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Tax Court Finds that SECA Limited Partner Exception Requires ‘Functional Analysis Test’

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

The Fine Print: IRS Examination of Artwork

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

What a Difference a Day Makes, at Least When it Comes to Tax Court Petitions

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

IRS Sanctioned for Bad Faith on Supervisory Approval of Penalties While Proposed Regulations on the same Issue are Pending

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

IRS Penalty Denied Because of Poor Penmanship

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

Supreme Court Will Hear Non-Willful FBAR Penalty Dispute

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

Fifth Circuit Says No Do-Overs in Oil and Gas Tax Dispute

In some federal tax disputes, if at first you don’t succeed you may not get to try again. A recent Fifth Circuit decision confirms issue preclusion when the parties and the issue are truly the same. See ETC Sunoco Holdings,...more

Taxpayer Wins Tax Refund Despite IRS Claims That The Taxpayer Used The Wrong Form

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

Taxpayer’s Testimony on Businesses Losses Defeats IRS Arguments and Penalties

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

Recent Tax Court Case Outlines Factors Taxpayers can use to Avoid Negligence Penalties

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

Non-Willful FBAR Penalties Will be Much Higher in the Fifth Circuit

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

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