Cir

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MICHAEL R. KELLY, No. 23-70040

Petitioner-Appellant, IRS No. 6225-

v.

OPINION

COMMISSIONER OF INTERNAL

REVENUE,

Respondent-Appellee.

On Petition for Review of an Order of the United States Tax Court

Submitted May 16, 2025* San Francisco, California

Filed June 5, 2025

Before: Carlos T. Bea and Ana de Alba, Circuit Judges, and Jeffrey Vincent Brown,** District Judge.

* The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). ** The Honorable Jeffrey Vincent Brown, United States District Judge for the Southern District of Texas, sitting by designation. Opinion by Judge Brown

SUMMARY***

Tax

The panel affirmed the Tax Court’s decision on a petition for redetermination of federal income tax deficiencies, holding that the Tax Court did not err by requiring taxpayer to prove the worthlessness of his discharged debts and declining to presume worthlessness because cancellation-of- debt (COD) income arose from that discharge. Between 2007 and 2010, taxpayer transferred millions of…