If you pay an airline for premium economy seating, is the amount you pay subject to the air transportation excise tax for the airline? The answer depends on whether the seating is necessary. Given the smaller spaced allotted for each passenger, one conclude that premium seating is necessary. The IRS determined that it is in……
Tag: Tax
Do Inaccurate eFile Forms Invalidate a Tax Return?
If a taxpayer signs an eFile form and there are defects in the information included on the form, does this invalidate the tax return that is eFiled? The IRS addresses this in CCA 201945027. This IRS memorandum addresses an eFile form where the person who signed the form for a partnership even though he had……
Paying Personal Expenses from Corporate Bank Account
Can you avoid paying tax by paying your personal expenses from your corporate bank account? Is avoiding tax that easy? No, our system doesn’t work that way. The Moacir Santos v. Commissioner, T.C. Memo. 2019-148 explains how the IRS handles these situations. Facts & Procedural History The taxpayer owns a engineering and paving company. It……
Recover Money Paid to the IRS in Error
What if the IRS gets it wrong and then fails to respond to the taxpayer for several years. Can the IRS then agree with the taxpayer, but argue that the taxpayer responded late? The informal claim doctrine can help in these situations. The Chenette v. United States, No. 19-cv-02998-JCS (N.D. Cali. 2019) case provides an……
Qualifying for the Foreign Earned Income Exclusion
As tax attorneys in San Antonio, we see a lot of U.S. citizens whose oil-related jobs require they spend significant time overseas. The wages earned overseas can escape tax in the U.S. This is due to the foreign earned income exclusion. But this exclusion generates quite a few tax disputes with the IRS, which is……
Discharging Unpaid Withholding Taxes in Bankruptcy
When a business owes unpaid taxes, bankruptcy can provide the business or its owner with a fresh start. The unpaid Federal taxes can be discharged if certain requirements are met. One of these requirements is that the tax returns for the unpaid taxes are filed within certain time periods. But what if there are more……