Justia Tax Law Opinion Summaries

The IRS sent petitioner a Letter 1153 (notice of proposed assessment) informing her that, pursuant to 26 U.S.C. 6672(a), she - as the chief operating officer of NPRN - was personally responsible for the company’s unpaid trust fund taxes for the second quarter of 2005. The IRS then made an assessment against her in the amount of $346,732.38. The court held that a taxpayer is entitled to a pre-assessment administrative determination by the IRS of her proposed liability for trust fund taxes if she files a timely protest. Therefore, in this case, the IRS erred by not making such a determination for petitioner after she filed a timely protest. The court vacated the judgment of the tax court and remanded so that it can address whether the IRS’ error, under the circumstances, is harmless or requires setting aside the 2007 assessment (or some lesser form of corrective action). View "Romano-Murphy v. Commissioner of IRS" on Justia Law

This case stems from a dispute regarding Palmer Ranch's residential development (B-10). Palmer Ranch argued that B-10’s highest and best use was residential development under a Moderate Density Residential (“MDR”) zoning designation, which would allow between two and five units per acre, or 164 to 410 units total. Based on this highest and best use, Palmer Ranch stuck to its initial $25,200,000 valuation. The IRS countered with a maximum highest and best use of 100 units and a corresponding valuation of $7,750,000. The tax court held in favor of Palmer Ranch. The parties cross-appealed. The court affirmed the tax court's determination of B-10's highest and best use. However, the court reversed the ensuing valuation and directed the tax court on remand to either stick with the comparable-sales analysis or explain its departure. Whatever the tax court chooses to do, the tax court must keep its sights set strictly on the evidentiary record for purposes of selecting an appreciation rate, and ensure that it crunches the numbers correctly. View "Palmer Ranch Holdings v. Commissioner" on Justia Law

Plaintiffs filed suit challenging the Notices of Final Partnership Administrative Adjustment (FPAAs) the IRS issued disallowing all items they claimed on their partnership returns on the ground that partnerships constituted an abusive tax shelter designed to generate artificial, noneconomic tax losses desired by the taxpayer. The district court upheld the administrative adjustments to the partnerships’ returns and entered judgment for the Government. The court concluded that the district court's Memorandum Opinion and Order correctly resolved these questions; and therefore, the court affirmed on this basis. The district court concluded that the FPAAs properly found that the partnerships lacked economic substance and made adjustments accordingly. However, the FPAAs improperly imposed penalties. View "Kearney Partners Fund v. United States" on Justia Law