IRS Attempts to Use its latest Judicial Win to Scare Micro-Captive Participants into Submission... [ read ]
On the heels of its fourth judicial win in Tax Court, today the IRS urged participants in allegedly abusive micro-captive insurance arrangements to exit these transactions as soon as possible. For many taxpayers, this approach is akin to throwing the baby out with the bathwater, as contrary to the IRS' belief, not every micro-captive arrangement is abusive.
Missteps in Filing a Tax Return Come Back to Haunt the Taxpayer and Her Representative... [ read ]
In prior blog posts, I discussed the mailbox rule and filing tax returns with the IRS. A recent case in Michigan reiterates the lesson discussed in that blog post about always using certified or registered mail if a tax return is mailed to the IRS. In addition, the Michigan case confirms that a taxpayer should always file a tax return in the manner described by the Internal Revenue Code and regulations, and not file it with an IRS representative not authorized to receive a return.
UNCLE SAM WANTS TO KNOW: WHO ARE YOUR OWNERS? (UPDATED 3-4-21)... [ read ]
The 2021 year has brought many new developments, including, and most importantly, a new federal law that will require small, privately-owned companies to report their ultimate individual owners to the federal government. This new law, which was enacted on January 1, 2021, is known as the Corporate Transparency Act ("CTA").
TEXAS TAXPAYERS GET A TAX FILING AND PAYMENT BREAK... [ read ]
The Internal Revenue Service has just announced (IR 2021-43) that taxpayers living in Texas are given an extension until June 15, 2021, to file their 2020 tax returns. The extension also applies to tax payments due between February 11 and June 15, 2021.
Another Tax Court case involving the Danielson Rule and this Time the Taxpayer Wins... [ read ]
In a prior blog post, I discussed a Tax Court memorandum opinion in Watts v. Comm'r, 2020-144, in which the Tax Court cited to the Danielson rule in holding for the IRS. The last line of that blog post reads, "The lesson from Watts and Danielson is that a taxpayer who attempts to disavow the tax consequences of an arm's length agreement will face a significant uphill battle." Well, only a few months later, the taxpayer in another Tax Court memorandum opinion, Complex Media Inc. v. Commissioner, T.C. Memo 2021-14, prevailed in that uphill battle and convinced the Tax Court that the taxpayer could disavow and recharacterize the form of a transaction.
To Tax or Not to Tax: Should PPP Loans That Are Forgiven Under Federal Law Be Subject to the Texas Franchise Tax?... [ read ]
Among the many issues confronting taxpayers, legislators and the Texas Comptroller related to COVID-19 is whether Paycheck Protection Program (PPP) loans forgiven pursuant to federal law should be subject to the Texas franchise tax.
Timely Filed IRS Documents and the Mailbox Rule... [ read ]
In a prior blog post, I discussed when the statute of limitation for the IRS assessing tax starts. The simple answer is, the statute of limitations starts when the tax return is filed. I recently read a case, Taha v. United States, which is being appealed by the taxpayer to the Federal Circuit Court of Appeals and involves a refund claim, the statute of limitations and the common law "mailbox rule".
When Does the Statute of Limitations for Assessing Tax Start?... [ read ]
I thought I would blog about a couple of December 2020 tax cases, decided within five days of each other, that involved taxpayers arguing that the IRS was time barred from assessing tax because the statute of limitations had run. In both cases, the IRS argued an assessment of tax was not time barred because the taxpayer had failed to file the required tax returns. In one case, Quezada v. IRS , the Fifth Circuit held in favor of the taxpayer, and in the other, Coffey v. Commissioner, the Eighth Circuit held in favor of the IRS.
Form 2848 and 8821 Now Accepted Online with E-signatures... [ read ]
On January 25, 2021, the IRS debuted an online tool to allow tax practitioners to obtain electronic signatures from clients and submit Forms 2848 and 8821 electronically. Practitioners may still mail or fax Forms 2848 or 8821 to the IRS; however, these methods require that all signatures on the Forms be handwritten and no electronic signatures are allowed. It is clear that the IRS is trying to entice practitioners to go "paperless," but is it worth the hassle?
IRC Section 6901 and Transferee Liability... [ read ]
In a previous blog post, I discussed a case involving the liability of an executor for unpaid federal estate taxes. In this blog post, I will discuss the basics of transferee liability for a transferor's taxes.