In this age of word processing and photoshopping, what’s to prevent a “creative” taxpayer from manufacturing a charitable contribution receipt from a real or fictitious charity and claiming a charitable deduction in the amount of their choice? Is that what the Tax Court thought when denying a couple’s $18,000 cash donation?  MORE »

In a divided opinion, the Tax Court has ruled that an estate is not entitled to an estate tax charitable deduction for the present value of annuity payments made to a family foundation from a testamentary charitable lead trust because the trust was funded via a partial disclaimer by the decedent’s sole heir that failed to qualify under section 2518(b)(4) because of the heir’s contingent-remainder interest in the trust. The dissenting judge argued the annuity and remainder interests were severable and, therefore, the disclaimer as to the annuity interest should have qualified. In addition, the entire court agreed in favor of allowing an estate tax charitable deduction for amounts disclaimed directly to the family foundation.  MORE »

In what it describes as "purely a substantiation case," the Tax Court in summary opinion has upheld a taxpayer's claimed cash and noncash charitable contribution deductions and denied his deductions for unreimbursed employee expenses.  MORE »

The Tax Court has upheld the IRS' denial of income tax charitable contribution deductions claimed over a series of years by three related couples for contributions of family limited partnership interests that were funded with interests in the family-owned C-corporation based on the fact the couples failed to satisfy the substantiation requirements of Section 170. Although the couples filed timely tax returns, they were not accompanied by qualified appraisals and Form 8283 was improperly or incompletely prepared. The court further denied business losses for dog breeding, cutting horse, and dairy activities because the petitioners failed to establish the requisite profit motive of Section 183.  MORE »

The Tax Court has held that a married couple who created business and charitable trusts that lacked economic substance did so fraudulently and were therefore liable for income taxes, self-employment taxes, and civil and accuracy-related penalties.  MORE »

The Tax Court has upheld the IRS's denial of an estate tax charitable deduction for a testamentary charitable remainder unitrust on the grounds that although the estate attempted to reform the trust by amendment, the defect did not constitute a "reformable interest." The only remaining remedy, therefore, was for the estate to commence a judicial proceeding to change the interest into a "qualified interest" within 90 days after the last date (including extensions) for filing the estate tax return, which it failed to do.  MORE »

The Tax Court has ruled an attorney cannot claim an income tax charitable deduction for the donation of photocopied materials received from the Government in defense of Oklahoma City bomber Timothy McVeigh because the attorney did not possess an ownership interest in the materials and was thus incapable of effecting a valid gift of the materials under Oklahoma State law.  MORE »

The Tax Court has denied a couple's claimed income tax charitable deductions of $17,889 for gifts of tangible personal property and $320 for gifts of cash based on the couple's failure to provide a qualified appraisal, file Form 8283, or produce cash donation receipts. The court upheld the IRS's deficiency in the amount of $4,283.  MORE »

In a memorandum opinion the Tax Court has determined a married couple failed to substantiate a charitable contribution on their joint tax return for the 2002 tax year and, although the couple divorced in 2003, further denied innocent spouse relief under section 6015 for the wife because she signed the return and knew an understatement of tax liability had occurred.  MORE »

In a memorandum opinion, the Tax Court has sifted through the arguments of taxpayer, Commissioner, and expert witnesses to determine the fair market value of a 31-acre property that held valuable proven sand and gravel deposits at the time it was donated to charity. The taxpayer argued a value of $1,801,618 while the Service tried to undermine (sorry, their metaphors, not ours) the taxpayer with a value of $301,000. The Tax Court settled on a value of $1,303,616.  MORE »