TaxProfBlog: Lessons From The Tax Court: An Object Lesson For Tax Professionals (November 14, 2022)

Bryan Camp has published an article on the TaxProf Blog, titled “Lessons From The Tax Court: An Object Lesson For Tax Professionals,” which discusses the tax court decision in Betty Amos V. Commissioner, T.C. Memo. 2022-109 (Nov. 10, 2022) (Judge Urda) focusing on the proper period of time tax records should be kept for. The article begins as follows:

It is not always easy to follow the advice you give others. A common question I get is “how long should I keep my tax records?” My somewhat snarky reply is “as long as you need to.” The response is not entirely snarky because even though each tax year stands alone, events that occur in one year might have tax repercussions many, many years later.

In Betty Amos v. Commissioner, T.C. Memo. 2022-109 (Nov. 10, 2022) (Judge Urda), the taxpayer failed to keep records as long as she needed to is. It is an object lesson for all of us. Ms. Amos was a highly successful tax practitioner, a CPA, who had decades of high-level business experience.  On her 2014 and 2015 returns she reported about $100,000 of IRA income against which she claimed over $4 million of net operating losses (NOLs) that dated back to 1999. While she could produce her 1999 tax returns showing the NOLs, she could not produce the underlying records substantiating what she had then reported, causing Judge Urda to write “It beggars belief that she would be unaware…[of] her responsibility to demonstrate her entitlement to the deductions she claimed.” Op. at 11.  Details below the fold.

Click here to see the full article: “Lessons From The Tax Court: An Object Lesson For Tax Professionals

Posted by Melissa Zheng, Associate Editor, Wealth Strategies Journal.

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