Tax Court In Brief | Smith v Comm'r | Exclusion Of Value Of Lodging Provided By Employer

• Jurisdiction: United States,Federal
• Law Firm: Freeman Law
• Subject Matter: Employment and HR, Tax, Employee Benefits & Compensation, Income Tax, Tax Authorities
• Author: Freeman Law
• Published date: 06 February 2023

The Tax Court in Brief - January 9th - January 13th, 2023

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 January 9th, 2022, through January 13th, 2023

• Vassiliades v. Comm'r, T.C. Memo 2023-1 | January 9, 2023 | Panuthos, J. | Dkt. No 12283-20S.
• Simpson v. Comm'r, T.C. Memo. 2023-4| January 9, 2023 | Jones, J. | Dkt. No. 16923-16
• Wondries v. Comm'r, T.C. Memo. 2023-5| January 9, 2023 | Kerrigan, J. | Dkt. No. 13345-19 (deficiencies for deduction of farm and ranch expenses evaluation of activity not engaged in for profit).
• Decrescenzo v. Comm'r, T.C. Memo 2023-7| January 12, 2023 | Halpern, J. | Dkt. No 16784-18

Smith v. Comm'r, T.C. Memo. 2023-06| January 12, 2023 |Toro, J. | Dkt. No. 5191-20

Summary: This is a deficiency case and a continuation of the Tax Court's opinion in Smith v. Commissioner, No. 5191- 20, 159 T.C. (Aug. 25, 2022), which is blogged right here on the ol' Tax Court in Brief. See https://freemanlaw.com/tax-court-in-brief-smith-v-commr-closing-agreement-and-malfeasance-of-fact/ (addressing the issue of whether a closing agreement could be avoided if there is malfeasance or misrepresentation of a material fact). In this more recent opinion, the Court addresses, basically, one issue: Whether, under 26 U.S.C. ' 119, Smith may exclude from gross income the value of lodging his employer provided during the relevant years (2016-2018).

Smith was employed by Raytheon Company, a private defense contractor, to work as an engineer in Pine Gap, Alice Springs, Northern Territory, Australia (Pine Gap). Raytheon used an Australian operations handbook, which informed Smith that he was eligible for housing in Alice Springs but was responsible for IRS taxable income on the rental value of furnished housing and the associated utilities. The Raytheon handbook stated that income tax on the value of housing and the associated utilities is the responsibility of the employee, and the taxable value of housing provided was reported via a Form 1099 issued by the U.S. Air Force.

Smith was assigned U.S.-government housing (Housing Accommodation) on a public street with public access. It was not on Raytheon's business premises, nor was it a "camp" as defined by section 119(c). All utilities other than...