Rejected e-File Return is a Valid Tax Return

Rejected E-file Return Is A Valid Tax Return

The IRS’s Identity Protection Personal Identification Number (“IP PIN”) is intended to protect those who are victims of identity theft. It does so by making it harder for third parties to file fraudulent tax returns. The IP PIN can also cause problems for taxpayers. This is particularly true for tax returns that are filed close…

The Mailbox Rule Extends Time to Recoup Tax Refund

The Mailbox Rule Extends Time To Recoup Tax Refund

Taxpayers often miss tax filing deadlines. This is even true when the IRS owes the taxpayer money back. Taxpayers have a limited time to request a refund of overpayments. The recent Harrison v. Commissioner, No. 3:19-cv-00194 (2nd Cir. 2020) case provides an opportunity to consider these rules–particularly the mailbox rule. Facts & Procedural History This…

Is an IRS Audit Report an Informal Claim for Refund?

Raising A Tax Issue For The First Time In Court

Amended returns generally have to be filed to recoup overpayments of tax. What counts as a refund claim is open to interpretation, as the courts have allowed a myriad of written documents to qualify. But what about the IRS report itself? If it includes a taxpayer-favorable adjustment, is the report itself an informal refund claim?…

Does an IRS Appeals Protest Count as a Refund Claim?

Raising A Tax Issue For The First Time In Court

Taxpayers generally have to submit refund claims to recoup taxes paid to the IRS. The law generally says that these claims have to be in writing, but not necessarily on the IRS’s official forms. Taxpayers submit a number of documents to the IRS. Written protests submitted to the IRS are an example. Can such a…

The IRS’s Math Error Powers

Can Defective Deed Defeat Irs Estate Tax Lien?

With our tax system, taxpayers are generally required to file returns to tell the IRS how much tax is due. This is no easy task. The tax reporting process can be confusing. Errors happen. Congress has authorized the IRS to correct mathematical and clerical errors made on tax returns. This is one of the exceptions…

The Dilemma: File A Timely or An Accurate Tax Return?

Court Clarifies Inventory Capitalization Rules For Producers

If you have an ongoing dispute with the IRS for one or more years and the outcome of that dispute will impact the current year, can you take a wait-and-see approach for filing the current year’s tax return?    Or should you wait to file an amended tax return after the audit? The Namakain v.…

When Forged Signatures Suffice: The Tacit Consent Exception

The Trade Or Business Requirement For The Sec. 199a Deduction

A tax return has to be signed to be valid.  But what if the return is signed by someone else?  Is a tax return with a forged signature a valid tax return?  The court addressed this in Coggin v. United States, No. 1:16-CV-106 (M.D.N.C. 2018). Facts & Procedural History The taxpayer relied on her attorney to…

Shareholder Cannot Make S Corp. Separately Stated Item Election

Shareholder Cannot Make S Corp. Separately Stated Item Election

S corporation’s account for separately stated items that flow through to the shareholder’s tax returns. They are computed on page 3 of the Form 1120S and then listed separately on the Schedule K-1. The idea for breaking these items out separately is that they can impact the shareholder’s individual returns differently. That makes sense, but…

Applying Tax Overpayments to Later Years is Usually a Bad Idea

Credit For Employment Taxes Reported In Error For Another Entity

Instead of requesting a refund, taxpayers can ask the IRS to hold the overpayment and apply it to the taxpayer’s tax liability for the following year. These tax payment credits can result in significant headaches. The recent Schuster v. Commissioner, No. 17-11647 (11th Cir. 2018) case provides an example of why taxpayers should request refunds…

Some Filing Deadlines are Strict, Others are Not

Some Filing Deadlines Are Strict, Others Are Not

When it comes to fixing tax problems, procedural footfaults can make solving the problem even more difficult. Filing deadlines are an example. The Duggan v. Commissioner, No. 15-73819 (9th Cir. 2018), case provides an example. Facts & Procedural History In Duggan, the taxpayer was contesting the IRS’s decision to proceed with collections. He requested a…