According to The Taxpayer Advocate Service Report, here are the top 10 tax issues which generated court opinions from Jun. 1, 2017 through May 31, 2018 (the most recent data). These haven’t changed much from the prior year. The first nine were all the same, and only the trust fund recovery penalty was new, beating out last year’s “joint and several liability for spouses.” In descending order starting with the most litigated issue, they were:

1. Accuracy-Related Penalty §6662(b)(1) and (2).
2. Trade or Business Expenses §162(a) and related Code sections
3. Summons Enforcement §§7602(a), 7604(a), and 7609(a).
4. Gross Income §61 and related Code sections.
5. Appeals From Collection Due Process (CDP) hearings §§6320 and 6330.
6. Failure to File Penalty §6651(a)(1), Failure to Pay Penalty §6651(a)(2)), and Failure to PayEstimated Tax Penalty §6654.
7. Civil Actions to Enforce Federal Tax Liens or Subject Property to Payment of Tax §7403.
8. Charitable Deductions §170.
9. Schedule A Deductions Under §§211-224.
10. Frivolous issues penalty (§6673 and related appellate level sanctions).

TAX PRACTITIONER PLANNING

If you and your client are dealing with any of these issues on the preparation of the 2019 tax return or a prior year’s tax return under audit, there will certainly be plenty of case law available to “flesh out” any of these most litigated tax problems.