In Uncategorized on 01/27/2021 at 15:27

Judge Travis A. (“Tag”) Greaves tags SO D (name omitted) for overlooking some non-cash income that Isaac Moore, Docket No. 8759-19L, filed 1/27/21, claims prevents him from coming up with the moola SO D claims he has to pay off his $386K tax liability.

Isaac had a couple years’ returns (hi, Judge Holmes) showing seven-figure income. So SO D says Isaac’s submissions at the CDP were less than transparent. Moreover, SO D reckoned Isaac might have been dissipating assets.

Isaac says The Phantom of the Opera is the Opera.

He sings thus: “… his unusually high AGI in 2016 and 2017 resulted from transactions that did not produce substantial cash he could use to pay his 2016 liability. Petitioner explains that his 2016 AGI of $1,497,552 includes a $1,642,927 gain from the sale of his medical office building in which he had no equity, and that he received only about $13,000 in cash from the sale. Of the $1,293,878 AGI reported on the 2017 return, petitioner claims $1,137,843 reflects his default on prior year borrowing from the principal of his annuities. He says this was cancellation of indebtedness income from which he received no cash in 2017.” Order, at p. 3.

Plausible, at least enough to be worth investigating, says Judge Tag Greaves, and SO D didn’t.

Phantom income isn’t cash. Taishoff says maybe Isaac paid too much for his office building, or it went in a forced sale. As for his previous loans, they weren’t income until he couldn’t or wouldn’t pay it back. And what he did with the loan proceeds is also a question for the dissipation analysis.

Howbeit, SO D didn’t consider phantom income might explain some or all of Isaac’s predicament.

No summary J for IRS.


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