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…

Is the IRS Bound by It’s Letters and Notices?

Is The Irs Bound By It’s Letters And Notices?

If the IRS sends a taxpayer a letter saying that it will process their refund claim but then it fails to do so, is the IRS bound by its letter? The court recently addressed this in Hawver v. Commissioner, T.C. Memo. 2017-244. The Facts & Procedural History The taxpayer filed his 2005 tax return in…

Form 2848 Must Specifically List Information Tax Returns

Irs Benefits From The Texas Homestead Exemption

The IRS can generally disclose a taxpayer’s tax information with a representative that is designated by the taxpayer on a Form 2848, Power of Attorney and Designation of Representative.  This covers all forms included with the taxpayer’s tax return as long as the type of tax return is listed on the Form 2848.  This raises…