The genesis of this article comes from a newsletter published by accounting firm Wegner, LLP. The title reminds me of those late TV commercials featuring Roni Deutch (America’s self-proclaimed tax lady) telling people they could just pay the IRS pennies on the dollar. It didn’t work for Roni (for more articles on her click here and here.)
The Wegner article discusses a federal court ruling that says taxpayers cannot cite a television commercial that mischaracterizes certain tax rules as authority to support the position taken on a tax return.
According to the court opinion, Ralph and Jacqueline Grosso bought a house for their adult son. They also claimed the first time home buyer’s credit of $6,500. The problem is that Mr. & Mrs. Grosso never lived in that house nor did they intend to. The plain language of the home buyer credit says you must live in the home.
The case should have ended right there after an audit reversed the credit. The Grossos, however, claimed they were entitled to the credit because they learned about it on a TV commercial. They say that because the commercial was misleading, somehow they were excused from the law requiring purchasers to live in the home.
The court concluded that a misunderstanding of the tax law does not excuse the clear requirements of the Internal Revenue Code (Grosso v. U.S., Eastern District of Pennsylvania Nov. 30, 2011).The fact that Ralph and Jacqueline had enough money to buy their kid a house suggests that they didn’t even need the $6,500 credit but that’s another story. The moral of the story? Don’t believe everything you see on TV.
A few minutes with an accountant early in the game can save a lot of aggravation (and attorneys fees) later.
Our tax practice is quite limited. If you bought into a fraudulent tax scheme or abusive tax shelter based on a TV commercial, we can’t help. But if you lost $1 million or more based on the bad advice of an accountant, insurance or investment advisor, we can probably help.
You may not be able to rely on TV commercials but should be able to rely on your tax adviser. Unfortunately, we often find unqualified insurance agents and investment professionals giving bad tax advice, they can be held responsible.
Need more information? Contact attorney Brian Mahany at (202) 800-9791 or by email at All inquiries are confidential and protected by the attorney – client privilege. We handle tax fraud and abusive tax shelter cases nationwide.
Mahany Law – America’s Fraud Recovery Lawyers.
Video One: “If It Sounds Too Good to Be True It Probably Is – Tax Lady Roni Deutch Prosecuted”
Video Two: Parody of Roni Deutsch Pay Pennies to the IRS Ads