In Uncategorized on 03/04/2019 at 16:14

Marc L. Mancini, 2019 T. C. Memo. 16, filed 3/4/19, may have taken a drug that lessened his Parkinson’s disease symptoms, but almost bankrupted him with the compulsive gambling it caused. The cause was Pramipexole, s/a/k/a Mirapex, a dopamine agonist. This prescription medicament supposedly stimulates the part of the brain Parkinson’s suppresses, but also causes impulse control disorders, so some people taking it can’t stop doing crazy stuff.

If I sounds like I know what I’m talking about, don’t be fooled; I cribbed all this from Judge Mark V Holmes’ trudge through the medical literature and Mark’s witness’ expert testimony. Judge Holmes finds the latter slides under Daubert (evidence geeks know what that means, but for human beings it means the minimum necessary to get experts into evidence) for “framework” evidence (what experts in the field generally agree on). But Marc’s expert flunks on “diagnostic,” as the expert didn’t himself treat Marc, so all the expert knows about Marc specifically is hearsay.

I’ve explored the compulsive drug-induced gambling from the Section 72(t) standpoint in my blogpost “Heal Thyself,” 11/21/18. And as I said then, “I don’t know if any of my readers have witnessed the nastier prescription drug side effects in anyone they know; I have. It’s no joke. Some of that stuff can be deadly.” Fortunately the victim survived and is doing very well.

Unfortunately, the drug-induced gambling spree casualty deduction doesn’t work for Marc. Marc wants a casualty loss for the millions he claimed he gambled away. But Judge Holmes says the caselaw requires casualty losses involve damage to property. Marc’s money wasn’t damaged, and anyway, Publication 547’s statement about losses from bank insolvencies doesn’t bind IRS.

I want to give Marc’s attorney a Taishoff “Good Try, Second Class” even though Judge Holmes isn’t buying.

“Sixty-odd years of caselaw notwithstanding, Mancini argues that physical damage can’t be a prerequisite of a casualty-loss deduction because, in general, the Code doesn’t limit the definition of “property” to just physical assets.  Mancini doesn’t cite any cases that support this argument, and, as we’ve seen, the caselaw on casualty losses says the exact opposite.  But he does cite something interesting: an IRS Publication that says a taxpayer can deduct as a casualty the ‘loss on deposits [that occurs] when a bank, credit union, or other financial institution becomes insolvent or bankrupt.’  IRS Pub. 547, Casualties, Disasters, and Thefts, at 4 (2017).  This would suggest that physical damage to the taxpayer’s property might not be required for a casualty loss.

“Fortunately for the Commissioner, his own publications aren’t the law.” 2019 T. C. Memo. 16, at p. 24 (Citations omitted).

Marc’s numbers don’t add up, even though Judge Holmes prepares his usual tables and compares what documents Marc has with his testimony.

It looks like Marc is up for chops, but IRS forgot the Section 6751(b) Boss Hoss sign-off, so no penalties.

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