The need to determine whether a taxpayer is engaged in a “trade or business” arises frequently. Although the term “trade or business” is used throughout the IRC and the associated regulations in the Code of Federal Regulations, it is not defined explicitly. In some ways this is...

In this article, we provide general observations about how tax practitioners are beginning to learn how to leverage the insights of machine learning to “crack the tax code.” We also examine how tax practitioners are using machine learning to quantify risks for their clients and ensure that...

Issues surrounding worker classification go back decades in the tax context. Given the rise of the gig-economy, these issues have resurfaced with urgency, with Uber and other gig-economy service providers making headlines for the past several years for allegedly misclassifying workers. The...

The Third Circuit’s recent decision in Skolnick once again demonstrates the predictive power of artificial intelligence in forecasting the outcome of tax appeals. Previous commentary analyzed the opinion of the Tax Court in that case, which held that the taxpayers’ horse breeding and racing...

The Chemoil tax dispute provides an opportunity to explore the relationship between the economic substance doctrine and unprofitable transactions that are rendered economically viable by tax credits. Chemoil raises a particularly interesting point of contention. Transactions that generate...

As 2023 begins, developments with large language models, most prominently ChatGPT, a recent offshoot of GPT-3, are generating buzz in legal technology circles. They are also triggering wariness among some in legal academia and practice. On November 30, 2022, OpenAI made ChatGPT available for...

Several months ago, we examined the Tax Court’s decision in Reserve Mechanical and predicted with 77 percent confidence that the taxpayer’s appeal would be dismissed and the Tax Court’s decision affirmed. The Tenth Circuit has now made that prediction accurate. In its decision, the Tenth...

The Tax Court held in Skolnick that horse breeding activities conducted by the taxpayers through Bluestone Farms LLC (which was treated as a partnership for federal income tax purposes) were not engaged in for profit. While several factors were indicative of a trade or business, including the...

To illustrate the insights possible with machine learning, we use the Blue J debt-equity predictor to analyze part of the decision recently rendered in Tribune Media. Tax Court Judge Ronald L. Buch discussed and assessed the 13 Dixie Dairies factors in Tribune Media, analyzing whether the...

The Tax Court in Mylan v. Commissioner, 156 T.C. 137 (2021) rejected the IRS’s position that expenses incurred in litigating patent disputes under the relevant specialized IP regime were capital expenditures. The IRS now seeks to have the decision remanded with instructions to disallow the...