As rare as a double eagle on a par 4, Andrew Gross & Angela Gross, Docket No. 2467-25S, filed 9/25/26, survive the Section 274 enhanced substantiation motor vehicle requirements, with Angela’s handwritten logs, her automobiles’ service records, and her MapQuest screenshots saving the 60,500 driven miles she reported.

Angela was a drive-by specialist. Don’t worry, no person or animal was harmed in the making of this blogpost.

Judge Ronald L. (“Ingenuity”) Buch tells the story. “Angela Gross conducted property inspections as a subcontractor for several different companies, mostly banks and insurance companies. The companies for which Ms. Gross was a subcontractor would provide a list of properties for her to visit on any given day. She would then drive to each of the properties on the list and check on them. For example, if a bank-owned property was supposed to be vacant, her drive-by inspection might be to simply verify that the property looks vacant. In contrast, if a bank made a loan on a property that was supposed to be used as a residence, Ms. Gross might need to confirm that it was, in fact, occupied. These cursory inspections didn’t take much time, but they involved a lot of driving.” Transcript, at pp. 3-4.

Angela’s handwritten log listed date, street address, miles driven, sometimes type of inspection. Angelka used the applicable Federal mileage rate to figure her car and truck expenses for her Schedule C. IRS conceded 30K of Angela’s claimed 60.5K. Angela conceded $7K of travel expenses.

Angela put in the log at trial, and the service records for her five-year-old Subaru that she traded in in year at issue for a three-year-old Ford, whose records she also tendered. The Suby showed 20K miles in four months, and the Ford showed $43K for that year, both on the odometers.

The MapQuest readouts varied from Angela’s claimed mileage, but not by a lot. Actual over-the-road involves shortcuts and detours, finding refueling stops or places for lunch breaks.

IRS says the logs don’t have the odometer reading, the addresses do not contain a city or state, and the log does not identify the business purpose.

Judge Ingenuity Buch: “… taxpayers may satisfy the substantiation requirements by providing a contemporaneous log along with other corroborating evidence, including the taxpayer’s own statements. This is what Ms. Gross has done. We have her logs in evidence. In addition, she testified as to the purpose of those travels, how those logs were created, and the meanings of her notations. The logs Ms. Gross provided were written contemporaneously and documented the total miles she drove each day. She supplemented them with her testimony.” Transcript, at p. 10.

Though her return showed a loss, if only accounting for fuel, she made money. And she testified she found the work profitable. Taishoff says I find it hard to believe someone drove 60K miles per year in a beat-up five-year-old Subaru with 215K miles on the clock, and a three-year-old Ford Focus starting with 43K on the clock for another 43K miles, except for money.

Anyway, Angela’s logs, maintenance records, and testimony carry the day. As for chops, let’s see what the Rule 155 beancount shows after concessions are taken into account.

It’s off-the-bench day in The Glasshouse in the City of the Fortified Ballroom, but that doesn’t mean the Judges aren’t working. Judge Emin (“Eminent”) Toro deconstructs Section 6211(b)(2) and accompanying Regs in Brendan Bettis, Docket No. 6560-25S, filed 9/25/26. The Rebate Debate goes on apace.

BB had his identity stolen by an unlicensed, unregistered preparer, to whom he entrusted all his PII and data for year at issue. Said preparer generated a phony return, which BB never saw, signed, nor for which he ever signed Form 8879 e-file authorization. Preparer then stole the refund the fictional “return” generated.

BB and IRS agree his real tax is $1263. But IRS claims he owes $23K, being the phony fuel tax credit the phony was allowed for the equally phony landscaping business BB never owned, operated, or ever heard of. The phony got the refund, less what BB owed for AL unpaid child support.

In this deficiency case, IRS claims Section 6211(b)(2) includes “rebates” and the fuel tax credit is a “rebate.” This is the famous “Deficiency = correct tax – (tax on return + prior assessments – rebates) = correct tax – tax on return – prior assessments + rebates,” to support Tax Court Section 6213 jurisdiction

Except.

“For a credit or refund to come within the scope of the term ‘rebate’ under section 6211(b)(2) on the facts before us, the statutory text requires the Commissioner to determine that the correct tax under the Code was less than the ‘amount specified in’ section 6211(a)(1). As relevant for our purposes, section 6211(a)(1) in turn requires consideration of ‘the amount shown as the tax by the taxpayer upon his return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon.’ See also Treas. Reg. § 301.6211-1(f) (‘As used in section 6211, the term ‘rebate’ means so much of an abatement, credit, refund, or other repayment as is made on the ground that the income tax imposed by subtitle A . . . is less than the excess of (1) the amount shown as the tax by the taxpayer upon the return increased by the amount previously assessed (or collected without assessment) as a deficiency over (2) the amount of rebates previously made.’ (emphasis added)).” Transcript, at p. 12.

Section 6211 requires IRS to compare the actual tax due to the tax shown on the taxpayer’s return. But BB never filed a return; the return filed here was a phony.

Judge Eminent Toro cuts to the cliché. “Whatever else the Commissioner may have done when he applied the credits to Mr. Bettis’s [year at issue] liabilities and sent money to the State of Alabama, he did not make the determination required by section 6211(b)(2).” Transcript, at p. 14.

The Regs don’t help.

“The regulations do not change this conclusion. Treasury Regulation § 301.6211-1(a) provides that ‘If no return is made, or if the return . . . does not show any tax, for the purpose of the definition ‘the amount shown as the tax by the taxpayer upon his return’ shall be considered as zero.’ But the regulations cannot save the Commissioner’s position.

“As we have discussed, on the fact pattern before us, a rebate exists only if the Commissioner compares the correct tax due under the Code with that reported by the taxpayer on his return and issues a repayment ‘on the ground that’ the former is less than the latter. See I.R.C. § 6211(b)(2). If no return is filed and the tax shown on the return is simply assumed to be zero for purposes of the deficiency computation (as the regulation contemplates), the Commissioner has no ground on which to make that determination.” Transcript, at pp. 14-15.

Section 6211(b)(4) is no better for IRS. The refundable fuel tax credit only gets included if shown on BB’s return. But BB filed no return.

Reg. Section 301.6211-1(f) is scraping the barrel, because it requires a return filed by the taxpayer to support IRS’ determination, and here there was none.

No Tax Court jurisdiction, because no deficiency.

Of course, IRS (and the rest of us taxpayers) are not without a remedy, but Judge Eminent Toro is not teaching a law school class. While a Section 6213 deficiency case fails for want of jurisdiction (parties stipulated actual tax due), 7 Cir suggested unjust enrichment in a civil recovery suit. See USA v.  Frontone, 383 F.3d 656 (7 Cir, 2004), at pp. 660-661 (citations omitted). Opinion by Judge Posner (whom else?).

BB was pro se, and did as good a job as many a practitioner.

Judge Emin (“Eminent) Toro has no present but only sympathy and bad news off the bench for Terry D. Predmore & Theresa A. Predmore, Docket No. 9391-25S, filed 9/25/26. They owe Section 6662(a) accuracy chops with a five-and-ten on the deficiency.

Fire destroyed a substantial portion of the Predmores’ domicile only two days before Christmas in year at issue. They filed their return for year at issue as Terry “always filed his own taxes and in the past did so by obtaining the Internal Revenue Service’s forms and instructions at public libraries.” Transcript, at p. 5. He claimed $315K as a Section 165 casualty loss.

Except.

The year at issue was post-TCJA. Terry’s claim he was going to use part of the house for a dogbreeding business fails because the business hadn’t started, and he was only going to use part of the house anyway. Personal Section 165s are out.

And his insurance company had paid loss of use and personal property cover. Terry claimed he wasn’t sure that the insurance would cover the house itself.

Except.

“Six weeks before they filed their return, the Predmores signed a contract indicating that insurance would be paying for the reconstruction of their home. About a month before they filed their return, the insurance company told the Predmores that the calculations for their dwelling coverage were complete and that actual cash value computations would be completed in about a week. Statements show that the insurance company paid the Predmores $258,332 either 17 days before or 4 days after they filed their return. Three days after they filed their return, the insurance company sent the Predmores a letter confirming that the company had paid out $333,689 on their claim to date.” Transcript, at p. 18.

And yes, ultrasophisicated readers, before you cry out “Section 165(h)(5)),” there were two (count ’em, two) Federally declared disasters in the Predmore’s home State (IN), but they were COVID-related.

While the Predmores may have been unsure about insurance (I always am before the check clears and the SOL runs out), Judge Eminent Toro finds that sincere, “we do not find that belief reasonable in light of all of the circumstances here.” Transcript, at p. 19.

Chop appropriately Boss Hossed.