106 Ltd. v. Comm'r
United States Tax Court
Partnership P entered into a Son-of-BOSS transaction. This generated more than $1 million in artificial losses which P's partners claimed on their 2001 returns. R adjusted various partnership items and determined a penalty under sec. 6662(h), I.R.C., for a gross-valuation misstatement of P's inside basis in an asset distributed by P. P now contests only that penalty, alleging it has a reasonable-cause-and-good-faith defense.
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Partnership P entered into a Son-of-BOSS transaction. This generated more than $1 million in artificial losses which P's partners claimed on their 2001 returns. R adjusted various partnership items and determined a penalty under sec. 6662(h), I.R.C., for a gross-valuation misstatement of P's inside basis in an asset distributed by P. P now contests only that penalty, alleging it has a reasonable-cause-and-good-faith defense. Held: The Court has jurisdiction over the penalty in this partnership-level proceeding after Petaluma FX Partners v. Commissioner, 135 T.C. 29 (2010), because the penalty…
1Opinion of the Court
Holmes, Judge:
David Palmlund bought into a bad deal to lose money but save on taxes. He has since filed an amended return and paid the tax he was trying to avoid. But he contests the penalty that the Commissioner asserts against him; he argues that he relied in good faith on professional advisers.
FINDINGS OF FACT
I. Palmlund
David Palmlund started his professional life in upstate New York. In 1964 he graduated with a dual degree in industrial engineering and management accounting from Syracuse University, then took a job in Rochester with Eastman Kodak as a cost engineer. After a year in the…
2Cases cited24 opinions
- United States v. BoyleSupreme Court of the United States · 1985
- Neonatology Assocs., P.A. v. Comm'rUnited States Tax Court · 2000
- Leo Goldman and Pauline Goldman v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1994
- Kligfeld Holdings v. Comm'rUnited States Tax Court · 2007
- Frank C. Pasternak Judith Pasternak (92-1681/1682) Anthony J. Cutaia Diane Cutaia David G. Koehlinger (92-1681) v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1993
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3Cited by24 opinions
- 106 Ltd. v. Commissioner, IRSCourt of Appeals for the D.C. Circuit · 2012
- Tigers Eye Trading, LLC v. Comm'rUnited States Tax Court · 2012
- In re WylyUnited States Bankruptcy Court, N.D. Texas · 2016
- Superior Trading, LLC v. Comm'rUnited States Tax Court · 2011
- Paschall v. CommissionerUnited States Tax Court · 2011
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