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.

Lawsuit alleging that the Internal Revenue Service misclassified the petitioner taxpayers' ranching and farming activities.

Garbini v. Commissioner

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Tax Court Ruled that Petitioners Were Not Engaged in Activities for Profit, Implicating Carbon Credits

Filed

United States of America

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Activities that relate to the production of goods and services from forests.

Tax Court Ruled that Petitioners Were Not Engaged in Activities for Profit, Implicating Carbon Credits

Policy instrument

Just transition

Economic sector

Finance