Document Summaries for the week of Feb. 7, 2022
Tax document summaries for the week of Feb. 7–Feb. 11, 2022, covering corporations, individuals, and IRS procedure.
Tax Court issues corrected Timberland decision
The Tax Court released a corrected opinion of a decision originally issued on Jan. 31, 2022. The court ordered the new opinion to reflect a corrected reference to a Treasury regulation. TBL Licensing LLC, 158 T.C. No. 1 (2/8/22) (corrected).
Court upholds deficiency assessment; rejects taxpayer's 'frivolous and groundless arguments'
The Tax Court upheld an IRS notice of deficiency assessing additional income taxes of almost $50,000 after disallowing certain deductions a taxpayer claimed in connection with his business. The court also upheld an assessment of more than $20,000 in penalties after noting that, rather than attempt to demonstrate that the IRS erred in its determination, the taxpayer challenged the determination with "frivolous and groundless arguments." Williams, T.C. Memo. 2022-7 (2/7/22).
Court agrees that transferees are liable for $24.7 million
On remand from the Ninth Circuit, which had reversed the Tax Court's holding that a group of taxpayers were not tranferees under the Arizona Uniform Fraudulent Transfer Act (Arizona UFTA) and Sec. 6901, the court agreed with the IRS's computations of the transferees' tax liability and rejected their computations. Thus, the Tax Court concluded that the transferees owe a tax deficiency of $13,494,884, an accuracy-related penalty of $2,698,997, and interest of $8,559,729, for a total of $24,753,610. Slone, T.C. Memo. 2022-6 (2/7/22).
IRS to no longer require facial recognition for account access
The IRS announced that it will transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts. IR-2022-27 (2/7/22) (see related news story).
IRS issues nonacquiescence in backup withholding case
The IRS announced that it would not acquiesce in the decision in Quezada, 982 F.3d 931 (5th Cir. 2020). Specifically, it said it would not acquiesce to the holding that the statute of limitation on assessing backup withholding liability begins when the taxpayer files a Form 1040 and Forms 1099-MISC that omit payee taxpayer identification numbers. AOD 2022-1 (2/4/22).
IRS identifies paused notices and letters
The IRS identified the letters and notices it will not send taxpayers as it works through its backlog of unprocessed prior-year returns. IR-2022-31 (2/9/22) (see related news story).
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
Quirks spurred by COVID-19 tax relief
This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.