Tax Law Blog


How People and the Tax System Impact Individual Cases

In tax, we spend a lot of time focusing on tax rules. But tax rules only go so far. The results in tax cases are impacted by the people who work tax cases as much as they are by the tax rules. Our system of tax administration also plays a role. This is hard to […]

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Court Revisits Reasonable Cause for Abating Penalties

The U.S. Supreme Court has made it clear that taxpayers cannot avoid penalties by blindly rely on tax advisors to file tax returns and make tax payments. These situations are unfortunate. The court in Specht v. United States, No. 15-3095 (6th Cir. 2016) highlights one way that taxpayers may be able to avoid the bright […]

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Substantial Compliance vs. Strict Compliance: Charitable Deduction Survives Foot Faults

There are a number of cases where taxpayers have had to pay more tax than they should due to technical foot faults. These cases often come up when the IRS employees believe that their job is to look for strict compliance (100%) rather than substantial compliance (something more akin to 80%). This brings us to […]

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Payments to Ex-Spouse Were Alimony Despite Missing Language in Agreement

Tax issues are often the last thing that spouses consider when going through a divorce. In other cases, one spouse plans for the tax issues and the other does not. This appears to have been the situation in Leslie v. Commissioner, T.C. Memo. 2016-171. Facts and Procedural History The taxpayer’s husband was an attorney. He […]

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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. […]

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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 […]

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Finding Opportunities to Contest Tax Liabilities

The IRS puts taxpayers on notice by mailing letters and notices. It is common for these letters and notices to not be delivered or to be delivered late. This can present a serious problem for taxpayers, particularly when the letter or notice is one tha…


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[…]

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Adobe PDF File Not Sufficient to Prove Refund Claim Was Timely Filed

The Tax Code imposes several artificial deadlines and consequences for not meeting those deadlines. Tax cases often come down to whether a taxpayer can prove that he met these deadlines. In Chan v. United States, No. 2:15-cv-739-DN-BCW (D. Utah 2016), …


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…