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…
Tax Articles
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…
TIGTA Suggests IRS Follow Transfer Pricing Roadmap
Transfer pricing is and has been the most significant and difficult issue the IRS audits. The audits are typically closed with the IRS agents proposing unreasonably large adjustments and IRS appeals sustaining a very low percentage of the adjustments. The IRS has not been very successful in litigating transfer pricing cases either. As a result,…
Stay-at-Home Mom Not Liable for Trust Fund Recovery Penalty
The IRS has the ability to assess a trust fund recovery penalty against those who are responsible for withholding payroll taxes for employees if they fail to withhold and pay over the taxes to the IRS. Then penalty is equal to the amount of the withheld but unpaid tax. Liability for the penalty falls on…
Does Changing Roof Mean No Facade Easement Deduction?
Donating the rights to change the facade of a building can qualify for a charitable tax deduction. The donation helps ensure that the historical significance of the building is not compromised. But what if you retain the right to change the roof to the building? Can you still qualify for a facade easement deduction? The…
TIGTA Questions IRS’s Future State Reorganization
IRS has the power to decide who gets what, when, and how when it comes to federal taxes. Many of these decisions are made by IRS employees as part of examining tax returns. This is why we are all watching the IRS reorganize its audit function. The Treasury Inspector General for Tax Administration (“TIGTA”) recently…
No Damages for Emotional Distress for IRS Violations of Bankruptcy Law
When a private party violates the law, there are often consequences. This is especially true for the automatic stay that protects individuals in bankruptcy from collections actions during the bankruptcy proceeding. In Hunsaker v. United States, Case No. 6:16-cv-00386-MC, the Ninth Circuit Court of Appeals concluded that the IRS’s repeated violations of these laws does…
Partnership Return Corrected by Amended Return
In U.S. v. Stewart, No. 15-20596, the Fifth Circuit Court of Appeals concluded that the taxpayer was not entitled to a tax refund that was based on a corrected Schedule K-1 received from a partnership the taxpayer owned. The question on appeal was whether a partnership tax return can be corrected by filing an amended…
Can Lump Sum Cash Payment Qualify as Alimony?
For taxpayers who pay alimony to an ex-spouse, the tax deduction for the alimony payment is usually quite large. It can significantly reduce their tax. But can a lump sum payment made in cash qualify for tax-deductible alimony? The court addressed this in Muñiz v. Commissioner, No. 15-14478 (11th Cir. 2016). Contents1 Facts & Procedural History2…