If you remember the time before the widespread use of personal computers, you will understand this better than others. We live in a society full of data. It’s everywhere. And it’s growing in volume, scope, and utility. The explosion of data has allowed taxpayers to produce documents, documents, and more documents. But why? Documenting business…
Category: Tax
Tax
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Moving Truck Driver Allowed to Estimate Contract Expense Deduction
In Bauer v. Commissioner, T.C. Memo. 2012-156, the U.S. Tax Court held that a moving truck driver was entitled to deduct expenses to hire contractors to load and unload his truck by estimating the amount of the expenses. Facts & Procedural History Mr. Bauer was a moving truck driver. He was hired by clients as…
Court Determines What Truck Driving Expenses Are Deductible
In Nolder v. Commissioner, T.C. Summary Opinion 2012-50, the U.S. Tax Court examined a number of different expenses incurred by a truck driver to determine which expenses were deductible. This case provides a good overview of the typical expenses truck drivers incur that are and are not deductible. Facts & Procedural History Mr. Nolder was…
Wages for Research Were Not Reasonable
The research tax credit provides a significant incentive to perform research. The credit is calculated by factoring in wages paid by the business and income from the business subject to self-employment. Given this, can a business owner pay himself an unreasonably large salary and thereby increase the amount of the credit? The court recently addressed…
Tax on Nonresident Alien Gambling Winnings
Are non-resident aliens who receive gambling winnings while visiting the U.S. able to deduct the gambling expenses incurred in earning the gambling winnings? And can they avoid the withholding tax on their gambling winnings? The court addresses these international tax law issues in Park v. Commissioner, 136 T.C. 569 (T.C. 2011). Facts & Procedural History…
The IRS’s Reach in a Research Tax Credit Audit
The IRS has a track record of taking aggressive stances when auditing research tax credits. But its position in the Bayer Corp. & Subs v. United States, Civil Action Nos. 08-693, 09-351 (W.D. PA 2010), raises the question whether a taxpayer claiming a research tax credit is signing up to disclose their confidential information. Facts &…
What is a Project for the Research Tax Credit?
It can be difficult to separate qualified and nonqualified research in computing the research tax credit. The research tax credit rules are generally applied to the “project,” but the term “project” is not even mentioned in the Code. The Trinity Industries, Inc. v. United States, 691 F. Supp. 2d 688, (N.D. Tex. 2010), case provides guidance…
Research Tax Credit: Taking Expenses for Depreciable Property
The IRS exam function often raises a number of questions about the rules for claiming expenses for depreciable property for the research tax credit. The recent TG Missouri Corporation v. Commissioner, 133 T.C. 13, provides much needed clarity in how to apply these rules. Facts & Procedural History TG Misouri is in the trade or…
Termination Payments to Insurance Agents: Capital vs. Ordinary
When insurance agents exit the business, are termination payments considered capital gains or ordinary income for tax purposes? The characterization can mean thousands in potential tax savings or liabilities. The Lendard v. Commissioner, T.C. Summary Opinion 2009-165, case addresses this issue. It involves an agent who challenged the IRS’s treatment of his termination proceeds. The…
Foreign Branch Income & the Research Tax Credit
The research tax credit is one of the most complicated provisions in our tax code. The international tax law aspects of this credit are even more difficult to follow. In Deere & Company v. Commissioner, 133 T.C. No. 11, the U.S. Tax Court considered whether income from foreign branches must be included in the gross…