have more…
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Lesson From The Tax Court: Prepare Once, File Twice
Most of us don’t think about what it means to file our tax return. We may rely on software or a hired return preparer to transmit our return to the IRS. The returns are either snail-mailed to the applicable Service Center, or they are e-filed to that amorphous “cloud.” We know it is important to…
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Lesson From The Tax Court: The Actual Payment Doctrine
Today is a lesson in timing. When I teach timing I emphasize to my students that they must analyze income items separately from deduction items. Today is an example of how the analysis applicable to inclusion can be different from the analysis applicable to deductions. As to income, we all know about the constructive receipt…
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Lesson From The Tax Court: It Takes More Than Putting In The Hours To Avoid §469 Restrictions
Tax Day approaches. I know many folks are putting in the hours on preparing tax returns this week … or else putting in the minutes filing Form 4868. But we all know—especially when unhappy clients come to us to fix a return messed up by some whack-a-doodle preparer—just putting in hours in filing tax returns…
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Lesson From The Tax Court: Attend Carefully To Your Entity Baskets
Easter approaches. On that day our church grounds will be overrun with children scampering to collect eggs into the various baskets, bags, and other containers they bring (or we give them if they need). They do not have to worry about what kind of container they use to collect their eggs. The candy will taste…
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Lesson From The Tax Court: The Whistleblower Who Blew Too Hard
Section 7623(b)(1) says that the IRS must reward whistleblowers when the information they provide causes the IRS to start “any administrative or judicial action” to collect unreported or unpaid taxes. In such cases, whistleblowers can get an award of up to 30% of the proceeds actually collected from such actions. Id. So what happens if…
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Lesson From The Tax Court: Another Reason To Keep Good Records
Last week’s Lesson looked at the inherent unreliability of third-party information returns. Taxpayers need to keep good records to refute those errors. This week’s Lesson continues that theme: keeping good records can help avoid a bank deposits analysis. When the IRS is forced to reconstruct income using the bank deposits method, it puts taxpayers in…
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Lesson From The Tax Court: Fill Out The Damn Form
The fuss has focused on FBARs. The FBAR requirements and penalty provisions have been hotly litigated. Recently the Supreme Court issued an opinion in Bittner v. U.S., deciding that the penalties were not as harsh as the government thought they should be. But forget FBAR. Today’s lesson is about a different, yet equally important, foreign…
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Lesson From The Tax Court: The New Evidence Rule In Spousal Relief Cases
When a taxpayer requests spousal relief under §6015, the IRS must decide whether to grant it. If the IRS denies relief, the taxpayer can petition the Tax Court. §6015(e). In 2019 Congress created a modified administrative record rule for how the Tax Court is supposed to conduct that review. Taxpayer First Act, 133 Stat. 981,…
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Lesson From The Tax Court: The Limited Review Of Passport Revocation Certifications
Today’s lesson is about §7345, created by Congress in 2015. The idea behind §7345 is simple. If you owe taxes and the government threatens to take your passport, you are more likely to pay up. But its operation is complex. It requires the IRS to first certify to the State Department that a taxpayer has…
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Texas Tech Seeks To Hire A Clinical Tax Professor
Texas Tech Law Faculty Posting: Texas Tech is looking to hire a new Director for its Low Income Taxpayer Clinic (LITC) here in Lubbock, TX, with a start date of August 1, 2023 (or earlier). Applications are due March 17th. I want to highlight three aspects of the position that I think are noteworthy: Staff…
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Lesson From The Tax Court: Mortgage Interest Deductions When The Payor Is Not The Borrower
Families can be complicated. Tax law can be complicated. Put those complications together and you get today’s lesson: family obligations to pay interest on a mortgage don’t support the §163 deduction even though they might, informally, be as binding as legal obligations. In Hrach Shilgevorkyan v. Commissioner, T. C. Memo. 2023-12 (Jan. 23, 2023) (Judge…
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Lesson From The Tax Court: The Tax Court Is Not Your Advocate
Today I present two lessons. First, we learn why diabetes is not a per se disability sufficient to avoid penalties for early 401(k) distributions. Second, we learn that pro se litigants cannot rely on the Tax Court to consider potential arguments they could have raised, but did not. Diabetes is a well-known and widespread disease,…
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Lesson From The Tax Court: The Meaning Of ‘Business Premises’ In §119
It’s a new year. And what better way to start than with the fundamental lesson I teach my students in our first few classes: “Everything is income. Everything including all your non-cash receipts.” Yeah, I actually sing that to the class, to the tune of Everything is Awesome from the Lego movie. It scans. Treas.…
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A Year Of Lessons From The Tax Court (2022)
Here is a chronological listing of all the Lessons From The Tax Court I posted in 2022, with links to the Lesson, the primary case discussed, and its author. I have also listed the primary Code sections mentioned or discussed in the Lesson. At the end of the chronological listing, you will find a table…
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Lesson From The Tax Court: Taxpayers Behaving Badly 2022
This will be my last new post until January. Next Monday, December 19, my annual Year Of Lessons From The Tax Court will appear in this space. It is a chronological listing of all the Lessons I posted in 2022, with links to each Lesson, the primary case discussed, and the judge who wrote the…
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Lesson From The Tax Court: It’s Not Income If You Pay It Back In Time
We all know that taxpayers do not have to report loans as income. But it's not clear why. It has something to do with the obligation to repay. It might be the obligation to repay burdens other assets so the loan does not represent an actual increase in wealth. Or it might be the obligation…