Amended Tax Return or Superseding Tax Return?... [ read ]
I recently had one of those "aha" moments and thought it was blog-post worthy. A tax return preparer called me after a tax return he tried to electronically file was rejected by the IRS because a return had already been filed for the taxpayer for same tax period. The first thought is: this is a case of stolen identity and a fraudulent return, right? In most cases, yes; but in this case, wrong. Upon further investigation, the preparer found that his office had inadvertently filed an incomplete return for the taxpayer, ten days before. In fact, the return that was filed was completely blank.
IRS Stands Firm on Microcaptive Settlement Terms and Warns of Similar Treatment for Variations... [ read ]
Lest we forget the IRS' position on microcaptives, yesterday the IRS issued a reminder to taxpayers that they should consult an "independent tax advisor" to size-up their captive insurance planning because "any future settlement terms will only get worse, not better." This warning applies not only to Section 831(b) microcaptives, but also variations that do not involve a Section 831(b) election that the IRS also identified as abusive.
IRS Has Requested Comments on Ending Revenue Procedure 94-69 Disclosures As a Defense to Penalties... [ read ]
On August 19, 2020 the IRS requested comments on whether it should eliminate disclosures made under Revenue Procedure 94-69, which allows taxpayers to avoid accuracy-related penalties with respect to self-reported adjustments at the beginning of an IRS audit
COVID Crisis Prompting the Need for a Private Letter Ruling in a Flash? No Problem.... [ read ]
Is COVID to blame for you missing a tax election, inadvertently terminating an election, or making the wrong election? Do you need immediate IRS attention… during a global pandemic when most IRS offices are closed? Don't you worry – the IRS is urging taxpayers to take advantage of expedited handling for private letter ruling requests to give you the tax certainty you need, when you need it.
To Forgive or Not to Forgive (in 2020): That is the PPP Question... [ read ]
For the many businesses that secured a potentially forgivable loan under the Paycheck Protection Program (PPP), one of the more pressing issues is whether to apply for forgiveness now or later and the tax implications of forgiveness in 2021 with respect to 2020 expenses that may become non-deductible upon forgiveness. So what is the right answer?
Missed Yesterday's Deadline? Just "COVID-19" It.... [ read ]
While the IRS has refused any formal program for late penalty relief, informally the IRS is embracing the virtue of forgiveness, with the magic word being "COVID-19."
IRS Launches Helpful Learning Resource on the New Rules Governing Partnership Audits... [ read ]
Yesterday the IRS launched a new website for taxpayers and tax practitioners seeking information on the centralized partnership audit regime. As many of you will recall, in 2015 Congress exchanged one set of overly-complicated audit rules applicable to partnerships, known as TEFRA, with a different but comparably complicated set of partnership audit rules known as BBA (after the enacting legislation, the Bipartisan Budget Act). The new audit regime is generally effective for tax years beginning January 2018.
Using the Substantial Compliance Doctrine to Defeat the IRS... [ read ]
On August 17th, the Tax Court held in favor of the taxpayers regarding a $4 million charitable contribution deduction for donating land to a town in Emanouil v. Commissioner, T.C. Memo 2020-10. The IRS had challenged the taxpayer's deduction for a number of reasons including the taxpayers' appraisals did not include all the required information and therefore failed to comply with the qualified appraisal requirements. In holding for the taxpayers, the Tax Court cited the taxpayer-friendly substantial compliance doctrine.
New Senate Committee Report Delivers More Bad News for Syndicated Conservation Easement Transactions... [ read ]
As if the onslaught of recent losses in Tax Court was not enough, investors in syndicated conservation easements now have more to worry about. On August 25, 2020, the Senate Finance Committee released a bipartisan report condemning syndicated conservation easements as abusive and encouraging the IRS to take further action to ferret out such abuses.
Second Verse, Same as the First: The IRS Sends Another Wave of Warning Letters Regarding Virtual Currency... [ read ]
As previously reported (Prior Blog Post), last summer the IRS sent letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from those transactions or did not report them properly. Well as the old saying goes, 1 is good, but 2 is better, as this summer the IRS initiates a second wave of letters to cryptocurrency users that suggest they may have misreported their transactions.
