Tuesday, May 27, 2003
Another Efficient Use of IRS's Attorney's Time
Richard Scott Gehrs sold securities but did not earn enough to require him to file taxes due to his basis. IRS called after receiving reports of the sales, and he refused to file a return, because he did make enough money. He wins in Tax Court on the deficiency because of his basis. In the Order, Tax Court said that he did not have a requirement to file a return.
In this case, Gehrs asked for litigation costs. He lost, because Tax Court said that although he did not owe taxes, he did have a requirement to file a return when the IRS made the demand. Way to be consistent, guys.
Thanks to their valiant efforts in defending against this petition, the IRS did not have to pay any of Gerhs' claimed $92.77 in costs.