Sell Today And Pay Tax in Thirty Years

Sometimes I am amazed to the extent people will go to minimize, defer or avoid taxes altogether.

I get it, though. When that alarm clocks goes off in the morning, there is no government bureaucrat there to prepare your breakfast or drive you to work. Fair share rings trite when yours is the only share visible for miles.

I am looking at an IRS Chief Council Advice.

Think of the Chief Counsel as the attorneys advising the IRS. The Advice would therefore be legal analysis of an IRS position on something.

This one has to do with something called Monetized Installment Sale Transactions.

Lot of syllables there.

Let’s approach this from the ground floor.

What is an installment sale?

This is a tax provision that allows one to sell approved asset types and spread the tax over the years as cash is collected. Say you sell land with the purchase price paid evenly over three calendar years. Land is an approved asset type, and you would pay tax on one-third of your gain in the year of sale, one-third the following year and the final third in the third year.

It doesn’t make the gain go away. It just allows one to de-bunch the taxation on the gain.

Mind you, you have to trust that the buyer can and will pay you for the later years. If you do not trust the buyer’s ability (or intention) to do so, this may not be the technique for you.

What if the buyer pays an attorney the full amount, and that attorney in turn pays you over three years? You have taken the collection risk off the table, as the monies are sitting in an attorney’s escrow account.

You are starting to think like a tax advisor, but the technique will almost certainly not work.

Why?

Well, an easy IRS argument is that the attorney is acting as your agent, and receipt of cash by your agent is the equivalent of you receiving cash. This is the doctrine of “constructive receipt,” and it is one of early (and basic) lessons as one starts his/her tax education.

What if you borrow against the note? You just go down to Fifth Third or Truist Bank, borrow and pledge the note as collateral.

Nice.

Except that Congress thought about this and introduced a “pledging” rule. In short, a pledge of the note is considered constructive receipt on the note itself.

Not to be deterred, interested parties noticed a Chief Council’s Memorandum from 2012 that seemed to give the OK to (at least some of) these transactions. There was a company that need cash and needed it right away. It unloaded farm property in a series of transactions involving special purpose entities, standby letters of credit and other arcane details.

The IRS went through 11 painful pages of analysis, but wouldn’t you know that – at the end – the IRS gave its blessing.

Huh?

The advisors and promoters latched-on and used this Memorandum to structure future installment sale monetization deals.

Here is an example:

(1)  Let’s say I want to sell something.

(2)  Let’s say you want to buy what I am selling.

(3)  There is someone out there (let’s call him Elbert) who is willing to broker our deal – for a fee of course.

(4)  Neither you or I are related to Elbert or give cause to consider him our agent.

(5)  Elbert buys my something and gives me a note. In our example Elbert promises to pay me interest annually and the balance of the note 30 years from now.

(6)  You buy the something from Elbert. Let’s say you pay Elbert in full, either because you have cash in-hand or because you borrow money.

(7)  A bank loans me money. There will be a labyrinth of escrow accounts to maintain kayfabe that I have not borrowed against my note receivable from Elbert.

(8)  At least once a year, the following happens:

a.    I collect interest on my note receivable from Elbert.

b.    I pay interest on my note payable to the bank.

c.    By some miraculous result of modern monetary theory, it is likely that these two amounts will offset.

(9)  I eventually collect on Elbert’s note. This will trigger tax to me, assuming someone remembers what this note is even about 30 years from now.

(10)      Having cash, I repay the bank for the loan it made 30 years earlier.

There is the monetization: reducing to money, preferably without taxation.

How much of the original sales price can I get using this technique?

Maybe 92% or 93% of what you paid Elbert, generally speaking.

Where does the rest of the money go?

Elbert and the bank.

Why would I give up 7 or 8 percent to Elbert and the bank?

To defer my tax for decades.

Do people really do this?

Yep, folks like Kimberly Clark and OfficeMax.

So what was the recent IRS Advice that has us talking about this?

The IRS was revisiting its 2012 Memorandum, the one that advisors have been relying upon. The IRS lowered its horns, noting that folks were reading too much into that Memorandum and that they might want to reconsider their risk exposure.

The IRS pointed out several possible issues, but we will address only one.

The company in that 2012 Memorandum was transacting with farmland.

Guess what asset type is exempt from the “pledging” rule that accelerates income on an installment note?

Farmland.

Seems a critical point, considering that monetization is basically a work-around the pledging prohibition.

Is this a scam or tax shelter?

Not necessarily, but consider the difference between what happened in 2012 and how the promoters are marketing what happened.

Someone was in deep financial straits. They needed cash, they had farmland, and they found a way to get to cash. There was economic reality girding the story.   

Fast forward to today. Someone has a big capital gain. They do not want to pay taxes currently, or perhaps they prefer to delay recognizing the gain until a more tax-favorable political party retakes Congress and the White House. A moving story, true, but not as poignant as the 2012 story.   

For the home gamers, this time we have been discussing CCA 2019103109421213.

You Have To Look At Your Return

I am looking at a case that covers relatively well-trod ground. It did however remind me of a client from around 20 years ago. I got a different result than the taxpayer did in this case, but I suspect part of the reason is the IRS becoming noticeably more overbearing with penalties over the last two decades.

Anna Walton is a psychologist. In 2014 the firm where she worked informed her that their interests had diverged. This of course is jargon for termination, and she transitioned to her own firm with multiple clients, including Brown University and the National Geographic Society.

 Having multiple clients meant that she received multiple Forms 1099 at the end of the year. It is a poor idea to blow these off, as the IRS uses the 1099s for computer matching of reported income. Report less income than the 1099s on file and you can anticipate an automated notice from the IRS.

Let’s roll to January, 2016 and Ms Walton was looking at her 2015 records. She e-mailed her accountant of approximately 20 years that the practice had approximately $525 grand in revenues. The accountant used that number to arrive at an estimated tax payment.

So far there is no big deal.

She later sent her tax stuff in. A staff accountant working at the firm noted that the 1099s she remitted only added-up to approximately $351 grand. Cross-referencing the $525 grand e-mail, the accountant asked whether Ms Walton had or was expecting other 1099s. She also asked about other stuff, such as contributions, tuition plans and whatnot going into the tax return.

COMMENT: In case you are wondering, it is quite unlikely that your accountant personally prepares your tax return. It is more likely that he/she hires someone to prepare your return, including questions, and then reviews the draft return once fully or mostly prepared. I for example prepare very few returns, but I review a ton. There are not enough hours in the day for me to work with as many returns as I do if I also had to prepare them.

Ms Walton responded to the accountant but blew-off the 1099 question.

The accountant asked again.

Ms Walton blew her off again.

I think you get the drift.

The accountant prepared the return with the information available. The IRS caught the underreporting of 1099 income. The IRS wanted tax. It also wanted penalties.

Ms Walton agreed to the tax, but she did not think she should owe penalties.

Off to Tax Court they went

Her argument was easy: she relied on her accountant.

Folks, there are prerequisites to the reliance argument. For example, one has to provide all necessary information to the accountant. Secondly, that reliance is moot if even the most cursory review of the return would alert the average person to errors on the return.

The Court was quite curious why Ms Walton did not inquire why the return showed approximately one-third less revenues than she herself had previously told the accountant.

I also suspect that the Court did not take kindly to Ms Walton repetitively blowing-off the staff accountant. The repeated questioning would have/should have alerted a reasonable person that more attention was required on the matter.

The Court decided that she did not have reasonable cause to abate the penalty.

I agree.

My client back in the antediluvian days?

He left $3.5 million off his return.

The IRS wanted tax and penalties.

I argued the penalties.

What was my argument?

The client reported so much income from so many sources that $3.5 million could reasonably have been overlooked on that year’s return.

I wish I had a personal tax return like that.

I got penalty abatement, by the way.

Our case this time was Walton v Commissioner, T.C. Memo 2021-40.

 

IRS Challenges Rent In A Small Town

Let’s look at a case involving rent.

What sets this up is a C corporation in Montana.

A C corporation means that it pays its own tax. Contrast this with an S corporation, which (with rare exception) passes-through its income to its shareholders, who then combine that income with their own income (W-2, interest and dividends) and pay tax personally.

As a generalization, a tax advisor working with entrepreneurial clients is much more likely to work with S corporations (or LLCs, an increasingly popular choice). The reason is simple: a C corporation has two levels of tax: once to the company itself and then to the owners when distributed as dividends. Now that may not be an issue to a Fortune 1000, some of which are larger than certain countries and themselves are near-permanent entities - expected to outlive any current corporate officer or investor. It however is an issue to a closely-held company that will be lucky to transition one generation and unlikely to transition two.

Plentywood Drug is a Montana corporation that operates the only pharmacy in Plentywood, Montana and serves four counties spanning 7,200 square miles.

The company has four owners, representing two families.

It leases a building owned by its four owners.

COMMENT: So far, there is zero unusual about this.

The company paid the following rent:

           2011                       $ 83,584

           2012                       $192,000

           2013                       $192,000

The IRS did not like this one bit.

Why not?

Let’s go tax nerd for a moment. The IRS said that the company was paying too much in rent. Rent is deductible. Excess rent is considered a dividend and is not deductible. The corporation would lose a deduction for its excess rent. The owners however received $192,000, so they are going to be taxed on that amount. How will they be taxed if the IRS ratches-down the rent? The excess will be considered dividends and taxed to them accordingly.

Remember: a C corporation does not get a deduction for dividends. The IRS gets more tax from the company while the individual taxes of the four owners stays the same. It’s a win for the IRS.

An S corporation does not have this issue, as all income of the S is taxed to its owners. This is another reason that tax advisors representing entrepreneurial wealth prefer working with S corporations.

How does the IRS win this?

Well, it has to show that $192,000 is too much rent.

Problem: the town of Plentywood has 1,700 people.

Another problem: Montana is a nondisclosure state, meaning real estate data – such as sales prices – is legally confidential and simply not available.

The IRS brought in its valuation specialist. Third problem: Montanans do not tend to share financial information easily with strangers.

The IRS expert remarked that that he did not identify himself as an IRS agent while he was in Plentywood.

Probably for the best.

Then the IRS expert made a fateful decision: he would base his appraisal solely on Plentywood data.

Well, that should take about half a day.

He looked at the post office, two apartment buildings and a 625-square-foot commercial space.

He did the best he could to compensate by making adjustments: for commercial versus residential, for the safety of the Post Office as a tenant, for Aaron Rodgers possibly leaving the Packers.

The two families brought in their specialist, who supplemented his database by including Williston, North Dakota – the “big town” about an hour away and with a population about eight times the size.

The IRS argued that Williston was simply not comparable.

Here is the Court:

We therefore do not accept the Williston properties as being reasonable comparisons.”

Oh oh.

The two families argued that the IRS specialist was mixing tamarinds and eggplants.

Here is the Court:

His expert used two residential properties in his analysis. Government-subsidized multifamily residential housing is like a retail drugstore in that both are rented. But not in much else.”

You can tell the Court was frustrated.

How about the post office? Both sides used the post office.

Yet even though both sides agree that the post office is comparable, they disagree about the number of square feet it has.”

The Court – having to do something – decided that fair rent was $171,187.

The IRS then wanted penalties. The IRS always wants penalties.

What for?

The Commissioner alleges that the first cause on this list – negligence or disregard of rules or regulations … - applies to Plentywood Drug ….”

The Court squinted and said: What? You brought a trial, the rent turned out to be within $20 grand of what the families deducted in the first place, we have heard far too much about appraising properties over frontier America and you have the nerve to say that there was negligence or disregard?

The Court adjusted the rent and nixed the penalties.

Our case this time was Plentywood Drug Inc v Commissioner, T.C. Memo 2021-45.

Divorced Parents And A Dependent Child

 It is one of my least favorite issues in tax practice.

Who is entitled to a dependent?

Granted, there is no longer a dependency exemption available, but there are other tax items, such as the child tax credit, that require a dependent.

The issue can go off-the-rails if the parents are (a) divorced and (b) combative.

It occurs when both parents claim the same child for the same year.

One of the parents is going to lose the dependency, of course, but how the Code determines which one may surprise you.

The Code wants to know which is the custodial parent – that is, which parent did the child live with for the majority of the year. Granted, in some cases the answer may be razor close, but most of the time there is a clear answer.

The Code anticipates that the custodial parent will claim the child.

What if the noncustodial parent provides most of the child’s support?

The Code (for the most part) does not care.

How does the noncustodial parent get to claim the child?

If the parents get along, then there is no issue. Everyone follows the rules and there is no tax controversy.

If the parents do not get along and both claim the same child, the IRS is going to get involved. It will want to know: who is the custodial parent?

But the divorce decree says ….

You might be surprised how little the IRS cares about that divorce decree.

What it is interested in is whether a certain form was filed with the noncustodial parent’s return: Form 8332.

This form has to be signed by the custodial parent. If the parents do not get along, you can see the problem.

What happens if the noncustodial parent does not attach this form and both parents claim the child?

Let’s take a look at the DeMar case.

The divorce decree said that Mr Demar (Dad) was to claim the son in odd-numbered years. Dad claimed the son for 2015.

Mrs DeMar (Mom) also claimed the son.

The IRS came in. There (of course) was no Form 8332. The IRS could care less what that divorce decree had to say, so off to Tax Court they went.

Dad is going to lose this all day every day, except ….

Would you believe that – before the Tax Court hearing – Mom signed Form 8332?  

That doesn’t happen much.

There is a proposed Regulation on this point:

A noncustodial parent may submit a copy of the written declaration to the IRS during an examination to substantiate a claim to a dependency exemption for the child.

Did that save Dad?

Let’s keep reading:

A copy of a written declaration attached to an amended return, or provided during an examination, will not meet the requirement of this paragraph … if the custodial parent … has not filed an amended return to remove that claim to a dependency exemption for the child.

So one can file the 8832 late but one also has to prove that the other parent amended his/her return to remove the dependency for the child.

Guess what?

Mom did not amend her return.

Dad lost.

The IRS did not care about that divorce decree and the odd-numbered year.

I get it. The IRS has no intention of playing family court, so it established mechanical rules for the dependency. The average person focuses on the divorce decree – understandably – but the IRS does not.  Procedure is everything in this area.

Our case this time was DeMar v Commissioner T.C. Memo 2019-91.

Tax Court And Delivery Services

 We sent a petition to the Tax Court on Friday. It needs to arrive by Monday.

Technically, the petition does not have to arrive Monday, as long as it is in the care of an “approved” delivery service. I do not like to count on that extra day(s), however, so I treat the final day of the 90-day letter as an absolute deadline. In truth, I do not like waiting this late into the 90 days, but there was, you know, tax season and all.

COMMENT: Yes, the individual filing deadline was moved to May 17, but we made a concerted effort to prepare as many individual returns as possible by April 15. The majority of us here at Galactic Command do not like or appreciate a Dunning-Kruger Congress requiring us to again reschedule our personal lives.  

You may remember the old days when people used to go to the post office on April 15^th and mail their returns, especially if there was money due. Clearly there is no way that the return could make it to the IRS on the 15^th if one mailed it on the 15^th. The reason this worked (and still works, although it is much less of an issue with electronic filing) is Code Section 7502.

            § 7502 Timely mailing treated as timely filing and paying.

(a)  General rule.

(1)  Date of delivery.

If any return, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under authority of any provision of the internal revenue laws is, after such period or such date, delivered by United States mail to the agency, officer, or office with which such return, claim, statement, or other document is required to be filed, or to which such payment is required to be made, the date of the United States postmark stamped on the cover in which such return, claim, statement, or other document, or payment, is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.

This Section means that putting the return in the mail timely equals the IRS receiving it timely.

Mail service in our corner of the fruited plain has been … substandard recently. We have an accountant who no longer uses mail delivery for repetitive time-sensitive filings, such as sales and payroll taxes. She has too many experiences of mail taking a week to go crosstown that she has given up on regular mail for certain returns.

It is easier nowadays to avoid the post office, of course, with Fed Ex and UPS and other delivery services available.

We sent our petition via Fed Ex.

I am looking at a case that deals with “approved” delivery services.

What makes this an issue is that a delivery service is not approved until the IRS says it is. Granted, a lot of services have been approved, but every now and then one blows up. Use CTG Galactic Delivery, for example, have a hiccup – or just cut it too close – and you may not like the result.

A law firm sent a Tax Court petition the day before it was due. The admin person shipped it with Fed Ex using “First Overnight” delivery.

OK.

Something weird happened, and the package got relabeled. Why? Who knows. The result however is the petition got to the Tax Court late.

In general, one would consider Fed Ex to be a safe bet and Fed Ex to be squarely within the list of approved delivery services. The problem is that the IRS does not look at Fed Ex overall as “approved.” It instead looks at the delivery options of Fed Ex as individually approved or not. When the law firm sent their petition, the following services were approved:

·      Fed Ex Priority Overnight

·      Fed Ex Standard Overnight

·      Fed Ex 2 Day

·      Fed Ex International Priority

·      Fed Ex International First

You know what service is not on the list?

Fed Ex First Overnight, the one the law firm used.

Now, Fed Ex Overnight eventually got added to the list, but not in time to save the law firm and this specific filing.

Are their options left if one blows the Tax Court filing?

Yes, but the options are less appealing. One could litigate in District Court, for example, but that would require one to pay the assessed tax in full and then sue for refund.

There is also audit reconsideration, but I shudder to take that option with IRS COVID 2020/2021. The IRS has the option of accepting or rejecting a reconsideration request. I can barely get the IRS to do what it HAS to do, so the idea of giving it the option to blow me off is unappealing.

For the home gamers, our case this time was Organic Cannabis Foundation LLC et al v Commissioner.

Racing As A Trade Or Business

 I am reading a case that made me grimace. The following is a total NO-NO if you are unfortunate enough to be selected for audit:

As part of the audit RA Chavez issued information document requests to petitioners requesting their accounting records for 2013, but petitioners did not respond. RA Chavez completed his audit without receiving any additional information from petitioners …”

The abbreviation “RA” means revenue agent; those are the IRS folks who do the examinations.

This is not going to turn out well.

… respondent issued … revenue agent reports (RARs) to petitioners with proposed adjustments to tax and accuracy-related penalties. Petitioners did not respond to the … RARs.

Chances are very good that I would have resigned from this representation or refused to accept the client in the first place.

We have, for example, a client who has not filed returns for years. There are mitigating reasons, but not that many or reasons that persuasive for the number of years. My partner brought them in; I looked at their stuff and gave them a list and timetable of what we needed. I reached out to the IRS, explained that they had just hired tax representation and requested time.

I am not going to say that the IRS is always hospitable, but in general they tend to be reasonable if someone is truly trying to get back into the system (except during COVID; the COVID procedural issues have been extensive, unrelenting and extremely frustrating. The IRS really should have stopped issuing notices like government stim checks until it could at least open its mail on a timely basis).

What did my partner’s client do?

They gave us nothing. Two weeks became two months. Two months became three. I received exculpatory e-mails that read like a Grateful Dead tour.

My - and our - credibility with the IRS took a hit.

If they were my client, I would have dismissed them. They are not, however, so I did the next emphatic thing I could do: I will not work with them. We have a younger tax pro here at Galactic Command, and he will take this matter over. He has a nice background in preparation, and I would like to expose him to the representation side of practice. He is somewhat interested (at least, not uninterested), and if he remains in a CPA firm as a career it will be a nice addition to his skill set.

Back to our case.

There is a lot going on, but I want to focus on one issue.

Two families own a construction S corporation (Phoenix). The IRS disallowed $121,903 in 2013 related to car racing activities. More specifically, the racing was by a son of the owners, and his car of choice was a 1968 Camaro.

He started racing it in 2014.

One has to be very careful here. One is taking an activity with a high level of personal interest and gratification and jamming it into a profitable company. It would take minimal tax chops to argue that the racing activity is a hobby or is otherwise personal. The purported advertising cannot be “merely a thin cloak for the pursuit of a hobby.”   

The company fired back with three arguments:

(1)  The racing expenses were ordinary and necessary advertising expenses.

(2)  Phoenix purchased the car as an investment.

(3)  Racing was a separate trade or business from Phoenix and was engaged in for profit.

I do not know if these arguments existed when the return was prepared or dredged-up after the fact, but still … kudos.

Except …

The racing was not conducted under the Phoenix name. There was no company logo on the car, with the possible exception of something minimal on the rear window. There were no photographs or videos of the car on the company’s advertising.

One more thing.

Phoenix did not even separate the car racing expenses as Advertising on its tax return. Instead, it just buried them with “Construction Costs.”

Folks, the IRS does NOT like it when one appears to be hiding something iffy in a big, enveloping category of other expenses. It is, in fact, an indicium of fraud.

The first argument whiffed.

One BTW does not race a car that is held for investment. One stores a car that is held for investment, perhaps taking it to an occasional show.

The second argument collapsed.

That leaves a lot of pressure on the third argument: that the car was its own separate trade or business.

You know what the car did not do in 2013 (the year of examination)? It did not race, that is what it did not do. If one were to argue that the car was a separate trade or business, then one would have to concede that the activity started the following year – 2014 – and not in 2013. All those expenses are what the tax Code calls “startup expenses,” and – with a minimal exception - they have to be amortized over 15 years.

Let me check: yep, this is a pro se case, meaning that the taxpayers represented themselves.

We have said it before: hire a pro, spend a few dollars. You do not know what you do not know.

What would I have advised?

They should have posted photos and videos of that car everywhere they advertised, and I would have recommended adding new advertising venues. I am thinking a video diary: the purchase of the car, its modification, interviews with principal parties, technical issues encountered and resolved, anticipated future race sites and dates.

And yes, I would have put the company name on the car.

Our case this time is Berry v Commissioner, T.C. Memo 2021-42.

Income and Credit Card Rebates

I am reading a case so unique that I doubt there is much takeaway taxwise, other than someone beat the IRS.

What gets the story started is automobile rebates back in the mid -70s. The economy was limping along, and car manufacturers wanted to sell cars. Buy a car, get money back from the manufacturer.

To a tax geek, receiving a check in the mail raises the question of whether there is income somewhere.

The overall concept behind taxable income is that one has experienced an accession to wealth. That is how discharge of debt can create income, for example. As one’s debt goes down, one’s wealth increases.

What to do with a car rebate?

The IRS did the obvious thing: it saw a car; it saw payment for a car; and it saw a rebate going back to whoever bought the car. There was no increase in wealth here, it decided. The result was that one paid less for the car.

There are countless variations on the theme. What to do with airline miles, for example?

Our case features Konstantin Anikeev (K). K got himself a Blue Cash American Express credit card. The card had a reward program. American Express would send you money for buying (approved) things with the card.

American Express disallowed certain purchases from the program, however, including:

(1)  Interest charges and fees

(2)  Balance transfers

(3)  Cash advances

(4)  Purchase of traveler’s checks

(5)  Purchase or reloading of prepaid cards

(6)   Purchase of any cash equivalent

I get it. American Express did not want someone to walk the transaction through back to cash.

K noticed something: the program did not address gift cards.

A gift card is just a prepaid card, right? Not quite. A gift card is not redeemable in cash or eligible for deposit into your bank account.

I had not really thought about it.

K did think about.

You know what you can do with a gift card?

You can buy a money order, that’s what. You then deposit the money order in the bank.

Sounds like a lot of work for a couple of bucks.

K went to town. Over the course of a year or so, he and his wife generated rebates of over $300 grand.

K knows how to commit.

Interestingly enough, American Express did not seem to care. 

The IRS however did care. They were going to tax K on his $300 grand. K pointed out that the IRS had provided guidance way back by saying that rebates were not income, and all he received were rebates. Granted, there were more bells and whistles here than a 1978 Chrysler Cordoba, but that did not change anything.

The IRS said nay-nay. The guidance they put out back in the 70s involved a product or service. That product or service had a cost, and that cost could then be reduced to absorb the effect of the rebate. There were no goods and services with K’s scheme. There was nothing to “absorb” the rebate.

Off they went to Tax Court.

There is a tax subtlety that we need to point out.

The IRS could have argued that the exchange of the gift card for a money order was a taxable event. Since the cost of the gift card had been adjusted down by the rebate K received (meaning the cost was less than a dollar-on-a-dollar), there would be a gain upon the exchange.

It is a formidable argument.

That is not what the IRS did. They instead argued that K had an income recognition event when he bought the gift card.

Huh? How?

Because he intended to ….

The Court was having none of this argument.

The Court reminded the IRS that gift cards are a product. The card has a uniform product code that the cashier uses to ring up the cost. It is a product, just like a car. The IRS was upset because it got gamed. It did not like the result, but that did not give the IRS leash to arbitrarily look down the road and back-up the tax truck when it did not like the destination. The IRS should tighten its rules.

Here is the Court:

These holdings are based on the unique circumstances of this case. We hope that respondent polices the IRS policy in the future in regulations or in public pronouncements rather than relying on piecemeal litigation.”

K won. He and his wife had tax-free cash.

BTW, K did all this with a card whose credit limit was $35 grand. I am REALLY curious how much time they put into this.

Our case this time was Anikeev v Commissioner, TC Memo 2012-23.