In recent years, the government has continued to ramp up its investigatory efforts concerning trust arrangements that it deems abusive for tax purposes. These investigations have included so-called “section 643(b) trusts” and other trust schemes that lack economic substance. In many instances, these probes have resulted in criminal indictments against the promoters of
U.S. persons who make outbound investments in foreign corporations often have thorny federal reporting obligations. In addition to the commonly filed IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, these taxpayers may have separate requirements to file an IRS Form 926, Return of a U.S. Transferor of Property
Disagreements happen. In the corporate context, one or more shareholders may share a different vision for the company than the other shareholders. Or, there may be acrimony amongst the shareholders for other reasons, as can often happen with family-run businesses. Regardless of the reason, sometimes shareholders simply want out.
Fortunately, the corporate income tax laws
U.S. persons with interests in foreign trusts often have complicated international reporting obligations. Aside from an IRS Form 3520, these persons may have separate requirements to file IRS Form 3520-A. Worse yet, the penalties for failing to file a timely and proper IRS Form 3520-A can be severe. This article discusses five important things
Married taxpayers can file their taxes together or separately. Because it is often more tax-advantageous and convenient to file together, most married individuals elect to file as married filing jointly. But there are risks with this approach. When spouses file a joint return, they become jointly and severally liable for the taxes owed for that
In recent years, the IRS has focused its attention and resources on large partnerships. In 2021, the agency launched an initial phase of its Large Partnership Compliance (LPC) program. Under this program, the IRS identified and initiated audits of some of the largest and most complicated partnership tax returns. Later, the agency used artificial intelligence
On March 25, 2024, the IRS issued proposed regulations (REG-108761-22) which, if finalized, would identify certain CRATs as listed transactions. For those unaware of the listed transaction rules, such a designation would mean that taxpayers and material advisors who participated in these CRATs would have to comply with lengthy disclosure statements or risk
We have previously spoken about monetized installment sales (“MISTs”) on Dollars & Sense. According to the IRS, these structures typically seek to defer gains associated with the sale of an appreciated asset through the use of an intermediary. In recent years, the IRS has scrutinized taxpayers’ usage of MISTs, even proposing regulations that would make
For some time, the IRS has targeted fraudulent employee retention credit (“ERC”) claims. More recently, on December 21, 2023, the IRS issued guidance on a new voluntary disclosure program (the “ERC-VDP”) that the agency intends to use to identify more of these types of claims. Significantly, the terms and conditions of the
In November 2023, Gray Reed Tax Partners Joshua Smeltzer and Matthew Roberts authored an article titled “Where Have All the Theft Losses Gone?” published in Taxes: The Tax Magazine.
The article discusses whether taxpayers can deduct theft losses on their tax returns for 2018-2025 after new limitations were set by the 2017 Tax Cuts