Judge Emin (“Eminent) Toro has no present but only sympathy and bad news off the bench for Terry D. Predmore & Theresa A. Predmore, Docket No. 9391-25S, filed 9/25/26. They owe Section 6662(a) accuracy chops with a five-and-ten on the deficiency.

Fire destroyed a substantial portion of the Predmores’ domicile only two days before Christmas in year at issue. They filed their return for year at issue as Terry “always filed his own taxes and in the past did so by obtaining the Internal Revenue Service’s forms and instructions at public libraries.” Transcript, at p. 5. He claimed $315K as a Section 165 casualty loss.

Except.

The year at issue was post-TCJA. Terry’s claim he was going to use part of the house for a dogbreeding business fails because the business hadn’t started, and he was only going to use part of the house anyway. Personal Section 165s are out.

And his insurance company had paid loss of use and personal property cover. Terry claimed he wasn’t sure that the insurance would cover the house itself.

Except.

“Six weeks before they filed their return, the Predmores signed a contract indicating that insurance would be paying for the reconstruction of their home. About a month before they filed their return, the insurance company told the Predmores that the calculations for their dwelling coverage were complete and that actual cash value computations would be completed in about a week. Statements show that the insurance company paid the Predmores $258,332 either 17 days before or 4 days after they filed their return. Three days after they filed their return, the insurance company sent the Predmores a letter confirming that the company had paid out $333,689 on their claim to date.” Transcript, at p. 18.

And yes, ultrasophisicated readers, before you cry out “Section 165(h)(5)),” there were two (count ’em, two) Federally declared disasters in the Predmore’s home State (IN), but they were COVID-related.

While the Predmores may have been unsure about insurance (I always am before the check clears and the SOL runs out), Judge Eminent Toro finds that sincere, “we do not find that belief reasonable in light of all of the circumstances here.” Transcript, at p. 19.

Chop appropriately Boss Hossed.