Office of Chief Counsel 360x1000
Ruth Bader Ginsburg 360x1000
Richard Posner 360x1000
Maria Popova 360x1000
1trap
11632
2trap
2falsewitness
Mark V Holmes 360x1000
14albion
Margaret Fuller 360x1000
1lafayette
storyparadox2
Anthony McCann2 360x1000
Maurice B Foley 360x1000
399
299
Samuel Johnson 360x1000
1defense
3confidencegames
Tad Friend 360x1000
Stormy Daniels 360x1000
10abion
6confidencegames
7confidencegames
Margaret Fuller1 360x1000
Thomas Piketty2 360x1000
Margaret Fuller5 360x1000
Learned Hand 360x1000
1lauber
13albion
3paradise
1jesusandjohnwayne
199
2confidencegames
7albion
8albion'
1gucci
1lookingforthegoodwar
2lookingforthegoodwar
9albion
2lafayette
1albion
1empireofpain
Susie King Taylor2 360x1000
2albion
James Gould Cozzens 360x1000
3defense
6albion
1madoff
1confidencegames
lifeinmiddlemarch2
Betty Friedan 360x1000
1transcendentalist
2paradise
Margaret Fuller 2 360x1000
LillianFaderman
5albion
499
2gucci
Lafayette and Jefferson 360x1000
AlexRosenberg
Thomas Piketty1 360x1000
2jesusandjohnwayne
Mary Ann Evans 360x1000
3albion
Margaret Fuller4 360x1000
5confidencegames
Susie King Taylor 360x1000
3theleastofus
Gilgamesh 360x1000
Thomas Piketty3 360x1000
Margaret Fuller2 360x1000
2defense
Spottswood William Robinson 360x1000
1theleasofus
Anthony McCann1 360x1000
1paradide
12albion
Storyparadox1
2theleastofus
11albion
George M Cohan and Lerarned Hand 360x1000
2transadentilist
George F Wil...360x1000
lifeinmiddlemarch1
4albion
Margaret Fuller3 360x1000
Edmund Burke 360x1000
4confidencegames
storyparadox3
Brendan Beehan 360x1000
Adam Gopnik 360x1000
1falsewitness

So let’s see if we can finally wrap up July.

Innocent Spouse

Trisha Anderson TCS 2026-6 is an innocent spouse case which makes you wonder what the IRS was thinking. As a summary opinion, it is not a legal precedent, but that wouldn’t stop me from throwing it a revenue agent during an audit. She and her former spouse Quentin separated in 2016 after selling their house. They filed jointly for 2016 agreeing that Quentin was responsible for the balance. Like sensible people they filed separately for 2017 and 2018.

Quentin had been the earner and managed the finances.  Quentin had an MBA and worked as an accountant.  Tisha, a psych major, managed the home and the children. The paperwork from the house closing indicated $108,407.83 in interest, which Quentin claimed as a deduction and the IRS disallowed. There is no indication as to whether Quentin argued with the IRS.

The Tax Court ruled, in effect, that the issue with the interest deduction was Quentin’s problem and granted Trisha innocent spouse relief.

The thing that struck me as really odd about this case is trying to figure out what the point was given this statement:

“Petitioner is currently unemployed without any monthly income. She is currently supported by a friend to whom she is neither engaged nor married. Because of her current health problems, petitioner is unable to work. She has a vehicle but does not currently have any personal bank accounts, investments, or other assets.”

Ed Zollars did a deep dive on Current Federal Tax Developments with an important takeaway.

“Anderson v. Commissioner reinforces a powerful shield for requesting spouses when a legitimate deduction is disallowed solely due to the nonrequesting spouse’s failure to cooperate and substantiate the expense during an audit. If the expense was actually paid, the requesting spouse cannot be deemed to have “actual knowledge” of the facts that made the deduction unallowable. For practitioners, the case underscores the necessity of establishing clear documentation regarding who held liability for the underlying debt and the actual payment flow when performing an allocation analysis under I.R.C. § 6015(d).”

Lew Taishoff has Paid Off. He closes with:

“A Taishoff “Good Job, First Class” to Trisha’s trusty attorneys, Chris and Rich, doubtless pro bono.”

Ministry Alter Ego With A Touch Of Sovereign Citizen – How Can I Resist?

USA v John Kistler et al delivered by the US District Court for the Middle District of Pennsylvania had competing motions to quash and a motion for a default judgement for USA against John M. Kistler, Blue Mountain Ministry Inc., Michael J Garvey and Kristi Kwiatkowski. And then there is the shutdown Catholic parish school and the convent. I decided to give this story the full treatment, but I am waiting for some further court action. Stay tuned.

Social Security Can Be Taxable – I Mean Who Knew?

Charmaine Gray received $65,085 in salary and $26,268 in Social Security in 2022.  She thought she should not pay tax on any of the Social Security.  IRS said she was wrong. Judge Jeffrey Arbeit of the Tax Court agreed with the IRS.

Another Round In The Dean Steeves Drama

Regular readers will be aware of my almost fondness for alternative tax thinkers.  Dean Steeves is about the highest stakes practitioner that I have encountered. Back in March I posted Inside Dean Steeves’ Long IRS Battle: $16M Assessments, a ‘Mandatory Tax-Excepted’ Ministry, and Why the Merits Never Get Reached. In July there was a report and recommendation which recommended that Steeves’s petition to quash a summons be denied but that his request to amend the summons be approved. The order was issued in August by Judge Cynthia Bashant of the US District Court for the Southern District of California.

I’ve been keeping in touch with Mr. Steeves. He has promised to share with me an article explaining why the federal income tax is unconstitutional. He inspired me to take another look at Brushaber and I realized that IRS and even some courts have been misstating the Brushaber holding for quite a while.  I had to follow that up with a piece assuring people that I still thought the income tax was constitutional.

John Caleb Wright – Not Just Me That Hates Crypto

John Caleb Wright on a three-count superseding indictment is charged with willfully attempting to evade and defeat payment of over $1 million in tax penalties and interest for 2018.  His big faux pas was moving crypto out of the Kraken exchange where it could be seized after IRS told him they were coming after him in 2021. He put the crypto back into Kraken and withdrew it again a couple of months later. That’s the first count.
The second count was just not paying his balance due for 2020.  That was just $21,616.  The third count was willfully not paying a balance due of $127,977 for 2021. It is a little disturbing, but thanks to Code Section 7203, simply not paying can be a crime.
Wright was seeking to have the third count severed. I’m thinking the strategy might have been to somehow play the sentencing guidelines, which with tax crimes are driven by the tax loss.  Regardless the court didn’t buy it.
“The prosecution of John Caleb Wright represents more than an isolated case of alleged tax evasion—it exemplifies a disturbing pattern of government persecution targeting the very individuals who pioneered the cryptocurrency revolution. This systematic campaign against early adopters reveals a coordinated effort to criminalize the foundational activities that built the digital asset ecosystem we know today.”
I actually think that they may have a point.  Here is a long twitter post by Caleb explaining his position.

More Reckoning After A Prison Sentence

Lawrence J Semenza, who had been US Attorney for Nevada from 1975 to 1977, pleaded guilty to failing to file individual and corporate income tax returns for 2006 to 2010 in 2014.  His tax troubles were not over after release. There was a problem about property that he had transferred to his stepson Phillippe Schaad without having cleaned up his criminal restitution and tax assessments.  It is a rather long and complicated holding but the bottom line was that the government got a good chunk when the property was sold. That was in June, and it somehow passed me by.  In July, there was an adjusted reckoning filed. It looks like he still owes quite a bit.

Another Month Put To Bed

So now you have what struck me from July just in time for me to start going through August.

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