Deconstructing Canal Corp. v. Commissioner – Part III

By Jonathan Prokup and Dustin Covello We now tackle the third question raised by our original post about Canal Corp. v. Comm’r: when (if at all) should courts defer to the opinion of a reputable tax advisor in deciding whether to uphold an assessment of penalties against a taxpayer? To be clear, deference in this … Continue reading Deconstructing Canal Corp. v. Commissioner – Part III

Deconstructing Canal Corp. v. Commissioner – Part II

By Dustin Covello and Jonathan Prokup Following up on our earlier post, Deconstructing Canal Corp. v. Commissioner – Part I, we now examine the second question raised by Judge Kroupa’s opinion.  Specifically, where a taxpayer relies on the opinion of an advisor to establish a “reasonable cause and good faith” defense to the imposition of … Continue reading Deconstructing Canal Corp. v. Commissioner – Part II

Deconstructing Canal Corp. v. Commissioner – Part I

By Jonathan Prokup and Dustin Covello Many practitioners were taken aback by the recent Tax Court decision in Canal Corp. v. Commissioner, where Judge Kroupa issued a stinging opinion that not only recast a leveraged partnership distribution as a disguised sale, but also upheld penalties against the taxpayer for what the judge characterized as the … Continue reading Deconstructing Canal Corp. v. Commissioner – Part I