Taxing Lessons Case Summaries

Case — Charitable Contribution Deduction

THE QUESTION Can an attorney take a tax deduction for case materials donated to a charity? THE DISPUTE Taxpayer Says:  Case files relating to the Oklahoma City bombing that were donated to the University of Texas are eligible for a charitable contribution deduction. Internal Revenue Service Says:  The case files did not belong to the taxpayer (an attorney), making the gift invalid and the deduction not…

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Taxing Lessons Case Summaries

Case — Deduction of Expenses Related to Illegal Activity

THE QUESTION When a business is engaged in two separate activities, do all ordinary and necessary business expenses of both become nondeductible because one activity involves an illegal activity (trafficking in a controlled substance)? THE DISPUTE Taxpayer Says:  All expenses related to separate activities of providing caregiving and medical marijuana (under the California Compassionate Use Act of 1996) are fully deductible.…

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Taxing Lessons Case Summaries

Case — Innocent Spouse Relief

THE QUESTION At what point does a spouse’s knowledge of embezzlement income make innocent spouse relief unavailable? THE DISPUTE Taxpayer Says:  Husband should not have to pay tax on wife’s embezzlement income because he did not know of it at the time the original joint tax return was filed. Internal Revenue Service Says: Innocent spouse relief does not apply because husband knew…

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