Garbini v. Commissioner

The petitioners, the Garbinis, were ranchers and landowners in Oregon. They argued that they engaged in ranching activities for profit and were thus able to deduct expenses from their taxes. The Tax Court decided for the Respondent, the Internal Revenue Service, finding that the petitioners did not engage in the kinds of behavior consistent with individuals engaging in profit-making activities, such as having a business plan and preparing budgets. The court made this decision in part because the petitioners neglected to sell carbon credits despite the ability to do so. The court believed that by neglecting to sell carbon credits, the plaintiffs were not seriously interested in making profits from their land.