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…
Category: Tax Returns
Tax Returns
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Form 2848 Must Specifically List Information Tax Returns
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…
Amending Tax Returns for FTC and NOL Carrybacks
The time limits for filing amended tax returns can present a number of difficult questions. This is particularly true when tax attributes, such as foreign tax credits and net operating loss deductions, are carried back to prior years. The carryback to one prior year can result in carrybacks to one or more years prior to…
The Form 1045 Dispute & Possible Solution: Include a Detailed Cover Letter
The Form 1045, Application for Tentative Refund, is used to carryback losses, credits, etc. from the current year to prior years. In many cases it is used when a taxpayer was previously profitable and then incurrs a loss. The now unprofitable business can go back and recoup taxes paid in prior years and get a…
Do You Have to Use the IRS’s Official Forms?
Do taxpayers have to use the official forms published by the IRS? In May v. United States, No. 15-16599 (9th Cir. 2017), the court considered whether a taxpayer is subject to the listed transaction penalty if he fails to file the IRS’s reportable transaction form, but the IRS is otherwise furnished with all of the information…
Duty of Consistency for Different Types of Tax Returns
Taxpayers have to report tax positions consistently from year to year. They cannot get a tax benefit from taking inconsistent positions. The duty of consistency doctrine provides for this. But does this doctrine require items to be reported consistently on different types of tax returns? The court addressed this in Musa v. Commissioner, No. 16-1841 (7th…
U.S. Foreign Tax Credit Not Impacted by Repayment of Foreign Tax Refund
The tax assessment and collection process in most foreign countries is markedly different than the process in the U.S. These differences can present a number of challenges for U.S. citizens who reside in foreign countries. In Sotiropoulos v. Commissioner, T.C. Memo. 2017-75, the court considered one of these challenges, namely, how does one determine whether…
Taxpayer Retains Right to Tax Refund Claims Despite Bankruptcy Discharge
The bankruptcy-tax rules can present a number of opportunities. In Martin v. United States, Case No. 3:13-CV-03130 (C.D. Ill 2017), the court concludes that the taxpayers retained the right to sue the IRS for substantial tax refunds for taxes that were overpaid prior to their bankruptcy, despite having discharged their debts in bankruptcy. Bankruptcy &…
Partnership Return Corrected by Amended Return
In U.S. v. Stewart, No. 15-20596, the Fifth Circuit Court of Appeals concluded that the taxpayer was not entitled to a tax refund that was based on a corrected Schedule K-1 received from a partnership the taxpayer owned. The question on appeal was whether a partnership tax return can be corrected by filing an amended…
Proving that You Mailed a Tax Return to the IRS
How do you prove that you mailed a tax return to the IRS? This may sound like a simple question to answer. It isn’t. The have been and continue to be disputes involving this very issue. The recent In Re McGrew, No. 13-00149 (Bank. N.D. IA 2016) provides an example. Facts & Procedural History McGrew filed…