Congress often creates tax incentives, but it is up to the IRS and courts to determine their implementation and interpretation. The Sec. 179D tax deduction is an example of this. The statute provides broad concepts but lacks substance, leading to the courts playing a crucial role in determining its implementation and interpretation. The details matter…
Tax Articles
Tax Court: Is Diabetes is a Disability?
If you find yourself without a job or facing unemployment, one of the options you might consider is taking a distribution from your retirement account. This is especially true if you are disabled and need the income to pay for your living costs or even your medical care. These distributions often result in additional Federal…
About the Monetized Installment Sale
The monetized installment sale is a tax strategy that allows a party to sell an appreciated asset while deferring capital gains tax for an extended period of time and receiving a significant portion of the sale proceeds in cash. The strategy involves the use of an installment sale and a monetization loan, which allows the…
The Premium Tax Credit Trap
In an effort to reform health insurance, the government implemented a system where it would make payments directly to insurance companies on behalf of taxpayers through the use of premium tax credits. These credits were a part of the Affordable Care Act and intended to make health insurance more affordable for those who might not…
The Crime-Fraud Exception to the Attorney-Client Privilege
Our laws protect certain communications. This includes communications with doctors, religious advisors, spouses, and even attorneys. When it comes to Federal tax matters, communications with tax attorneys are usually at the forefront. The IRS often seeks information about these communications to help it figure out how the taxpayer structured their affairs. The attorney-client privilege is…
Late-Filed Tax Returns & Excess Collections
Life happens. We all experience it. There are times when life events can result in tax returns being filed late. Our tax laws offer little in way of leniency when this happens. The IRS will assess late filing penalties. Worse yet, amounts that were already timely paid to the IRS may not be refunded to…
S Corporation: Distribution of Appreciated Assets
Those who set up S corporations usually do so as their accountant told them that it could save taxes. This is often true. The S corporation can result in tax savings. This may include the standard reduction in self-employment/payroll taxes or, for more advanced tax planning, income taxes. The ability to freeze the value of…
Can a Forensic Accountant Testify as an Expert?
One of the most frequent disputes in IRS audits is whether the taxpayer had unreported income. This is income that the taxpayer failed to report on his or her income tax return. This typically involves cash a business or service provider received from clients. It may also include non-cash deposits into financial accounts. This “income…
The Qualified Nonpersonal Use Vehicle
What Congress provides with one provision, it often takes away with another. This can result in legal challenges whereby the court creates exceptions. The exceptions can be modified and qualified by later legislation. This creates a labyrinth that one has to navigate to determine how an item is treated for federal income tax purposes. The…
The U.S. Tax Court: 1 Day Late
In many ways the U.S. Tax Court is a court and operates like other courts. But in other ways, the U.S. Tax Court is more akin to a government agency. This quasi-court status has raised a number of interesting issues about how to litigate a case in tax court and what standards apply and what…