Opinion
14916-15
09-20-2022
GENECURE, L.L.C., FRANK Y. TUNG, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Courtney D. Jones Judge
On May 23, 2022, the Court issued its Memorandum Findings of Fact and Opinion (T.C. Memo. 2022-52) resolving outstanding disputes concerning partnership adjustments determined by the Internal Revenue Service for Genecure, LLC's (Genecure), taxable years 2009-12. On the same day, we issued an Order instructing the parties to file, on or before August 22, 2022, computations for entry of decision under Rule 155.
Unless indicated otherwise, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulatory references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The parties timely filed separate Computations for Entry of Decision (Computations).
With respect to taxable year 2009, respondent's Computation concludes that Genecure had ordinary business income (loss), i.e., line 22 of Form 1065, totaling ($99,798) and that it received no loan from Lilly Tung (Mrs. Tung). Petitioner, Frank Y. Tung (Mr. Tung), appears to agree with the aforementioned conclusions but additionally concludes that Genecure had net earnings (loss) from self-employment, i.e., line 14a of Schedule K, totaling ($40,455). Mr. Tung provided no explanation as to how he arrived at this figure, although it appears to come directly from the notice of final partnership administrative adjustment (FPAA) for taxable year 2009.
With respect to taxable year 2010, respondent's Computation concludes that Genecure had ordinary business income (loss) totaling ($152,009) and QTDP grant recapture tax liability totaling $230,979. Mr. Tung's Computation concludes that Genecure had ordinary business income (loss) totaling ($402,009) and QTDP grant recapture tax liability totaling $201,772. Mr. Tung's Computation further concludes that Genecure had net earnings (loss) from self-employment totaling ($55,856). Mr. Tung provided no explanation as to how he arrived at this figure, although it appears to come directly from the FPAA for taxable year 2010.
With respect to taxable year 2011, respondent's Computation concludes that Genecure had ordinary business income (loss) totaling ($177,678) and that it received no capital contribution from Mrs. Tung. Mr. Tung appears to agree with the aforementioned conclusions but additionally concludes that Genecure had net earnings (loss) from self-employment totaling ($75,715).
With respect to taxable year 2012, respondent's Computation concludes that Genecure had ordinary business income (loss) totaling ($515,713); guaranteed payments totaling $420,000; and net earnings (loss) from self-employment totaling $127,539. Mr. Tung appears to agree with respondent's conclusions regarding the $515,713 ordinary business loss and the $420,000 in guaranteed payments. He disagrees with respect to the $127,539 net earnings from self-employment figure and concludes that it should be a $255,193 loss; he provided no explanation as to how he arrived at this figure, although it appears to come directly from the FPAA for taxable year 2012. Respondent similarly provided no meaningful explanation as to the basis for his computation of the net earnings from self-employment figure.
Upon due consideration, it is
ORDERED that respondent shall file, on or before October 7, 2022, a memorandum detailing or otherwise explaining (1) the omission on his proposed decision document of bottom line figures regarding Genecure's net earnings (loss) from self-employment, i.e., line 14a of Schedule K, with respect to taxable years 2009- 11 and (2) the basis for the $127,539 net earnings from self-employment he computed with respect to taxable year 2012 (including why the FPAA determination of a $255,193 net loss from self-employment is no longer operative).