Tax news of interest to investors came mainly from the courts this week, though the IRS gave paid tax return preparers something to groan about. (more…)
Archive for the ‘Court Rulings’ Category
Friday Wrapup
Friday, July 23rd, 2010Stock Loan Treated as Sale
Friday, July 23rd, 2010The Tax Court has sided with the IRS in a case where they sought to collect over $100 million in taxes from billionaire Philip Anschutz. At issue was a complicated arrangement known as a variable prepaid forward contract, in which Anschutz received cash up front for a sale to occur later. Anschutz loaned the shares that were covered by this contract to the firm providing the up front payment, permitting that firm to sell the shares. The court found that the prepaid contract and the lending arrangement had to be seen as part of a single deal, with the result being that the sale is viewed as taking place at the time of the up front payment rather than later as Anschutz intended. (more…)
Part-Time Gambler Is Professional
Tuesday, July 20th, 2010In a summary opinion, the Tax Court has found that an individual can qualify as a professional gambler despite pursuing the activity part-time. While the decision doesn’t have precedential value, it should help inform us in determining who qualifies as a professional trader. (more…)
Snipes Sentence Upheld
Saturday, July 17th, 2010A federal appeals court has upheld the three-year sentence of Wesley Snipes for willful failure to file income tax returns. Best known for playing the title role in the Blade trilogy of movies, Snipes earned some $34 million from 1999 to 2004 but failed to file income tax returns for those years.
While Snipes is not the first celebrity to have tax problems, his case is unusual in that he became actively involved in tax resistance, encouraging others to join him in refusing to pay. He was part of a group promoting frivolous arguments that he and others had no legal obligation to pay income tax.
Friday Wrapup
Friday, July 9th, 2010Tax developments were a little slow for this shortened holiday week, but we managed to find several interesting topics to cover, including a court ruling on exempt status for an organization formed for the purpose of . . . well, you’ll just have to read on. (more…)
Today’s Most Fascinating Tax Case
Thursday, July 8th, 2010Ladies, this guy wants you to have his baby. Seriously. But it’s not what you think. You don’t have to date him. He’s formed a nonprofit corporation to make his sperm available, and he took the IRS to court when they denied its application for recognition of exemption. (more…)
Ruling on Foreign Currency Option
Friday, May 21st, 2010In a case of first impression, the Tax Court has ruled (PDF) that a foreign currency option is not a foreign currency contract as that term is defined for purposes of section 1256 of the Internal Revenue Code. The ruling prevents the taxpayer from using the mark-to-market rules of section 1256 to claim a loss in connection with the option.
