The IRS is authorized to assess criminal restitution for certain tax crimes. This process allows the IRS to collect the criminal restitution as if it was a tax. The law authorizing these collections is relatively new and evolving. The recent Carpenter v. United States, 152 T.C. 12, case highlights why it is important for those…
Tax Articles
What if the IRS Loses Your Mail?
The IRS manages to lose a lot of mail. To be fair, some of the mail is likely lost before it even gets to the IRS. When this happens, can the taxpayer lose out on their rights? The court revisits this issue in Baldwin v. United States, 17-55115 (9th Cir. 2019). Contents1 Facts & Procedural…
Time Frame for IRS Whistleblower Claims
The IRS is slow in making awards to whistle-blowers. It can take years just to get the final rejection letter from the IRS. This can be very frustrating for informants. In the Whistleblower 769-16W v. Commissioner, 152 T.C. 10 (2019), case, the IRS asked the court to send the case back to the IRS whistleblower…
Return Preparer Liable for Returns She Didn’t Prepare
The IRS has been increasing its focus on tax return preparers who file false or fraudulent tax returns. Congress recently beefed up the due diligence requirements preparers have to comply with and the penalty amounts have also been increased. But these laws only apply to tax returns the preparer actually prepared. In Tolentino v. United…
Tax Refunds for Equitable Innocent Spouse Relief
Innocent spouse relief can provide a remedy for spouses who file joint tax returns. This relief is particularly useful if the innocent spouse can obtain a tax refund for amounts previously paid. But not all innocent spouse requests can result in refunds. One has to be careful what they ask for. The Henry v. Commissioner,…
Does an IRS Appeals Protest Count as a Refund Claim?
Taxpayers generally have to submit refund claims to recoup taxes paid to the IRS. The law generally says that these claims have to be in writing, but not necessarily on the IRS’s official forms. Taxpayers submit a number of documents to the IRS. Written protests submitted to the IRS are an example. Can such a…
Did You Update Your Address With the IRS?
Note: the appeals court reversed this case. You can read about the appeals case here. The IRS relies heavily on the U.S. Postal Service to deliver notices to taxpayers. Many of these notices are received by taxpayers. This often comes up when the taxpayer has changed addresses. When the taxpayer does this and the address…
Is IRS Manger Approval Required for Computer Generated Penalties?
The IRS and the courts have invalidated penalties where the IRS fails to obtain IRS manager approval before assessing the penalty. It has done so in cases where the penalties are manually assessed by IRS personnel. But what about penalties that are automatically assessed by the IRS’s computers? The court addresses this in Atl &…
Can Gambling Losses be Deducted as Casualty Losses?
If a taxpayer cannot deduct gambling losses given the restrictions on gambling losses, can they deduct them as casualty losses instead? What if the gambling loss are attributable to prescription medications known to cause compulsive gambling? The court addresses this in Mancini v. Commissioner, T.C. Memo. 2019-16. Contents1 Facts & Procedural History2 Deducting Gambling Losses3…
The IRS’s Math Error Powers
With our tax system, taxpayers are generally required to file returns to tell the IRS how much tax is due. This is no easy task. The tax reporting process can be confusing. Errors happen. Congress has authorized the IRS to correct mathematical and clerical errors made on tax returns. This is one of the exceptions…