If you file an extension for an estate tax return and pay the tax before the extended due date, can the IRS impose penalties for late payment? The court addresses this in Estate of Agnes R. Skeba v. United States, No. 3:17-cv-10231 (D.N.J. 2019). Facts & Procedural History The taxpayer is an estate. It’s estate……
Category: Tax Law
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……
Liability for Prior Real Estate Owner’s Unpaid IRS Taxes
Liability for Prior Real Estate Owner’s Unpaid IRS Taxes You have to be diligent if you buy real estate from someone who owes unpaid taxes to the IRS. There are instances where the IRS can collect the prior owner’s taxes from you as the purchaser of the property. The recent Shirehampton Drive Trust v. JP……
The Affirmative Act of Tax Evasion
Taxpayers get behind on their taxes as they do every other type of liability. It happens. But owing the IRS unpaid taxes can be more than a civil problem. Non-payment can lead to criminal tax evasion charges. The United States v. Connerton, No. 3:17-cr-47 (D. Conn. 2019), case provides an opportunity to consider the “affirmative……
IRS Foreclose on Inheritance that is Jointly Owned?
What happens when someone inherits money from their parents, but they also owe the IRS? Can the IRS collect on the inherited assets? What if the taxpayer only inherited a fractional interest in the property? Can the IRS foreclose on the property to pay the back taxes? The court considered this in United States v.……
Taxpayer Not Entitled to In-Person Tax Collection Hearing
Dealing with unpaid taxes and the IRS bureaucracy can be challenging. Sometimes the key is to get in front of the right person at the IRS. But the IRS often refuses in-person meetings. The Roberts v. Commissioner, T.C. Memo. 2019-117, case provides an example of this. It involves the taxpayers request for an in-person collection……
Setting Off a Non-Tax Debt Owed by the IRS
If you owe back taxes but the Federal government owes you for some other matter, can the IRS offset the unpaid taxes with the amount the government owes you? The answer is more complex than one would think. The court addresses this in Tartt v. Commissioner, T.C. Memo. 2019-112. Facts & Procedural History The taxpayer……
What is a Genuine Opportunity to Dispute a Tax Liability?
Taxpayers are able to dispute a tax liability before the IRS can take certain collection actions. But what if the IRS does not afford the taxpayer with a genuine opportunity to dispute the liability as required by law? The court addresses this in Dood v. Commissioner, T.C. Memo. 2019-107. Facts & Procedural History The taxpayer……
IRS Tax Debts from Retirement Account Distributions
Retirement account distributions typically trigger sizable tax liabilities. These liabilities often go unpaid, which results in unpaid tax debts and IRS collection enforcement actions. With careful planning, sometimes these taxes can be avoided. Tax on Retirement Account Distributions Most distributions from retirement accounts trigger income taxes. This includes distributions from IRAs and 401(k)s. The idea……