When someone owes the IRS money, chances are good that they have other creditors who are also owed money. This raises questions as to who gets paid first–the third parties or the IRS. The answer is usually the IRS–if the IRS even bothers to attempt to collect. In many cases, the IRS does not ever……
Category: Tax Law
IRS Can Force Business to Use Payroll Service, Court Rules
When a business fails to pay its payroll taxes, the consequences can be severe. The IRS has several collection tools at its disposal to collect unpaid payroll taxes. This includes liens, levies, and even criminal charges against the business owners. The IRS recently attempted to expand its collection powers to prevent future non-compliance. In United……
Tee Time on Taxpayers’ Dime: IRS Employee Golfing on the Job
The IRS cannot simply terminate employees as private-sector employers can. IRS employees are often shielded by complex bureaucratic processes that makes it difficult to remove them from their positions. The recent case of Sheiman v. Department of the Treasury, No. 2022-2045 (Fed. Cir. 2024), provides an opportunity to consider the IRS’s challenges in terminating an……
About “Sandbagging” in Tax Litigation
The litigation process requires parties to adhere to various procedural rules. These rules are intended to ensure fairness and efficiency in the court process. One of the most critical aspects of this process is the discovery phase, where parties exchange information and evidence relevant to the case. Some litigants may attempt to gain an unfair……
IRS Can Sidestep Taxpayers’ CDP Rights by Applying Overpayments
Imagine that Congress sets out a remedy to curb IRS abuses. And further consider that after the taxpayer pursues the remedy, the rules allow the IRS to simply sidestep the remedy. So the remedy is no remedy at all. That is what we have in the Zuck v. Commissioner, No. 25125-14L (U.S.T.C. Apr. 6, 2022)……
Tax Form Mixup Can Extend the IRS’s Statute of Limitations
Suppose you file a tax return and, months or years later, you get a letter from the IRS saying that it will not accept the tax return. The IRS letter says that you used the wrong tax form. And maybe even change the facts so that the IRS mailed this letter to you, but you……
The “Effective Date” for Tax Rules
At the end of every tax statute, there is language that specifies when the new tax rule is effective. Given the frequency with which Congress enacts new tax laws, often several times every year, one might think that there is no dispute as to the “effective date” language that it uses. One might think that……
When the IRS Comes Knocking: Addressing Tax Fraud
Tax fraud typically involves neglecting tax responsibilities, such as by not filing returns or evading tax payments, or engaging in deliberate actions to obstruct the IRS’s assessment or collection of taxes. The compliance problems that are later found to be tax fraud usually involve actions that pyramid over time. This timing issue arises as repeated……
The Stock Sale as a Sham Transaction
Taxpayers are continually seeking ways to avoid or minimize their tax liabilities. And rightfully so, as taxes take a significant amount of profit or gain from any deal or effort. Take the case of a lawsuit award. You sue someone and settle or win the case. There are nuances, but generally, you are usually taxed……