From Code to Courtroom
Why Tax Pros Should Read Court Cases
“But we're not attorneys — why read court cases?”
I’ve been asked this more than once when teaching (and it is an excellent question!):
Here’s my answer: because tax is law, and we work in it every day.
You don’t need a law degree to understand how the courts interpret deductions, apply penalties, or evaluate business purpose. In fact, reading case law helps you become a more informed, strategic, and proactive tax professional, especially when the rules get murky.
Tax court cases are real stories — real taxpayers, real fact patterns, real consequences. A case refers to the dispute, while the opinion is the written decision explaining how the judge(s) ruled and why. If you're only relying on IRS publications, you're missing the side of tax where things get really interesting.
Why Court Cases Matter to Tax Pros
They Show How the Law Works in Practice
Anyone can read IRC §162 — but what does “ordinary and necessary” really mean? The courts provide us with real-world interpretations, not just theoretical ones.
Nearly every messy case starts with a pattern we’ve seen before:
Poor records
Blurred personal/business lines
Hobby losses disguised as businesses
Tax protestors - you know how these cases will go, but they are a fun read! Often, the court is much more charitable to the protester than I or many other tax pros would be.
They Sharpen Your Advice
Clients push boundaries. Reading court decisions helps you offer stronger advice, grounded not just in what the code says, but in how courts enforce it.
They Give You Language That Sticks
Some judges write with surprising clarity — and a bit of humor. Their words help you explain complex ideas to clients and add weight to your advice.
How to Start Reading Cases
Skim the facts first — learn the story.
Look at the holding — what did the court decide, and why?
Pay attention to reasoning — this is where you pick up practical tips.
For Tax Court opinions DAWSON (the official US Tax Court System) & for all other courts, JUSTIA are great resources — both are free and searchable. There are paid services, such as Taxnotes, that have summaries of cases.
Pick cases relevant to your clients and your practice — rental losses, S corps, collection issues, etc.
Cases You Should Know
Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955) - Supreme Court Case - What is income?
“undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.”
Commissioner v. Duberstein, 363 U.S. 278 (1960) - Supreme Court Case - What is a gift?
“A gift, in the statutory sense, proceeds from a detached and disinterested generosity out of affection, respect, admiration, charity, or like impulses, and while the donor's intention is the most critical consideration, the donor's characterization of the donor's actions is not necessarily determinative. The absence of a legal or moral obligation to make a payment does not establish that it is a gift.”
United States v. Boyle, 469 U.S. 241 (1985) - Supreme Court Case - Reliance on a tax professional as it relates to filing.
“The failure to make a timely filing of a tax return is not excused by the taxpayer's reliance on an agent, and such reliance is not "reasonable cause" for a late filing under § 6651(a)(1).”
Batok v. Commissioner, T.C. Memo. 1992-727 - Tax Court Case - Is the income in question subject to self-employment tax? Does it rise to the level of a trade or business?
“Petitioner's activity, although engaged in for profit, was neither continuous nor regular. Petitioner had never installed windows prior thereto nor at any time thereafter. Rather, petitioner's activity was a "one-time job". Sloan v. Commissioner, T.C. Memo. 1988-294. Accordingly, petitioners are not liable for self-employment tax on the compensation received from M. David Paul.”
Gary J. Sinopoli Jr. et al. v. Commissioner, T.C. Memo. 2023-105 - Tax Court Case - An example of a poor attempt at the “Augusta Rule” (IRC §280A(g))
“Petitioners have not presented any written documentation such as minutes, agendas, or calendars, showing that all the claimed meetings occurred during the years at issue to substantiate rent deductions of Planet. Furthermore, we find that petitioners’ testimony was not credible as to the frequency of meetings during the years at issue. Their testimony was inconsistent and included testimony that petitioners did not recall the number of meetings that took place. Planet deducted rent expenses for three meetings per month, once at each residence. Petitioners have not established that meetings occurred at that frequency. They have established only one meeting per month for January 2016 through September 2017. Respondent has allowed in the notices of deficiency a $500 rent deduction for each meeting. Petitioners have also established with their testimony that some meetings occurred during 2015. Accordingly, we will allow a deduction of rent for 12 meetings for 2015.”
Final Thoughts
Reading court cases won’t make you a lawyer, but it will make you a better tax pro. You’ll catch issues earlier, give more grounded advice, and have more confidence when a client (or another professional) pushes back.
At the end of the day, we’re not just form-fillers — we’re advisors. And great advisors understand not just what the law says, but how it plays out.
Tax research is a learned skill, and it’s worth investing in. One of the best CE courses I’ve ever taken — and one I recommend often — is Tom Gorczynski’s Tax Research Process Masterclass. It’s available on demand and worth every penny.
What’s your favorite court case and why?
How often do you read court cases?