Blackman v. Commissioner 88 T.C. 677 (Tax Ct. 1987) Blackman got into an argument with his estranged wife. In a rage, he took all her clothes and burned them in a fire. The fire got out of control and burned down the entire house. Blackman was not convicted of arson, but his house insurance refused to pay for the loss. When Blackman filed his taxes, he took a deduction for a casualty loss for the damage to the home. 26 U.S.C. §165(c)(3) allows for deductions due to property losses, including losses from fires. The IRS denied the deduction. Blackman appealed. Blackman argued that he had definitely lost property, so he should get the deduction. The IRS argued that is intended to cover unlucky people, not negligent people, so if you are partially at fault, you can't take the deduction. The Tax Court found for the IRS and denied the deduction. The Tax Court noted that the negligence of the taxpayer is not a bar to the allowance of the casualty loss deduction. See Anderson v. Commissioner (81 F.2d 457 (1936)) and Shearer v. Anderson (16 F.2d 995 (1927)). However, the Court also noted that gross negligence on the part of the taxpayer will bar a casualty loss deduction. Heyn v. Commissioner (46 T.C. 302 (1966)). In this case, the Court found that Blackman's actions amounted to gross negligence and therefore didn't qualify for a deduction under §165(c)(3). The Court also found that allowing a casualty loss deduction, in this factual setting, would severely and immediately frustrate the public policy against arson and burning, and against domestic violence. Basically, this case says that you can claim a casualty loss deduction under §165(c)(3) even if you are negligent, but not if you are grossly negligent.