Deck 5: Judicial Interpretations

Question 1

Where are regular Tax Court decisions published Illustrate the elements of both a temporary and a permanent regular Tax Court citation. Explain what each part of the citation means.

Answer 1

A decision that engages an unusual point or a new point of law, which is demonstrated by the Chief Judge, is known as regular decision.
The Government Printing Office (GPO) published the regular decision of the Tax Court in a set of bound reporters, known as the Tax Court of the US reports. Since, a large duration of time elapse between the decision releases and its publication, thus such kind of decisions receive permanent as well as temporary citation.
The temporary citation is given as follows:
Francis T. Foster, et ux. v. Commissioner , 138 T.C. __ (2012), No. 4.
The elements of temporary citation are explained as follows:
The number of volume is 138.
The abbreviation T.C. refers to the Tax Court Reporter.
The number of page which would determine latter is indicated by_.
The case number is shown by No.4.
The year in which decision is taken is (2012).
The permanent citation is given as follows:
Francis T. Foster, et ux. v. Commissioner , 138 T.C. 51
The elements of permanent citation are explained as follows:
The number of volume is 138.
The abbreviation T.C. refers to the Tax Court Reporter.
The number of page is indicated by 51.
The year in which decision is taken is (2012).

Question 2

Identify the circuit court that would hear the case of a taxpayer who lives or works in each of the following areas:
a. Idaho
b. Indiana
c. South Carolina
d. Puerto Rico
e. Guam

Answer 2

US court of appeals is divided into 13 parts regionally. Each part is independent of each other and follows the order of the Supreme Court.
The US court of appeals has 13 courts, out of which 11 are concerned with the hearing of the cases in their designated states. Both tax and non tax litigation issues are being considered in the US courts of appeals. It hears only those cases which are related to the question of law. The US courts of appeals resolve the national security problem.
a.
If a taxpayer is living or working in I then his case will be hear by 9 th circuit court. I district court is a ninth circuit one of the part.
b.
If a taxpayer is living or working in I then his case will be hear by 7 th circuit court. It covers all the area of the I.
c.
If a taxpayer is living or working in SC then his case will be hear by 4 th circuit court. SC district court is a fourth circuit one of the part.
d.
If a taxpayer is living or working in PR then his case will be hear by 1 st circuit court. PR district court is a first circuit one of the part.
e.
If a taxpayer is living or working in G then his case will be hear by 9 th circuit court. G district court is a ninth circuit one of the part.

Question 3

In the citation Simons-Eastern v. U.S. , 354 F. Supp. 1003 (D.Ct., Ga, 1972), the "F. Supp." tells the tax researcher that the decision is from which court

Answer 3

Citation is the statement which is written in the article or report. It describes the source of content which is written in the report. Reader can easily find the source with the help of citation.
The abbreviation "F.Supp" refers to as federal supplement series of west publishing and it includes the decisions of district court. All the decisions of the district court are included in this series for publication. Various non tax cases are also included.
West publishing is a business of Thomson Reuters. Its main purpose is to publish legal, business and regulatory information.

Question 4

Find the court decision located at T.C. Memo. 1992-204.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 5

Snidely Limited spent $1 million this year to upgrade its manufacturing plant, which had received several warnings from the state environmental agency about releasing pollution into the local river. Late in the year, Snidely received an assessment of $700,000 for violating the state's Clean Water Act. After he negotiated with the state, which cost $135,000 in legal fees, Snidely promised to spend another $200,000 next year for more pollution control devices, and the fine was reduced to $450,000. How much of these expenditures can Snidely Limited deduct for tax purposes

Question 6

Your client, Luther Lifo, is a professor who runs a CPA review course. He comes to you with the following tax questions:
Question One. Luther teaches CPA review courses on either a guaranteed or a nonguaranteed basis. Under the contractual guaranteed program, students pay higher tuition and, if they fail the CPA examination, are entitled to a full refund within two weeks of the release of the results. The CPA review course contracts require him to place the tuition in a set-aside escrow account until the students pass the exam; he established a escrow account as a qualified trust account for this purpose. The registration fee and tuition must be paid in full before the classes begin. Thus, students enrolled in the class that started in January 20x1 paid their tuition in December 20x0. In 20x0, Luther deposited registration fees and tuition, including $30,000 in guaranteed tuition payments for the winter 20x1 courses, into a qualified trust escrow account. Also during 20x1, he paid refunds to guaranteed students who failed the 20x1 exams from that account. Does Luther report the $30,000 as income in 20x0 or 20x1 How are the refunds paid in 20x1 treated for tax purposes State the authority for your conclusion.
Question Two. Luther is a majority shareholder in a corporation that owns an office building. He leases space in the building for use in his CPA review course. Luther pays approximately $20 per square foot in annual rent. The corporation leases the remaining space in the building to a LSAT, GMAT, SAT, and GRE review course run by other taxpayers for approximately $10 per square foot. Luther's main intent in negotiating the discounted lease was to secure the additional traffic generated by the other review courses in order to enhance the potential revenue for the CPA review course. What is the amount of rent that Luther can deduct in connection with the CPA review course State the authority for your conclusion.
After appropriate research, write a letter to Luther explaining your findings. His address is 321 Fifo Street, Temecula, CA 91980.

Question 7

Tax Court memorandum decisions are not published by the federal government. However, commercial reporters include these decisions. Illustrate the elements of both a temporary and a permanent citation for a Tax Court memorandum decision, using both the CCH and Thomson Reuters reporters. Explain what each part of the citation means.

Question 8

Identify the circuit court that would hear the case of a taxpayer who lives or works in each of the following areas:
a. Arizona
b. Alabama
c. Alaska
d. Arkansas
e. Washington, D.C.

Question 9

By using only the citation, state which court issued each of the following decisions. If you cannot determine which court by looking at the citation only, say so.
a. Davis v. U.S. , 43 Fed. Cl. 92 (1999)
b. D.C. Crummey v. U.S. , 68-2 USTC ¶ 12,541
c. U.S. v. Goode , 86 AFTR2d 2000-7273
d. James v. U.S. , 81 S.Ct. 1052 (1961)

Question 10

Find the court decision located at T.C. Summary Opinion 2013-21.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 11

Last year, only four of 32 professional sports teams in a new league turned a nominal accounting profit. Betty purchased such a team this year. Her taxable loss was determined to be $950,000. Can she deduct this loss

Question 12

Austin Towers is a convicted former spy for the former Soviet Union. Austin received a communication from a current Russian agent that $2 million had been set aside for him in an account upon which he would be able to draw. Austin was told that the money was being held by Russia rather than in an independent or third-party bank or institution, on the petitioner's behalf. Over the next few years, Austin drew approximately $1 million from the account. During that period, Austin filed annual tax returns with his wife showing taxable income of approximately $65,000 per year. Conduct appropriate research to determine Austin's tax liability for the $1 million in spy fees.
After appropriate research, write a letter to Austin explaining your findings. His address is Lompoc Federal Prison, Cell #123, Lompoc, CA 93401.

Question 13

What is the jurisdiction of a U.S. District Court

Question 14

Identify the circuit court that would hear the case of a taxpayer who lives or works in each of the following areas:
a. Nebraska
b. Nevada
c. New Hampshire
d. New Mexico
e. New Jersey

Question 15

What is a case headnote How might it be useful to the tax researcher

Question 16

Find the court decision located at T.C. Summary Opinion 2006-20.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 17

Herbert, a collector of rare coins, bought a 1916 Spanish Bowlero for $2,000 in 1984. He sold the coin for $4,500 in January. Herbert retired from his loading dock job in June and began actively buying and selling rare coins. By December, Herbert's realized gain from such activities was $21,500. What type of taxable income was January's $2,500 gain

Question 18

Your client, Teddy Chow, and his wife Abby filed a lawsuit to recover damages for personal injuries Teddy sustained in an auto accident in 2000. In 2004, a jury awarded Teddy $1.62 million in damages. In addition, delay damages in the amount of $1.08 million were then added to that award, resulting in a total judgment of $2.7 million. The defendants appealed the award, and while the appeal was pending, the parties reached a settlement, which provided for payment to Teddy of $2.55 million. In 2009, after attorney fees of $850,000 were subtracted, Teddy received $1.7 million. Teddy wants to know how these amounts are treated for tax purposes.
After appropriate research, write a letter to Teddy and Abby explaining your findings. Their address is 654 Hops Street, Golden, CO 78501.

Question 19

Can Tax Court summary opinions be cited as precedent Discuss.

Question 20

Each court of appeals has approximately 20 judges. How many of these judges hear a typical case

Question 21

By using only the citation, state which court issued each of the following decisions. If you cannot determine which court by looking at the citation only, say so.
a. Douglas, Christopher , T.C. Memo 1994-519
b. Takaba, Brian G. , 119 T.C. 285
c. Botts, Roy R. , T.C. Summary Opinion 2001-182
d. American Airlines, Inc. , 40 Fed.Cl. 712

Question 22

Find the court decision located at 108 AFTR 2d 2011-5569.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 23

Steve is an usher at his local church. Can he deduct commuting expenses for the Sundays that he is assigned to usher for church services

Question 24

Cabrito Ranch Inc. is a family ranch owned and operated by two brothers, Billie and Bubba Cabrito. The corporation made in-kind bonus payments, in the form of goats, to its two officers (Billie and Bubba) in exchange for their performance of agricultural labor. The two brothers are the only employees to receive goat bonuses. The transfers of the goats to the officers occurred within days after the date Cabrito Ranch would have sold the goats within the ordinary course of its business. The two officers/brothers did not market their bonus goats separately from other Cabrito Ranch goats; rather, the bonus goats were loaded onto the same trucks and sold to the same goat buyer on the same terms as other Cabrito Ranch goats. The officer/brothers' goats were sold for $70,000 ($35,000 to each brother). Cabrito Ranch wants to know how to treat the cash from the goat bonuses for FICA purposes.
After appropriate research, write a letter to Billie and Bubba explaining your findings. Their address is 247 Angora Road, Mohair, TX 77501.

Question 25

Who can initiate a court case that deals with a tax matter-the taxpayer or the IRS

Question 26

Must the taxpayer pay the disputed tax deficiency to the government before his or her case will be heard in a district court In the U.S. Court of Federal Claims In the U.S. Tax Court

Question 27

Name the three court case reporters that publish court of appeals decisions. Illustrate the elements of a citation that might be found in each reporter. Explain what each part of the citation means.

Question 28

Locate the court case Central Labor's Pension Fund v. Heinz , 541 U.S. 739 (2004). Using only the headnotes, answer the following questions:
a. What issue(s) did the court address
b. What was the ruling of the court

Question 29

Find the court decision located at 2007-1 USTC ¶50,210.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 30

Sam Shiatsu is a self-employed massage therapist and is the brother-in-law of a partner in the CPA firm where you work. During tax year 2008, Sam worked as an assistant supervisor and clinician for the Western College of Oriental Massage in Gila Bend, Arizona, an institution owned by Massage Center, Inc. (MCI). Sam was paid $20,500 with checks issued by MCI for services he provided to MCI pursuant to a contract, which stated that MCI would file a Form 1099-MISC, Miscellaneous Income, with the IRS and that Sam would be responsible for paying any tax liability that resulted from the payments. Sam has a B.S. degree in accounting, a master's degree in industrial relations, and a B.S. degree in nutrition. Sam, although not an attorney, also has four years of experience as a justice of the peace in Blanco, Texas.
Sam did not file a tax return for tax year 2008 and he did not pay any federal income tax or make any payments of estimated tax for that year. He did not file a return because he claims he is a citizen of the "Republic of Arizona" and therefore not subject to the U.S. federal income tax. On February 25, 2010, the IRS mailed Sam a notice of deficiency setting forth respondent's determination of a deficiency in petitioner's income tax for tax year 2008 and additions to tax.
Tracy (your boss) asks you to research this issue and determine Sam's exposure for not filing his 2008 tax return. Summarize in a short internal memo the key points you find.

Question 31

Gwen Gullible was married to Darrell Devious. They were divorced two years ago. Three years ago (the year before their divorce), Darrell received a $250,000 retirement plan distribution, of which $50,000 was rolled over into an IRA. At the time, Gwen was aware of the retirement funds and the rollover. The distribution was used to pay off the couple's mortgage, purchase a car, and for living expenses. Darrell prepared the couple's joint return, and Gwen asked him about the tax ramifications of the retirement distributions. He told her he had consulted a CPA and was advised that the retirement plan proceeds used to pay off a mortgage were not taxable income. Gwen accepted that explanation and signed the return. In fact, Darrell had not consulted a CPA.
One year ago (after the divorce), Gwen received a letter from the IRS saying it had not received the tax return for the last full year of marriage. On advice from a CPA, Gwen immediately filed the return. (She had a copy of the unfiled return.) The IRS notified Gwen that no estimated payments on the retirement distribution had been paid by Darrell, and that she owed $60,000 in tax, plus penalties and interest. The deficiency notice provided that the retirement distribution, minus the amount rolled over, was income to the couple.
After appropriate research, prepare (in good form) a research memorandum to the file. (See Chapter 2 for an illustration of the structure of a tax memo.) Then write a letter to Gwen explaining your findings. Her address is 678 Surprise Street, Houston, TX 77019.

Question 32

Explain the general organization of the federal court system for cases concerning federal tax issues.

Question 33

Which of the trial courts is most appropriate for a taxpayer who wishes to limit the judicial review of the relevant year's tax return to the specific issue(s) involved in the case

Question 34

Can a taxpayer have a jury trial before a court of appeals

Question 35

Locate the court case Fisher v. Comm. , 105 AFTR2d 2010-2226. Using only the headnotes, answer the following questions:
a. What issue(s) did the court address
b. What was the ruling of the court

Question 36

Find the court decision located at 67 AFTR2d 91-718.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 37

Professor Stevens obtained tenure and promotion to full-professor status many years ago. Yet he continues to publish research papers in scholarly journals to satisfy his own curiosity and to maintain his professional prestige and status within the academic community. Publications are also necessary in order for Professor Stevens to receive pay raises at his university. This year, Dr. Stevens spent $750 of his own funds to travel to southern Utah to collect some critical pieces of data for his work. What is the tax treatment of this expenditure

Question 38

Pealii Loligo owned and operated three "House of Calamari" restaurants from 2005 through 2007. His wife, Cleopatra Decacera, assisted with the management of the restaurants.
In May 2006, Ms. Decacera and Mr. Loligo purchased a $900,000 home. In relation to this home purchase, in 2004 and 2005 they signed mortgage loan applications indicating joint annual incomes of $235,000 and $321,000, respectively. On their 2004 joint federal income tax return, however, Ms. Decacera and Mr. Loligo reported that they earned no salaries and had net losses of $55,000; and on their 2005 joint tax return, they reported that Mr. Loligo earned a salary of $23,000, and that they had net losses of $77,000.
During 2006-2008, Ms. Decacera and Mr. Loligo paid approximately $70,000 for home furnishings, $30,000 for a swimming pool, and $40,000 for Ms. Decacera's jewelry. In addition, they leased two Mercedes-Benz automobiles and took Ms. Decacera's parents on vacations to Florida and Nevada.
In 2010, Ms. Decacera and Mr. Loligo were indicted and charged with filing false tax returns in 2004 and 2005. Mr. Loligo pled guilty, while Ms. Decacera signed a deferred prosecution agreement and admitted filing false returns. The couple divorced in 2011, and in 2012 the IRS issued a deficiency notice for the 2004 and 2005 taxes. In September 2012, Ms. Decacera filed a petition in which she requested relief from joint and several liability for the income taxes. During January 2013, Mr. Loligo filed his "notice of intervention." In July, an IRS appeals officer determined that Ms. Decacera did not qualify for innocent spouse relief under § 6015(f).
After appropriate research, prepare (in good form) a research memorandum to the file. (See Chapter 2 for an illustration of the structure of a tax memo.) Then write a letter to Ms. Decacera explaining your findings. Her address is 4567 Whome Lane, Escondido, CA 92069.

Question 39

May a taxpayer take his or her tax case directly to the U.S. Supreme Court

Question 40

Which of the trial courts would best serve a taxpayer litigating an issue of a technical tax nature Why

Question 41

What is the highest court in the United States What is its jurisdiction Where does it hear cases

Question 42

Locate the court case Container Corporation v. Commissioner , 134 T.C. No. 5 (2010). Using only the headnotes, answer the following questions:
a. What issue(s) did the court address
b. What was the ruling of the court

Question 43

Find the court decision located at 101 AFTR2d 2008-1612.
a. Which court heard the case
b. Who was the judge(s)
c. Which tax year(s) is in question and in what year was the case decided
d. Which Code section(s) was at issue
e. What was the issue(s) involved
f. Which party prevailed in the decision

Question 44

The local electric company requires a $200 refundable deposit from new customers in lieu of a credit check. Landlord Pete pays this amount for all his new-to-town tenants. Can he deduct the $200 payments on his tax return

Question 45

Ned Naive operated several franchised stores, and at the home office's suggestion he consolidated the stores' payroll and accounting functions with Andy the Accountant. Andy is not a CPA. Last year, Andy began embezzling taxpayer's escrowed tax withholdings and failed to remit required amounts for the four quarters. The IRS assessed Ned $10,000 in penalties for failing to make the proper withholding deposits during the year.
After appropriate research, prepare (in good form) a research memorandum to the file. (See Chapter 2 for an illustration of the structure of a tax memo.) Then write a letter to Ned explaining your findings. His address is 4567 Brainless Street, Phoenix, AZ 91234.

Question 46

Who has the burden of proof in most cases involving the tax law Why

Question 47

Is a federal district court a national court How many judges hear a case brought before a federal district court

Question 48

How does one petition the Supreme Court to hear one's tax case

Question 49

Locate the court case Alemasov and Popov , T.C. Memo. 2007-130. Using only the headnotes, answer the following questions:
a. What issue(s) did the court address
b. What was the ruling of the court

Question 50

If your last name begins with the letters A-L, read and brief the following cases:
a. Sorensen , T.C. Memo. 1994-175
b. Keller , 84-1 USTC ¶ 9194.
If your last name begins with the letters M-Z, read and brief the following cases:
c. Washington , 77 T.C. 601
d. Tellier , 17 AFTR2d 633

Question 51

High-Top Financing charges its personal loan holders a 2 percent fee if the full loan principal is paid prior to the due date. What is the tax effect of this year's $50,000 of prepayment penalties collected by High-Top

Question 52

Phred Phortunate won his state lotto two years ago. His lotto ticket was worth $10 million, which was payable in 20 annual installments of $500,000 each. Phred paid $1 for the winning ticket. The lotto in Phred's state does not allow winners to receive their payout in a lump sum. Phred wanted all his money now, so he assigned his future lotto winnings to Happy Finance Company for a discounted price of $4.5 million. Assignment of lotto winnings is permitted by Phred's state lotto. Phred filed his tax return and reported the assignment of the lotto winnings as a capital gain ($4.5 million-$1 basis) taxable at a 15 percent rate.
After appropriate research to determine if Phred correctly reported his lotto winnings assignment, prepare (in good form) a research memorandum to the file. (See Chapter 2 for an illustration of the structure of a tax memo.) Then write a letter to Phred explaining your findings. His address is 2345 Ecstatic Street, White River Junction, VT 05001.

Question 53

The U.S. Tax Court hears only certain types of cases. Identify those cases.

Question 54

Name the three court case reporters that publish tax and non-tax district court decisions. Illustrate the elements of a citation that might be found in each reporter. Explain what each part of the citation means.

Question 55

How many justices are appointed to the Supreme Court How many hear each case

Question 56

Locate the court case Angela J. Brown v. Commissioner , T.C. Summary Opinion 2010-56. Using only the headnotes, answer the following questions:
a. What issue(s) did the court address
b. What was the ruling of the court

Question 57

Read and brief the following cases:
a. Rownd , T.C. Memo. 1994-465
b. Arnes , 93-1 USTC ¶ 50,016.

Question 58

Cecilia died this year, owning mutual funds in her IRA worth $120,000. Under the terms of the IRA, Cecilia's surviving husband, Frank, was the beneficiary of the account, and he took a lump-sum distribution from the fund. Both Cecilia and Frank were age 57 at the beginning of the year.
a. How does Frank account for the inheritance assuming that he rolls it over into his own IRA in a timely manner
b. Would your answer change if Frank were Cecilia's brother

Question 59

Your client, Gary Gearbox, wholly owned and worked full time for a C corporation in the business of repairing autos. His wife, Tammy, wholly owned and worked full time for another C corporation that provided mobile auto-windshield repairs. Both corporations' offices were located in the Gearboxes' home. The corporations paid the Gearboxes rent for the use of this office space. In addition to renting this portion of their home, the Gearboxes also owned five rental properties. On their last three tax returns, the Gearboxes reported net income from leasing office space to their C corporations of $40,000, $24,000, and $22,000, respectively. During these years, the combined losses from the five other rental properties exceeded the income derived from their office leases. On their last three tax returns, the Gearboxes offset the losses from the rental properties against the income from the office leases and, as a result, paid no tax on the rental income paid to them by their corporation.
After appropriate research to determine if Gary and Tammy correctly reported their rental income, prepare (in good form) a research memorandum to the file. Then write a letter to the Gearboxes explaining your findings. Their address is 7895 NASCAR Way, Talladega, AL 35160.

Question 60

The U.S. Tax Court has undergone an evolution since it was founded. What happened to its structure in 1926, 1943, and 1969, respectively

Question 61

Differentiate between a primary and a secondary case citation.

Question 62

Why does the Supreme Court hear so few tax cases

Question 63

Locate the court case Zimmerman, et al. v. United States , 2001-1 USTC ¶50,107, 86 AFTR2d 2000-6701. Using only the headnotes, answer the following questions:
a. What was the issue(s) addressed by the court
b. What was the ruling of the court

Question 64

Read and brief the following cases:
a. Willie Nelson Music Co. , 85 T.C. 914
b. Independent Contracts, Inc. , 73 AFTR2d 94-1406

Question 65

Jerry Baker and his wife, Hammi, believe in the worship of the "Sea God," which is a very personal religion to Jerry and Hammi. To practice their beliefs, the Bakers want to take a two-week trip to Tahiti this year to worship their deity. The cost (e.g., airfare, hotels) of this religious "pilgrimage" is $5,250. Jerry wants to know if he can deduct the cost of this trip as a charitable deduction on his and Hammi's joint Form 1040, Schedule A.

Question 66

Your client, Jack Benny, and his wife were divorced last year. Jack had been employed by the city of Rancho Cucamonga for 30 years. Jack was a participant in a defined-benefit pension plan. He had been eligible to start receiving pension benefits five years ago, but he kept working and did not collect his pension. The divorce decree gave Jack's wife one-half of the community interest in the pension plan. If Jack had retired on the date of the divorce, she would have been entitled to receive $2,200 per month. Because Jack did not retire, however, the divorce court ordered him to pay his former spouse $2,200 per month until he retired. The divorce court also ordered the pension plan to make the same monthly payments to Jack's ex-wife after his retirement. Jack paid his former spouse $26,400 in the current year as ordered in the divorce decree. Jack is still working and has not yet retired.
After appropriate research to determine if Jack can deduct the payments to his ex-wife as alimony on his current tax return and prepare (in good form) a research memorandum to the file. Write a client letter to Jack with your findings. His address is 543 Camino Disolución, Rancho Cucamonga, CA 91730.

Question 67

How many judges sit on the U.S. Tax Court What is the length of time of the appointment of each judge

Question 68

What types of cases are heard by the U.S. Court of Federal Claims

Question 69

Differentiate between the Supreme Court's overturning of a lower court's decision and its denial of a writ of certiorari.

Question 70

Locate the court case Anderson Columbia, Inc. v. U.S. , 54 Fed. Cl. 756 (2002). Using only the headnotes, answer the following questions:
a. What issue(s) did the court address
b. What was the ruling of the court

Question 71

Read and brief the following cases:
a. Gregory v. Helvering , 55 S.Ct. 266 (1935)
b. Hunt , T.C. Memo. 1965-172

Question 72

Willie Waylon is a famous country-and-western singer. As an investment, Willie started a chain of barbecue restaurants called Willie's Wonderful Ribs. Willie's friends and associates invested $500,000 in this venture. The restaurant chain failed, and the investors lost all their money. Because of his visibility and status in the entertainment community, Willie felt that he personally had to make good on the losses suffered by the investors, to protect his singing and business reputation. Consequently, he personally paid $500,000 to reimburse the investors for their losses. What are Willie's tax consequences (if any) from the reimbursement

Question 73

Many years ago your client Lucy Hapless (currently single and age 48) started working with Sham Credit Swap (SCS) Inc., where she participated in the company's 401(k) plan. Five years ago, she took out a home loan from her 401(k) plan. The loan was repayable with interest through semimonthly payroll deductions over a 10-year term. Lucy made the scheduled payments until she was laid off this early this year. The outstanding balance of the loan became due and payable at the time of Lucy's termination, but she did not have the money to pay off the loan nor was she able to refinance it. No payments were made on the loan after her layoff, and the loan went into default. The 401(k) plan sent Lucy a letter, notifying her that she had a deemed distribution from the plan equal to the then unpaid loan balance of $72,000. The 401(k) plan sent Lucy a check for $98,000, which represented the balance of her plan account minus federal tax withholding of $24,500. Six months ago, after Lucy received the check, she deposited the entire $98,000 into her checking account and has been using the money for living expenses, because she has been unable find another job.
After appropriate research to determine if determine Lucy's tax consequences from this 401(k) plan loan payoff and prepare (in good form) a research memorandum to the file. Write a client letter to Lucy with your findings. Her address is 789 Hard Luck St., Carefree, AZ 85377.

Question 74

The U.S. Tax Court is a national court that meets in Washington, D.C. Does this mean that the taxpayer and his or her attorney must travel to Washington to have a case heard

Question 75

How many judges are appointed to the U.S. Court of Federal Claims

Question 76

Name the four court case reporters that publish Supreme Court decisions. Illustrate the elements of a citation that might be found in each reporter. Explain what each part of the citation means.

Question 77

Find the court decision located at 138 T.C. 40.
a. Which court heard the case
b. Who was the judge(s)
c. In what year was the case decided
d. What was the issue(s) involved

Question 78

Read and brief the following cases:
a. Fulcher, Douglas R. , T.C. Summary Opinion 2003-157
b. The Boeing Company and Consolidated Subs. , 91 AFTR2d 2003-1088 (123 S.Ct. 1099)

Question 79

Paul Preppie is an accountant for the Very Big (VB) Corporation of America, located in Los Angeles. When Paul went to work for VB, he did not have a college degree. VB required that Paul earn a B.S. degree in accounting, so he enrolled in a local private university's night school and obtained the degree. VB Corporation does not reimburse employees for attending night school, and because Paul attended a private university, the tuition and other costs were relatively expensive. Under California law, once Paul has his degree, he is eligible to sit for the CPA exam and can become a CPA in California. Can Paul deduct any of the $10,500 he paid in tuition and other costs during the current tax year
Prepare (in good form) a research memorandum to the file. (See Chapter 2 for an illustration of the structure of a tax memo.)

Question 80

Mary and Manny Muffler were involved in an auto accident several years ago with an uninsured motorist. The uninsured motorist was at fault and caused significant injuries to Mary. Because of her injuries, Mary was unable to work for more than a year. At the time of the accident, Mary and her husband had two vehicles insured under separate automobile liability insurance policies through Farm State Automobile Insurance Co. (Farm State). Both insurance policies were purchased by Mary and her husband and had endorsements for uninsured and underinsured motorist (UM/UIM) coverage with policy limits of $50,000.
Although Mary filed a lawsuit against the motorist who was at fault in her accident, her counsel ascertained that the defendant had neither significant assets nor any insurance. Mary submitted a claim under her UM/UIM coverage to Farm State for compensation for her injuries in the automobile accident. Farm State took the position that Mary was entitled to recover under the UM/UIM coverage of only one of the two policies she and her husband held, resulting in an effective limit on recovery of $50,000. In taking this position, Farm State relied on antistacking provisions in its insurance contracts with Mary and her husband, under which the insured was precluded from aggregating or "stacking" his or her UM/UIM coverage under multiple Farm State policies. Mary agreed to settle her claim with State Farm for $32,000 plus $18,000 in attorney fees ($50,000 total).
After receiving the $32,000 payment several years ago, Mary became a member of a class action against Farm State that alleged that the antistacking rules constituted a breach of contract and a breach of a covenant of good faith and fair dealing in their insurance contracts, and that she was entitled to collect on the second policy. Farm State settled the claim. As a result, Mary received an additional $53,000 ($50,000 plus interest) payment pursuant to the settlement agreement as her pro rata portion of the settlement funds. During that year Mary was issued a Form 1099-MISC, Miscellaneous Income, reflecting the payment.
After appropriate research, determine how Mary (who has since divorced Manny) should report the $53,000 payment on her current year's tax return and prepare (in good form) a research memorandum to the file. Write a client letter to Mary with your findings. Her address is 789 Mustang St., Shelby, CA 92111.