The RESPECT Act: Will Congress Pass Legislation to Limit IRS Civil Forfeiture in "Structuring" Cases?... [ read ]
The RESPECT Act (H.R. 1843), also known as the Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools Act, was originally introduced in the House of Representatives in March 2017. The House Ways and Means Committee recently unanimously approved the RESPECT Act, which prohibits the IRS from carrying out seizures relating to a currency structuring transaction unless the property to be seized is from an illegal source or the funds were structured for the purpose of concealing the violation of another criminal law. It also requires notice and a post-seizure hearing for such currency structuring seizures.
The Treasury Targeting the Recent Section 385 Debt-Equity Regulations (and Others) for Potential Repeal... [ read ]
On Friday, July 7th, the U.S. Department of the Treasury (the "Treasury") announced in Notice 2017-38 that it is targeting eight tax regulations for potential repeal. Included in the eight targeted are the final section 385 regulations issued in October of 2016. In a previous article from December of 2016, I discussed the onerous documentation requirements under the final section 385 regulations for related-party debt and touched on what effect these requirements may have on closely-held corporations. The Treasury's announcement could prove as a relief to those corporations dreading the potential financial burden resulting from the new documentation requirements.
Practical Suggestions for Effectively Representing a Taxpayer Before IRS Appeals... [ read ]
In a previous blog posted on June 27, 2017, we discussed some suggestions for representing taxpayers in a IRS examination. In this blog, we discuss the next step, i.e., when the exam cannot be resolved and you must make a request for review by an IRS Appeals Officer. Most of the suggestions in the previous exam blog are applicable to working with IRS Appeals and will not be repeated here. If you are representing a taxpayer in an appeals conference, you should review the previous blog and the suggestions below.
Practical Suggestions for Effectively Representing a Taxpayer in an IRS Examination... [ read ]
Through the years we have developed, or adopted from other practitioners, suggestions about dealing with the IRS in exams. The suggestions below are generalizations, to which there are substantial exceptions. Practitioners that deal with the IRS are bound not only by their individual professional ethics but also by Circular 230. It is important to recognize the significance and import of those rules and to apply not only their letter but also their spirit. The goal of any representative is to get a client out of an IRS examination as quickly as possible.
It's a Trap! Beware the Anti-Toggle Rule under I.R.C. § 409A... [ read ]
Companies often utilize deferred compensation arrangements to incentivize their workers to use their best efforts to grow the value of those companies. If a company provides a worker with a legally binding right to payment that will be received in a future year, that arrangement generally constitutes a nonqualified deferred compensation plan. As such, the plan must satisfy all of the requirements under I.R.C. § 409A in order to avoid potentially disastrous tax consequences to the worker.
Payroll and Human Resources Departments Beware: An Update on an Identity Theft Scam... [ read ]
On March 1, 2016 the IRS issued IR-2016-34, alerting "payroll and human resources professionals to beware of an emerging phishing email scheme that purports to be from company executives and requests personal information on employees." Recent information indicates that cybercriminals have increased the use of this phishing email in 2017. Identity theft and phishing are both on the 2017 IRS Dirty Dozen List.
Community and Separate Property Regimes: Educating the Mobile Client and the Multijurisdictional Attorney... [ read ]
Most clients and many attorneys are unfamiliar with the concept of community property-that is, how it works and how it affects a broad spectrum of legal practices including family law, tax law and estate planning. For attorneys with diverse clients and multijurisdictional practices, ignorance of community property law can be costly. This article provides an introduction to the community property system and highlights topics to discuss with clients planning a move either to or from a community property state.
Golden Opportunities - Maximizing Long-Term Capital Gain Treatment and Deferral of Taxable Gain Recognition from Partnership Sales... [ read ]
It is commonly known that sales of partnerships can give rise to ordinary income (subject to a current maximum tax rate of 39.6%) and long-term capital gain (subject to a current maximum tax rate of 20%). This is true regardless of whether the transaction consists of the partnership's sale of its assets or the partners' sale of their ownership interests in the partnership. Tax professionals can assist their clients in maximizing the long-term capital gain recognized from a sale of a partnership by negotiating an allocation of more of the sales proceeds to long-term capital gain assets and less of the sales proceeds to "hot assets," such as inventory, accounts receivables, and depreciation recapture.
IRS Extends Disclosure Deadline for Newly "Listed" Syndicated Conservation Easement Deals... [ read ]
At the close of 2016, the IRS' contempt for syndicated conservation easement deals reached its peak with the IRS identifying such transactions as "listed transactions." See prior MC Talks Tax blog post dated December 27, 2016, "The IRS Adds Conservation Easements to the List of Tax Avoidance Transactions."
Enhanced IRS Scrutiny of Compensation in Closely-Held Businesses (Video Included)... [ read ]
The IRS is stacking-up victories in its attack against compensation arrangements of closely held business, with C corporations, S corporations, and partnerships all potentially facing an IRS challenge. Now is the time to engage your owner-operated business clients in a discussion about compensation and ways to potentially enhance existing arrangements and bolster defenses in the event of an IRS challenge.
