Houston Tax Attorney Blog
FBAR Not Limited to $100,000, Willfulness Upheld
There have been a number of recent court cases involving foreign bank account or FBAR reporting penalties. This is likely due to the significant amount of the penalty and that many do not fully appreciate the amount of the liability they face if caugh…
When Forged Signatures Suffice: The Tacit Consent Exception
A tax return has to be signed to be valid. But what if the return is signed by someone else? Is a tax return with a forged signature a valid tax return? The court addressed this in Coggin v. United States, No. 1:16-CV-106 (M.D.N.C. 2018). Facts &…
Avoiding Cancellation of Debt Using Rebates or Refunds
Can taxpayers avoid cancellation of debt income by structuring debt reductions as rebates or refunds? The court touched on this issue in French v. Commissioner, T.C. Summary Opinion 2018-36. The Facts & Procedural History The taxpayers borrowed mo…
Construing Tax Laws Tied to Activities, Time for a New Rule?
When Congress provides a tax benefit contingent on some activity, there is often a question as to whether the activity can be read broadly to encompass many sub-activities or has to be read narrowly. The NextEra Energy, Inc. v. United States, No. 17-1…
Perception Can Be As Important as Substance in Tax Disputes
Taxpayers voluntarily submit information to the IRS. The IRS not only evaluates the substance of this information, but also the taxpayer’s candor in preparing and providing the information. The perception of candor is just as important as the s…
Loaning Money to Business Triggers Trust Fund Penalty
You work hard to build a business, you find success over the years, and then you find out that your long term accountant did not remit payroll taxes and you owe a significant balance. What do you do? The recent McClendon v. United States, No. 17-2017…
Shareholder Cannot Make S Corp. Separately Stated Item Election
S corporation’s account for separately stated items that flow through to the shareholder’s tax returns. They are computed on page 3 of the Form 1120S and then listed separately on the Schedule K-1. The idea for breaking these items out sepa…
The Statutory Employee Classification Post-TCJA
The Tax Cuts and Jobs Act (“TCJA”) made several changes to our tax laws. One such change is that employees are no longer able to deduct unreimbursed expenses incurred as an employee. Given this change, employers and their workers may need t…
Guaranteeing a Loan for Your S Corporation
In Phillips v. Commissioner, No. 17-14439 (11th Cir. 2018), the court concluded that a judgment against the owner of an S corporation for guaranteeing the business debts does not increase the owners tax basis in the S corporation. This is one area whe…
Court Says No Legal Right to IRS Appeals Review
Does the Taxpayer Bill of Rights create a legal right to have a tax dispute considered by the IRS Office of Appeals? The court recently addressed this question in Facebook, Inc. v. Internal Revenue Service, No. 17-cv-06490-LB (N.D. Calif. 2018), concl…