The U.S. Tax Court hears over 300 cases a year. Only about 12% are ones dealing with interpretation of the law ("regular" decisions). The rest are memorandum and summary opinions. The summary opinions are the "small claims" part of Tax Court where the amount at stake has to be under $50,000 and the taxpayer waives any appeal rights. Non-regular cases involve primarily interpretation of the facts. But, many are quite interesting and can serve as reminders of rules we might not look at often, or reminders of questions to be asking clients ("due diligence"), and problems to avoid.
A recent TC Summary Opinion is a reminder of a few things:
- Even figuring out filing status can be difficult.
- Spouses should be careful of one spouse filing electronically and telling his/her spouse after the fact.
- When a married couple file separately (rather than jointly), they lose some tax benefits, such as the Earned Income Tax Credit. If they are contemplating divorce though, separate filing might be a good idea to avoid joint liability. Note that in California, if they are a very high income couple (over $1 million), filing separately might reduce an extra tax applicable in California. (If you have that much income, find a preparer knowledgeable about taxes for individuals such as yourself.)
The case summary and lessons learned are posted at
CPE Link's blog (my guest post) -
Bruce, TC Summary Opinion 2014-46. I hope you take a look.
What do you think?
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