Haury v. CIR

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Appellant, a software engineer, filed no federal individual income tax return for 2007. The Commissioner issued a notice of deficiency alleging unpaid taxes, penalties, and interest of more than $250,000 based on a substitute return prepared by the IRS. On appeal, appellant challenged the Tax Court's IRA rollover and business bad debt rulings. The court concluded that appellant's April 30, 2007 contribution was a qualifying partial rollover contribution under I.R.C. 408(d)(3)(D) and appellant was entitled to reduce his taxable IRA distributions by $120,000. Accordingly, the court reversed the Tax Court's decision as to this issue. The court concluded that the Tax Court did not clearly err in finding that appellant failed to prove that his dominant motivation for making the four loans in question made them deductible bad debts when they became worthless in December 2007. The court remanded for a redetermination of the deficiency. View "Haury v. CIR" on Justia Law