IRS Confirms 2023 Indexed Amounts... [ read ]
Our wealth transfer tax system provides taxpayers with exclusions from certain taxes. These exemptions are adjusted annually; the amount of the adjustment is tied to the Consumer Price Index. The IRS has published the 2023 indexed amounts.
New Tax Court Case Reveals the IRS' Two-Front War Against Microcaptives... [ read ]
A recently filed Tax Court case has revealed just how much disdain the IRS has for microcaptives. And it is a lot. The case is SCC Holding Company of Pinellas, Inc. v. Commissioner, Docket No. 16285-22, filed in July 2022. At the time of filing, the taxpayer and the IRS were already long-time "friends." Starting in 2016, the IRS had issued a series of Notice of Deficiency covering tax years 2010 through 2016. Therein, the IRS disallowed deductions for captive insurance premiums and asserted a 40% penalty based on the IRS' determination that the microcaptive planning lacked economic substance and was not properly disclosed.
The IRS Makes it Easier and Cheaper to Fix Foot Faults on S-Corp Elections... [ read ]
On October 7th, the IRS released Revenue Procedure 2022-19 which provides simplified measures for correcting six procedural missteps that the IRS says are resolvable without requesting a letter ruling. The IRS believes the relief provided in Rev. Proc. 2022-19 will reduce burdens on taxpayers and the government, facilitate increased taxpayer compliance with the rules for electing S corporation status, and reduce costs and delays in completing transactions involving S corporations and qualified subchapter S subsidiaries.
IRS Successfully Stifles Taxpayer's Effort for Judicial Review of IRS Cryptocurrency Guidance... [ read ]
The IRS is a bit thin-skinned when it comes to the income taxation of cryptocurrency transactions. While it zealously advocates the legal soundness and correctness of its views, the IRS is just not ready for criticism – especially the judicial kind.
IRS Announces New Audit Campaign Focusing on Partnership Distributions... [ read ]
Do you have 10, 20 or even 30 years of data to prove up basis in a partnership interest? Well, I hope so, because the IRS will be asking for it as part of a new IRS Compliance Campaign.
Treasury Marches Forward with Efforts to Create a National Database of Business Entities... [ read ]
You know the news is BIG when the Government spends 308 pages explaining (justifying) rules where the rules themselves take up only 22 pages. Today the Treasury Department announced final regulations requiring business entities to report details on their beneficial ownership to the federal government. No, today is not April 1 and my fingers are not crossed.
When Inflation Isn't All Bad?... [ read ]
Our wealth transfer tax system provides taxpayers with exclusions from certain taxes. These exemptions are adjusted annually; the amount of the adjustment is tied to the Consumer Price Index...
The Merge: Will Ether Holders Have a Taxable Event Upon a Successful Merge?... [ read ]
Today marks a day years in the making in the crypto world. Today, the Ethereum blockchain is scheduled to convert from a Proof of Work system to a Proof of Stake system. This is commonly known as "the Merge." As background, a Proof of Work system relies on miners expending massive amounts of energy to create—or "mine"—new blocks in a blockchain. A Proof of Stake system, on the other hand, relies on people staking their cryptocurrency—essentially locking it up from trading for a period of time. Those who stake a sufficient amount of cryptocurrency are then able to validate transactions for, and add new blocks to, the blockchain. Both miners and stakers receive rewards in the form of cryptocurrency for their efforts.
When is an Amended Return NOT A Qualified Amended Return?... [ read ]
In a prior blog post I discuss options for correcting mistakes and omissions on tax returns and other IRS filings, including filing a qualified amended tax return ("QAR"). A recent Tax Court opinion, Lamprecht v. Commissioner, T.C. Memo. 2022-91, discusses a taxpayer's attempt to avoid the accuracy-related penalty by filing what the taxpayers hoped were QARs.
The IRS Wants to Interview Me. What Are My Rights?... [ read ]
It can be intimidating for any taxpayer to be contacted by the IRS, much less be interviewed by the IRS. Although I have never asked how they came to the conclusion, some of my clients have said the IRS is more intimidating than the police or FBI. Any taxpayer who is contacted by the IRS for an interview has a right to representation and although the IRS has done a poor job in letting taxpayers know this right, a recent report from the Treasury Inspector General for Tax Administration (TIGTA) says that the IRS is getting better.
