Tax Court Issues Solar Energy Credit Opinion: In Golan v. Comm’r, T.C. Memo. 2018-76, the Tax Court considered several issues relating to energy credits under sections 46 and 48 and special depreciation deductions under section 168(k) claimed by the taxpayer in connection with the installation of solar panels and related equipment. Because of errors in the notice of deficiency, the IRS generally bore the burden of proof before the Tax Court, in contrast to the general rule that a determination of a deficiency is presumed correct, and the taxpayer has the burden of proving it incorrect. The Tax Court found that the IRS could not bear its burden with respect to: (i) the disallowance of approximately half of the energy tax credits; (ii) the disallowance of all of the special depreciation deductions; (iii) its contention that the taxpayer did not have sufficient amounts at risk under section 465; and (iv) its contention that the taxpayer was not a material participant in the solar energy venture under section 469. The Tax Court held that the IRS did meet its burden of proof in disallowing the remaining half of the energy tax credits. The Tax Court did not impose an accuracy-related penalty because it found that the taxpayer had reasonable cause and acted in good faith in relying on the advice of an accountant.

Hearing Scheduled for Tax Court Nominations: The Senate Finance Committee has scheduled a hearing on June 12 at 10 a.m. to consider several pending nominations, including the nominations of Elizabeth Ann Copeland and Patrick J. Urda to the U.S. Tax Court.

Social Security and Medicare Trustees Reports Released: Today the Social Security and Medicare Boards of Trustees released their annual financial review of the programs.

The projections indicate that income is sufficient to pay full scheduled benefits until 2026 for Medicare’s Hospital Insurance (HI) program, 2032 for Social Security’s Disability Insurance (DI) program, and until 2034 for Social Security’s Old Age and Survivors Insurance (OASI) program. For the 75-year projection period, the actuarial deficit for the Medicare HI program is 0.82 percent, and the actuarial deficit for the combined Social Security OASDI program is 2.84 percent of taxable payroll.

Secretary Mnuchin released a statement regarding the reports, saying that “[r]obust economic growth will help to ensure [the] lasting stability” of the programs.