IRS-The 10 Deadly Sins... [ read ]
I've been practicing tax law for more than 30 years helping businesses and individuals resolve disputes with the IRS and I can't tell you how many times a new client has complained about how they were mistreated by the IRS and that IRS employees can do whatever they want because they have lifetime employment. In 1998, in response to the congressional testimony regarding perceived IRS abuse of taxpayers, Congress enacted the 1998 Revenue Reform Act (RRA 98) which, many of us will recall, was intended to make for a kinder and gentler IRS. Taxpayers became "customers" and tax professionals became "partners". I'll leave for another post my thoughts about RRA 98 and whether the IRS became kinder and gentler. What I am addressing today is Section 1203 of RRA 98, a list of 10 actions by an IRS employee that can result in automatic termination of employment, with appeal only to the IRS Commissioner, i.e., the Ten Deadly Sins.
Musing While Waiting on Hold for Someone at the IRS to Answer My Question... [ read ]
Trying to work out a client's IRS issues these days can be frustrating for the client and the tax professional. You can't throw a stone without hitting a story about delays and problems the IRS is having. I was recently waiting on hold with the IRS hoping to find someone who could help me find out the status of my client's refund claim. While I listened to the "wonderful" hold music that is on a 30 second loop and hoped I would not a get a "courtesy" hang up, I started doing some web surfing and stumbled onto the Taxpayer Advocate Service webpage. At the very top of the TAS webpage is the following: "Refund delayed? Our ability to help may be limited" and a link to a page detailing why the TAS may not be able to help with a delayed refund. Not a good sign.
Tax Court Petitions and Premature Assessment... [ read ]
When a taxpayer does not agree with tax adjustments proposed by an IRS examiner, the IRS sends the taxpayer a Notice of Deficiency, which gives a taxpayer 90 days to file a petition with the U.S. Tax Court to dispute the proposed adjustments. If the taxpayer files a timely petition, the IRS cannot assess the proposed tax until the case is resolved by the U.S. Tax Court. If a taxpayer does not file a tax court petition, the IRS assesses the tax and the taxpayer is contacted by the IRS collection division for payment.
IRS Statute of Limitations and Civil Fraud... [ read ]
On July 26th, U.S. Tax Court Judge Lauber issued an opinion in George S. Harrington v. Commissioner, upholding the IRS' determinations that the taxpayer fraudulently underreported his offshore income and the civil fraud penalty applied. There is nothing particularly unique about the case but it includes a very good discussion of the factors the court will consider when the IRS proposes a civil fraud penalty and the resulting impact on the statute of limitations.
Taxpayer's Penalty Defense Gets Boyled (Boiled?)... [ read ]
In previous blog posts I have discussed the late filing penalty and the reliance on a tax professional defense to the penalty. We discussed the reliance defense with respect to a late estate tax return and with respect to late e-filed returns .
Are You Feeling Lucky? IRS Taxes on Wagers and Bookmakers... [ read ]
These days it seems like the government taxes everything it can. While it is debatable whether or not that is true, there are a number of "hidden" taxes of which many taxpayers are unaware. Taxes on wagers and occupational taxes on bookmakers are a couple of those "hidden" taxes. Although the casinos in Las Vegas know about and pay these taxes, illegal bookmakers may not be and could be facing significant tax liabilities as a result.
Is There Still Hope for Taxpayers? Another Court Determines Previous IRS Guidance Limiting FBAR Penalty is Invalid... [ read ]
On July 13, 2021, the Second Circuit issued an opinion in United States v. Kahn, No. 19-3920 (2d Cir. 2021) affirming the trial court's grant of summary judgment against the defendants for FBAR penalties, plus statutory additions and interest, in the amount of $4,264,728.
Recent Legislation Gives Taxpayers Greater Access to District Court in Challenging the Texas Comptroller's Denial of a Refund Claim or Assessment of Tax... [ read ]
Among the various bills that became law in the 87th Texas Legislature of 2021 are two amendments to the Texas Tax Code that will significantly impact the procedures available for challenging the denial of tax refund claims and assessments by the Texas Comptroller of Public Accounts in district court. Both of these bills (SB 903 and HB 2080) are intended to make district court more accessible to taxpayers.
Because 130 Years Isn't Long Enough... [ read ]
Under Texas law, a non-charitable trust may not last forever. Historically, a Texas trust was required to vest, "not later than 21 years after some life in being at t he time of creation of the interest, plus a period of gestation".
Will Claiming a Carryback Open a Prior Year to Audit?... [ read ]
The CARES Act resurrected the carryback of net operating losses (NOL) for 2018, 2019, and 2020. An individual taxpayer has a choice in how they request a refund for a carryback NOL, and the statute of limitations applies differently depending on which alternative they choose.
