IRS Abandons Automatic Assessment of Foreign Gift Penalties... [ read ]
The IRS has renounced its membership to the Green Day band fan club and finally restored due process in its procedures for assessing foreign gift tax return penalties. IRS Commissioner Danny Werfel publicly announced yesterday that the IRS will no longer automatically impose penalties for late-filed forms related to foreign gifts.
Cryptocurrency Staking Clarity on the Horizon? If At First You Don't Succeed…... [ read ]
In February 2022, I wrote about the cryptocurrency staking case, Jarrett v. United States. At issue in Jarrett was whether particular cryptocurrency tokens (Tezos) created through staking should be considered taxable income. The taxpayers said the newly-created tokens were not taxable income, but the government took the opposite view
IRS Launches New Exam Unit Dedicated to Increasing Audits of Pass-Through Entities... [ read ]
I always enjoy life-imitating-art moments, especially when a 1970s Saturday morning cartoon is involved. Yesterday the IRS launched a new initiative: A Wonder-Twin-esque collaboration between small and large business divisions of IRS Exam specifically devoted to ensuring compliance of pass-throughs of every size and form—including partnerships, S-corporations and trusts. Unlike the Wonder Twins, the IRS' goal is not an octopus riding an ice unicycle, but rather, "to reverse historically low audit rates" for pass-through entities.
IRS Announces More ERC Refunds, But Should Taxpayers Cash the Checks?... [ read ]
Yesterday the IRS announced the processing of 400,000 ERC claims, with the vast majority being approved and totaling $10 billion. The question is: should taxpayers cash the check or assess their options?
ERC Update: More Time For Appeals to be Filed... [ read ]
On September 19, 2024, the IRS published a page to its website with new and potentially helpful information about Employee Retention Credit (ERC) denial letters.
The IRS Has Changed the Rules for a Voluntary Disclosure. Will Anyone File One?... [ read ]
Starting in 2009, the IRS Offshore Voluntary Disclosure Program started changing how a voluntary disclosure is made, and more recent changes are threatening to kill the practice of voluntary disclosures.
Appeals Court Rules: IRS Must Follow the Constitution Regarding FBAR Penalties... [ read ]
The Eighth Amendment of the U.S. Constitution provides that excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted. The IRS has for many years calculated penalties related to foreign bank and financial accounts that many rational thinkers would view as excessive. Yet, courts have generally not ruled that the IRS's FBAR penalties violated the Eight Amendment's Excessive Fines Clause. No more.
Beware the ERC Clawback: IRS May Recapture Tens of Thousands of ERC Refunds... [ read ]
On August 15, 2024, the IRS not only announced a second ERC Voluntary Disclosure Program (VDP), they also announced that this fall they would be mailing a large volume of letters ("up to 30,000") reversing previously-paid ERC refunds. The IRS anticipates that the clawback notices—commonly referred to as "recapture letters"—could represent more than $1 billion in claims. Businesses receiving such IRS recapture letters will be ineligible for the new ERC VDP, which provides an incentive for businesses to move quickly if they wish to participate in the ERC VDP.
ERC Voluntary Disclosure Program Revived... [ read ]
On August 15, 2024, the IRS announced that they are opening a new ERC Voluntary Disclosure Program (VDP). The new program is similar to the first iteration of the program.
ERC Denial Letters: What To Do?... [ read ]
Having been involved in ERC matters for some time now, we have been waiting for the IRS to finally act—and act in a material manner—with respect to its massive inventory of pending ERC claims. The IRS is finally acting. To that end, the IRS has begun issuing large batches of ERC denial letters. Of the denial letters that we are seeing, there are several recurring issues:
