IRS Expands Form 1040 Reporting of Digital Assets for Tax Year 2022... [ read ]
The IRS has seemingly endless curiosity when it comes to cryptocurrency and other digital assets. For tax year 2022, the IRS seeks to expand Form 1040 reporting to require disclosure of all inward and outward transfers of digital assets – whether tradeable or not, whether taxable or not.
AICPA Makes Recommendations to the IRS About Transparency, Communications and Backlog... [ read ]
On July 11th, the American Institute of Certified Public Accountants (AICPA) wrote a letter to the IRS commissioner and Assistant Secretary for Tax Policy, making recommendations and requests for how the IRS could do a better job while it is recovering. The AICPA makes some very good suggestions to which the IRS may or may not agree. It is a quick read for anyone who is interested.
Want a Charitable Contribution Deduction? Make Sure You Dot the I's and Cross the T's... [ read ]
A recent Tax Court decision, Albrecht v. Commissioner, was a reminder that the IRS requirements for substantiating a charitable contribution are strictly enforced by both the IRS and the Tax Court. In Albrecht, a widow lost a $464,000 deduction for failing to comply with the IRS requirements, although many of us would consider it nitpicking by the IRS and the Tax Court.
Certain Estates Now Have Five Years to Make a Portability Election... [ read ]
On Friday, July 8, 2022, the IRS released Revenue Procedure 2022-32, which supersedes Revenue Procedure 2017-34 and extends the period of time certain estates have to make a "portability" election under IRC § 2010(c)(5)(A). A portability election allows for a surviving spouse to utilize the deceased spouse's unused exclusion amount (DSUE). The portability election may only be made on a timely filed federal estate tax return (Form 706).
Thinking of Calling the IRS? Good Luck.... [ read ]
The National Taxpayer Advocate Service (TAS) recently issued its annual report to Congress. One of the more troubling findings in the report was that during the 2022 filing season, the IRS received 73 million calls and only 7.5 million of those calls were answered by an IRS employee. Another interesting side note was that in 2021, the IRS received 167 million calls and only 9% of those calls were answered by an IRS employee.
Congress May Soon Overrule the IRS on Crypto Taxation; What Should Taxpayers Do?... [ read ]
Earlier this year, I wrote about Jarrett v. United States, No. 3:21-cv-00419 (M.D. Tenn.), a case in which a crypto taxpayer rejected a complete government concession of a lawsuit. At issue in the case was whether the taxpayer's cryptocurrency staking rewards were immediately taxable. Presumably, the taxpayer was motivated by a desire to have a court publicly address the issue—which still has not occurred. To this date, there is no clear rule—let alone a clear signal from the IRS about how it views the issue—that dictates whether staking rewards are or are not immediately taxable.
Part Two: Are Tax Returns Given to an IRS Agent Considered Filed?... [ read ]
In 2015, I wrote a blog post with this same title (here) concluding that based on case law, a tax return that is given to a representative of the IRS is not considered filed and, therefore, the statute of limitations does not start. I followed that up with a blog post (here) last year discussing a case which confirmed that tax returns are not considered filed if merely given to an IRS representative. Furthermore, in 2015 the 9th Circuit reversed a CPA's convictions for tax evasion because "filing" is an element of tax evasion and the CPA handed his fraudulent tax returns to the IRS agent instead of filing them. United States v. Boitano
March Tax Blog... [ read ]
This blog post summarizes a few noteworthy court decisions released in March 2022 that pertain to federal tax matters.
A Unanimous Supreme Court Delivers Important Taxpayer Victory... [ read ]
It is not every day that the Supreme Court hears a federal tax case. Of the issues the Court deals with, tax issues are usually low on the list. But the Court did hear a case earlier this year and on April 21, 2022 the Court issued its opinion. The ramifications could be huge.
Some CRATs are CR*P, So Sayeth the IRS and Department of Justice... [ read ]
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.