Categories
Federal Income Tax

Valuation of Management Fees Paid by Related Parties

Related party transactions can raise difficult tax questions. This is especially true for management fees paid by one legal entity to another legal entity that has the same or similar owners or that are controlled by the same owners. As noted in the recent Wycoff v. Commissioner, T.C. Memo. 2017-203 case, related-party management fees often […]

Categories
Tax Procedure Tax Returns

Substantial Compliance vs Strict Compliance

There are a number of cases where taxpayers have had to pay more tax than they should due to technical foot faults. These cases often come up when the IRS employees believe that their job is to look for strict compliance (100%) rather than substantial compliance (something more akin to 80%). This brings us to […]

Categories
Estate & Gift Tax Tax

Estate Tax Valuation vs. Income Tax Valuation

The question in Janis v. Commissioner is whether a taxpayer can claim that property has a low value for estate tax purposes and then turn around and claim that the property has a high value for income tax purposes. The Ninth Circuit said “no,” but the answer could have been different under slightly different facts. […]

Categories
Federal Income Tax

Taxpayer: It’s All About Valuation; IRS: We’re Damned if We Do

Many tax practitioners agree that valuing property for tax purposes is the most important issue that they face. Yet valuation issues are often murky and amorphous. In most cases valuation disputes are resolved in favor of the party that has the most convincing valuation expert. In other cases valuation disputes are resolved on even less […]