Charitable donations · ValuationT.C. Memo. 2026-115Nov 5, 2026MemorandumChief Judge UrdaDocket 9620-21
- Issue
- Two LLCs bought adjacent Tennessee tracts for roughly $1,350 an acre and, a year later, donated them and claimed deductions of $26.7 million and $19.4 million.
- Holding
- Both deductions were denied in full because neither entity obtained a qualified appraisal; the managers knew the appraiser would overstate value. The 40% gross valuation misstatement penalty applies, plus the 20% penalty on the remainder for Murphy Hollow.
- Why it matters
- A deduction can be lost entirely, not just reduced, when the people running the deal knew the appraisal was inflated.
Filing status · Child creditsT.C. Memo. 2026-116Nov 5, 2026MemorandumJudge MarshallDocket 6448-24
- Issue
- A father claimed head of household status, the child tax credit and the earned income tax credit for two sons who were also claimed by their mother.
- Holding
- The court sustained the IRS: he did not show the children lived with him for more than half the year, so he could not claim them or head of household status. The IRS conceded the accuracy-related penalty.
- Why it matters
- Separated parents claiming the same children need records of where the children slept, night by night.
Unreported income · Schedule CT.C. Memo. 2026-113Nov 4, 2026MemorandumJudge MorrisonDocket 5050-19
- Issue
- A tax-preparation business owner's 2008 and 2009 returns were examined; the civil exam was suspended during criminal proceedings and later resumed.
- Holding
- The court sustained nearly all adjustments, including gross receipts of about $377,000 and $341,000 versus roughly $200,000 and $143,000 reported, disallowed cost of goods sold, and treated the business as a disregarded entity subject to self-employment tax. His procedural objections were rejected.
- Why it matters
- Bank deposits drive gross receipts; a civil case can resume years later after a criminal case.
Whistleblower awardsT.C. Memo. 2026-110Nov 4, 2026MemorandumJudge GustafsonDocket 6983-19W
- Issue
- A whistleblower challenged the IRS Whistleblower Office's denial of his award claim relating to dividend-withholding schemes.
- Holding
- The court denied his motions to add documents to the administrative record and granted summary judgment to the IRS, finding no abuse of discretion in the denial.
- Why it matters
- Whistleblower cases are reviewed on the administrative record, so the claim file has to be complete when it is submitted.
Unreported incomeT.C. Memo. 2026-114Nov 4, 2026MemorandumJudge FungDocket 6587-24
- Issue
- A married couple's 2021 joint return omitted capital gain, dividend and interest income reported to the IRS.
- Holding
- The court held for the IRS on the $7,295 deficiency; the IRS had conceded the accuracy-related penalty.
- Why it matters
- Investment income reported on Forms 1099 is matched automatically; reconcile every brokerage statement before filing.
Conservation easements · ValuationT.C. Memo. 2026-112Nov 3, 2026MemorandumJudge LauberDocket 8669-20
- Issue
- In a syndicated conservation easement case, the partnership switched its highest-and-best-use theory six weeks before trial from residential development to a 780,000 sq. ft. distribution facility.
- Holding
- The court rejected the industrial use: rezoning was not shown to be reasonably probable, and the facility was not shown to be physically possible or financially feasible.
- Why it matters
- Highest-and-best-use claims must be legally permissible, physically possible and financially feasible, with evidence for each.
Partnership procedure (BBA)167 T.C. No. 14Nov 2, 2026Precedential (T.C.)Judge BuchDocket 10272-25
- Issue
- The IRS asked the court to reconsider its September 2026 holding that the BBA partnership petition deadline can be equitably tolled.
- Holding
- Motion denied. The court found the IRS repeated rejected arguments and raised new theories, leaving the equitable-tolling holding in place.
- Why it matters
- For BBA partnership audits, a late Tax Court petition may still be heard in the right circumstances, but don't rely on it; file on time.
Substantiation · PenaltiesT.C. Memo. 2026-111Nov 2, 2026MemorandumJudge FungDocket 23707-22
- Issue
- A business deducted $118,302 of subcontractor expenses for its fiscal 2019 year.
- Holding
- The deduction was disallowed for lack of substantiation, and the 20% accuracy-related penalty was sustained for fiscal 2018.
- Why it matters
- Keep contracts, invoices, proof of payment and Forms 1099-NEC for every subcontractor.
Schedule C deductionsT.C. Summary Opinion 2026-10Nov 2, 2026Summary (non-precedential)Special Trial Judge LeydenDocket 10807-25S
- Issue
- A sole proprietor claimed Schedule C expense deductions for 2023.
- Holding
- The deductions were disallowed and the accuracy-related penalty applied. The IRS conceded that gross receipts were correct as reported.
- Why it matters
- Small-business deductions stand or fall on records; a reported income figure doesn't support the expenses.
Exempt organizationsT.C. Memo. 2026-109Oct 29, 2026MemorandumJudge GustafsonDocket 18549-23X
- Issue
- A sportsmen's club challenged the IRS revocation of its section 501(c)(7) social club exemption.
- Holding
- The court sustained the revocation effective January 1, 2023, after the IRS dropped its request to make it retroactive to 2017.
- Why it matters
- Social clubs must keep non-exempt activity insubstantial and monitor it every year.
Summaries are general information prepared by VG CPA PC, not legal advice. Summary opinions (S cases) are not precedent. Read the full opinion on the Tax Court docket before relying on any case.
