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Tax Court Allows Multimillion Multiyear Arabian Horse Losses

Tax Court Allows Multimillion Multiyear Arabian Horse Losses

If you told that story to some CPAs who had been in the business a long time, you would get two different reactions.  One would be a kind of “There but for the grace of God, go I” and another would be “Well that would never happen with a transaction that my firm was involved with.  We have procedures and policies to avoid that type of thing”.  The latter group is divided into two classes – people who are deluding themselves and liars. The humility of the “grace of God” crowd actually makes it less likely that they’ll screw up that way because they will have a couple of paranoid partners who worry about stuff like that happening.

At any rate, the Metzes “reliance on professional” defense did not work, since they should have noticed that a gain of $2 million or so had slipped through the cracks and they were hit with the accuracy penalty.  Have to wonder whether that will end up coming out of somebody’s malpractice coverage

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IRS Agent Causes Grief For Taxpayer’s Spouse By Being Helpful

IRS Agent Causes Grief For Taxpayer’s Spouse By Being Helpful

Generally, pursuant to section 6011(a) a taxpayer obligated to file a Federal tax return must conform to the forms and regulations prescribed by respondent. Even though signed by petitioner and Mr. Rodriguez, the consent is hardly a form described in section 6011 or section 1.6011-1, Income Tax Regs. Furthermore, a Form 4549 is not signed by the taxpayer under penalties of perjury, one of the critical requirements for a document to be treated as a Federal income tax return.  Petitioner’s argument that the consent should be treated as a joint return is rejected.

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