To determine whether the IRS can levy or take property, one has to consider what property the taxpayer owns. State law dictates what property the taxpayer owns. The property laws in most states are similar, which makes applying Federal tax collection law relatively easy. But then there is Louisiana law. Louisiana law differs in many…
Tax Articles
The Tax Preparer’s Right to Appeal Return Penalties
The IRS has been focusing on tax return preparer audits. The aim of these audits is to impose penalties on tax return preparers. The IRS typically provides a means for tax preparers to appeal these penalties administratively, but there are cases where it doesn’t provide this opportunity. In those cases, the IRS will assess the…
S Corp Election Terminated by Standard LLC Language
If you make an S corporation election and do not fix the standard language that is typically included in the LLC company agreement, you’ll void the S corporation election. This is an issue that is usually identified by during an audit by the IRS. Many taxpayers overlook this issue until it is too late (it…
Can You Rely on IRS Statements?
If you ask someone a direct question and the person responds with incorrect information, is the person bound by their misrepresentation? This raises questions of “estoppel,” which apply to most litigants. But does it apply to IRS employees who make a misrepresentation? Put another way, can you rely on statements by IRS representatives? The court…
The Late Mark-to-Market Election
Those who trade stocks can take advantage of the mark-to-market election to convert capital losses into ordinary losses. This election is only available to “traders.” There are often questions as to when a taxpayers trading activities are sufficient to warrant being treated as a “trader” for tax purposes. By the time the taxpayer discovers that…
Substantial Authority, When the Authority is Not Clear
What if you have a tax question and find a court case that: (1) has the same facts as your case, (2) addresses the same tax item as in your case (such as a tax deduction, credit, etc.), and (3) the court case is decided in the taxpayer’s favor, but the court case does not…
About Tax Preparer Penalty Audits
The IRS’s power to regulate tax return preparers was limited by the Loving v. Internal Revenue Service, 742 F.3d 1013 (D.C. Cir. 2014) line of cases. These cases generally limit the IRS’s ability to regulate tax preparer conduct at an administrative level. But the IRS still has a number of tools at its disposal to…
Tax Loss Planning: The At-Risk Rules
Are you purchasing a business or real estate that involves financing a business or investment that is likely to produce tax losses in the future? Or have you already made the purchase? If so, there may be ways to ensure that you can take the loss in the future. To do so, you have to…
When Clients Testify Against Their Tax Preparer
The IRS has been focusing on examinations of tax return preparers. These examinations often result in the imposition of civil penalties under Section 6694 and 6695. But they can also result in criminal liability for the tax return preparer. The criminal sentencing guidelines can be problematic for tax return preparers. The Keleta v. United States,…
Fix to Duplicate IRS Address Problem
The IRS sends taxpayers letters and notices from quite a few different IRS offices. As a result, taxpayers are often confused as to what IRS office to respond to. This is particularly true if the IRS letter or notice includes more than one IRS address. The IRS has maintained a harsh stance on taxpayers who…