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
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]
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
Today’s news media is full of stories about supposed malicious allegations, unfounded criminal investigations and indictments based on perjury.
Regardless of our political leanings, all of us should hope that such things are actually exceedingly rare. However, a case decided recently by the Sixth Circuit Court of Appeals shows that such things really do happen. Mynatt v. United States, — F.4th —-, 2022 WL 3335690 (August 12, 2022).
It is well-established that attorneys and their clients are entitled to private and protected communications. But what level of protections are available when an accountant is used in an engagement to provide an area of expertise not possessed by the attorney?
This is a significant question because accountants are frequently relied upon as indispensable members of legal teams because they have the ability to properly interpret complex technical accounting concepts and explain them to lawyers, judges and juries. When utilizing accountants in legal matters, the level of protections afforded will often depend on the agreement entered into between the parties.
As an initial matter, parties involved in legal disputes should understand that the accountant-client privilege generally does not provide the same level of protections as the attorney-client privilege. Relying solely on the accountant-client privilege presents substantial risks for the client. Rather, the parties should recognize and consider the benefits of entering into a Kovel Agreement to protect their communications.
“The investigative work of 2021 has all the makings of a made for TV movie – embezzlement of funds from a nonprofit, a family fraud ring that stole millions in COVID-relief funds and a $1 billion Ponzi scheme used to buy sports teams and luxury vehicles. But this is real life and I’m grateful to our IRS-CI agents for pursuing these leads and ensuring that the perpetrators were prosecuted for their crimes,” said IRS-CI Chief Jim Lee.
The top 10 IRS-CI cases of 2021, as decided by the IRS-CI, include:
There is a wealth of information available from the IRS that is not generally made available to the public. Most of this information can be obtained by asking. This information includes files the IRS assembles about a taxpayer, and various training manuals used by the IRS to train its employees. In addition to training given to its employees, the IRS, like most professional organizations, conducts continuing education on an annual basis for its various divisions. Most of the training manuals and annual training materials are available to the practitioner pursuant to the Freedom of Information Act (FOIA).
Field examinations involve returns with more complex issues, thereby requiring examination by someone more knowledgeable in the field of accounting and the Internal Revenue laws. Field examinations are conducted by Revenue Agents and are normally performed at the taxpayer’s place of business where the Revenue Agent can examine the taxpayer’s books and records and decide on the taxpayer’s correct taxable income and correct tax liability. The Revenue Agent is supposed to make an appointment with the taxpayer at a time and place that will be convenient for the taxpayer. The arrangement of the time and place can be done by telephone; however, the telephone contact cannot be used to verify items appearing on the income tax return.
Understanding the IRS and the tax laws is very difficult and confusing. When a taxpayer has a tax controversy matter with the IRS, selecting a tax attorney may be just as confusing and complicated. Not all attorneys are created equal when it comes to the tax laws and representing clients before the IRS. Dealing with the IRS can be risky and confusing for someone, including an attorney, if that person is not familiar with IRS procedure. Clients seeking a tax attorney when they are having problems with the IRS must be careful to select someone who understands this unique area of the law. Challenging the IRS requires an attorney with special expertise and experience.
A new client presents a great opportunity, but there is also great risk that the relationship will not be a good fit. If the client is not a good fit it will be bad for both sides and result in hurt feelings, damaged reputation or worse. Here are some steps for conducting successful interviews with potential clients.