Tax Procedure Archives

You Can’t Raise What You Didn’t Know: The Variance Doctrine

Our income tax system uses a self-reporting process. Taxpayers, in most cases, voluntarily file income tax returns. The IRS can then evaluate the filings to determine whether they appear to be correct or warrant further investigation. The IRS has developed a whole regime of forms to be used for this very purpose. Taxpayers who fill…

Can Jury Trial for IRS Penalty be Conditioned on Paying the Penalty First?

There have been a number of court cases that have considered whether various administrative agency determinations violate constitutional jury trial rights. These are often premised on the fundamental promise of American justice that courts should remain open to all. The issue is presented when government agencies require substantial upfront payments before allowing judicial review. One…

Business Owner Liable for Tax Incurred by a Buyer After the Sale of the Business?

If you own a business and you sell it to a third party, should you be liable to the IRS for taxes triggered by the buyer after the business you sold? What if the tax was triggered by the buyer’s wrongdoing? What if there was no evidence that you even knew that the buyer would…

Can a Criminal Prosecution Delay a Civil Tax Case?

Imagine that you earned significant income and failed to file tax returns. You later file the tax returns once the IRS caught on to you, but you omitted a large part of your income. The government indicts you on criminal tax evasion charges, and starts an IRS audit. Before the criminal trial, the IRS audit…

How Wrong Does the IRS Have to be to Be Liable for Attorneys Fees?

In most civil litigation cases, the parties are not entitled to an award of attorneys fees. The exceptions are generally when there is a contract that provides for attorneys fees or there is a statute. This can be problematic in litigation cases–particularly where one party brings or defends a friviolous suit just to drive up…

Is a Taxpayer Accountable for their Tax Preparer’s Fraud?

Most taxpayers opt to hire professionals to prepare their tax returns. Tax professionals understand the complexities of deductions, credits, and reporting requirements that can overwhelm even sophisticated business owners and investors. Once the tax returns are filed and a few years pass without incident, most taxpayers reasonably assume those tax years are closed forever. But…

Can the IRS Disclosure Your Tax Info in Cases Agains Other Taxpayers?

You cooperate with an IRS audit. You provide detailed financial records. You answer questions about your business. Years later, you discover the IRS is using your information in cases against other taxpayers. The IRS is sharing details about your business location, your EIN, even the fact you’re under investigation for a tax promoter penalty. Is…

Does DOJ Referral Strip IRS of Power to Process Refund Claim?

You think the IRS owes you a refund. You file a refund claim. The IRS eventually processes your refund, but does not issue checks to refund the money to you. You later find out that the IRS had referred the matter to the Department of Justice–maybe you find out years later even. Can the simple…

When Can the IRS Levy Church Assets as “Nominee” Property?

Religious organizations and churches often own property and bank accounts that support their mission and operations. Sometimes, these assets are also used to benefit the organization’s leaders personally. This begs the question, can the IRS collect on the religious organization or church’s assets for the individuals tax debt? Can the IRS use the “nominee” rules…

Court Limits Equitable Tolling For Late Tax Court Petitions

We live in a fast-paced world where technology has made it possible to do more, see more, and accomplish everything else more efficiently. While some routines of life have not changed, most have been transformed by our increasingly connected environment. For better or worse, one thing that has not changed is the concept of deadlines,…