The IRS Private Letter Ruling: When 100% Tax Certainty (or 100% Tax Relief) is a Must... [ read ]
A structured transaction with lots of zeros behind the dollar sign? A fatal planning misstep discovered too little too late? Or an IRS election that everyone thought was made but somehow slipped through the cracks? Enter the IRS private letter ruling.
Newly-Announced IRS Audit Campaigns Continue Trend of IRS Enforcement in the Areas of International and Captive Insurance... [ read ]
The IRS Large Business and International (LB&I) division – which serves corporations, subchapter S corporations, and partnerships with assets greater than $10 million – has announced a new series of targeted audits, referred to as "campaigns." Through these campaigns, the IRS is focusing its examinations on specific issues in an effort to channel the development of tax issues into the hands of those agents that have the most knowledge and training in that particular subject matter. Among the tax issues that are the subject of these new audit campaigns are captive service providers (focusing on transfer pricing), offshore private banking (focusing on unreported income) , and Form 5471 foreign corporation reporting (focusing on "loose-filed" forms). To date the IRS has announced a total of 53 campaigns.
IRS Completes Two-Week Blitzkrieg on Employment Tax Noncompliance, with More Action to Come... [ read ]
The Internal Revenue Service just announced the results of a national two-week campaign to combat employment tax crimes featuring visits to nearly 100 businesses showing signs of potential serious noncompliance and taking several dozen legal actions against suspected criminals. Roughly two dozen more enforcement actions are planned in the weeks following the two-week campaign as well. Will your client be next?
Double Tax?! IRS Prevails in Disallowing Deductions to Insured and Taxing Premium Income to Captive in Latest Tax Court Win Against Section 831(b) Microcaptive... [ read ]
The IRS just won its third consecutive battle in its war against Section 831(b) microcaptive arrangements with the Tax Court's decision in Syzygy Ins. Co., et al vs. Commissioner released on April 10, 2019. Although the Tax Court refused to impose penalties, it otherwise handed a landslide victory to the IRS, sustaining the tax deficiency against the insured businesses based on disallowed premium deductions while at the same time taxing those identical premiums as income to the microcaptive. This decision will serve to embolden an already-confident IRS in its audit campaign against microcaptives, increasing the importance of early strategizing with trial counsel. Will your client's current, or proposed, microcaptive arrangement pass muster?
Senate Finance Committee Launches Tax Investigation of Conservation Easements... [ read ]
On March 27th, the Senate Finance Committee launched an investigation into conservation easements by sending letters to 14 people involved in easement transactions. The letters ask for copies of appraisals, promotional materials and internal documents. The senators are also requesting investors' names and addresses, along with information about promoters' fees.
Items You May Want to Discuss with Your Tax Preparer... [ read ]
1. Does the taxpayer have investments in cryptocurrency which resulted in taxable transactions in 2018 or requiring "yes" answer to having a foreign account because of the situs of the exchange or basis issues?
Utilizing a Relative's Unused Lifetime Exemption to Eliminate Capital Gains Tax... [ read ]
Fundamentally, estate plans are designed to pass assets to future generations as efficiently as possible. Nevertheless, it might be beneficial to employ an "upstream transfer" to eliminate built-in gains on highly-appreciated or income-producing assets. This technique achieves an income tax basis adjustment by purposefully causing inclusion of certain assets in an ancestor's non-taxable estate at death—thus utilizing a relative's lifetime estate and gift tax exemption that would otherwise be wasted. The assets then revert back downstream to the original owner or his descendants.
Appeals Court Holds That No Offer Is Too Low To Be A Qualified Offer... [ read ]
In a prior blog post we discussed using a Qualified Offer as a tool for settling a tax case with the government. On February 8th, the U.S. Court of Appeals for the Federal Circuit issued an opinion in BASR Partnership v. United States, holding that a partnership that prevailed in case against the IRS could recover its reasonable litigation costs from the government when it submitted a nominal $1 qualified offer.
Formal Document Request... [ read ]
In prior blog posts, we discussed the IRS using a summons to obtain information and options a taxpayer or third party has for responding to or objecting to a summons. In this blog post we will discuss an additional tool the IRS has to obtain information, a Formal Document Request ("FDR").
Rental Real Estate Under Section 199A Final Regulations... [ read ]
The Section 199A Final Regulations were released on January 18, 2019 and a corrected version was issued on February 1, 2019, with a few corrections and clarifications.