In Uncategorized on 09/20/2017 at 17:04

And it doesn’t matter if your boss paid directly or indirectly, as long as you didn’t. That’s the reason why John Curran & Carey Curran, filed 9/20/17, Docket No. 7500-16L, filed 9/20/17, are singing the blues after this designated hitter.

John’s disability insurance payments came from Prudential, via his boss Jet Blue, but John never got W-2s showing the premiums listed as salary, wages, compensation, or anything. Because they weren’t. Jet Blue paid Prudential, and Prudential paid John.

John claims his disability was tax-exempt, except Section 104(a)(3) says they’re not, unless the premiums were compensation to John (and taxable as such), or that John paid them his own self with after-tax dollars. In fact, an AO so advised John even after he failed to petition the SNOD that hit him.

But the Pru was generous to a fault, and paid John more than he was entitled to for the year at issue. John paid Pru back the next year, and Pru gave John a claim-of-right letter, saying he could deduct the overpayment that year.

See, says John, it’s exempt.

Negatory, says The Judge With A Heart, STJ Armen. If you got taxable income under a claim that you were entitled to it, but it turns out you weren’t and have to give it back, you can deduct the giveback, but only if you paid tax on it previously. John never did.

So John is out, right? He blew the 90-days, and Appeals tossed him.

Not so fast, says STJ Armen, proving once again he has a heart.

“Petitioners requested an installment agreement as a collection alternative on their Form 12153. In response, the settlement officer requested financial information. At this time the record is unclear as to what financial information petitioners submitted to the settlement officer although petitioners contend that they submitted all of the financial information that had been requested of them. In sum, viewing the facts in a light most favorable to petitioners as the Court is obliged to do given the nature of the pending motion, the Court concludes that there is a genuine issue or dispute of material fact.” Order, at p. 8.

So did Appeals abuse its discretion by tossing John without considering all the documents they asked for and that he gave them?

Summary J on liability for tax and chops, but maybe John gets the IA he wanted.

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