Imagine a successful medical marijuana dispensary generating millions in revenue and incurring significant business expenses. When tax season arrives, the owner naturally wants to claim deductions to reduce their taxable income. But is this allowed under federal tax law, even if the business is legal under state law? The answer, according to the recent case……
TX-LW Blogs
IRS Cannot Assess Foreign Information Return Penalties
Many businesses today have some international transactions. Many U.S. businesses even have operations in foreign countries–which may include ownership of entities, operations, or just sales. Our tax laws include several provisions that require U.S. taxpayers to report most of these foreign business interests and activities. These filings are mostly made by filing various information returns.……
Most Probate Court Orders Are Not Immediately Appealable
When a probate court makes decisions during the administration of an estate, parties who disagree with those decisions may want to appeal right away. If the probate court makes a decision that negatively impacts the party’s rights, time may be of the essence to fix it. From an economic or practical perspective, a delayed fix…
Attorney Fees in Tax Litigation: Jury Says Yes, Judge Says No
In most litigation, each party pays their own attorney fees regardless of who wins the case. This “American Rule” applies even when one party is clearly right and the other clearly wrong. But litigation against the government, such as tax litigation, presents a unique inequity. When taxpayers are forced to defend against an incorrect IRS……
Will Cannot Be Probated Before Trial on the Will Contest
When a loved one passes away leaving a will, the family often wants to proceed with probate as quickly as possible to settle the estate. In cases where someone contests the will’s validity, the natural question arises: If the will appears valid on its face, why can’t the court admit it to probate now and…
Frivolous Tax Returns Avoid Accuracy-Related Penalties
Our federal tax system depends on voluntary compliance by a large segment of taxpayers. Encouraging compliance, while deterring and punishing non-compliance, remains the IRS’s greatest challenge. To meet this challenge, Congress has armed the IRS with a myriad of civil and criminal tax penalties. These penalties are designed to address different types of non-compliance, from……
Charitable Deductions for Defective Inventory
Manufacturers and retailers frequently face the challenge of handling defective or obsolete inventory that cannot be sold. This situation often results in waste. The inventory has some utility or value, but the benefit of repurposing or rehabilitating the inventory is often outweighed by the cost of handling or repurposing the inventory. Examples are easy to……
Signature Not Required on Tax Return for Criminal Liability
One of the requirements for a document to be a tax return is that it is signed by the taxpayer under penalties of perjury. Most tax forms that are intended to be tax returns include a declaration at the bottom that includes the penalty of perjury language. But most tax returns today are filed electronically.……
Can Small Businesses Challenge Unfair Tax Regulations in Court?
Small business owners often struggle to keep up with the ever-changing labyrinth of IRS regulations. Deciphering these complex rules can be time-consuming and costly, diverting resources from core business operations. This leads to the question of what happens when the IRS fails to properly consider the unique burdens its rules place on small entities? The……