Taxpayer Advocate Reports on Tax Court Wins and Losses

[The Observer]

The Wall Street Journal covered a report prepared by the Taxpayer Advocate Office regarding the outcomes of Tax Court cases. While most of the article focused on the litigation and outcomes for taxpayers who were pursuing legitimate claims (surprisingly taxpayers representing themselves in Tax Court won 17% of time compared to 22% in wins if they had representation in court).

However, Ms. Olson did spend a little time on those litigants who pursued frivolous arguments:

Taxpayers in one category of cases nearly always argue on their own behalf—those fighting a penalty up to $25,000 for making frivolous arguments to the IRS. These taxpayers often lose.

In one case reviewed by Ms. Olson, the taxpayer assured a Tax Court judge that he didn’t owe the IRS $3,840 of tax and penalties for dozens of reasons, including that he was a citizen of California, not the U.S., and that he had his own definition of income. Asked to provide it, he said, “It’s a cat with a pink bow.”

After warning the taxpayer four times, the judge imposed a $3,500 penalty.

[NYGman]

The Wall Street Journal covered a report prepared by the Taxpayer Advocate Office regarding the outcomes of Tax Court cases. While most of the article focused on the litigation and outcomes for taxpayers who were pursuing legitimate claims (surprisingly taxpayers representing themselves in Tax Court won 17% of time compared to 22% in wins if they had representation in court).

However, Ms. Olson did spend a little time on those litigants who pursued frivolous arguments:

Taxpayers in one category of cases nearly always argue on their own behalf—those fighting a penalty up to $25,000 for making frivolous arguments to the IRS. These taxpayers often lose.

In one case reviewed by Ms. Olson, the taxpayer assured a Tax Court judge that he didn’t owe the IRS $3,840 of tax and penalties for dozens of reasons, including that he was a citizen of California, not the U.S., and that he had his own definition of income. Asked to provide it, he said, “It’s a cat with a pink bow.”

After warning the taxpayer four times, the judge imposed a $3,500 penalty.

For more on the pink bowed cat, viewtopic.php?t=10998