Tax Court Determines that IRS Must Obtain Written Penalty Approval under I.R.C. Section 6751(b) to Assert Penalties against Taxpayers.... [ read ]
On December 20, the Tax Court issued a supplemental opinion in Graev v. Commissioner, in which it reversed its prior position on I.R.C. Section 6751(b) and agreed with the Second Circuit's decision in Chai v. Commissioner. In Chai, the Second Circuit held that Section 6751(b)(1) requires the IRS to obtain written supervisory approval of an initial penalty determination no later than the date the IRS issues the notice of deficiency or files an answer asserting the penalty. A previous blog post discussed the Chai decision and its impact on pending Tax Court cases.
Taxpayers May Want to Consider Accelerating Large Dollar Purchases Under the New Tax Law... [ read ]
As the year comes to a close, one additional matter that individual taxpayers may want to consider is whether to expedite any large dollar purchases into this year if sales tax will be due on those transactions.
Recent Tax Legislation Includes Significant Changes to the Taxation of "Qualified Equity Grants", While Possibly Signaling Other Deferred Compensation Reforms to Come... [ read ]
The House of Representatives and the Senate have been busy these past few weeks in their attempt to drag some semblance of H.R. 1, also known as the Tax Cuts and Jobs Act ("TCJA"), over the proverbial goal line, and it appears that they have done so this week. Barring any additional procedural snafus, the TCJA should land on President Trump's desk for his signature before the break for the holidays. While there hasn't been much publicity surrounding the possible changes to non-qualified deferred compensation plans, employers of privately held companies should pay particular attention to the end result of the TCJA as passed in its final form.
The Texas Comptroller Receives Christmas Gift from the Texas Supreme Court in MTC Apportionment Decision... [ read ]
In a much anticipated decision the Texas Supreme Court today issued its decision in Graphic Packaging Corp. v. Hegar, No. 15-0669, (December 22, 2017). The Court held that Graphic Packaging could not use the three-factor apportionment formula provided for in the Multistate-Tax Compact for apportioning Texas franchise tax, notwithstanding that Texas is a member of the Compact.
Estate Tax and the New Tax Act... [ read ]
As we sit on the precipice of the new tax act going into effect (it only needs the President's signature to become law), it appears that the only transfer tax change in the Act consists of the doubling of the Section 2010(c) basic exclusion amount from $5,000,000 to $10,000,000 for transfers made and decedents dying after December 31, 2017 and before January 1, 2026.
A Couple of Interesting Rulings in Undisclosed Foreign Account Penalty Cases... [ read ]
Read about two cases involving interesting rulings in Undisclosed Foreign Account Penalty Cases: United States v. Forbes and Jarnagin v. United States.
Bitcoin Is Drawing the Interest of Investors and the IRS... [ read ]
In a prior blog post (here) my colleague Chris Weeg discussed using Bitcoin as part of year end charitable giving. Bitcoin has been in the news lately as the value of a single Bitcoin has risen dramatically in the last month. Some financial experts view Bitcoin as the next great investment, while other financial investors believe that Bitcoin is a scam. Currently Bitcoin has limited usage beyond investment, but one of the Big 4 accounting firms says it has begun accepting Bitcoin as payment (here). In addition, futures trading on Bitcoin is expected to start next week.
As Year-End Approaches, Donations of Bitcoin and Other Virtual Currencies Explained... [ read ]
Time is running out to make charitable contributions for the 2017 tax year. With virtual currencies trading at record highs, contributions of this pioneering property may be a viable option for some. The most common (and valuable) virtual currency is Bitcoin, which is valued at approximately $9,600 as of this writing and up over 900% year-to-date. Other popular virtual currencies include Etherum (valued at approximately $415) and Bitcoin Cash, a split-off of Bitcoin (valued at $1,260). For those riding the Bitcoin rocket ship (or, perhaps, the Bitcoin roller coaster), you may consider taking advantage of the following favorable charitable contribution tax rules.
Buckle Your Seat Belts – Major Changes to International Taxation Currently Pending in Congress.... [ read ]
As of the date of this article, the U.S. Congress is considering two different legislative proposals that would cause significant changes to the U.S. income taxation of international business activities and investments. The U.S. House of Representatives passed on November 16, 2017, H.R. 1, the "Tax Cuts and Jobs Act" (the "House Proposal") while the Senate Finance Committee passed, on that same date, its own proposal (the "Senate Proposal"). The Senate and House proposals are generally consistent regarding the nature of the changes that would be made to the U.S. income tax laws affecting international transactions, but there are subtle differences that will need to be resolved as the legislative process moves forward to achieve passage of final legislation. This article does not attempt to summarize every change to the U.S. international tax laws that would result under the pending House and Senate proposals. Rather, this article summarizes five categories of international tax reforms under the pending proposals that would be broadly applicable and thus are important to monitor as the legislative process advances. In addition, this article does not discuss every nuance or detail relating to the pending proposals discussed herein. Instead, this article is intended to provide a high level overview of the pending proposals so that readers will be alerted and can look further into the proposals potentially impacting them.
IRS Issuing "Soft Letters" to Taxpayers Suspected of Under-Reporting their Offshore Activities... [ read ]
IRS officials are making it known that the IRS is losing patience with taxpayers who have not come forward to fully report their offshore activities. Not only is the IRS doubling down on its efforts to audit taxpayers who withdrew or were denied entry into the IRS' Offshore Voluntary Disclosure Program, the IRS recently announced a program whereby they will be sending not-so-subtle "soft" letters to taxpayers encouraging them to disclose (or else).
