The IRS has broad collection powers. These powers generally trump state law. This is even true of state Limited Liability Company (“LLC”) rules that prevent parties from suing or reaching the LLC’s assets. There are nuances to these rules when it comes to income and payroll taxes. The payroll tax rules have changed completely. Many…
Tax Articles
Tax on Real Estate Purchase Price Reduction
The term “income” is broad. It includes just about any money or gains that a person receives. There are exceptions, however. Take the purchase price reduction. Assume Party A sells a property to Party B for $100. Party A will likely have a gain on the sale. The gain is income and may trigger income…
Substantial Compliance: Finding Acceptance With the IRS
A professor can increase overall class scores for extra credit. A police officer is authorized to issue warnings for minor traffic infractions. A judge can allow a defendant to plead guilty to a lesser charge when justice warrants it. These situations involve individuals who have a certain level of authority or power in a particular…
Strategy for Paying Employment Taxes Late
Employers are generally required to withhold employment taxes from employee wages. The employer then remits these withheld employment taxes to the IRS. These are referred to as trust fund taxes, as they are held in trust pending payment to the IRS. Employers are also required to pay employment taxes for employees based on the wages…
One Ex-Spouse Void the Other’s Alimony Deduction: Tax on Alimony
Assume that a divorce decree says that a payment is to be made to an ex-spouse. Does that mean that it is alimony the ex-spouse has to report as income for Federal income tax purposes? And if not, can the ex-spouse who receives the payment request a ruling from the IRS to say that the…
Non-Profit No More: The Defunct Non-Profit
People often form non-profit entities with the intent that they will get traction and take off. Not all entities do that. The entity may not be able to raise funds or secure donations, funding may dry up, or the entity may not find the support of those who need to operate or service it. There…
Taxation of Employee Donated Sick Leave
Even simple acts of kindness, such as donating paid sick leave to co-workers in need, can trigger complex tax requirements. The IRS recently released Private Letter Ruling 200720017 that sheds light on the federal tax consequences of such donations, highlighting the importance of following specific requirements such as employer-sponsored medical leave-sharing arrangements or qualified employer-sponsored…
Can Court Force Taxpayers to Hire Tax Attorney?
Have you ever tried to represent yourself in a legal matter? It’s not easy, and the court usually advises against it. But what happens when a taxpayer repeatedly refuses to hire an attorney and insists on representing themselves in a criminal tax matter? This was the issue at hand in the United States v. Baucom,…
IRS Tax Attorneys Realign Organization Structure
The IRS Office of Chief Counsel employs the IRS’s own tax attorneys. These attorneys handle most of the civil tax court matters for the IRS. Whenever the IRS implements changes to its organizational structure or management team for this function, it warrants close attention and analysis from taxpayers, tax professionals, and other stakeholders. Such changes have…
City Collects Church Property For Un-Owed Taxes
I once had a state auditor and state attorney tell me that they had to “shut that down.” They were referring to a taxpayer who took a tax credit that was specifically set out in the state tax code. They went on to express that they did not agree with the state legislature as to…