The IRS doesn't play fair

I rarely get into work on this blog, but in case the average person was to ask me how often the IRS was fair in their audits or the adjustments that they propose, I'd like to point this out as an example:


"The Tax Court held that the IRS's determinations are arbitrary, capricious, and unreasonable. The court further held that T's comparable uncontrolled transaction method, with appropriate adjustments, is the best method to determine the requisite buy-in payment."

So in a nutshell, the IRS made a determination in this case, which goes beyond "we think" and actually means "pay up" and the taxpayer had to go to tax court, where tax court determined the IRS was "arbitrary, capricious, and unreasonable" and the taxpayer's method was "the best method."

This is the mentality that I bring in every time I see an audit or proposed adjustment on a tax return because the IRS really does have a history of getting it completely wrong.