TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, May 17, 2007

Rutgers Adjunct Law Prof Defaults on $34.7 Million Tax Court Case

Rutgers_2The Tax Court (per Judge Gale) yesterday decided a case involving a taxpayer's failure to report capital gains from stock sales contained on Forms 1099-B received by the IRS. Charlton v. Commissioner, T.C. Memo. 2007-122 (5/16/07).  Among the interesting aspects of the case are:

  1. The Service assessed taxes and penalties of over $34.7 million.
  2. Despite the large assessment, the taxpayer proceeded pro se.
  3. The taxpayer, Anna E. Charlton, is an adjunct law professor at Rutgers-Newark. and her husband, Gary L. Francione, is a chaired law professor at Rutgers-Newark. They are leaders in the animal rights movement and "started and operated the Rutgers Animal Rights Law Clinic/Center from 1990-2000, making Rutgers the first university in the United States to have animal rights law as part of the regular academic curriculum, and to award students academic credit not only for classroom work, but also for work on actual cases involving animal issues."
  4. Although taxpayer's Tax Court petition claimed that the IRS erred in the notice of deficiency by failing to subtract her basis in the stock from the gross sales proceeds in arriving at the amount of capital gain, she never provided the IRS or the Tax Court with any evidence on the amount of her basis in the stock.
  5. The IRS continually tried to contact the taxpayer prior to the trial date, but was unsuccessful.
  6. The taxpayer did not show up at the Tax Court trial on January 22, 2007 in Philadelphia.
  7. The Tax Court granted the Government's motion to dismiss the taxpayer's petition.

For more, see Joe Kristan.

Update:  It was subsequently determined that the claim of a tax deficiency by the IRS was an error. There was a stipulation of no tax deficiency or liability submitted to the Tax Court and the opinion was withdrawn by the Tax Court in this order.

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