Avoid IRS Interest With Credit Elects

Avoid Irs Interest With Credit Elect Overpayments

A tax attorney might say that you should never go into an iffy transaction naked. This refers to a tax position that covers a real or perceived tax liability from a transaction. This is a corporate tax concept. Larger corporations often have a longer view when it comes to business tax planning. Given their time…

Using Contract Law to Avoid IRS Interest

Using Contract Law To Avoid Irs Interest

Interest that accrues on taxes can be abated due to IRS errors or delays. The law that implements this general rule often fails to provide a meaningful remedy in most interest abatement cases. But what about contract law? Can contract law provide another means for obtaining a remedy in interest abatement cases? The court addresses…

Is a Taxpayer Liable for Interest if the IRS Delays an Audit?

The Importance Of Accounting For C Corporation Expenses

Can the IRS fail to audit a taxpayer for several years and then, once it actually opens the audit, drag its feet for years and then charge the taxpayer interest retroactively back to the date the tax return was filed? What if that period of time happens to be, say, fourteen years? The court considers…

Revocation of Nonprofit Status Triggers Retroactive Interest

Revocation Of Nonprofit Status Triggers Retroactive Interest

There are some areas of law where principles of equity and good faith play a big role. By and large, tax law does not adopt these principles. The CreditGUARD v. Commissioner, 149 T.C. 17 (2017) case provides an example. The case addresses whether the IRS is entitled to interest on a corporate tax liability when…

Wholly Owned Corp and Parent Not the “Same Corporation” for Interest Netting

Wholly Owned Corp And Parent Not The “same Corporation” For Interest Netting

In Ford Motor Co. v. United States, No. 14-458T (Ct. Cl. 2017), the court addressed whether a wholly owned corporation and its parent were the “same corporation” when computing the amount of interest the taxpayer owed to the IRS. This “same corporation” issue is one that comes up in most interest-netting cases. The Interest Netting…

Unmarried Taxpayers Can Claim Mortgage Interest Deduction

Unmarried Taxpayers Can Claim Mortgage Interest Deduction

Mortgage Interest Deductions for Unmarried Couples In Voss v. Commissioner, 796 F.3d 1051 (9th Cir. 2015), the court addressed the rule that limits the deductibility of interest on home mortgages and home equity loans. This rule limits the amount of interest that can be deducted on mortgages in excess of $1 million and home equity…

Transferee Liable for $13 Million in Pre-Judgment Interest

Irs Allowed Interest For Unpaid Taxes Despite Waiver

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…

Business Should Review Interest Netting in Light of Wells Fargo Case

Irs Allowed Interest For Unpaid Taxes Despite Waiver

In Wells Fargo & Company v. United States, No. 2015-5059, the United States Court of Appeals for the Federal Circuit considered whether a business that has merged with another business can obtain refunds for interest the prior business entity paid to the IRS. The court’s broad reading of the interest netting statute may allow some…

Getting Interest Abated Can be Challenging

Getting Interest Abated Can Be Challenging

The IRS has the authority to abate or remove interest on tax liabilities; however, the process for getting the IRS to exercise this discretion can be challenging. The U.S. Tax Court describes this process in Select Steel, Inc. v. Commissioner, T.C. Summary Opinion 2008-79. Facts & procedural History In Select Steel, the taxpayer was required…

IRS Incentive to Delay Processing Cases: Extra Tax Penalties & Interest

Irs Incentive To Delay Processing Cases: Extra Tax Penalties & Interest

I think that most citizens would agree that the IRS should not benefit from failing to do its job in a timely manner. The recent United States v. Ryals case provides an example of how the IRS can benefit from denying taxpayer claims and delaying the collection of taxes. Ryals Case Ryals owed taxes for…