Income Taxes, Internal Revenue Code (IRC), Business Expenses

Paid or Incurred: Marijuana Rescheduling, Taxes, and Section 280E

McGlinchey Stafford on 6/6/2024

The cannabis industry knows well the economic burden imposed by Section 280E of the Internal Revenue Code of 1986 (Code). It substantially increases the cost of doing business because it disallows deductions for expenses...more

Tax Court in Brief | Moore v. Comm’r | Research Credit and Computation of Research Expenses under Section 41(a)

Freeman Law on 2/27/2023

Summary: Petitioner Gayla Moore was the sole owner of Nevco, Inc. (Nevco), a subchapter S corporation, during the tax years in issue (2014 and 2015). Nevco claimed the section 411 credit for increasing research activities...more

Tax Court in Brief | Avery v. Comm’r | Collection Due Process and a Lawyer’s Race Car Business Expense Deductions

Freeman Law on 2/27/2023

Summary: Since 1982, James William Avery (Avery) was a practicing lawyer, specializing in personal injury law as a solo practitioner primarily in Denver, Colorado for the period 2008–2013 but also some in Indiana during...more

Tax Court in Brief | Craddock v. Comm'r | Deficiency for Disallowed Business and Travel Expenses

Freeman Law on 2/6/2023

Summary: In this non-precedential opinion (see section 7463(b)), the Tax Court addresses deficiencies for disallowed business expenses claimed by taxpayers, Mathew Craddock and Chasta Craddock. Mr. Craddock was employed...more

Tax Court in Brief | Wondries v. Comm’r | Deficiencies for Deduction of Farm and Ranch Expenses; Hobby or Activity Engaged in For...

Freeman Law on 1/16/2023

Summary: Paul Wondries and Patricia Wondries (the Wondries) sought relief from the Tax Court to review the IRS’s determinations of deficiencies and accuracy-related penalties arising mainly from deductions for expenses...more

Tax Court in Brief | Ismail v. Comm’r | Foreign LLC for U.S. tax purposes; Substantiation of Schedule C Expenses; Section 274

Freeman Law on 1/3/2023

Short Summary: The case discusses the tax classification of a foreign corporation for U.S. tax purposes and the substantiation of various business expenses such as vehicle, travel, and meals and entertainment expenses....more

Tax Court in Brief | Hoakison v. Comm’r | Schedule F Farming Expense Deductions and Deficiencies Relating to Same

Freeman Law on 12/12/2022

Hoakison v. Comm’r, T.C. Memo. 2022-117| December 5, 2022 | Paris, J. | Dkt. No. 16577-17 Short Summary: Mr. and Mrs. Hoakison (collectively, the “Hoakisons”) are long-time farmers. They own real estate used for farming and...more

Weekly IRS Roundup September 26 – September 30, 2022

McDermott Will & Emery on 10/3/2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 26, 2022 – September 30, 2022....more

Tax Court in Brief | Eze v. Commissioner | Schedules C and C2 Business Expense Deductions of a Sole Proprietorship

Freeman Law on 8/10/2022

Tax Litigation: The Week of August 1st, 2022, through August 5th, 2022 Whistleblower 769-16W v. Comm’r, 159 T.C. No. 2 | August 4, 2022 | Toro, J. | Dkt. No. 769-16W ...more

Tax Court in Brief | Ziroli v. Commissioner | Is a Disgorgement Payment a Deductible Business Expense under Section 162?

Freeman Law on 7/15/2022

Tax Litigation: The Week of July 11th, 2022, through July 15th, 2022 Estate of DeMuth, v. Comm’r, T.C. Memo. 2022-72 | July 12, 2022 | Jones, J. | Dkt. No. 18724-19 Whistleblower 972-17W v. Comm’r, 159 T.C. No. 1 | July 13,...more

Tax Court in Brief | Walters v. Comm’r | Deductibility of “For Profit” Business Expenses

Freeman Law on 3/15/2022

Section 280E and The Taxation of Cannabis Businesses

Freeman Law on 8/20/2021

Section 280E of the Internal Revenue Code prohibits taxpayers who are engaged in the business of trafficking certain controlled substances (including, most notably, marijuana) from deducting typical business expenses...more

The Tax Court in Brief - April 2021

Freeman Law on 5/28/2021

The Week of April 26 – April 30, 2021 - Plentywood Drug, Inc. | April 26, 2021 | Holmes| Dkt. No. 17753-16 - Short Summary: The Tax Court was asked to decide whether rent paid by the Taxpayer was reasonable. The...more

IRS Continues to Audit and Litigate Against Cannabis Businesses

Holland & Knight LLP on 4/23/2021

As Congress continues to deliberate the federal legalization of marijuana, the cannabis industry continues to face scrutiny from the IRS under Section 280E of the Internal Revenue Code (Code). Enacted in 1982 in response to a...more

[Podcast] How Will States Tax Forgiven PPP Loans?

BakerHostetler on 2/2/2021

The CARES Act created the Paycheck Protection Program. The PPP allowed businesses to secure forgivable SBA loans. Federal taxation of forgiven loans and related expenses are quite favorable - will states follow suit? Matt...more

ADOR Affirms Deductibility of PPP Loan-Related Expenses but Unanswered Conformity Questions Remain

Bradley Arant Boult Cummings LLP on 1/12/2021

The Alabama Department of Revenue issued helpful guidance on January 7, following its December 18, 2020 guidance implementing Governor Ivey’s landmark Supplemental Emergency Proclamation. The new guidance affirms the...more

PPP Loan-Funded Expenses Nondeductible If Borrower Has “Reasonable Expectation” Loan Will Be Forgiven

Pillsbury Winthrop Shaw Pittman LLP on 11/25/2020

On November 18, 2020, in Rev. Rul. 2020-27, the IRS reaffirmed its position that deductions for eligible expenses will be disallowed if a PPP loan is forgiven and extended the rule to deny deductions paid or incurred in a...more

A Trap for the Unwary – IRS Denies Deductions for Expenses Paid with Forgiven PPP Loans

Bowditch & Dewey on 9/3/2020

A central feature of the CARES Act, the Paycheck Protection Program (PPP), provided a lifeline to a multitude of small businesses during the early days of the Coronavirus pandemic. PPP loans were used to cover payroll...more

The Worlds of Sports and Tax Law Intersect During the COVID-19 Pandemic

Foster Garvey PC on 5/18/2020

During these trying times, especially with stay-at-home orders still in effect in most states, it is difficult not to over-focus on the uncertainty that lies ahead. Hopefully, we can find healthy distractions to refocus our...more

Taxpayers May Get to Have Their Cake and Eat It Too After All – Senate Bill 3612 Could Be the Silver Bullet That Makes Things...

Foster Garvey PC on 5/7/2020

Last week, we reported that the IRS issued Notice 2020-32, wherein (relying primarily on Code Section 265) it emphatically pronounced that taxpayers receiving Paycheck Protection Program (“PPP”) loans do not get to have their...more

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