Federal Taxation and Cutting Horses:  It’s Not Just About The Horses

Recently I came across a United States Tax Court memorandum decision dated November 25, 2019 involving a South Dakota farmer with a cutting horse and seed business.  The issues in the case that struck me were (1) whether the taxpayer’s cutting horse activity was an activity “not engaged in for profit” within the meaning of Section 183 of the Internal Revenue Code, and (2) whether the taxpayer should be required to pay the accuracy-related penalties under Section 6662(a) of the Internal Revenue Code.

Taxpayers with Significant Tax Debts Can Lose Their U.S. Passports

Ever heard of the Fixing America’s Surface Transportation (FAST) Act of 2015?  Well, under FAST the IRS has the authority to notify the State Department of taxpayers certified as owing the federal government.  The FAST requires the State Department to revoke the delinquent taxpayer’s U.S. passport and limit the taxpayer’s ability to travel outside the United States.