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Some CRATs are CR*P, So Sayeth the IRS and Department of Justice
By on March 30, 2022
In a February blog post, IRS Sends a Shot Across the Bow to Taxpayers With Grantor-Retained Annuity Trusts, I discussed the IRS blowing up a taxpayer's GRAT planning and sending a message to taxpayers and tax professionals. Soon after, another message was sent when the Justice Department filed a civil complaint in a Missouri District Court accusing five individuals and two LLCs of promoting an abusive tax scheme involving charitable remainder annuity trusts (CRATs) to eliminate capital gains taxes.
Tax Court Determines That Officer-Shareholder Compensation is Not Reasonable
By on March 16, 2022
In a recent memorandum decision, Clary Hood Inc. v. Commissioner, T.C. Memo. 2022-15, the Tax Court considered the issue of reasonable compensation to an owner/executive of a construction company. Unfortunately, the Tax Court held that the company failed to establish how the amount it deducted as compensation for its CEO and shareholder was both reasonable and paid solely as compensation for his services. To add insult to injury, the Tax Court held the company liable for an accuracy-related penalty for one of the years under consideration.
By on March 15, 2022
Beginning today, March 15, 2022, anyone requesting a Certificate of No Tax Due from the Texas Comptroller must now use Form 86-114 Joint Request for Certificate of No Tax Due to make the request. This is a change from the prior procedure, which allowed for informal requests by emailing very limited information to a dedicated Comptroller email address.
By on March 14, 2022
The Supreme Court passes on most of the cases it is invited to decide, but appellate court splits are often the key to a Supreme Court opinion. Following the 5th Circuit Court of Appeals holding in United States v. Bittner, there now exists a divide among the 5th Circuit and 9th Circuit in the determination of the penalty that can be levied by the IRS when a taxpayer non-willfully fails to report offshore accounts on an FBAR. Mr. Bittner has requested that the Supreme Court settle the circuit court dispute.
By on March 1, 2022
This blog post summarizes a few noteworthy court decisions released in January 2022 that pertain to federal tax matters.
