IRS Badges of Fraud... [ read ]
On June 22nd, the U.S. Tax Court released a memorandum decision in Kamal v. Commissioner, T.C. Memo 2023-80, which is a helpful reminder of what evidence a court will consider when the IRS has proposed a 75% civil fraud penalty. In addition, Kamal is another example of the potential risks of filing a Tax Court petition.
How Long Does the IRS Have to Challenge an ERC Refund?... [ read ]
For employers who have either filed for or have received payment for Employee Retention Credit (ERC) claims, the significant surge in IRS examinations of ERC claims is similar to the shark in the movie Jaws. You know he is out there, but you don't know where he will bite and when.
The Employee Retention Credit: Some Guidance Exists But Uncertainty Remains... [ read ]
If you follow the Meadows Collier blog, you are likely already aware that the IRS is focused on improper Employee Retention Credit ("ERC") transactions. My colleagues' previous blog posts described how the IRS has added Employee Retention Credit transactions to its annual "Dirty Dozen" list. We are now seeing the IRS begin new examinations related to the ERC and, in other cases, pursue criminal indictments. My colleagues have also described how the IRS is focusing on tax preparers and promoters involved in improper claims of the ERC. In sum, the IRS is serious about improper ERC claims.
California Introduces Settlement Proposal for Micro-Captive Insurance Transactions and Syndicated Conservation Easement Transactions. What's the IRS' Plan?... [ read ]
On May 31, 2023, the California Franchise Tax Board (FTB) issued Notice 2023-02 providing a limited time settlement opportunity to taxpayers who participated in potentially abusive Micro-Captive Insurance (MCI) and Syndicated Conservation Easement (SCE) transactions.
Sometimes "The Truth" is Reasonable Cause for IRS Penalties... [ read ]
I was reminded of a Seinfeld episode when I read the summary opinion by the Tax Court in Tracy v. Commissioner, T.C. Summ. Op. 2023-30, where the judge held that the taxpayer had reasonable cause for his failure to file employment tax returns and pay employment taxes because he had a good story to tell.
Sometimes the IRS is Even Steven... [ read ]
Seinfeld fans will recall the episode called "Even Steven", where Jerry was Even Steven. If he lost a gig, another one became available. If he lost money, he would find the same amount somewhere else. In two recent cases, the IRS was Even Steven, like Jerry. In one case, Lakepoint Land II LLC v. Commissioner, Tax Court Docket No. 13925-17, the IRS stands accused of knowingly using a backdated document to win a penalty defense. In the second case, Soleimani v. Commissioner, T.C. Memo 2023-60, the IRS prevailed in disallowing millions of dollars in deductions, after the court determined the taxpayers were relying on forged documents and information from a fictious lawyer.
Do Not Wait Until Midnight to File Tax Court Documents... [ read ]
In Nutt v. Comm'r, the Tax Court held that electronic filing deadlines are in the eastern time zone (the time zone where the court is located).
Delaware Must Turnover Communications with Microcaptive Promoters... [ read ]
On April 21st, a Third Circuit Court of Appeals panel ruled that the Delaware Department of Insurance (DDOI) must comply with a 2020 summons from the IRS for all communications with microcaptive insurance companies and their managers. This is another step in the IRS continuing attack on microcaptive insurance companies.
Update on IRS Tax Deposits and a Potential Crack in the Door for Interest Abatement?... [ read ]
I recently wrote a blog about whether partners in BBA partnerships can make deposits under IRC Section 6603. Now there are more updates to share about deposits, although this time unrelated (at least directly) to BBA partnerships.
Tax Court Opinion Reminds Taxpayers to be Careful about Social Media Posts... [ read ]
Most lawyers, especially those who handle some type of litigation, have warned clients about social media posts. Because people like to post pictures of events, extravagant trips and other adventures or discuss what they are doing on social media, it is standard operating procedure for lawyers to search social media of an opposing party for helpful information.
