Our tax administration operates within the framework of a zero-sum game, leaving little flexibility for taxpayers who encounter technical foot faults or minor errors. Even when taxpayers have complied with most of the tax law requirements, a single misstep can potentially result in the disallowance of a tax benefit or deduction. This zero-sum approach, while……
Category: Tax Law
The Evolution of Foreign Account Tax Reporting
The IRS and Treasury face a number of challenges in administering our tax and financial systems. This includes challenges presented by foreign transactions by U.S. citizens and residents. In recent years, high-profile cases involving Americans using offshore accounts to evade taxes have prompted the U.S. government to crack down on tax evasion and make it……
When a Fictitious Business is Reported on Your Tax Return
So you reported a fictitious business on your income tax return. The fictitious business resulted in a tax loss and, maybe, you got a large tax refund from the IRS as a result of it. It’s a fraudulent tax return. The IRS sends you an IRS audit notice. What do you do? The answer varies,……
Taxpayer Loses for Tax Court Petition Filed 11 Seconds Late
The voluntary nature of income tax returns in the United States means that taxpayers are responsible for reporting their income and paying the appropriate taxes. Taxpayers do this largely as it is the right thing to do. This is premised on a perception that the tax system has some elements of being fair and uniform……
Recovering Legal Expenses for Mistaken IRS Audit of Non-Resident
The U.S. has significant and complex reporting and filing and notice requirements. This includes a myriad of state and local requirements and federal requirements, including income tax return filing requirements. As odd as it sounds, it is part of what makes America great. We often don’t think about it, but these filing requirements are part……
Buy-Sell Agreements & Perils of the Estate Tax
Taxes punish success. They are a consequence of hard work or, in some cases, ingenuity. Even seemingly common business transactions can trigger this type of punishment, and the consequences can be sizeable. This is especially true when it comes to the Federal estate tax. The tax itself can amount to 40% of the value of……
The Disguised Dividend for Owner-Employees
The corporation can be viewed from a number of different perspectives. One way is to view it as a group of people coming together to perform some business activity, with each having different relationships and risks in the arrangement. The role any one individual plays in the corporation may not be clearly defined. The owner-employee……
Gift Tax Return for Wrong Year Starts IRS Statute of Limitations
The IRS receives a vast amount of information, which can make it challenging for them to act on all the information they possess. However, taxpayers have the ability to alert the IRS to potential tax issues and wait for the IRS’s response. The IRS generally cannot ignore information it has received. For example, in the……
The Collection Exception to Notice for IRS Summons
In tax disputes, the IRS holds a considerable advantage, as the law is often stacked in their favor, granting them broad collection powers. When all other avenues fail, the IRS summons becomes their primary tool for obtaining taxpayer records and information needed to assess and collect taxes. Despite the summons rules being unchanged for a……