If you pay tax for another party, can you recover the payment if the tax is not owed? The answer is generally “no,” as you cannot sue the Federal government unless it consents and it only consents in limited circumstances. One such consent is the ability to sue for a refund. The rules that allow…
Category: Federal Income Tax
Federal Income Tax
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IRS Guidance on Structuring Attorneys Fees
It should not be a surprise to learn that attorneys often hire tax attorneys to help them minimize their taxes. One popular tax savings strategy for attorneys is to structure their contingent fees. A contingent fee is a payment arrangement in which a lawyer provides services on the condition that payment will only be made…
Amount of 179D Tax Deduction for Building Designer
Congress often creates tax incentives, but it is up to the IRS and courts to determine their implementation and interpretation. The Sec. 179D tax deduction is an example of this. The statute provides broad concepts but lacks substance, leading to the courts playing a crucial role in determining its implementation and interpretation. The details matter…
Tax Court: Is Diabetes a Disability?
If you find yourself without a job or facing unemployment, one of the options you might consider is taking a distribution from your retirement account. This is especially true if you are disabled and need the income to pay for your living costs or even your medical care. These distributions often result in additional Federal…
About the Monetized Installment Sale
You probably found this by searching for “monetized installment sale IRS” or some similar term. The monetized installment sale is a tax strategy that allows a party to sell an appreciated asset while deferring capital gain tax for an extended period of time and receiving a significant portion of the sale proceeds in cash. The…
The Premium Tax Credit Trap
In an effort to reform health insurance, the government implemented a system where it would make payments directly to insurance companies on behalf of taxpayers through the use of premium tax credits. These credits were a part of the Affordable Care Act and intended to make health insurance more affordable for those who might not…
The Qualified Nonpersonal Use Vehicle
What Congress provides with one provision, it often takes away with another. This can result in legal challenges whereby the court creates exceptions. The exceptions can be modified and qualified by later legislation. This creates a labyrinth that one has to navigate to determine how an item is treated for federal income tax purposes. The…
Planning for Commercial Solar Tax Credits
The solar tax credit can significantly reduce Federal income taxes. Congress has recently reaffirmed its desire to spur these investments to curb reliance on foreign energy and to help the environment. As with most tax incentives, such as the research tax credit, there are a number of rules that have to be followed to be…
A New Beginning for Innocent Spouse Relief
The Taxpayer First Act of 2019 made several changes that impact how tax cases are handled. We are just now seeing some of these changes play out administratively and in court. The recent Bacigalupi v. Commissioner, Docket No. 20480-21 (U.S. Tax Court 2022) is an example of this. It is an innocent spouse case that…
Reasonable Cause & Reporting Charitable Donations
The IRS is tasked with enforcing our tax laws. The task should be to ensure “substantial compliance” by taxpayers. But all too often the audit process is nothing more than the IRS examining a handful of go-to-adjustment issues. These go-to-adjustment issues involve tax laws that Congress passed that leave room for interpretation. These issues often…