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Articles by David Schultz
IRS Says Tax Court Got Deadline Ruling Wrong, Asks for a Redo Original
The US Tax Court committed “glaring interpretive errors” when deciding it doesn’t need to automatically reject petitions filed outside of a statutory 90-day deadline, according to a filing by the IRS. The court should reconsider its opinion in Big Apple Tompkins Realty v. Commissioner because it directly conflicts with another opinion handed down in 2025, the IRS said Oct. 21. There, in North Wall Holdings v.
Taxpayer Win on Right to Jury Trial Vacated by Appeals Court Original
A federal district court needs to reconsider its ruling that found a taxpayer assessed certain penalties by the IRS has a right to a jury trial, according to an Oct. 21 unsigned order from the US Court of Appeals for the Fifth Circuit. The appeals court vacated the ruling in United States v. Sagoo and remanded it back to the US District Court for the Northern District Texas, saying the lower court should revisit its decision light of a Supreme Court ruling earlier this year. In FCC v.
Basketball Player in Japan Says He Deserves Foreign Tax Credits Original
A professional basketball player who played in Japan sued the IRS in US Tax Court, contesting the agency’s rejection of more than $1.28 million in foreign tax credits he claimed on his 2020 and 2021 federal returns. Ryan Rossiter, who has played professional basketball since at least 2011, argues that he adequately documented the Japanese taxes he paid while playing for two teams in Japan’s professional basketball league, according to an Oct. 13 petition filed in Tax Court.
Forged Document, Math Error Sinks Land Donor’s Tax Court Case Original
The US Tax Court sided against a Georgia real estate developer Monday in a nearly multi-million dollar tax case that the judge said involved “grotesque overvaluations of property.” The IRS was correct to deny Terry Heath a $19.2 million charitable tax deduction for easements he put of 333 acres of undeveloped land across two sites in rural eastern Georgia, Judge Albert G. Lauber said.
Silicon Valley Bank’s Successor Will Get $21 Million Tax Refund
The IRS has agreed to give the entity liquidating the defunct Silicon Valley Bank a tax refund of nearly $21.7 million, plus interest, according to a document filed in US Tax Court. The agency released the details of its settlement with the bank’s liquidators in an Oct. 5 filing in a case in which the IRS initially said the liquidators owed $41.3 million in taxes.
Portland’s Arts Tax Hike Was Invalid, City Business Group Says
The Portland City Council in Oregon needed to get approval from voters before increasing its arts tax by more than 40% earlier in May and, therefore, the tax hike should be nixed, a city business group said. The Portland Metro Chamber sued the city in Oregon Tax Court Thursday, arguing that it violated the state’s constitution and the city’s own charter when it increased the annual tax to $50 from $35.
Oklahoma Charter School Owners Dispute $76 Million Excise Taxes
Part-owners of a for-profit company that managed a nonprofit virtual school challenged more than $76 million in federal excise taxes the IRS assessed against them for allegedly receiving excess financial benefits from the nonprofit in 2018 and 2019. David Chaney and Benjamin Harris, Oklahoma residents who co-owned Epic Youth Services LLC, filed their challenges in the US Tax Court Sept. 28. The IRS determined that Chaney and Harris each owe $38.2 million in excise taxes.
DOJ Can’t Reinstate Tax Penalty Invalidated by IRS, Judge Says
A federal judge won’t allow the Justice Department to revive a $2.4 million tax penalty against a foreign debt investor because the IRS had previously abated it. DOJ prosecutors said only they — not the IRS — had the authority to invalidate a penalty against Philip Groves, a buyer, seller, and servicer of Chinese distressed debt. But that’s not the case, according to a Sept. 30 opinion from Judge John F. Kness of the US District Court for the Northern District of Illinois.
Hedge Fund Bid to Drop $100 Million Tax Bill Gets Court Scrutiny
A hedge fund was met with tough questioning from a panel of Third Circuit judges Wednesday as it argued the IRS improperly treated it as a business rather than investors for tax purposes, which led to a $100 million tax bill. The agency’s decision to classify YA Global Investments, an arm of the investment manager Yorkville Advisors, as a business led to large tax consequences for the firm because it hadn’t been withholding taxes on its income attributable to its foreign partners.
Easement Donor Had Sufficient IRS Appeals Access, Tax Court Says
A Tennessee conservation easement donor had ample opportunities to contest a disputed land valuation before going to court, a federal judge ruled Tuesday, even though the IRS paused the case after their appraiser was indicted.
Amusement Equipment Maker’s Estate Denied $537,000 Tax Refund
The son and executor of a go-kart, bumper car, and miniature golf manufacturer lost a bid for a tax refund after a federal court barred his own testimony for being disclosed too late. The estate of Jay Grant Sr. isn’t entitled to a $537,000 tax deduction stemming from losses generated by his business, Amusement Products LLC, according to a Monday opinion from Judge Katherine A. Crytzer of US District Court for the Eastern District of Tennessee.
Justice Department Sides With Churches in Political Speech Case
The Justice Department told an appeals court it largely agrees with the religious groups suing it over how far churches can wade into politics and still keep their tax-exempt status. The DOJ said a lower court judge was wrong to throw out an agreement the government reached with these religious groups in July 2025 that would have significantly weakened the Johnson Amendment, a 1950s law that conditions religious organizations’ tax-exempt statuses on steering clear of political campaigns.
Victim of Crypto ‘Pig Butchering’ Scam Drops Tax Refund Lawsuit
An Ohio man who lost more than $820,000 in a cryptocurrency “pig butchering” scam has dropped his tax refund lawsuit against the IRS. Shane Vaia is voluntarily dismissing his suit without prejudice and is covering his own attorneys’ fees, according to a Thursday filing in the US District Court for the Southern District of Ohio. He had been seeking a refund of more than $130,000 in taxes he paid for the 2024 tax year.
IRS Says Court Must Strike Down ‘Staggering’ Covid-19 Tax Ruling
A lower court ruling that would retroactively invalidate all tax administration that took place during the Covid-19 pandemic has “staggering” implications and must be overturned, the IRS told a federal appeals court. The agency is challenging a lower court ruling last year in Kwong v. United States which found that a statute providing tax relief to people affected by disasters applied to the entirety of the three-plus year pandemic.
Tax Court’s Self-Employment Limited Partner Test Survives Appeal
An investment firm’s state-law limited partners don’t qualify for an exemption from self-employment taxes on their distributive shares of income, accepting a case-by-case analysis by the US Tax Court on whether they work in a limited capacity, the Second Circuit said Thursday as it created a circuit split.
Cannabis-Infused Lemonade’s Shareholders Challenge Tax Bills
Shareholders of a Washington state cannabis business are challenging taxes and penalties the IRS imposed on them, saying their products contain only a fraction of a percent of THC and, therefore, legally don’t qualify as controlled substances. Shareholders of Dogtown Pioneers, makers of the cannabis-infused beverage Ray’s Lemonade, filed three separate petitions Sept. 10 in US Tax Court.
OnlyFans Creator Admits to Evading Taxes on $3 Million of Income
A 39-year-old OnlyFans content creator pleaded guilty to tax evasion after earning more than $3 million from 2019 through 2022 but willfully failing to pay any taxes or file returns. Stamford, Conn., resident Seathra Zmeena Orr faces a maximum of five years in prison and owes more than $1.1 million in restitution to the IRS.
Appeals Court Again Revives Austin Homeowners’ Annexation Suit
A federal appeals court for the second time revived a legal challenge Tuesday from a group of Texas homeowners who say the City of Austin improperly annexed their homes. The US Court of Appeals for the Fifth Circuit reversed a lower court’s decision to dismiss the homeowners’ lawsuit, saying their equal-protection claim didn’t turn on an uncertain state law question. The lower court had dismissed the case for the second time under the US Supreme Court decision Railroad Commission of Texas v.
Sysco’s Theories in Dividend Deduction Case Rejected by Court
dividends-received deduction is limited to directly held stock, the US Tax Court said, rejecting the food service giant’s arguments and applying its earlier ruling in a case involving Varian Medical Systems. In April, Judge Emin Toro ruled in Varian Medical Systems II that the dividends-received deduction under Section 245A is only available for dividends on shares the taxpayer directly holds, and set out a formula for calculating the resulting foreign tax credit disallowance.
Woman Must Pay Late Ex-Husband’s Foreign Bank Account Penalties
A New York woman must pay tax penalties out of her late ex-husband’s estate because he failed to report to the IRS hundreds of thousands of dollars he had deposited in foreign bank accounts, a federal court ruled. The failure of Karen Veeraswamy’s ex-husband, Velappan, to report his Indian bank accounts was willful because it was “obvious to a reasonable person” that he was subject to a filing requirement that he wasn’t fulfilling, according to a Sept. 10 ruling from Judge Rachel P.
Failed Picasso Deal Triggers $5 Million in Taxes for Art Broker
A failed multi-million dollar deal involving a Pablo Picasso painting resulted in an art broker owing more than $5 million after the US Tax Court said Thursday money he received from the father of former Treasury Secretary constituted taxable income. Art broker David Tunkl should have reported $16.5 million he received from art gallery owner and retired Goldman Sachs banker Robert Mnuchin, the opinion said. Judge Adam B.
Estate Resolves Tax Lawsuit Centering on Ill Lawyer’s Advice
A Rhode Island estate’s lawsuit over penalties for failing to timely file a tax return has been dismissed, after both sides reached an undisclosed settlement in the case. The tax refund lawsuit filed by Rita Mayo, the executor of the estate of her brother, Vincenzo Sandonato, was jointly dismissed with prejudice last week, with each side agreeing to cover their own costs, according to a filing in the US District Court for the District of Rhode Island.
Estate Resolves Tax Lawsuit Centering on Ill Lawyer’s Advice
A Rhode Island estate’s lawsuit over penalties for failing to timely file a tax return has been dismissed, after both sides reached an undisclosed settlement in the case. The tax refund lawsuit filed by Rita Mayo, the executor of the estate of her brother, Vincenzo Sandonato, was jointly dismissed with prejudice last week, with each side agreeing to cover their own costs, according to a filing in the US District Court for the District of Rhode Island.
Tax Court Refuses to Toss Woman’s Innocent Spouse Relief Bid
A taxpayer can continue her legal action against the IRS after the US Tax Court said Wednesday that the agency couldn’t prove it mailed a notice to her home. Dania Wales is petitioning the IRS for innocent spouse relief, in which someone can be excused from certain tax debts if they can prove they were unaware of their partners’ filing errors. Judge Christian N. Weiler rejected the IRS’s motion to dismiss.
Business Group Urges Tax Court to Stop Covid-19 Interest Accrual
Interest that accrued on unpaid taxes during the Covid-19 pandemic should be wiped out because of the text, structure, and history of a disaster relief statute, according to a brief filed in US Tax Court by the US Chamber of Commerce. The Chamber is encouraging the court to take a broad view of a federal statute that suspends some tax deadlines during a federally declared disaster in its Monday amicus brief.
Grand Jury Materials Denied by Tax Court in Whistleblower Case
A trader with expertise in foreign exchange who claimed information he provided led the IRS to prosecute promoters of abusive tax shelters can’t access grand jury materials, the US Tax Court ruled Thursday. Jeremy Berenblatt didn’t meet the high standard that would have allowed him to use information from a grand jury in his challenge of an IRS whistleblower award denial, according to a memorandum opinion from Judge Elizabeth A. Copeland.
Soroban Pushes Back on IRS Letter Citing Appeals Court Ruling
Soroban Capital Partners LP told the Second Circuit the IRS is misinterpreting a recent ruling on when principals in a partnership owe self employment tax. Soroban filed a letter with the US Court of Appeals for the Second Circuit on Monday saying the Fifth Circuit’s recent revised ruling in K. Alain LLLP v.
Atlanta Law Firms Drop Two Employee Retention Credit Lawsuits Original
Two Atlanta-based law firms that said the federal government owed them hundreds of thousands of dollars in Covid-19 tax credits dropped their lawsuits against the agency less than three weeks after filing those complaints. The firms Rueb, Stoller, Daniel LLP and Bodker, Ramsey, Andrews, Winograd & Wildstein told the US District Court for the Northern District of Georgia Aug. 21 that they were dropping their claims against the federal government without prejudice.
Bisignano Can’t Lead Without Senate Confirmation, Union Says (1)
Aug. 21, 2026, 3:55 PM UTC; Updated: Aug. 21, 2026, 4:48 PM UTC Frank Bisignano’s actions as the IRS’ CEO for the past 10 months are invalid because he hasn’t been confirmed by the Senate, a federal employee union said in a new lawsuit against the agency. The National Treasury Employees Union is asking a federal court to find that Bisignano was improperly appointed to the job, and to specifically throw out his decision to stop granting advance sick and annual leave requests for IRS employees.
Bisignano Can’t Lead IRS Without Senate Confirmation, Union Says
Frank Bisignano’s actions as the IRS’ CEO for the past 10 months are invalid because he hasn’t been confirmed by the Senate, a federal employee union said in a new lawsuit against the agency. The National Treasury Employees Union is asking a federal court to find that Bisignano was improperly appointed to the job, and to specifically throw out his decision to stop granting advance sick and annual leave requests for IRS employees.
Mistaken Court Filing Shows Fetterman Campaign Paid Tax Interest
The campaign of paid the IRS almost $50,000 last year in tax interest, according to a document the campaign’s lawyers mistakenly filed in court. The document consists of a letter to the IRS dated Aug. 10 asking the agency to confirm in writing that “no penalties or fees remain outstanding” and asks that “the IRS regard this matter as closed.” The letter, filed in US Tax Court, also includes a copy of a receipt for a payment the Fetterman campaign made to the IRS for $49,751.33 in April 2025.
Momentum Builds Among Judges for a Pro-Taxpayer ‘Tiebreaker’
Unclear tax laws are emerging as the latest issue for lower courts grappling with close calls between federal agencies and the plaintiffs challenging their decisions. A growing school of thought holds that when ambiguity prevents clear interpretation of a tax statute, the tie should go to the taxpayer. The most prominent recent example of this is a concurring opinion authored by Judge Eric E. Murphy, a Trump appointee on the US Court of Appeals for the Sixth Circuit.
Former CPA Can’t Contest Tax After Signing Agreement, Court Says
A closing agreement with the IRS signed by a former certified public accountant is valid and prevents him from challenging his tax bill, the US Tax Court ruled Wednesday. James Ballengee, a businessman in the oil and gas industry who previously worked as an accountant at , lost his case after Judge Adam B. Landy denied Ballengee’s request to invalidate the agreement.
IRS Land Value Appraisal Upheld in $14 Million Conservation Case
The US Tax Court was right to adopt wholesale the findings of an IRS expert over a pair of taxpayer witnesses who offered conflicting takes on the fair market value of a property at the center of $14 million conservation easement trial, an Eleventh Circuit panel ruled.
Valuation Method in Conservation Easements Gets Judges’ Scrutiny
Three conservation easement donors’ arguments for how their donated real estate should be valued — an argument that failed each time at Tax Court — seemed to fare little better before an Eleventh Circuit panel Thursday.
Valuation Method in Conservation Easements Gets Judges’ Scrutiny
Three conservation easement donors’ arguments for how their donated real estate should be valued — an argument that failed each time at Tax Court — seemed to fare little better before an Eleventh Circuit panel Thursday.
New York Landlord’s Estate Challenges $5.4 Million Tax Bill
The estate of Laurence Gluck, founder of the Manhattan real estate firm Stellar Management, said the IRS incorrectly assessed him $5.4 million in taxes and won’t let the estate appeal this assessment. Gluck’s estate filed a petition asking the US Tax Court to negate its tax bill and to reverse the decision of the IRS Independent Office of Appeals that this bill can’t be challenged because it was a part of a partnership-level proceeding.
Law Firm Loses Tax Deadline Case Years After High Court Revival Original
A North Dakota law firm lost its tax case at the appellate level Monday despite a US Supreme Court win four years ago that gave it a chance to ask the courts for leniency on a narrowly missed filing deadline. Boechler P.C. is not entitled to equitable tolling that would allow it to challenge a levy notice the IRS sent in 2017, the US Court of Appeals for the Eighth Circuit ruled.
Trading Firm Can’t Deduct Foreign Dividends, US Tax Court Rules Original
A trading firm held both long and short positions in stocks simultaneously, so therefore it can’t deduct the dividends it received from those stocks or claim related tax credits, the US Tax Court ruled.
Two Law Firms’ Suits Say IRS Owes Them Pandemic-Era Tax Credits Original
Two law firms are arguing in separate lawsuits that the IRS wrongly denied the Covid-19 tax credits they claimed. The firms Rueb Stoller Daniel LLP and Bodker, Ramsey, Andrews, Winograd & Wildstein PC filed their suits Monday in the US District Court for the Northern District of Georgia. They said they are entitled to employee retention credits, a tax incentive created during the pandemic to encourage businesses to keep their workers on their payrolls.
Cannabis Firms Say Unique Business Structures Are Tax Legit (1) Original
Two different companies are saying the IRS was wrong to disregard the business structures they set up when the agency denied deductions under a section of the tax code that has long vexed state-legal cannabis operations.
Judges Open to Texas Homeowners’ Challenge of Austin’s Tax Power
A panel of federal appeals court judges indicated they don’t think a lower court was right to dismiss a tax lawsuit from a group of Texas homeowners who say Austin’s 2019 annexation of their homes was improper. Judge Kurt D. Engelhardt of the US Court of Appeals for the Fifth Circuit said that, while the city is now taxing these homes, it may not be providing them with municipal services like water and wastewater.
Pediatrics Management Company Challenges $1.7 Million Tax Bill Original
A pediatric management company petitioned the US Tax Court to challenge a more than $1.7 million IRS tax bill for its 2022 tax year. Pediatrics on Demand Management LLC filed the petition to contest an IRS determination that disallowed various business expense deductions. The IRS identified a $1.1 million tax deficiency and imposed almost $230,000 in penalties and nearly $380,000 in interest charges.
IRS Says Convicted Army Corps Employee Owes $1.6 Million Original
A former employee of the US Army Corps of Engineers who pleaded guilty to accepting bribes now owes the IRS nearly $1.6 million in taxes and penalties, according to a lawsuit filed Wednesday. The IRS is seeking a court order to collect funds from Michael Alexander, who pleaded guilty in 2012 on bribery and money laundering charges and was sentenced to six years in prison.
Justice Department Sues Estate Executor for Unpaid Tax Penalties Original
The federal government sued an estate executor and multiple companies to collect over $1.3 million in unpaid taxes and penalties from a deceased man’s estate, claiming the executor improperly transferred estate funds while owing federal taxes. Louis Paolino Jr. serves as executor of the estate of David Ehrlich, who was assessed penalties for his role in promoting a tax scheme involving donated art, according to a complaint filed Monday in the US District Court for the Western District of Texas.
Appellate Judges Receptive to BankUnited’s $40 Million Refund Original
Federal appellate judges during oral arguments Tuesday seemed likely to allow to revive its nearly $40 million tax refund claim that originated out of an FDIC-mediated acquisition of another bank at the height of the Great Recession. BankUnited is trying to overturn a lower court ruling that found its 2019 refund claim was filed beyond the 10-year statute of limitations.
Illinois Easement Donors Challenge IRS Deduction Rejections Original
Four partnerships who made conservation easement donations for Illinois property are challenging the IRS’ assertions that they owe a total of roughly $91 million in underpayments and $36 million in penalties. The IRS said the value of the land donations made to two separate conservation groups was actually worth nothing and, therefore, the donors were not entitled to charitable tax deductions, the donors said in four separate petitions filed in US Tax Court Wednesday .
Paychex Unable to Challenge NY Income Tax Apportionment Rules Original
must let an administrative process play out before it can challenge New York’s income tax apportionment regulations in court, a state appeals court ruled Thursday. Because Paychex hasn’t been assessed a tax bill yet, its harm “remains conjectural in nature,” Justice Mark Powers wrote for the New York Supreme Court, Appellate Division, Third Department.
School District Sues Texas Over Property Tax Recapture System Original
Texas’s education funding system that requires property-rich school districts to remit some of their revenue to the state for redistribution functions as a statewide property tax prohibited by the Texas Constitution, according to a district’s lawsuit. The system, often referred to as the “Robin Hood” plan, uses a formula to determine how much each school district should receive in funding.
Scam Victims Say IRS’s Crippling Tax Bills Compound Their Trauma
When Lori Flowers got caught up in a romance scam in 2022, she immediately felt embarrassment and shame. The full scope of the financial pain didn’t reveal itself for a while. She only realized she’d been defrauded after her online “partner” said he needed a short-term loan and convinced her to liquidate $400,000 from her 401(k). Not only was the money gone, but she’d need to pay taxes and early withdrawal penalties.
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