§6214 — Determinations by Tax Court

The Adeyemos timely filed a petition under section 6213(a) for redetermination ofthe deficiencies.2 We havejurisdiction under section 6214. After concessions, the following issues for decision remain: (1) Is the Adeyemos' rental real-estate business a passive activity? We hold that the business is a passive activity. (2) Does the allowance provided by section 469(i) apply to the Adeyemos' rental real-estate business? We hold that the allowance does not apply.

s, and because it does not “refer to the 90-day deadline or to section 6213(a)”, then the deadline of section 6213(a) is not jurisdictional because “[t]he remaining sentences in section 6213(a) do nothing to ‘connect’ this 90-day filing period to the jurisdictional grant contained in section 6214.” We do not agree.

In this opinion we hold: 1.

We hold that it did.

We havejurisdiction, pursuant to section 6214, to redetermine the deficiency and the penalty determined in the notice ofdeficiency.

(We hold that the expenses were in the nature ofloans.) (2) Was the IRS's determination that the advanced litigation expenses should be treated as loans a change in method ofaccounting, and therefore, was a section 481 adjustment proper?

We hold that it did.

We hold that he is not entitled to 2All section references are to the Internal Revenue Code as in effect for the 2007 tax year.

We havejurisdiction, pursuant to section 6214, to redetermine the deficiency and the penalty determined in the notice ofdeficiency.

SERVED Jul 12 2012 - 2 - Respondent, in his answer and pursuant to section 6214·(a),1 affirmativelyalleged that petitioners are liable for a section 6662(a) accuracy-relatedpenalty of$507.

We hold: (1) During 2008, Alderman received $39,735 ofnonemployee compensation and $58 ofinterest that he failed to report on his tax return, (2) Alderman is liable for the accuracy-relatedpenalty, and (3) Alderman is liable for a $4,000 penalty for maintaining frivolous arguments in this case.

We havejurisdiction, pursuant to section 6214, to redetermine the deficiency and the penalty determined in the notice ofdeficiency.

We havejurisdiction pursuant to section 6214 to redetermine he deficiency and penalty determined in the notice ofdeficiency.

We hold that the amount is $6,790.

Status of Trans International and Branch International as S Corporations Pursuant to section 6214 (a) and.Rule 41(a), respondent amended the answer to assert that Trans International and Branch International were S corporations in 1989 and 1990." Proceeding along this line, respondent argues in the main that Mr.

This Court has' jurisdiction in deficiency cases 'to redet rinine the amounts of penalties pursuant to section 6214 (a) ." Thus, - 27(...continued) in full.' New Millennium Trading, L.L.C.

Where a challenge to the existence or amount of a taxpayer's underlying liability is properly before the Court, "we should decide that challenge in the same manner as we would redetermine a deficiency pursuant to section 6214." Washington I, supra at 129 (Halpern, J., concurring).

ng tax liability (i.e., a challenge to the determination of the tax on which the Commissioner based his assessment) is properly before us, the taxpayer is entitled to a hearing de novo and may make a record, and we should decide that challenge in the same manner as we would redetermine a deficiency pursuant to section 6214.

Section 6214 provides us with jurisdiction to determine an increased deficiency if a claim therefor is asserted by the Secretary at or before the hearing.

We have previously construed section 6214 (b) as granting us the authority for "computing, as distinguished from 'determining,' the correct tax liability for a year not in issue when such a computation is necessary to a determination of the correct tax liability for a year that has been placed in issue." Lone Manor Farms, Inc. v. Commissioner, 61 T.C. 436, 440 (1974), affd. without published opinion 510 F.2d 970 (3d Cir. 1975). Petitioners have asked us to do much more than merely compute the co

In order to put this argument into perspective, we turn to section 6214, entitled "Determinations by Tax Court." Section 6214(b) provides: SEC.

In order to put this argument into perspective, we turn to section 6214, entitled “Determinations by Tax Court.” Section 6214(b) provides: SEC.

For purposes of section 6214, deficiencies are defined by section 6211 as follows: SEC.

For purposes of section 6214, deficiencies are defined by section 6211.

ith and rely primarily on the text ofthe statutes establishing it. In the deficiency context, these are sections 6212, 6213, and 6214. However, the opinion ofthe Court mentions sections 6212 and 6213 only in passing and is devoid ofany reference to section 6214. To be sure, we routinely gloss over these statutes in our opinions and instead cite a handful ofwell-trodden cases forjurisdictional principles, so this omission is not particularly surprising. For this case, though, in which the Court i

Thus, even if the Schedule K-1 adjustment had not been in the notice of deficiency, section 6214 allows respondent to ask for an increased deficiency based on the Schedule K-1 adjustment .

Neither section 6214 nor any other statute provides this urt an independent jurisdictional basis to review the Inter al Revenue Service's refusal to issue an ITIN if the refus l is irrelevant to the determination of a deficiency . ecause petitioners accepted respondent's concession of the depenIe cy exemptions and child tax credits, it is unnecessary to re

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it.is well settled that such jurisdiction generally does not extend to s.tatutory interest imposed under section 6601.

While this Court has jurisdiction to determine deficiencies in tax pursuant to section 6214, it is well settled that such jurisdiction generally does not extend to statutory interest imposed under section 6601.

Section 6214 provides that this Court has jurisdiction to redetermine the correct amount of tax deficiencies that are contested in timely petitions filed by taxpayers. Sec. 6214(a); see also sec. 6213. If this Court finds that there is no deficiency and further finds that the taxpayer has made an overpayment of tax for the same taxable year, sectio

Section 6214 provides that this Court has jurisdiction to redetermine the correct amount of tax deficiencies that are contested in timely petitions filed by taxpayers. Sec. 6214(a); see also sec. 6213. If this Court finds that there is no deficiency and further finds that the taxpayer has made an overpayment of tax for the same taxable year, sectio

Section 6214 provides us with jurisdiction to determine an increased deficiency if a claim therefor is asserted by the Secretary at or before the hearing. Respondent has not relied on section 6214, so we assume that respondent does not argue that he asserted a timely, appropriate claim. We conclude that the recovery period applicable to the 1990- 9

Section 6214 provides us with jurisdiction to determine an increased deficiency if a claim therefor is asserted by the Secretary at or before the hearing. Respondent has not relied on section 6214, so we assume that respondent does not argue that he asserted a timely, appropriate claim. We conclude that the recovery period applicable to the 1990- 9

6214 provides, in pertinent part, as follows: SEC. 6214. DETERMINATIONS BY TAX COURT. * * * * * * * (b) Jurisdiction Over Other Years and Quarters.--The Tax Court in redetermining a deficiency of income tax for any taxable year or of gift tax for any calendar year or calendar quarter shall consider such facts with relation to the taxes for oth

We further consider petitioners' reliance on section 6214 to make the argument that they are entitled to currently claim losses that may have occurred in prior years.

§ 6214; see Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 328 (1974). Our determination as to Mr. Barney’s tax liability must be made on the merits of the case and not any previous record developed while his return was under examination with the IRS. See Clapp v. Commissioner, 875 F.2d 1396, 1403 (9th Cir. 1989); Greenberg’s Expres

, e.g., Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 973-74 (9th Cir. 2013). But our jurisdiction in deficiency cases is a form of federal-question jurisdiction, see sec. 6214; Butler v. Commissioner, 65 T.C. 327, 331 (1975), and only a sliver of federal-question jurisdiction at that, see sec. 6330(d)(1); Vigon v. Commissioner, 149 T.C. 97, 104 (2017). So which law do we use--must we follow state law because corp

Moreover, even though section 6214 gives us jurisdiction to "redetermine the correct amount of * * * [a taxpayer's] deficiency", the record does not establish either that the software in question had an ascertainable useful life or the recovery periods applicable to the furniture and fixtures, machinery and equipment, and computer equipment included among the assets of

, e.g., Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 973-74 (9th Cir. 2013). But our jurisdiction in deficiency cases is a form of federal-question jurisdiction, see sec. 6214; Butler v. Commissioner, 65 T.C. 327, 331 (1975), and only a sliver of federal-question jurisdiction at that, see sec. 6330(d)(1); Vigon v. Commissioner, 149 T.C. 97, 104 (2017). So which law do we use--must we follow state law because corp

Moreover, even though section 6214 gives us jurisdiction to "redetermine the correct amount of * * * [a taxpayer's] deficiency", the record does not establish either that the software in question had an ascertainable useful life or the recovery periods applicable to the furniture and fixtures, machinery and equipment, and computer equipment included among the assets of

6214; see also Naftel v.

se. We disagree. In that case the taxpayer and the IRS settled their Tax Court case and that settlement constituted a final determination ofthe taxpayer's liabilities for the years before the Tax Court. Int'l Bldg. Co., 345 U.S. at 505-506; see also sec. 6214; Krueger v. Commissioner, 48 T.C. 824, 828-830 (1967). By contrast, the bankruptcy court in this case resolved the amount ofthe IRS' claim to be allowed in the plan ofreorganization. That does not constitute a final determination of Federal

f$419,233 for the tax year 2006 and $2,806,961 for the tax year 2007. CGGA filed a petition with the Court seeking redetermination ofthe deficiencies, as permitted by section 6213(a).¹ The Court hasjurisdiction to redetermine the deficiencies under section 6214. Before filing the motion and cross-motion for summaryjudgment, the parties executed a stipulation offacts. After concessions by the parties, the only 'Unless otherwise indicated,all "section" references are to the Internal RevenueCode,as

tax under section 6651(a)(1)2 of$83,146, (cid:16)042 addition to tax under section 6651(a)(2) of$44,344, and (cid:16)042 addition to tax under section 6654(a) of$8,840. Evans timely filed a petition under section 6213(a). We havejurisdiction under section 6214. Evans resided in California at the time he filed his petition.3 The parties have since made several concessions. To resolve the remaining issues, the Court makes the following determinations: ¹All dollar amounts have been rounded to the

iency of$4,109 and an addition to tax under section 6651(a)(1)' for failure to timely file of$219.45. Crawfordtimely petitioned this Court under section 6213(a) for redetermination ofthe deficiency and the addition to tax. We havejurisdiction under section 6214. Our resolution ofthe issues for decision is as follows: (1) Crawford is not entitled to deductions claimed on Schedule C, "Profit or Loss From Business", for car-and-truck expenses; (2) Crawford is not entitled to deductions claimed on S

Accordingly, petitioner was not entitled to deductions for tax years 2006 and 2007 for reimbursements related to business expenses paid in prior years.6 Section 6214 empowers the Court to consider net operating loss (NOL) carryforwards and carrybacks in determining the correct amount oftax for the years at issue.

Johnson. SERVED APR - 2 2013 - 2 - [*2] section 6662(a)2 accuracy-related penalty of$2,150.80. Johnson and Smith timely filed a petition under section 6213(a) requesting that we redetermine the deficiency and the penalty. We havejurisdiction under section 6214. After concessions,3 the issues for decision are: (1) Was the notice ofdeficiency itselffatally deficient? (2) Did Johnson and/or Smith receive unreported income, and, ifso, how much? (3) Are Johnson and Smith entitled to deductions for b

According to the amendment to answer, the loss from the rental properties, whether computed as shown on the 2006 return or the amended return, 2Petitioners' claim to additional deductions is not made in a pleading. The issues relating to those additional deductions were tried by consent. See Rule 41(b). is a loss from a passive activity

A 1 2013 - 2 - Penalty [*2] Year Deficiency sec. 6662(a) 2008 $14,220 $2,844.00 2009 11,688 2,237.60 The Bigdelis timelypetitioned this Court under section 6213(a)i for redetermination ofthe deficiencies and the penalties. We havejurisdiction under section 6214. Several issues remain to be decided, while some other issues are purely computational. Our resolution ofthe issues for decision is as follows: (1) The Bigdelis are not entitled to deductions claimed on Schedule C, Profit or Loss From Bus

ay have applied here, ifrespondent [the IRS] had asserted it." See op. Ct. p. 31. However, the record does not disclose whether the IRS has asserted a sec. 6676 penalty. This is not surprising. The present proceeding is a deficiency proceeding under sec. 6214. In a deficiency proceeding the Tax Court does not have authority to redetermine a taxpayer's liability for a sec. 6676 penalty, which the IRS can (continued...) - 62 - penalty was a sufficient (or exclusive) penalty for returns that seek r

tax of$1,630.80, and a section 6654(a) f1flVED MAY 2 9 2013 - 2 - [*2] addition to tax of$618.52.i Jones timely filed a petition under section 6213(a) requesting that we redetermine the deficiency and the additions to tax. We havejurisdiction under section 6214. After concessions,2 the issues for decision are: (1) whether Jones is entitled to deduct $45,011.72 for business expenses reported on Schedule C, Profit or Loss From Business; (2) whether Jones is liable for the section 6651(a)(1) additi

- 8 - [*8] to determine the taxpayer's correct tax liability. Sec. 6001; Hradesky v. Commissioner, 65 T.C. 87, 89-90 (1975), aff'd per curiam, 540 F.2d 821 (5th Cir. 1976); Meneguzzo v. Commissioner, 43 T.C. 824, 831-832 (1965). In general, a trade or business expense, ifproperly substantiated, is allowed as a deduction. See sec. 162. P

have applied here, if respondent [the IRS] had asserted it.” See op. Ct. p; 395. However, the record does not disclose whether the IRS has asserted a sec. 6676 penalty. This is not surprising. The present proceeding is a deficiency proceeding under sec. 6214. In a deficiency proceeding the Tax Court does not háve authority to redetermine a taxpayer’s liability for a sec. 6676 penalty, which the IRS can assess without a notice of deficiency. See sec. 6671(a). It is the earned income credit that m

This Court acquiresjurisdiction under section 6214 where a valid notice of deficiency is issued and a timely petition is filed.

Our jurisdiction generally remains unimpaired until the Court has decided the controversy. Naftel v. Commissioner, 85 T.C. at 529-530. The Commissioner conceding the deficiency does not deprive us ofjurisdiction. LTV Corp. v. Commissioner, 64 T.C. 589 (1975). It rests within our discretion to issue.an opinion on the merits even where the

3Unless otherwise indicated, . section references are to the Internal Revenue. Code in effect for the years at issue, and Rule references are to the Tax Court Rules of Practice and Procedure. - 4 - 1994-97 Federal income tax returns with the filinge status of married filing separately. Petitioners were divorbed at the time of trial

The Brennans petitioned the Court under section 6214 for redetermination of the deficiency.

In exercising our jurisdiction under section 6214 to redetermine deficiencies in income tax, we generally presume that the IRS's determinations are correct.7 Welch v.

The primary issue for decision is whether Wilmot's photography activity was an "activity not engaged in for profit" within the meaning of section 183.

In the notice of deficiency respondent made a series of determinations concerning petitioners' 2000 taxable year, the result of which was a loss for that year of $38,601, rather than the $60,464 claimed on the return. The notice determined that, pursuant to section 183, the losses arising from petitioners' Amway activity in excess of

Thus, even if the Schedule K-l adjustment had not been in the notice of deficiency, section 6214 allows respondent to ask for an increased deficiency based on the Schedule K-l adjustment.

Rather , section 6214 confers on this Court jurisdiction to redetermine a "deficiency" ; and section 6211 defines a "deficiency" as an amount of "tax" .

Section 6214 allows. the IRS to assert an additional deficiency at or before the hearing or a rehearing and to allege and demonstrate in the pending suit a deficiency greater tha n 13( . .continued) the Tax Court acquired jurisdiction to decide the entire gamut of possible issues that controlled the determination of the amount of tax liability for

1996-252 ; see also Poirier v .

Petitioner makes two arguments in opposition to the inclusion in income of the foregoing amounts: (1) the notices of deficiency, which are a prerequisite to this Court’s jurisdiction to redetermine a deficiency under section 6214,8 are invalid (essentially because they were based upon substitute returns prepared without valid regulatory authority and were printed on the wrong IRS form), so that the Court lacks jurisdiction for both years, and (2) the compensation and retirement payments to petit

Petitioner makes two arguments in opposition to the inclusion in income of the foregoing amounts: (1) the notices of deficiency, which are a prerequisite to this Court’s jurisdiction to redetermine a deficiency under section 6214,8 are invalid (essentially because they were based upon substitute returns prepared without valid regulatory authority and were printed on the wrong IRS form), so that the Court lacks jurisdiction for both years, and (2) the compensation and retirement payments to petit

Petitioner makes two arguments in opposition to the inclusion in income of the foregoing amounts: (1) the notices of deficiency, which are a prerequisite to this Court’s jurisdiction to redetermine a deficiency under section 6214,8 are invalid (essentially because they were based upon substitute returns prepared without valid regulatory authority and were printed on the wrong IRS form), so that the Court lacks jurisdiction for both years, and (2) the compensation and retirement payments to petit

For purposes of section 6214, deficiencies are defined by section 6211 as follows : SEC .

s $62,707, (cid:16)04wh2ile the three mortgages respondent treated in the·notice of deficiency as giving rise to COD income totaled $253,456. Therefore, since there is no assertion of an overall increase in deficiency', this case does not fall under section 6214. However, by claiming that an amount arising from a different mortgage is COD income, respondent has raised a new matter and therefore under our Rules has the burden of proof in regard to that claim. B. Burden of Proof Gross income inclu

The constitutionality of the Tax Court repeatedly has been upheld on the basis of congressional authority to create specialized courts under Article I of the Constitution. Freytag v. Commissioner, 501 U.S. 868, 890-891 (1991); Rowlee v. Commissioner, 80 T.C. 1111, 1114 (1983); Burns, Stix Friedman & Co. v. Commissioner, 57 T.C. 392, 394

he years in issue. Petitioner concedes that he produced false documentation to support the claimed child care credits for the years in issue. Respondent concedes that petitioner is not liable for an increased deficiency pursuant to the provisions of sec. 6214 for the 1996 tax year. - 3 - County Metropolitan Transportation Authority as a full-time bus operator. Since 1993 petitioner resided at 4431 West 49th Place, Los Angeles (LA residence). The LA residence was purchased in 1993 by Druetta R. O

limited by the amount of corporate income tax deficiency determined in the notice because of the timing of the concession (by means of reply brief) and because respondent has not sought to amend his answer and to assert an increased deficiency under sec. 6214. - 29 - APPENDIX Summary of Ownership Interests Ownership Interests in Rountree Cotton Co., Inc. William Tharp Charles Tharp Claudia Keith Estate of Glenda Tharp Rountree Cotton 16.8% 33.5% 33.0% 16.7% Co., Inc. Ownership Interests in Other

tation of interest is greater than the amount determined in the notice of deficiency, respondent is limited by the amount of corporate income tax deficiency determined in the notice because of the timing of the concession (by means of reply brief) and because respondent has not sought to amend his answer and to assert an increased deficiency under sec. 6214.

Under section 165(a), taxpayers generally are entitled to deduct losses not otherwise compensated for by insurance or otherwise. Section 165(c) limits the deductions of noncorporate taxpayers to losses incurred in a trade or business activity, a for-profit activity, or casualty and theft losses. To decide whether a taxpayer is entitled t

e notice of deficiency respondent actually determined the amount of this addition to tax is $2,273, about 25 percent of the determined deficiency of $9,090. We regard respondent's statement on motion to be a typographical error and not a claim under sec. 6214 (a) for an increased deficiency or for an increased addition to tax. - 7 - Background--Facts Anthony and Gloria are husband and wife; they were residents of Mehoopany, Pennsylvania, when the petition was filed in the instant case. During th

6662 1990 $11,276 $2,255 1991 22,232 4,446 1992 36,483 7,297 By way of an amendment to respondent's answer, respondent sought increased deficiencies and penalties against petitioners under section 6214 for each of the years in issue, alleging that petitioner David Smith received taxable distributions from a pension plan under section 72(p) and (t).

Code section 6214 limits the jurisdiction of Tax Court to redetermining g deficiency when g retyrn ip deficient. 23. By law, Tax Court has no authority to decide matters of law or Constitutional issues. 24. The deficiency notices are null and void because .they were issued in violation of procedures required by law. 25. By law, Tax Court cannot acquire

Commissioner, supra at 1226-1227: In an income tax deficiency proceeding, the Court's jurisdiction is generally limited by section 6214 to a redetermination of the correct amount of the deficiency as defined in section 6211.