James Tinnell - Page 5




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          mining activity for 1991, 1992, 1993, and 1994 constituted an               
          activity engaged in for profit within the meaning of section 183,           
          and (2) whether petitioner was liable for the accuracy-related              
          penalty under section 6662(a) for each of the years at issue.               
          Following a trial on the merits, we held in Tinnell v.                      
          Commissioner, T.C. Memo. 2001-106 (Tinnell I), that petitioner’s            
          mining activity was an activity engaged in for profit within the            
          meaning of section 183 and that petitioner was liable for the               
          accuracy-related penalty with respect to the stipulated and                 
          computational issues and the adjustment with respect to                     
          petitioner’s exercise of his Zila stock options.  We based our              
          holding with respect to section 183 on a review of the relevant             
          facts and circumstances and an analysis of nine factors,                    
          enumerated in section 1.183-2(b), Income Tax Regs.  This Court              
          and others, including the Court of Appeals for the Ninth Circuit            
          to which an appeal in this case would lie, typically apply these            
          factors to evaluate whether a taxpayer conducted his activity               
          with the intention of making a profit.  See, e.g., Golanty v.               
          Commissioner, 72 T.C. 411, 426 (1979), affd. without published              
          opinion 647 F.2d 170 (9th Cir. 1981).                                       
               After we issued our opinion in Tinnell I, petitioner filed a           
          motion for award of litigation costs in which he alleges that he            
          satisfies all of the requirements of section 7430 and that he is            
          entitled to litigation costs of $187,958.22.                                






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