An appeal of a Tax Court decision by a taxpayer who was found by the Tax Court to owe $90.86 should have an interesting story behind it. After all the fee to file the appeal is $500. And the story behind Grajales v. Commissioner of Internal Revenue is pretty good as we can learn about how the system works and fails to work for ordinary taxpayers who get caught up in it.
Where It Begins
Kirgizia I Grajales needed to borrow some money from her retirement plan with the State of New York to pay for her mother’s funeral. The New York State & Local Retirement System produced a 1099 that treated the loans as a taxable distribution in the amount of $9,025.86. That prompted the IRS to issue a notice of deficiency in the amount of $3,030 on July 10, 2017 on her 2015 return. Ms. Grajales responded with a Tax Court petition.
This story will be appearing in Think Outside The Tax Box.
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