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Accounting Method Federal Income Tax Tax

Tax Planning for Contingent Loans

Tax is often about timing. Timing issues are those where the taxpayer defers the requirement to pay taxes to a later date. Preferably a later date that is many, many years in the future. The hope is that the taxpayer can retain the amounts that would have been paid in tax today and use the […]

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Business Tax Employment Tax Partnership Tax Tax

Limited Partner Subject to Self-Employment Tax

When it comes to tax law, there are quite a few known-unknowns. These are tax questions that have been raised tangentially in court cases and rulings, but have not been fully answered. These situations confuse taxpayers. Tax practitioners are often asked to provide answers. The answers from tax practitioners often differ, as practitioners have different […]

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Employee Benefits Federal Income Tax Tax

Tax Court Clarifies Employee Tool Plans

Prior to the Tax Cuts and Jobs Act (“TCJA”) of 2018, it was common for employers to simply pay employees more and leave it to the employees to deduct their employee business expenses on their personal income tax returns. The TCJA limited the employee’s ability to deduct employee business expenses. Many employers responded by adopting […]

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IRS Penalties Tax Procedure Trust Fund Penalties

Fixing Trust Fund Recovery Penalties

The public may not be fully cognizant of this, but, the IRS is in the business of processing information and making decisions. It accomplishes this by siloing work on tax returns and accounts. The siloed work is intended to allow the IRS to process and make consistent decisions based on a very large volume of […]

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IRS Audits Partnership Tax Tax Tax Procedure

Electing Out of the Partnership Audit Regime

When it comes to income taxes and IRS audits, there are a lot of procedural rules that are counter-intuitive. Even if one thinks they are half-baked, the rules are the rules. They can have serious consequences. The centralized partnership audit regime is an example. Tax advisors often instruct their clients to elect out of the […]

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Bankruptcy Tax IRS Debts Tax Tax Procedure

IRS Audits for Insolvent Taxpayers

When times are good, we don’t need to worry about the tax loss rules, the net operating loss (“NOL”) rules, or even the bankruptcy tax rules. But these rules are front and center in most tax planning and advice during and after an economic downturn. We saw this with the 2001 dot com bust, the […]

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IRS Debts Tax Procedure

Taxes & Defunct Texas Corporations

Our Federal tax laws often look to state law. Differences in state law can expand or limit the IRS’s ability to assess and collect Federal taxes. In Patrick’s Payroll Services, Inc. v. Commissioner, T.C. Memo. 2020-47, the court considers whether a defunct Michigan corporation can bring suit against the IRS. This case provides an opportunity […]