Tax Court Says It Erred By Not Evaluating Penalty on Partnership

The US Tax Court Wednesday said it made a “substantial error” by failing to evaluate if a negligence penalty applied to a Georgia partnership when it disallowed the partnership’s $20.67 million charitable contribution deduction on a conservation easement.

The court earlier this year applied a penalty to the partnership, Oconee Landing Property LLC, for a substantial understatement of income tax. But the court erred in finding that a “no stacking” rule barred the court from also analyzing if a negligence penalty applied, Judge Albert G. Lauber said in the July 17 decision.

• The Tax Court can reconsider a case where, ...