Previous Audit Does Not Bless Deductions

In 1999, the IRS audited the tax return of Millard Thomas and accepted his position that his disability pension benefits were nontaxable. In 2003, the IRS again audited Thomas’s tax return, but this time the IRS contended that the disability income was taxable.

Thomas took his case to court, where the court ruled against his position that the previous audit approved his nontaxable treatment of the disability income.1

The court noted that, from a legal standpoint, income ... Log in to view full article.