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Monday, January 13, 2003


Apparently, the theme of today�s Tax Court opinions is �Why we need an independent judiciary.� If the legislature codifies some well-meaning exceptions to certain rules, for example for people suffering from a disability, inevitably some nut-case will come along and try to abuse the system. That was Mr. Bosi, whose case was blogged below, and who claimed to be suffering from the disability of being a well-paid professional. (Please note that I am not using the colloquial term �nut-case� to imply that Mr. Bosi has a diagnosable mental illness. If he did, he would be entitled to claim the status of being �disabled�, and would ironically then not be a �nut-case�.)
And just as inevitably if some people can be denied the exception by being labeled a nut-case abuser, the bureaucracy that administers the law will claim that everyone who claims the exception is a nut-case abuser. The IRS assessed additional taxes on Richard J Meyer III for an early distribution from a retirement plan, failure to file timely, and failure to pay estimated income tax, all of which have an exception for disability. Mr. Meyer had AIDS and suffered a nervous breakdown that forced him to take time off of work. Tax Court, unlike the IRS, can tell the difference between a well-paid professional and an AIDS patient suffering a mental breakdown.
Mr. Meyer lost a disagreement over payments to a separate spouse without a written agreement, as well as the dependency exemption and child care credit where he failed to get a signed release from the custodial parent. An issue not raised by Tax Court was that it is not clear to me that either parent was entitled to the exemption. The Tax Court found that during the years in question, the mid-nineties, the custodial parent lived rent-free with her parents in a condo in Hawaii. It does not say where in Hawaii, but some locations in Honolulu at that time may have had rents greater the amounts that Mr. Meyer was paying for support. If so, the grandparents may actually have been the ones entitled to the exemption.

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