IRS audit


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 …


Donations to Pastor are Taxable Income, Not Gifts

The distinction between taxable compensation and non-taxable gifts comes up in a number of contexts and has led to a number of tax disputes.  Severance payments made to workers are an example.  The recent Felton v. Commissioner, T.C. Memo. 2018-168, co…


Failures in Reporting Taxes is Not Tax Obstruction

Does a taxpayer commit a felony offense if they pay a babysitter without withholding taxes, fail to keep receipts for charitable donations, or neglect to provide every record to an accountant? A strict reading of the law would suggest that …

The post Failures in Reporting Taxes is Not Tax Obstruction appeared first on Houston Tax Attorney: Mitchell Law.


Getting Out of IRS Adjustments Agreed to on Audit

Taxpayers often regret agreeing to IRS audit adjustments. These agreements are not necessarily final when the paperwork is signed. The taxpayer typically still has time to change their mind. In Sandoval Lua v. United States, No. 2016-1313 (5th Cir. 2016), the court considered a case where the taxpayer changed his mind, but failed to act […]

The post Getting Out of IRS Adjustments Agreed to on Audit appeared first on Houston Tax Attorney.


Taxes Remitted to the U.S. Virgin Islands in Error Were Not Compulsory Payments

One of the common issues that comes up on audit is whether payments to foreign governments are creditable for purposes of the U.S. foreign tax credit (“FTC”). This often hinges on whether the payments were “compulsory.” There is little guidance as to what payments are compulsory. The court recently addressed this issue in Vento v. […]

The post Taxes Remitted to the U.S. Virgin Islands in Error Were Not Compulsory Payments appeared first on Houston Tax Attorney: Texas Lawyer.


Termination Payment for Failed Real Estate Deal Was Ordinary Gain

In CRI-Leslie, LLC v. Commissioner, 147 T.C. 8, the court addressed the tax treatment of a termination payment received from a real estate deal that fell through. The court concluded that the termination payment was ordinary gain, not capital gain, for the taxpayer. This is an important topic and an important case, as this is […]

The post Termination Payment for Failed Real Estate Deal Was Ordinary Gain appeared first on Houston Tax Attorney: Texas Lawyer.


Agreeing to Extend the Time for an IRS Audit–or Not

Congress provided a limited time for the IRS to audit tax returns. This time can be extended if the taxpayer agrees. While some taxpayers require the IRS to stick to the time provided by Congress, other taxpayers choose to extend the time period. This is a difficult issue that taxpayers face on audit. The Assessment[…]

The post Agreeing to Extend the Time for an IRS Audit–or Not appeared first on Houston Tax Attorney: Texas Lawyer.


IRS Agents May Contact Third Parties But Must Maintain Confidentiality

We often get questions as to whether IRS agents can contact various third parties during the course of an IRS audit. The general rule is that IRS agents can in fact contact third parties. And they frequently do. The ability to do this is limited and it…


The Start-Up Expense Limitation: Starting a Business in Retirement

There are several occupations where highly skilled individuals are forced to retire due to mandatory retirement provisions. These individuals often use their skills to start new businesses during retirement. The court addressed this situation in Tizard…


Quotes: The IRS Does Not Have to Be Consistent

The post Quotes: The IRS Does Not Have to Be Consistent appeared first on Houston Tax Attorney: Texas Lawyer.