A recent U.S. Tax Court decision provides clarity to what the Internal Revenue Service (“IRS”) considers a limited partner for purposes of the ‘limited partner exception’ to the Self-Employment Contributions Act (“SECA”) tax...more
Intellectual property (“IP”) is hugely important to businesses. Given that importance, IP owners must occasionally litigate against the unauthorized use of their technology. The costs of such litigation and appurtenant...more
2/21/2024
/ Intellectual Property Litigation ,
Intellectual Property Protection ,
Internal Revenue Code (IRC) ,
IRS ,
License Agreements ,
Litigation Fees & Costs ,
Patents ,
Settlement Agreements ,
Share Purchase Agreements ,
Tax Deductions ,
Tax Liability ,
Tax Planning
Many taxpayers have art collections. However, the art collections of some high-net-worth individuals, family offices, and business taxpayers may draw the unwanted eye of the IRS. With the increased focus on auditing...more
2/12/2024
/ Art ,
Art Collections ,
Artists ,
Charitable Donations ,
Estate Tax ,
Fine Art ,
Internal Revenue Code (IRC) ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Paintings Sculptures and Engravings ,
Tax Audits ,
Tax Court ,
Tax Liability ,
Tax Planning
The Tax Court can be an unusually cruel place when it comes to deadlines. This is what a recent taxpayer found out in a Tax Court decision that denied their challenge of an over $4.6 Million dollar tax bill asserted by the...more
Recently, in a criminal case involving a physician who hired an accountant to prepare and submit certain tax forms to the IRS on her behalf, the court denied attorney-client and work-product privilege claims and ordered the...more
11/13/2023
/ Accountants ,
Attorney-Client Privilege ,
Compelled Testimony ,
Confidential Information ,
Criminal Liability ,
Debt Collection ,
Discovery ,
Indictments ,
Internal Revenue Code (IRC) ,
IRS ,
Tax Preparers ,
Work-Product Doctrine
On June 30, 2023 the District Court in the Northern District of California granted a petition to enforce the cryptocurrency exchange Kraken to release customer information. Specifically, Kraken was ordered to produce the...more
11/6/2023
/ Crypto Exchanges ,
Cryptocurrency ,
Digital Assets ,
Enforcement Actions ,
Financial Markets ,
Financial Regulatory Reform ,
Financial Services Industry ,
Financial Transactions ,
FinTech ,
Income Taxes ,
Investment ,
IRS ,
Reporting Requirements ,
Tax Liability
On September 8, 2023 the IRS announced a sweeping effort to focus enforcement efforts on high-income individuals, partnerships, and corporations. On September 20, 2023 the IRS announced that it will establish a special...more
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...more
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...more
8/15/2023
/ Business Interruption ,
CARES Act ,
Coronavirus/COVID-19 ,
Employee Retention ,
Employees ,
Employer Liability Issues ,
IRS ,
Relief Measures ,
Supply Chain ,
Tax Credits ,
Tax Relief
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”. And...more
The IRS knows it has a problem, in that it knows there are far more cryptocurrency transactions than are being reported on tax returns. The IRS may also get an $80 billion increase in funding for enforcement that will help...more
8/12/2022
/ Bitcoin ,
Brokers ,
Cryptocurrency ,
Currency Exchange ,
Digital Assets ,
Digital Currency ,
Enforcement Actions ,
Financial Services Industry ,
Investment ,
Investors ,
IRS ,
John Doe Investigation ,
Summons ,
Tax Avoidance
Many people, myself included, can sometimes be accused of poor penmanship. As our paperwork becomes more and more electronic, we write less and less down with pen and paper. However, a recent decision from the tax court may...more
On June 21, 2022, the United States Supreme Court agreed to hear a dispute involving split decisions among the circuit courts on non-willful penalties. The Fifth Circuit parted ways with the taxpayer friendly decision of the...more
6/23/2022
/ Failure-to-File ,
FBAR ,
Foreign Financial Accounts ,
Income Taxes ,
IRS ,
Penalty Reductions ,
Regulatory Violations ,
Reporting Requirements ,
Tax Court ,
Tax Evasion ,
Tax Penalties ,
Tax Planning
Properly navigating the IRS labyrinth of rules and regulations is difficult and sometimes taxpayers fail to dot every “i” and cross every “t”. The results can sometimes be devastating for both individuals and small...more
Although the government bears the burden of production for penalties, this often involves nothing more than showing that the penalties were properly assessed. Penalty relief is usually only given when the taxpayer can marshal...more
Dealing with the IRS can be a dangerous labyrinth for the untrained taxpayer or their non-tax advisors. In a recent Federal court case, E. John Rewwer, et al. v. United States, the taxpayers filed the wrong form claiming a...more
Starting any business has risk, and most businesses take time to become profitable. Unfortunately, the IRS sees multiple years of losses from a business as a red-flag that usually results in further scrutiny. That scrutiny...more
All kinds of penalties are being assessed by the Internal Revenue Service (IRS) against taxpayers, and more can be expected in the future. In 1954 there were 13 penalties in the Internal Revenue Code, and now there are more...more
Once the IRS makes an assessment against a taxpayer, the taxpayer will receive several notices before the IRS takes enforced collection action....more
12/17/2021
/ Commercial Bankruptcy ,
Consumer Bankruptcy ,
Debt Collection ,
Income Taxes ,
IRS ,
Offers in Compromise ,
Tax Abatement ,
Tax Debt ,
Tax Levy ,
Tax Liability ,
Tax Returns
The IRS is vigorously litigating cases involving conservation easements they believe are abusive. One such case was Plateau Holdings, LLC v. Comm’r, T.C. Memo 2020-93 (Plateau I). In that case the Tax Court denied the entire...more
12/10/2021
/ Conservation Easements ,
Defense Strategies ,
Fair Valuation ,
Good Faith ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Tax Court ,
Tax Deductions ,
Tax Liability ,
Tax Penalties
On November 30, 2021, the Fifth Circuit parted ways with the taxpayer friendly decision of the Ninth Circuit that non-willful penalties are capped at $10,000 per FBAR filing instead of the $10,000 per unreported bank account...more
12/1/2021
/ Enforcement Actions ,
FBAR ,
Foreign Bank Accounts ,
Income Taxes ,
Internal Revenue Code (IRC) ,
International Tax Issues ,
IRS ,
Offshore Funds ,
OVDP ,
Reporting Requirements ,
Tax Court ,
Tax Evasion ,
Tax Liability ,
Tax Penalties ,
Tax Planning ,
Tax Returns
Deadlines are important in legal matters, especially when it relates to tax issues. There are estimated tax deadlines, tax return filing deadlines, and a host of deadlines if a return is audited and any adjustments are...more
Lawyers, tax or otherwise, understand that privileged information must be protected to encourage a full and frank dialogue that might not occur without confidentiality.1 Tax information, in particular, contains some of the...more
Several abusive tax shelters in the 1970s and 1980s caused Congress to enact rules to prevent taxpayers from deducting losses when a taxpayer doesn’t materially participate in the activity. These passive loss rules apply to...more
Businesses are started with good ideas and a lot of hard work. Companies are sustained by applying that same hard work to the challenges and problems they face along the way. ...more