Retail Mortgage Lender Sues IRS Over $3.77 Million Adjustment

CrossCountry Mortgage LLC sued the IRS for increasing its partnership income by more than $3.77 million after the agency said that it only performed certain insurance transactions for their tax benefits.

The nationwide retail mortgage lender petitioned the US Tax Court on Aug. 27, challenging the nearly $1.4 million imputed underpayment determined by the IRS in its final partnership adjustment. CrossCountry said the adjustment was premised on the mistaken idea that certain expenses it incurred weren’t deductible as insurance premiums.

The IRS should accept those payments as deductible premiums, CrossCountry said, because they had a substantive economic effect of mitigating ...