Stewart Weston, T. C. Memo. 2025-16, filed 2/12/25, claims he was robbed by his business partner. It’s a tangled fact pattern, so I’ll leave it as a characterization of investor vs. operator. And if you’re going to claim a theft loss, file a police report, especially when your lawyer suggests you do so.

But I’ll focus on the dispute about whether the deficiency resulting from Stewart’s disallowed theft loss was properly set forth in the SFR which IRS prepared.

Judge Elizabeth A.(“Tex”) Copeland has to provide the recipe for an SFR.

“To constitute an SFR, the document prepared by the IRS must be subscribed, it must contain sufficient information from which to compute the taxpayer’s tax liability, and it must purport to be a ‘return.’  The combination of Form 13496, Form 4549–A, and Form 886–A, as included in each SFR prepared for the Westons, suffices to constitute a valid SFR under section 6020(b). There is no requirement that an SFR include a Form 1040 executed on behalf of the taxpayer.” T. C. Memo. 2025-16, at p. 17. (Citations omitted).