Chapter 1, Problem 8DQ

James has just been audited by the IRS and, as a result, has been assessed a substantial deficiency (which he has not yet paid) in additional income taxes. In preparing his defense, James advances the following possibilities. Are any of them viable? Although a resident of Texas, James plans to sue in a District Court in Oregon that appears to be more favorably inclined toward taxpayers. If (a) is not possible, James plans to take his case to a Texas state court as he is more familiar with the practices there. Yes If he loses at the trial court level, James plans to appeal to either the Federal Circuit or the 11th Circuit Court of Appeals because he has relatives in both Washington D.C., and Atlanta. Staying with these relatives could save James lodging expense while his appeal is being heard by the court. Even if he does not win at the trial court or appeal court level, James feels certain of success on an appeal to the Supreme Court.

Alison receives a notice of property taxes that are due from the County tax collector. The taxes are for the property next door to Alison and were incorrectly sent to her address. Alison believed the tax bill was for her property and paid it before realizing the error. Can Alison recover the amount she paid in taxes from her neighbor? Why or why not.

45.  Michelle lives in a state that allows use of a beneficiary deed to transfer property at death. She owns her home in her sole name. She wants this asset to go to Bertram, her only child, at her death. Which one of the following is a correct statement regarding use of a beneficiary deed in this situation?     A) A beneficiary deed can only transfer personal property at death.     B) She will incur gift tax if she records the deed.     C) If she uses a beneficiary deed, she will not be able to live in the house until her death.     D) If Bertram predeceases her, Michelle will be able to name another beneficiary to receive title to the home at her death.