Tax Court In Brief | Howland v. Commissioner | Mortgage Interest Deduction In Foreclosure Sale And Accuracy-Related Penalty

• Published date: 20 June 2022
• Subject Matter: Finance and Banking, Tax, Charges, Mortgages, Indemnities, Income Tax, Tax Authorities
• Law Firm: Freeman Law
• Author: Freeman Law

The Tax Court in Brief - June 13th - June 17th, 2022

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

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Tax Litigation: The Week of June 13th, 2022, through June 17th, 2022

• Phillips v. Comm'r, T.C. Memo. 2022-58 | June 13, 2022 | Lauber, J. | Dkt. No. 18553-21L
• Chavis v. Comm'r, 158 T.C. No. 8 | June 15, 2022 | Lauber, J. | Dkt. No. 11835-20L
• Hatfield v. Comm'r, T.C Memo. 2022-59 | June 13, 2022 | Lauber, J. | Dkt. Nos. 7327-20, 1500-21
• Romana v. Commissioner, T.C. Summary Opinion 2022-9 | June 16, 2022 | Carluzzo, J.| Dkt. No. 1156-21S
• Kellett v. Comm'r, T.C. Memo 2022-62 | June 14, 2022 | Greaves, J. | Dkt. No. 21518-18
• Walker v Commissioner T.C. Memo. 2022-63 | June 15, 2022 |Nega, J.| Dkt. No. 16958-18L

Howland v. Commissioner, T.C. Memo. 2022-60 | June 13, 2022 | Weiler, J.| Dkt. No. 17526-19

Opinion

Summary: In 2007, Ronald Howland, Jr. and Marliee Howland (together, Howland) executed a credit agreement with a bank, consisting of a promissory note and mortgage secured by their principal residence, with respect to a line of credit up to $390,000 (credit agreement). That credit agreement was secondary to a first mortgage loan held by another lender. Under the credit agreement, Howland's payments were applied first to interest and then to principal. Howland defaulted on the credit agreement, and the bank filed a complaint for foreclosure. At the time, Howland owed $377,060 in principal on the credit agreement, plus accrued interest, fees, and other charges. In the foreclosure action, the bank sought an award for the full amount due, including the right to foreclose on Howland's residence. In 2016, a foreclosure sale of Howland's house was ordered, and the house was sold to purchaser bank for $321,000. At the time of the foreclosure sale, the sum of the accrued interest on the credit agreement was $100,607. Also in 2016, a second foreclosure complaint regarding Howland's residence was filed by the first mortgage holder. That lender claimed a balance due of principal, interest, late charges, attorney's fees, and other permitted expenses of $247,046. On December 30, 2016, foreclosure-purchaser bank sold the residence for $594,000. No Internal Revenue Service (IRS) Form 1098, Mortgage Interest Statement, was issued to Howland for...