In some cases, courts may take shortcuts to ensure that justice is served. While these shortcuts can be effective in obtaining the desired outcome, they can also raise concerns about fairness and due process. One such case is United States v. Spangler, 224 F. App’x 890 (11th Cir. 2007), where a trial court ordered the…
Category: Tax
Tax
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Navigating the Taxability of Defamation Awards
The taxability of compensation for personal injuries unrelated to lost wages or earnings has been a topic of uncertainty, especially after the Murphy decision. The IRS may request the Supreme Court to resolve this issue if it is not successful in the upcoming rehearing of Murphy. Recently, the Ninth Circuit Court of Appeals solidified its…
IRS Estate Tax Liens (Explained)
The process of resolving property disputes after someone’s death can take years or even decades. This is largely due to the probate process and settlement process under state law. While the IRS is not typically a direct party to these disputes, it does have an interest in the assets involved, particularly in the case of…
Can the IRS Collect Additional Taxes After Tax Restitution Is Paid?
In the case of Creel v. Commissioner, 419 F.3d 1135 (11th Cir. 2005), the IRS attempted to collect additional taxes, penalties, and interest from a taxpayer even after his criminal restitution obligation for the very same tax had been paid and satisfied. The district court had ordered the taxpayer to make restitution to the IRS…
Referrals/Leads Group is Not a Tax Exempt Entity
The tax laws in the United States provide for several types of tax-exempt organizations, including charities, social welfare organizations, and business leagues. In Private Letter Ruling 200709070 the IRS has brought attention to the requirements for organizations to qualify as a tax-exempt “business league.” The ruling denied tax-exempt status to a referral/leads group on the…
Video Poker Cannot Qualify as Professional Gambling
As technology and computers advance, there are more and more activities that put us, as humans, against computers. We, as humans, are in the position of having to game or strategize how to manipulate or beat computers to produce desired results. While it is not pointed out generally, whole industries are focused on doing just…
How HRAs Can Help Your Business
As a business owner, it’s always important to keep costs down while looking for opportunities to grow your business. One potential way to do this is through a Health Reimbursement Arrangement (HRA). An HRA is a tax-advantaged benefit that allows employers to reimburse employees for medical expenses on a tax-free basis. The employer contributes a…
Is Tournament Poker the Same as Live-Action Poker?
Are tournament poker losses subject to the same tax rules as live-action poker losses? This question turns on whether tournament poker is a “wagering activity.” Despite the amount of money at stake and the importance to taxpayers who gamble, the term wagering activity is not defined. This is where the recent Today, in Tschetschot v.…
The Hobby Loss Rules: Planning for Unprofitable Businesses
American culture still has a hint of the protestant work ethic. There are people in the United States who still work hard and are willing to take risks to make things happen. The country benefits if they are successful–particularly if it ends up in a viable commercial venture. Not all ventures end up being successful.…
Tax Basis Planning for Inherited Property
When you sell a property, you are typically required to pay income tax on the gain, which is calculated as the difference between the sales price and the tax basis. The tax basis is usually the amount that you paid to purchase or invest in the property plus the amount paid to improve the property.…