Houston Tax Attorney Blog


IRS Can Collect Father’s Tax Restitution from Son

The rules that allow the IRS to assess and collect criminal restitution as if it is a tax due present some unique questions.  In Bontrager v. Commissioner, 151 T.C. 12, the court considered whether the IRS can assess and collect a father’s t…


IRS Appeals Guidance on In-Person Conferences

The IRS Office of Appeals has been making changes to how it conducts appeals conferences.  In this past few years, these changes have made it difficult to obtain an in-person conference.  The IRS recently issued interim guidance AP-08-1118-0013 to auth…


The Dilemma: File A Timely or An Accurate Tax Return?

If you have an ongoing dispute with the IRS for one or more years and the outcome of that dispute will impact the current year, can you take a wait and see approach to filing the current year tax return?   The Namakain v. Commissioner, T.C. Memo. 2018-…


Court Clarifies Inventory Capitalization Rules for Producers

There are a few items that are low hanging fruit that make for easy adjustments for IRS auditors.  The adjustment for indirect costs is an example of such an adjustment that can be made for any taxpayer that has inventory.  The recent Patients Mutual A…


For Early IRA Distribution, Compulsive Gambling Not a Disability

Early distributions from IRAs are subject to a 10 percent additional tax.  The 10 percent additional tax does not apply if the distribution is taken when the IRA owner is disabled.  The recent Gillette v. Commissioner, T.C. Memo. 2018-195, case address…


Planning for Tax Deductible Entertainment Expenses

Entertainment expenses are deductible but the deduction is limited to 50 percent of the amount spent. There have been a number of disputes between taxpayers and the IRS as to what counts as a limited entertainment expense. The law was recently changed …


U.S. Taxpayer With U.S. Residence Cannot Exclude Foreign-Earned Income

There are a number of tax issues that U.S. citizens and residents who live abroad have to consider.  One of these is whether they qualify to exclude their foreign-earned income in computing U.S. income taxes.  This exclusion has resulted in a number of…


Documenting Tax Losses for Worthless Securities

Tax losses for worthless securities are often challenged by the IRS.  It particularly important to document the loss.  There are several elements taxpayers have to establish to secure the benefit of tax losses for worthless securities.  The recent Giun…


Court May Explain How to Allocate Tax Basis to Intangible Assets

If the U.S. government allows a taxpayer to call a liability an asset and then acts to make the asset worthless, can the taxpayer take a tax loss for the loss of the so-called asset?  The Citigroup, Inc. v. United States, No. 15-953T (Ct. Cl. 2018) cou…


The IRS Isn’t Charged With Knowledge of Other Federal Agencies

The IRS only has to mail a notice of deficiency to a taxpayer’s last known address in order to assess or record a tax liability for the taxpayer.  This “last known address” rule is often the subject of disputes.  The Sadek v. Commissi…