Raising a Tax Issue for the First Time in Court

Houston Tax Attorney

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With tax litigation, it is often best to raise every argument possible. But what if the law seems clear on an issue and then, during the course of the tax dispute, another court issues an opinion making the law less clear? If this isn’t discovered or realized soon enough, should the taxpayer be precluded from […]

Does an Author Pay Self-Employment Tax on Royalties?

Houston Tax Attorney

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Taxpayers are free to structure payments for services rather than for something other than services. This can save self-employment taxes. But can a taxpayer carve out part of their service income by asserting that some part of the income is not from a business? The Slaughter v. Commissioner, T.C. Memo. 2019-65, case addresses this in […]

Is an IRS Audit Report an Informal Claim for Refund?

Houston Tax Attorney

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Amended returns generally have to be filed to recoup overpayments of tax. What counts as a refund claim is open to interpretation, as the courts have allowed a myriad of written documents to qualify. But what about the IRS report itself? If it includes a taxpayer favorable adjustment, is the report itself an informal refund […]

What if the IRS Violates the Law?

Houston Tax Attorney

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What happens if the IRS violates the law? Specifically, what if the IRS assesses a penalty and attempts to collect it without first issuing the proper notice to the taxpayer? The court addresses this in Romano-Murphy v. Commissioner, 152 T.C. 62, in the context of a trust fund recovery penalty. Facts & Procedural History The […]

IRS Summons and the Attorney-Client Privilege

Houston Tax Attorney

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The attorney-client privilege protects communications with a tax attorney from disclosure to third parties, such as the IRS. If the IRS discovers that a tax attorney advised a client on a transaction that wasn’t structured properly, should the IRS be able to use its power to issue an administrative summons to require the attorney produce […]

LLC Cannot Use Crewman’s Exemption for Employment Taxes

Houston Tax Attorney

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Can a U.S. citizen who owns and operates a vessel outside of the U.S. avoid paying U.S. employment taxes for its crewmen by using a foreign legal entity? The court considered this issue in DAF Charters LLC v. Commissioner, 152 T.C. 14, for a single member LLC formed in the U.S. that was owned by […]