Tax Court Puffery: Exaggeration is Not Evidence

Tax Court Puffery: Exaggeration Is Not Evidence

Every communication makes statements. The statements may be truthful or false. A statement that is misleading or exaggerated is somewhere between these two. There can be significant legal consequences depending on where a statement falls on this continuum. This raises questions as to how precise do the statements have to be to be false? If…

Correcting an Erroneous Judgment for Unpaid Taxes

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.…

Raising a Tax Issue for the First Time in Court

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…

What if the IRS Violates the Law?

Raising A Tax Issue For The First Time In Court

What happens if the IRS violates the law? Specifically, what if the IRS assesses a penalty and attempts to collect it without first issuing the proper notice to the taxpayer? The court addresses this in Romano-Murphy v. Commissioner, 152 T.C. 62, in the context of a trust fund recovery penalty. Facts & Procedural History The…

IRS Summons and the Attorney-Client Privilege

Raising A Tax Issue For The First Time In Court

The attorney-client privilege is a fundamental principle of the American legal system and is designed to encourage open and honest communication between attorneys and their clients. The privilege is especially important in federal tax matters as it allows taxpayers to seek tax advice and representation without fear of retribution. The attorney-client privilege protects communications with…

Tax Litigation When the Administrative Process Failed

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…

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

Court Says Partnership Is Worth Less, Not Entirely Worthless

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…

The Government’s Ability to Recoup Tax Preparation Fees

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…

Failures in Reporting Taxes is Not Tax Obstruction

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.…

IRS Summons Reaches Attorney’s Client Names

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?  Can the IRS issue an IRS summons to get this information? The court addressed this in U.S. v. Servin, No. 17-1371 (3d…