Any Taxpayer Who Paid An International Information Return Penalty Should Consider Requesting a Refund... [ read ]
On April 3rd the Tax Court issued an opinion in Farhy v. Commissioner, holding that the IRS does not have authority to assess certain international information return reporting penalties. As a result, any taxpayer who previously paid an international information return penalty should consider requesting a refund of the penalty.
1014 Basis Adjustments and Irrevocable Grantor Trusts... [ read ]
On April 17, 2023, the IRS released Revenue Ruling 2023-02, concluding that the basis adjustment incident to a person's death, under Section 1014 of the Code, generally does not apply to the assets of a grantor trust unless the assets are included in the grantor's gross taxable estate.
ERC Gets "Listed" - IRS Adds Employee Retention Credits to Dirty Dozen List... [ read ]
Each year, the IRS identifies a dozen transactions -- inclusive of scams, structured transactions, and other transactions that the IRS just doesn't like – and puts them on its so-called "Dirty Dozen" list. Much like the Razzies, it's a not a list you want to make. And this year the IRS has added for the first time Employee Retention Credits ("ERC").
Part Three: Are Tax Returns Given to an IRS Agent Considered Filed?... [ read ]
Last June, I wrote a blog post on a 9th circuit panel opinion in Seaview Trading LLC v. Commissioner, where the panel, in a 2-1 decision, reversed the Tax Court on the meaning of a "filed" return. The panel held that a tax return sent to an IRS agent was considered filed and started the three-year time period of limitations for the IRS to issue a notice of deficiency. This was important because the IRS did not issue a Notice of Deficiency until more than three years after the tax return was provided to the IRS examiner, and therefore was beyond the statute of limitations.
ERC: Is the IRS Trying to Ski Uphill?... [ read ]
One of my favorite things to do is snow ski. I've been doing it for a long time and try to go on a couple of ski trips every year. In fact, I just returned from a trip with a couple of friends including my colleague Alan Davis, who is not only a great estate planning attorney, he is also an excellent skier. But I digress. Uphill skiing was brought to mind when I saw on March 7th the IRS released its third warning in six months regarding fraud and abuse in the Employee Retention Credit (ERC) program.
BREAKING NEWS: Supreme Court Rejects the Government's Aggressive FBAR Argument; FBAR Nonwillful Penalties Apply Per Form.... [ read ]
When a taxpayer omits a foreign account from an FBAR form and that omission is nonwillful, federal law can still impose a steep monetary penalty. Originally that penalty was capped at $10,000, but the law requires that the maximum penalty be inflation-adjusted each year. Currently, the maximum nonwillful penalty is $15,611.
The IRS Gets Serious About ERC Abuse... [ read ]
In a prior blog post, I discussed how both the IRS Examination Division and the IRS Criminal Investigation Division were starting to focus on Employee Retention Credits (ERC) and ERC promoters. In a recent interview, an IRS CID official said that there have already been 10 or 11 ERC indictments.
Can BBA Partners Make Deposits Under IRC Section 6603?... [ read ]
If you owe the IRS money in 2023, the interest accruals are far more costly than they have been in recent history. That is because Congress requires the IRS to charge a mark-up on the federal short-term rate, which has skyrocketed. Congress also has mandated that interest be compounded daily. Under these rules, most taxpayers are currently facing a 7% interest rate that compounds daily. Given these staggering interest rates, more and more of my clients are considering making what is known as a "deposit" to the IRS. Deposits stop interest from accruing to the extent of the amount of the deposit.
IRS Proposes A New Acronym and a New Tip Reporting Program... [ read ]
The government loves a good acronym for a program, institution or act, like FATCA (Foreign Account Tax Compliance Act), TEFRA (Tax Equality and Fiscal Responsibility Act), NASA or IRS. There must be a branch of the government solely dedicated to creating acronyms and making sure the acronym is not offensive, like Seattle's South Lake Union Trolley which I understand was quickly changed to South Lake Union Streetcar.
What Do The National Taxpayer Advocate and David Letterman Have In Common?... [ read ]
When I was in college, Late Night With David Letterman, which was on NBC immediately after The Tonight Show With Johnny Carson, was must see TV. I know I am dating myself, but almost every weeknight my fraternity brothers and I would watch Late Night to see Dave, Paul Schafer, Larry "Bud" Melman, stupid pet tricks, stupid people tricks, the guy under the seats and other wacky bits. Of course, this was only after we had completed 2-3 hours of quality study time at the fraternity house. I know from recent experience that you can waste a whole weekend watching old Late Night clips on YouTube, including an audience favorite, the nightly Top 10 list. The Top 10 list was usually topical, but could be anything.
