![]() Unless I missed something there were only three substantive 183 opinions this year. For a roundup of the last decade or so you might want to check out my Honest Objective Trumps Realistic Expectation – Why Tax Practitioners Should Be More Aggressive On Hobby Losses. The other important point the guide makes is that that Section 183 and the related regulations are close to unchanged from the early seventies. Therefore all of the nearly fifty years of case law remains relevant. Oddly the guide does not have much on the case law. So here is your opportunity to be ahead of the revenue agents. ![]() It is a presumption in favor of taxpayers and can't be used against them. There is a great deal of attention to the presumption outlined in Section 183(d). The presumption comes into play if there is profit in three out of five years or two out of seven in the case of horses. If somebody knows one thing about the hobby loss rules it is probably some sort of distorted version of the presumption. If you study the case law, you will find it has little practical significance. There is one very important observation about the presumption in the guide.Įxaminers cannot use IRC 183(d) as the reason for disallowing losses under IRC 183 even when the taxpayer fails to meet the presumption. The guide tells agents why their cases get pushed back by Appeals. Oddly, they seem to imply that is a bad thing. The guide encourages agents to talk directly to taxpayers rather than deal with representatives who don't have all the answers. So if you are a representative, make sure you have all the answers.
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