An interesting recent Tax Court decision seems to indicate that taxpayers have clear autonomy with regards to judicial review as well as retracting judicial review of “seriously delinquent tax debt.”
In Pugh v. Commissioner, the IRS certified Pugh to the Secretary of State under I.R.C. § 7345 as an individual with a “seriously delinquent
For some time, the IRS has cautioned taxpayers about filing false or fraudulent ERC claims. More recently, on September 14, 2023, the IRS issued a News Release, IR-2023-169, indicating that it would no longer process ERC claims from September 14, 2023, through “at least” December 31, 2023. Significantly, this only relates to new ERC
A hearing is scheduled for September 11, 2023 for interested persons and organizations to provide testimony on proposed regulations on the timing and approval process for penalties. Section 6751(b) provides that:
No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate.
The timing of when the approval is required by Section 6751(b) has been the subject of significant litigation. The Second Circuit in Chai v. Commissioner concluded that Congress enacted section 6751(b) to “prevent IRS agents from threatening unjustified penalties to encourage taxpayers to settle.” This has caused a lot of litigation in both the Tax Court and U.S. District Courts such that there are currently two different standards on timing of when such supervisory approval is required. If supervisory approval is to meet the goal of not being used as an unfair “bargaining chip” it must be required before such unwanted behavior can occur. Many groups have submitted comments asking for supervisory approval to be done earlier in the examination process than the proposed regulations require and that approval be done by a direct supervisor and not just anyone with penalty approval rights within the IRS.
For some time, promoters have shopped around an arrangement known as a “section 643(b) trust,” known alternatively as a “non-grantor, irrevocable, complex, discretionary, spendthrift trust.” On August 9, 2023, IRS Chief Counsel issued a Memorandum that shoots down many of the contentions raised by the promoters relating to the tax benefits of these arrangements. The full Memorandum can be found here. Taxpayers who have entered into these types of arrangements should take careful note of the IRS Chief Counsel Memorandum and should discuss its implications with a tax professional.
Section 2301 of the CARES Act, as amended, permits employers to claim employee retention credits (“ERCs”) if they meet certain requirements. Under one of those requirements, an employer may claim an ERC if the employer’s trade or business operations were fully or partially suspended due to a federal or state COVID-19 governmental order (the “Business Suspension Test”).
Monetized installment sale transactions (“MISTs”) have been on the IRS’s radar for some time. On May 7, 2021, IRS Chief Counsel issued an advice memorandum, contending such transactions were “problematic” and “flawed”.[1] And shortly thereafter, on July 1, 2021, MISTs found themselves on the annual IRS “Dirty Dozen” list, or the publication the IRS uses to alert the public of abusive transactions.[2] The IRS’s “Dirty Dozen” list for 2022 and 2023 also includes MISTs.[3]
Deadlines are important, particularly in federal tax law. Many taxpayers are aware, for example, of the significant penalties that the IRS may impose upon them for failure to timely file an income tax return or timely pay all taxes owed. But fewer taxpayers have an understanding or appreciation for the deadline rules associated with filing a timely petition with the United States Tax Court.
In a recent article by Tax Notes, tax experts expressed their concerns and hopes for the influx of funding granted to the IRS via the Inflation Reduction Act. Gray Reed Partner Joshua Smeltzer was one of the experts interviewed. Board Certified in Tax Law by the Texas Board of Legal Specialization, Joshua uses his experience
The IRS, like the rest of society, has faced several challenges as a result of the pandemic. Some of those challenges are still lingering, such as funding, backlog, lack of guidance and inexperienced auditors. Efforts to fix these problems are underway but will take time. As taxpayer advisors, it’s important to recognize the limitations in
Former Trump Organization Finance Chief Allen Weisselberg pled guilty last week to 15 felonies for what he admitted was a tax fraud scheme he committed while an executive for Trump’s company. Law360 covered the story and quoted Gray Reed Partner Tony Box multiple times. Tony is a former Assistant US Attorney and tax coordinator responsible