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.
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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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.
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…
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…
The post Quotes: The IRS Does Not Have to Be Consistent appeared first on Houston Tax Attorney: Texas Lawyer.
In Voss v. Commissioner, 796 F.3d 1051 (9th Cir. 2015), the court addressed the rule that limits the deductibility of interest on home mortgages and home equity loans. This rule limits the amount of interest that can be deducted on mortgages in excess …
There are quite a few cases where the IRS disallowed loss deductions for “hobbies.” There are also quite a few cases where the courts have upheld the IRS’s position. These cases are decided based on the facts and how the courts interpret these facts. The facts in Main v. Commissioner, T.C. Memo. 2016-127, provide a […]
The post Tax Deductions for Hobby Survives IRS Scrutiny appeared first on Houston Tax Attorney: Texas Lawyer.
The IRS uses a computer matching system to make various tax adjustments. The IRS refers to this as its automated underreporter program. This program adjusts millions of taxpayer accounts each year. The program generally goes unnoticed, until there is a problem. The Newman v. Commissioner, T.C. Memo. 2016-125, case provides an example of how this […]
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