Correcting an Erroneous Judgment for Unpaid Taxes

If the IRS gets a court judgment for unpaid taxes, can you challenge the judgment after it is entered? What if you can show that no tax is due? Can you fix the erroneous judgment after the fact? Can you just prepare corrected returns and file them? The court addresses this in United States v.…Continue readingCorrecting an Erroneous Judgment for Unpaid Taxes

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…Continue readingReasonable Cause: Proving Reliance on a Tax Advisor

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…Continue readingRaising a Tax Issue for the First Time in Court

IRS Summons and the Attorney-Client Privilege

The attorney-client privilege protects communications with a tax attorney from disclosure to third parties, such as the IRS. If the IRS discovers that a tax attorney advised a client on a transaction that wasn’t structured properly, should the IRS be able to use its power to issue an administrative summons to require the attorney produce…Continue readingIRS Summons and the Attorney-Client Privilege

Tax Litigation When the Administrative Process Failed

There are cases where the administrative process does not reach the right conclusion. There are also cases where the administrative process isn’t available or fully completed. This can happen with tax disputes handled by the IRS. When it does, does this mean that the taxpayer cannot litigate the tax dispute? The record rule comes into…Continue readingTax Litigation When the Administrative Process Failed

When the IRS Raises A New Matter on the Eve of Trial

During the course of litigating a tax matter, the IRS may increase the amount of tax, penalties, and interest that it alleges the taxpayer owes. The IRS is typically allowed to do this. If it does, the IRS may have a harder time prevailing on this type of issue. This “new matter” rule was recently…Continue readingWhen the IRS Raises A New Matter on the Eve of Trial

The Government’s Ability to Recoup Tax Preparation Fees

Tax preparers can grow their businesses in a short period of time by filing fraudulent tax returns.  As word spreads about the size of the refunds these preparers are able to secure for their clients, the preparers pick up new clients and increase the amount of fees they earn.  These noncompliant tax return preparers are…Continue readingThe Government’s Ability to Recoup Tax Preparation Fees

Failures in Reporting Taxes is Not Tax Obstruction

Does a taxpayer commit a felony offense if they pay a babysitter without withholding taxes, fail to keep receipts for charitable donations, or neglect to provide every record to an accountant? A strict reading of the law would suggest that these actions are felony offense. The U.S. Supreme Court recently addressed this in Marinello v.…Continue readingFailures in Reporting Taxes is Not Tax Obstruction

IRS Summons Reaches Attorney’s Client Names

Communications with an attorney are generally protected from disclosure.  But what about client names?  And what power does the IRS have the power to force an attorney to disclose the names of his clients?  The court addressed this in U.S. v. Servin, No. 17-1371 (3d Cir. 2018). Facts and Procedural History The case involved an attorney…Continue readingIRS Summons Reaches Attorney’s Client Names