Attorney-at-Law

ASK

In Uncategorized on 04/21/2017 at 15:44

I posted a Very Much Off-Topic musical rant today, thinking Tax Court would be dull. But Judge Goeke, although unaware of my perceived plight, has an off-the-bencher that reminds me of a recent exchange between two of my nearest and dearest.

“K: I’m not going to ask you the question, because I know what you’re going to say.

“Me: Really? What am I going to say?

“K: No.”

No, “Me” is not I.  I suggested asking the question anyway, and when the expected answer was received, negotiate. I was rebuked.

Well, here’s the story of Mark Glenn Hexum, Docket No. 13994-16, filed 4/21/17. Mark Glenn didn’t ask his trusty preparer, and it cost him.

Mark Glenn was tussling with the IRS over some amortization he paid on the mortgage encumbering the marital residence, after divorce decree but before said residence was sold and the proceeds split between Mark Glenn and his loved-once. Mark Glenn claimed he should get credit therefor, dollar for dollar, but that didn’t play in Peoria, and the Circuit Court for Peoria County, IL just split the proceeds.

Mark took the amortization as an alimony payment. IRS said “No,” and Judge Goeke agrees. It’s the old Section 71(b)(1)(D) liability to make any such payment for any period after the death of the payee spouse issue, and Mark Glenn agrees that if loved-once had left this vale of tears before the sale closed, he’s still on the hook for the net proceeds split.

So game over on the deficiency.

But how about the 20% chop?

“In the present case the Petitioner did not ask his return preparer whether, in fact, the [amortization] should be treated as deductible. We believe a tax professional would have instructed him that he should make an inquiry whether the payment in question would have been a continuing obligation even upon the death of his spouse, in which case it would not have been deductible as alimony expense. The fact that Petitioner did not make this inquiry we believe makes a reasonable cause defense inapplicable to him under section 6662(a) and section 6664(c)(1). Therefore, we believe that the statutory additions to tax is applicable and we sustain the Government’s determine of the addition to tax.” Order, transcript, a pp. 10-11.

Note to my nearest and dearest: Ask.

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  1. For the record, K did indeed move for the immediate release and delivery to her possession of dessert, but her Mother (the “Me” hereinabove referenced) denied the motion and dismissed the case. K attempted to negotiate with Me while simultaneously appealing to Daddy. Sadly for her, K neither recognized nor fully appreciated the extent to which State Supreme and Appeals are in cahoots. Daddy refused to hear the appeal, admonishing K to speak to her mother. At this point, K abandoned the case and turned her attention to the toy with which her younger sister was engaged.

    Like

  2. Much love and many kisses to my dearest ladies.

    Liked by 1 person

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