In Uncategorized on 06/27/2019 at 16:34

No, this is not Cohan revisited. George M.’s T&E deductions have gotten more mileage than “Give My Regards to Broadway.” This is the inexactitude of Kelvin R Crews, 2019 T. C. Memo. 80, filed 6/27/19.

Kelvin was a chicken farmer, and his wife was a registered nurse. To supplement the chickenfeed he got from the farm, he started a couple businesses (hi, Judge Holmes), but put his wife, and later his daughter, in charge of everything. Then the agrigiant for whom Kelvin worked fired him.

IRS hits Kelvin with TFRPs for both of the businesses. Kelvin filed Form 843 for a refund. And that’s where the trouble started. IRS was prepared to let Kelvin off, but he thought for both businesses. The deficient quarters covered the same times for both businesses.

But IRS was never clear that they meant the TFRPs for Business One, but not Business Two. And enough different IRS employees were involved so nobody had enough of a handle to say definitively.

Kelvin called in counsel, but they couldn’t unscramble the frittata to Judge Morrison’s satisfaction. And Kelvin has the burden of proof.

The real problem is that the letter from IRS on which Kelvin relies specifically mentions Business One, but not Business Two. And worse, the stipulation of facts said that all Kelvin was off the hook for was Business One. The stip didn’t mention Business Two.

After all the tohubohu, whatever the standard and scope of review, Kelvin loses.

Read the opinion. With some headache medicine close at hand.

Yes, Tax Court bears heavily against the taxpayer…whose inexactitude is of his own making.


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