Whether a taxpayer or an S corporation the taxpayer used to own, but which was now owned by an ESOP, actually made charitable contributions was one of the matters at issue in the case of Zavadil v. Commissioner, TC Memo 2013-222. The Tax Court’s decision limiting his deduction to the amounts he had actually repaid the corporation (not ones where his repayment was immediately paid for by a new corporate advance) for deductions made in the year in question was sustained on appeal by the Eighth Circuit (Docket No. 14-1053, 2015 TNT 137-14)

The IRS has issued proposed regulations (REG-115452-14) that will establish a series of tests to determine if an arrangement will be treated as a disguised payment for services under IRC §707(a)(2)(A).  The key test, based on the section’s legislative history, will be whether the payment is subject to significant entrepreneurial risk.

An IRS full unilateral concession of the case is not a settlement, per the Ninth Circuit, and thus the taxpayer was prevailing party for purposes of Knudsen v. Commissioner, No. 13-720077, 2015 TNT 136-13 reversing the Tax Court’s contrary holding in an earlier ruling in the same case (TC Memo 2013-87).

The taxpayer in the case of Padilla v. Commissioner, TC Summary Opinion 2015-38 did not fall into the traps that have caused other taxpayers to lose their cases claiming to be a real estate professional and deducting losses arising from their rentals.  But he found himself trapped by a different problem.

One of the “rules of thumb” for tax planning is that “smell counts” in any tax situation.  If the result just “looks bad” there’s a good chance that the courts will simply not allow it to stand.  This is doubly true with regard to §501(c)(3) charitable organizations that, while technically operated under principles that serve the public good, in reality always seem to benefit a very distinct, not so public, private group—like a single family.

That turned out to be the problem in the case of the Educational Assistance Foundation for the Descendants of Hungarian Immigrants in the Performing Arts, Inc., v. United States, 2015 TNT 128-15.

In the case of Levi v. Commissioner, TC Memo 2015-118 the question before the court was, effectively, whether the Levis had filed a valid return.  The issue arose because the return had been signed by an attorney retained by the couple to prepare their tax return.

Notice 2015-46 provides guidance to charitable hospitals on how to comply with the requirement in Reg. §1.501(r)‑4(b)(1)(iii)(F) that a hospital must include a provider list in its financial assistance policy (FAP).   The list must include all providers, other than the hospital itself, that deliver care in the facility and specify whether the individual providers are or are not covered by the FAP.

In the case of Greenberger, et al v. Commissioner, 115 AFTR2d ¶2015-844, US DC ND Ohio, No. 1:14-cv-01041 the issue is not whether the taxpayers had incurred a deductible loss—the IRS agreed that was so.  Rather the question was the nature of the loss.

Specifically the issue was whether the loss represented a theft loss (deductible as an ordinary loss under IRC §165 or was rather a capital loss that could only offset other capital gains or be slowly absorbed against $3,000 of other income each year.