The IRS has the power to levy on or take a taxpayer’s property. This includes nearly all property, including Social Security payments. The Treasury Inspector General for Tax Administration (TIGTA), the agency that audits the IRS, recently released a report that examined the IRS’s practices in levying on Social Security payments. Social Security Payments TIGTA’s…
Tax Articles
The IRS’s Streamlined Procedures for Foreign Accounts
Given its limited resources and ability to detect foreign assets, accounts and income, the IRS has offered various voluntary programs to entice taxpayers to come clean and report this information. The IRS’s OVDP program and the more recent streamlined procedures are two examples. The Maze v. Internal Revenue Service, Nos. 15-1806 (D.D.C. 2016), highlights several…
Online Account Trigger FBAR Filing, Not Poker Websites
In Hom v. United States, No. 14-16214 (9th Cir. 2016), the court addressed whether an online payment account and poker websites triggered FBAR filing requirements. The stakes are high with FBAR penalties, so those with foreign accounts should take heed. Contents1 FBAR Filing Requirements2 What Foreign Accounts Trigger FBARs?3 The Technical Explanation4 The Layman’s Explanation5…
Five IRS Audits in Ten Years is Not Harassment
There are times when the IRS does not act reasonably. It happens. There are also instances where a few IRS employees take it upon themselves to thoroughly examine all aspects of the taxpayer’s finances. Taxpayers do have rights, but these rights only go so far. This brings us to the Appenrodt v. United States, No.…
IRS Whistleblower Claimants May Be Entitled to Larger Awards
The IRS is often gets more from whistleblowers than one may think. Specifically, the IRS may be able to recoup taxes, penalties and interest for other years or related but different issues. There is a question as to whether the whistleblowers who shine the light on these other years or issues should be compensated for…
Taxpayer Not Entitled to Attorneys Fees Despite Prevailing In Lawsuit
The government makes mistakes. It is not perfect. The United States v. Appelbaum, No. 5:12-CV-186 (W.D.N.C. 2016) , case provides an example. In Appelbaum, the government sued the taxpayer for nearly $4 million that the taxpayer did not owe. The question before the court was whether the taxpayer could recover attorneys fees he incurred in…
Failing Business Triggers Trust Fund Penalties
Taxes are often neglected when a business is having financial difficulties. This can have serious repercussions for the business and the individuals who are responsible for having taxes withheld and remitted to the IRS. The IRS has the ability to assess trust fund recovery penalties against these individuals, which essentially makes the business tax liability…
Choosing Not to Comply With an IRS Summons
The law requires taxpayers to keep certain records. The IRS expects taxpayers to produce these records on request. The IRS has the power to issue an administrative summons if the taxpayer does not cooperate. This begs the question of what happens if the taxpayer chooses not to comply with an IRS summons. The United States…
Seismic Surveyor Entitled to G&G Expense Deductions
In CGG Americas, Inc. v. Commissioner, 147 T.C. 2, the U.S. Tax Court concluded that a seismic surveyor is entitled to geological and geophysical (G&G) expenses deductions even though they merely gathered data for license to third parties and did not engage in exploration or development work. Facts & Procedural History The taxpayer was in…
Transferee Liable for $13 Million in Pre-Judgment Interest
There are times when our tax laws draw distinctions that can seem unfair. The Tricarichi v. Commissioner, T.C. Memo. 2016-132, highlights one of these situations. Tricarichi is a transferee liability case in which the taxpayer was held liable for $13 million in interest on a tax liability owed by a third party even though the…