Ten Lame Tax Arguments

Forbes recently published an article that discusses the ten lamest taxpayer arguments of 2011. Overviews of three of these ten lame arguments are below:

• Anietra Y. Hamper v Commissioner, TC Summary Opinion 2011-17 

Anietra Y. Hamper, a TV anchorwoman, would ask herself, when buying clothes, “would I be buying this if I didn’t have to wear this” to work? If she answered no, then she would deduct the clothing as a business expense. However, the “ideal in selecting an outfit on-air use should be the selection of `standard business wear’”, and work clothing suitable for ordinary wear is not deductible.

• Renkemeyer, Campbell and Weaver, LLP

Three of a firm’s legal partners performed legal services, and the fourth partner was an S corporation owned by a tax-exempt ESOP. The beneficiaries of the ESOP were the three attorney partners. One of the partners attempted to avoid SE tax by asserting that the special allocation of the net business income of the firm for 2004 was proper because the allocation was made pursuant to the partnership agreement’s provisions. However, the agreement was not in the record.

• Tony L Robucci, et al. v. Commissioner

Dr. Robucci’s, a psychiatrist, attempted to value his practice in two ways: the value of its goodwill the value from the work that he did. This plan was based on the idea that 85% of the net come of a single doctor psychiatric practice is attributable to goodwill. However, psychiatry does not contain much opportunity for leveraging the work of others (a critical element for a return of goodwill).

See Peter J. Reilly, Of Thongs and Sheet Music – 10 Lamest Taxpayer Arguments of 2011, Forbes, Dec. 20, 2011.

Special thanks to Jim Hillhouse (WealthCounsel)for bringing this article to my attention.