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IRS Trying To Make It Harder To Qualify As Real Estate Pro

IRS Trying To Make It Harder To Qualify As Real Estate Pro

The stakes were pretty high in this case, just over $130,000.  Rather than risk Tax Court the Stanleys went the route of paying the tax and suing for refund.  It may well have been calculation of the odds, since taxpayers have not done that well in Tax Court in 469 cases, although usually their facts are a lot worse.  That this is a district court decision lessens its value as precedent.  Adam Chodorow told me that the Tax Court judges consider themselves the experts. They are bound to follow appellate decisions, but only in the circuits where they are decided.

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Hobby Lobby Owners Win First Round In $3 Million Tax Refund Case

Hobby Lobby Owners Win First Round In $3 Million Tax Refund Case

The Trust filed its 2004 return on October 15, 2005 claiming a charitable contribution of $20,526,383. On October 15, 2008 the trust filed an amended return upping the charitable deduction to $29,654,233 and claiming a refund of $3,194,748. That is a pretty slick move, although you have to have plenty of cash in order to use it. In the event the IRS finds other issues on the return besides the higher charity, they can only be used to offset the refund. As long as it is not being frivolous the Trust has no penalty exposure and the interest clock is running in the taxpayer’s favor.

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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.