The good news for the taxpayer in the case of Provitola v. Commissioner, US Tax Court Bench Opinion, Nos. 12357-16 and 16168-17 (2019)[1] was that the Court rejected the IRS arguments that their business related to a product to enhance television viewing was a sham.  But that was more than offset by the bad news when the Court also found that the business had not yet commenced in the years in question, meaning all expenses were capitalized pursuant to IRC §195 until the year the business actually begins operations.

Mr. Provitola is an attorney who also holds a B.S. in physics.  His law practice specializes in patent law and he is sole owner of the S corporation in which he practices.  Around 2003 he had an idea to enhance television viewing and began developing a product. Between 2005 and 2016 he was awarded seven patents that related to this product he was developing. [2]

he taxpayer in the case of Tarighi v. Commissioner, TC Summary Opinion 2015-28 the taxpayer ran afoul of, among other things, the problem of the start-up expense provisions of IRC §195.