The IRS frequently challenges travel expenses. These expenses have a higher substantiation requirement, which the IRS uses to disallow every expense no matter how reasonable or how certain it is that the expense was incurred. But what if it was exceedingly certain that the expense was incurred and there is a method for computing the…
Category: Tax Procedure
Tax Procedure
From IRS audits and appeals to tax litigation and penalties, our tax attorneys can help you navigate the tax procedure landscape with confidence. Give us a call to see how we can help, (713) 909-4906.
Voluntary Disclosure to IRS of Privileged Communication
The attorney-client privilege projects confidential communications with attorneys. It allows the attorney to avoid disclosing protected communications. But what if the attorney voluntarily discloses information and the disclosure is to the IRS about a tax matter? The court addresses this in Gaetano v. United States, No. 19-1122 (6th Cir. 2019). Facts & Procedural History This…
Can IRS Rely on Third Party Reports to Identify Taxable Income?
If a third party collects monies for you and send you a report reflecting the monies but the reports show too much income, should you be taxed on the higher income or what you actually received? The Ghadiri-Asli v. Commissioner, T.C. Memo. 2019-142, case addresses this. Facts & Procedural History The taxpayer is a physician.…
IRS Levy Does Not Attach to Future Payments
The IRS levy is one of the IRS’s primary methods for collecting unpaid taxes. The IRS’s levy power is broad, but it is not unlimited. The IRS levy can attach to some amounts held by third parties that are owed to the taxpayer. It does not attach to future payments. The recent Gold Forever Music…
Is a Taxpayer Liable for Interest if the IRS Delays an Audit?
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…
Reasonable Cause: Proving Reliance on a Tax Advisor
If you hire a competent tax advisor and end up having a late filed return, you may be able to avoid penalties for the late filing. But this is a defense. It is something that you, the taxpayer, have to prove. So how does a taxpayer prove that they relied on a tax advsior? The…
Is Reliance on a CPA Sufficient for a Late Filed Tax Form?
The IRS often turns a deaf ear to taxpayers who miss a filing deadline due to some action or inaction by their CPA or tax preparer. This is the case for late filing tax penalties. But what about a late filed accounting method change? Is reliance on a CPA or tax preparer sufficient for a…
Cashing a Tax Refund Check for a False Return is a Crime
Cashing a tax refund check that was triggered by filing a false tax return is a crime. It is theft of government money. Theft of government money is different than tax evasion. The recent United States v. Box, No. 18-13935 (11th Cir. 2019) court case provides an opportunity to consider the crime of theft of…
CPA Penalized for Knowledge of Understatement
Section 6701 imposes a penalty for assisting another person in understating their tax liability. The Section 6701 penalty is not subject to a statute of limitations. The IRS can assess these penalties at any time, even years and decades after the fact. This can result in very large penalty assessments for those who prepare tax…
Raising a Tax Issue for the First Time in Court
With tax litigation, it is often best to raise every argument possible. But what if the law seems clear on an issue and then, during the course of the tax dispute, another court issues an opinion making the law less clear? If this isn’t discovered or realized soon enough, should the taxpayer be precluded from…