Taxpayers who are assessed trust fund recovery penalties need to take note of the U.S. Tax Court’s recent decision in Anderson v. Commissioner, T.C. Memo. 2016-219. The decision highlights a potential foot fault they may make when trying to resolve their trust fund recovery penalties at the IRS administrative level. Contents1 Facts and Procedural History2…
Tax Articles
Tax Court Expands Innocent Spouse Relief for Divorced Taxpayers
Innocent spouse relief can allow a taxpayer to avoid joint liability for taxes that arose during the marriage. There is an exception for the would-be innocent spouse if they had actual knowledge of the item that resulted in the tax. The U.S. Tax Court addressed this limitation in McDonald v. Commissioner, T.C. Summary Opinion 2016-79,…
Written Manager Approval for Penalties
An IRS agent is generally required to get written approval from their manager for a tax penalty can be assessed. This is requirement is set out in the Code. This begs the question as to what happens if the agent does not get written approval before he closes the audit? The court addressed this in…
IRS Closing Agreement Not Binding for “All” Tax Issues
A well-drafted closing agreement can provide a level of certainty to an uncertain tax position. The agreements do this by binding the IRS and the taxpayer. They normally include language that says that the agreements are valid for all Federal income tax purposes. In Analog Devices, Inc. v. Commissioner, 147 T.C. 15, the court concluded…
Court Invalidates Process to Challenge IRS Levy
If the IRS fails to mail a collection notice to the taxpayer or if it mails a required collection notice to a taxpayer using the wrong address, should the taxpayer be able to get a court ruling invalidating the IRS’s subsequent collection efforts? Congress added several notice requirements to help protect taxpayers from unlawful IRS…
Court Considers Whether Moneygram is a Bank that Makes Loans
There are tax laws that provide significant tax advantages to banks. One of these laws allows banks to deduct capital losses against ordinary income. This allows banks to deduct losses immediately when others might have to carryover the loss to other tax years. There are other tax laws that are specific to banks. These laws…
IRS Wage and Salary Levy Exemptions for 2017
The IRS recently issued Publication 1494, Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income – Forms 668-W(ACS), 668-W(c)(DO) and 668-W(ICS), for 2017. This publication provides the amount of wage and salary that are exempt from the IRS’s levy. The monthly wage and salary amounts for 2017 are as follows: Exemptions…
Reportable Transaction Penalty, Full Payment Required
Tax matters can be litigated in a number of different courts. One of the advantages of bringing suit in U.S. Tax Court is that the tax does not have to be paid prior to bringing suit. For tax matters litigated in the U.S. District Courts or the Court of Federal Claims, the tax has to…
Can IRS Cure Defective Summons With Second Summons?
The administrative summons is one of the IRS’s primary tools for obtaining information from taxpayers and third parties. There are very few requirements that the IRS has to satisfy in issuing IRS summons. In Maxcrest Limited v. United States, Case No. 15-mc-80270-JST, the U.S. District Court for the Northern District of California addressed whether the…
Lost IRS Notice Was Timely, Despite IRS Not Following Procedures
There are a number of dates that must be met when it comes to taxes. Many of these dates are triggered by some action by the IRS. This raises the question as to what happens if the taxpayer is not aware that the IRS took the action and the IRS destroys the primary evidence that…